Santa Rosa boosted greens fees, tightened financial controls and reduced payments to the operator of the Bennett Valley Golf Course Tuesday in an effort to help the popular attraction through the roughest financial patch in its history.
The changes, in the works for several months, are aimed at keeping from dipping any further into the course's dwindling reserves, which were on track to be nearly depleted by the end of the year.
Mayor Scott Bartley strongly cautioned staff against allowing the course's financial reserves, which are supposed to stand at more than $1 million but are now less than half that, to drop as precipitously as they have since 2009.
He said the course reserves "vaporized" with little warning to the council from city staff. "That can't be repeated. It's unacceptable," Bartley said.
The one-year contract changes are intended to preserve cash
and
give the city time to negotiate longer-range changes to help the course be more sustainable.
They include reducing the monthly payment to course operator Bob Borowicz by $4,158 to $70,000, having him pay as much as $45,000 in supplies, and requiring him to pay for a marketing consultant, and allowing him to offer discounts of up to 30 percent.
The goal of the discounts is to help drive traffic during slow periods or inclement weather, a tactic currently not permitted.
"We're trying to stay competitive with the golf courses around us," said Assistant City Manager Jennifer Phillips.
The 18-hole course, opened in 1970, is the most popular in the region, with just over 70,000 rounds played last year. It is known for its competitive rates, excellent maintenance and modern facilities.
To increase revenue, the council raised greens fees $1 to $3 for individual rounds and a 7 percent for annual passes.
Council members made it clear that they wanted the course to pay for itself and not require additional support from the city's general fund. The course is supposed to be self-sufficient but has struggled in the weak economy and under increasing debt payments for its club house.
"We need to be extremely careful that the golf course and its operations do not come back and impact the general fund," Councilwoman Robin Swinth said.
The financial problems stem from the decision to build a $9.6 million clubhouse and restaurant and pro shop just as the nation's economy tanked. The 2007 project was financed with $5 million in bond sales, and payments have run the city $400,000 per year.
Several golfers urged the council not to try to push the costs of those buildings, which some characterized as extravagances pushed by city officials, onto golfers.
Former course operator John Flachman said he was on the committee that selected an architect for the new club house and pro shop. It became apparent to him that the committee wanted something more than just a club house; they wanted a community building.
For this reason, he thinks the golfers shouldn't be held responsible for the entire cost. "I just don't think it's fair for the golfers to fund that whole amount," he said.
Several golfers praised the changes as modest and said they will be worthwhile if they help the course return to financial health.
"I think what been proposed is reasonable and workable," said Bill Ward, noting that Borowicz and his employees do a "terrific job" of running the course.
But Gerry Niimi cautioned the council against thinking it could solve the problem simply with higher fees.
"Recreationally, golf is not the only game in town. There's a casino coming!" Niimi said.
The changes are in response to an
consultant's review conducted by Sirius Golf Advisors earlier this year. The report praised the course in general but recommended several financial, operational and capital improvements. The report concluded the course needs
a
"major overhaul" that could cost up to $5 million.
That report caused the city to
conduct a further financial review of the course, which concluded
that many of the problems identified in the earlier report were the result of confusion or incomplete information. Many of the financial red flags
had reasonable explanations, Phillips said.
She noted that confusion in the way some season passes were accounted for stemmed from the fact that were paid in installments. This made it seems as though there were more passes than there really were, Phillips said. Changes have been made to require the passes to be paid upfront, she said.
Other changes recommended in the review, such as assigning cash drawers to individuals cashiers, have logistical downsides and other solutions have been found, she said.
"We want to balance customer service and efficiency along with accountability," Phillips said.
Borowicz has agreed to implement a passcode-protected system that allows him to track who accessed cash drawers, Phillips said.
Phillips stepped in as interim director of parks and recreation after Marc Richardson retired last year after City Hall learned he had been accepting thousands of dollars of free golf from Borowicz. He was later fined by the state Fair Political Practices Commission for failing to report the gifts and having a conflict of interest in accepting gifts while he negotiated Borowicz contract.
Vice Mayor Erin Carlstrom, participating in the meeting by teleconference, said she wanted to know more about whether the existing contract could be relied upon given that it was negotiated by Richardson.
"I'm very concerned that the terms of the existing contract were not negotiated at arms length on behalf on the city," Carlstrom said.
She asked City Attorney Caroline Fowler to look into the matter further.
Phillips said it was her intention to begin renegotiating the Borowicz contract, which runs through 2019, but some council members signaled they might have other ideas.
With so many red flags raised, Julie Combs said it struck her that it might be a good time to consider putting the course operations out to bid.
"It seems that we should at least be talking about that," Combs said.
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