SACRAMENTO (CBS13) — The city of Sacramento is proposing to contract out maintenance of the municipality’s four financially troubled golf courses to help ease the impact on the budget, but a report by the city auditor reveals millions in debt obligations as play continues to decline.
The city’s golf operations suffered a $529,919 deficit in the 2010-11 fiscal year and is expecting a similar loss in 2011-12 because of debt obligations and declining play at its Haggin Oaks, Bing Maloney, Bartley Cavanaugh and Land Park courses, according to a report by the city auditor presented to the City Council on Tuesday.
The city had $6.2 million in expenditures in 2010-11 and $5.7 million in revenue, according to the report. The deficit was covered by a surplus in the city’s golf fund, but a similar loss in 2011-12 would likely require the city to dip into its general fund.
“The idea is that golf should be self-supporting and not take away from the general fund dollars, or the dollars that support our parks and police and fire,” said Barbara Bonebrake, the city’s director of convention, culture and leisure, which oversees the city’s golf courses.
Under the proposal, Morton Golf, which already is under contract with the city to operate the courses, would take over maintenance as well. The City Council is scheduled to vote on the plan in late October or early November and, if approved, the 38 city workers would be laid off Jan. 1.
“Outsourcing sounds good on the surface, but basically you run into the same problems down the line,” said one golfer, Joseph Scott of Sacramento.
The 38 misplaced workers would be encouraged to re-apply with Morton or be given priority for other city positions.
“We have 38 employees that have done an incredible job with limited resources, limited equipment and had their budget cut year after year after year,” Bonebrake said.
Complicating matters for the city’s golf operation, the golf fund has two outstanding loans from the city’s risk management fund: a capital improvement loan with a balance of $2.8 million and an operating loan of $4.7 million. Debt payments are being made to the capital loan at $247,000 per fiscal year, but no payments have gone toward the operating loan, according to a city report.
If payments were to start on the operating loan, the 2011-12 deficit would grow to a projected $783,000, according to the report.
This is all compounded by the fact that play at city courses continues to go down. According to the city report, play has decreased from 301,000 rounds in 2005 to 245,000 in 2010, down 19 percent. That compares to a 5 percent decrease nationwide.
According to the report, in that same time period two public courses went out of business but two were added in the area, and five courses that were previously private started allowing public play to boost their own revenues.