Robert Thompson (you can follow him on Twitter @Going4theGreen), of the blog Going for the Green, hosted on Canadiangolfer.com wrote a post yesterday about the City of Toronto Golf courses financial struggles.
He points out the Toronto is the latest in a long line of communities who are struggling with the question about what to do with their money losing golf courses. He makes the claim municipalities have traditionally viewed their golf course operations as “cash cows”, but in the new reality of the golf business should view them more in line with arena’s and other recreational facilities. He also makes a good point about municipalities needing to consider the financial structures by which golf courses are managed (i.e. unionized workers on grounds crews).
I always enjoy Robert’s posts and this one was no different. It got me thinking though, and after reading it I realized my opinion on the topic consisted of more than the 140 characters twitter allows me, hence my response post.
Generally, I believe that a core responsibility of municipal government is to provide recreational opportunities to its citizens. I think the combination of tax dollars and user fees has worked out fairly well from a service deliver standpoint. I acknowledge the arguments for why municipalities should not be in such business, but I don’t agree with them from an ideological standpoint (what can I say, I am a fiscal and social liberal).
My take on the system is that recreational opportunities should be provided based on the notion that the private sector does not offer such services (at all or where demand out paces supply), or the private sector does not offer such services at an affordable price.
In Robert’s post he points out that cities build and operate arenas at an annual financial loss, so why not golf courses. Even with packed arena’s the user fees rarely cover the expenses. The same can be said (in my opinion) about indoor swimming pools. Both arena’s and swimming pools are heavily used facilities that rarely turn a profit. However, traditionally speaking (and this is starting to change in many municipalities across the country), arena’s and swimming pools have been facilities that are not build by private owners, for the fact that they always lose money. If it wasn’t for municipal facilities access to arena’s and swimming pools (and other facilities) would be greatly reduced do to demand and or cost.
Now onto golf courses. In Ottawa, we have one municipal facility of 36 holes, Pineview Golf Course. I do not know much about the course (I have played both 18s once each in my 7 years in Ottawa) other than what I read in the papers and on the golf forums. My understanding is that the city owns the course, but it is run by an arms length board (however, it looks like 6 city councils sit on the board, so not really arms length). The course is in financial trouble, but it appears that has to do more with financial mismanagement than it does with other factors.
Here is the problem I have with Pineview as a municipal golf course (and other municipal golf courses in similar situations). The course conditions at Pineview are average to slightly below average if I believe everything I read, I think this is consistent with what people expect from a municipal course. From this standpoint, the course does not offer anything beyond what you would find at a dozen other privately owned, but public, courses. To play the championship course they charge you $43 + tax (they recently moved the rate to $40, but I think that is for fall deal). If we look at the average cost to play similar courses in Ottawa on a weekend at Prime Time, the cost is $42.64 + tax (details here).
So, the course has, at best, similar conditions to many courses around the city, and it charges the same. From a business standpoint, this makes sense as they are in the mix in terms of conditions and price point, but from a municipal recreation standpoint, it doesn’t really make sense at all. If we look at Pineview in the light of my earlier notion that municipalities should provide recreational facilities that are either not being provided by the private sector or are not affordable in the private sector, Pineview fails on both accounts. In the first, there are many golf courses in Ottawa and area that are open to the public, there are even other courses within city limits that is accessible by public transit (Cedar Hill and Falcon Ridge). The Ottawa golf market is fairly saturated and it would be tough to argue that the demand is so high that the city must step in to provide the service. On the later, Pineview is no more accessible, cost wise, than the average course across the city. Arena’s, swimming pools, fitness centers, are all provided by municipalities at a fraction of the user fee cost to that of private facilities.
I think there are opportunities out there for Pineview and other municipal golf courses to look outside the box, especially when it comes to getting more juniors, low income families and new Canadians involved in the game (something privately owned courses would benefit from, but are hesitant to do themselves as it effects the bottom line). However, the real benefit of municipal golf courses are in communities where privately owned, affordable options don’t exist (i.e where demand is high). In the current context of golf industry trends, I don’t think it is a benefit to the community or the local golf industry to have a money losing municipal course “competing” with privately owned courses that are offering the same services level and the same price. For the community it means the municipal golf course isn’t any more accessible than privately owned public courses, and for the local golf industry it is one more course that, in many communities, is contributing to a saturated golf market.
I don’t want to see courses close, but I think municipalities need to ask themselves what service(s) are the courses providing that are not offered by the private sector (or demand is beyond would private sector can fulfill) , or are not offered at an affordable price by the private sector.
See you at the turn,