Laserfiche WebLink
41; <br /> FINANCIAL STABILITY <br /> It is incumbent upon a public agency,that,when choosing a management firm,certain financial <br /> requirements be met by the firm to qualify as an operator. Examples would be: ability to supply <br /> a letter of credit or other security deposit for at least one-third of the annual revenue generated <br /> by the golf course;ability to commit a certain dollar amount in initial capital for improvements <br /> as detailed by the agency; adequate bonding eligibility. <br /> ADVANTAGES AND DISADVANTAGES <br /> As in any new trend,there are those who agree and those who disagree with the practice. Golf <br /> course management firms which operate public facilities are subject to the same treatment.The <br /> NGF has determined that a great majority of public agencies involved with a course manage- <br /> ' ment contract are satisfied with the arrangement <br /> As mentioned earlier, for one reason or another, some communities have experienced large <br /> deficits or have barely managed to break even in operating golf courses. Contracting the <br /> responsibility of operations and maintenance of courses has been the only alternative for some <br /> public agencies. The NGF found that,in most cases,where a city has leased out a facility,that <br /> city is better off financially. Major savings are found in the elimination of labor costs to <br /> maintain courses and the expense of specialized equipment These two items,especially labor <br /> costs,have been the reasons many communities fail to realize a positive return in operating golf <br /> courses. Therefore,the main advantage of contract operations is the potential for saving funds. <br /> There are certain disadvantages to contracting,however. It was found that quality of work was <br /> a major concern of public agencies. Because management firms are operating to make a profit, • <br /> sometimes there may be cutbacks in services in order to increase profits. Cutbacks usually take <br /> place in salaries for labor. It was observed that management firms often pay much less for their <br /> labor; consequently, it is felt they will not attract good help. <br /> When a city contracts out its golf course, there is the possibility of existing employees losing <br /> their jobs. A golf professional and course superintendent may have been associated with a <br /> community course for many years and then, in a short time, the course is turned over to a <br /> management firm which will not employ the current professional staff. Sometimes these <br /> people will be offered jobs,but at much lower salaries. More recently,the lessor has moved to <br /> protect existing employees, at least for a reasonable time. <br /> • <br /> In certain cases,financial instability on the part of a management firm has created a situation <br /> that wasa detriment to. the. course and its players. Conditions such as providing capital <br /> improvements,were not met according to the lease agreement,and,as a consequence,the golf <br /> course suffered. Overall, however, contracting the operations of golf courses can be very <br /> advantageous to a public agency. - -- , <br /> - CONCLUSION <br /> The trend to lease both publicly-owned courses and private clubs to private management firms <br /> is growing. A look at the history and reasons why public agencies have been leasing their golf <br /> 6 <br />