PORT TOWNSEND — The Port Townsend finance and budget committee is considering its options for a city-run golf course after its lease expires next year, and missing records could provide key pieces to the puzzle.
The city might choose to update and market the course or hire a separate contractor to run parts of the business, interim City Manager Nora Mitchell said Monday.
It also could consider the property for uses other than golf, Mitchell said.
But before committee members recommend an option to the full council, they want more detailed financial records that include how many rounds are being played and how much revenue the city is receiving from the course as mandated by the lease.
The information they’re currently working with is incomplete, Mitchell said.
“We would probably be looking at an audit of some sort,” she said, adding the city might hire a company to go through records due to lack of staff availability.
The numbers, including a “worst-case scenario” as provided in a consultant report by the National Golf Foundation (NGF) in June, are coming up short in a suggested five-year break-even point, even with the city subsidizing the course at $500,000 each year.
NGF said it wasn’t able to document all of the course’s revenues and expenditures, although the city should be receiving 8 percent of the 9-hole and 18-hole daily fees and 5 percent of other sales, including the driving range and cart rentals, according to its lease.
City Finance Manager Sheila Danielson told the committee Monday the city has received $4,700 in revenue this year. The NGF report showed steadily declining annual revenues from $19,861 in 2008 to $9,883 in 2017.
Some rounds aren’t paid for because they’re traded for volunteer maintenance work, the report stated.
“With the limited financial information given to [NGF] from the golf course, it doesn’t seem like we can make a strong decision one way or the other,” said City Council member Bob Gray, who sits on the finance committee.
The lease, currently held by Gabriel Tonan Golf Shop LLC, is set to expire Dec. 31, 2020.
The NGF report suggested a $1.2 million renovation, the bulk of which would go into a new irrigation system, a step the city already has been taking. Part of the city’s responsibility is regular maintenance, said Alex Wisniewski, the city’s parks, recreation and community services director.
“We’ve completed the drilling and encased it, so the hole is ready to go,” Public Works Director Greg Lanning told the committee. “We’ve got costs and plans for buying the pump and putting the pump in the hole.”
Lanning said those funds likely will come in next year’s budget.
“It’s got both a water conservation component to it and an emergency backup,” he said. “It’s got these other uses in it in addition to irrigating the golf course.”
However, the rest of the capital improvements would have to be financed, likely at $80,000 annually with at least a 2 percent interest rate, Mitchell said, and those costs aren’t included in the NGF’s business case to break even.
The study set 10,000 rounds per year as its worst-case scenario and 18,000 annual rounds within five years, an increase based on assumptions in renovations, course conditions and marketing efforts.
“The increase in rounds from what we’re currently experiencing to what we would need to the five-year break-even assumption of 18,000 rounds is kind of concerning given what we’re currently experiencing,” Mitchell said.
One option could include additional revenue streams. Wisniewski said the city could create a public facilities district with an increase in sales tax to help fund the improvements at the course, or it could ask voters to create a limited use metropolitan parks district, which would come with an increase in property tax.
Committee members also discussed the possibility of forming a parks district as part of a public-private partnership to build a state-of-the-art YMCA, but Wisniewski said there would not be enough funds for both projects with one parks district.
“To me, it makes sense to look at these things in the larger picture,” Mayor Deborah Stinson said.
The city is launching a parks, recreation and open space plan this month with a consultant from Tacoma, and Wisniewski said he wants to use that opportunity to gather community input on priorities.
Mitchell said if the city is going to put out a request for proposal to run parts of the course, such as the food and beverage service or the pro shop, it will need to do so by the first quarter of 2020.
Jefferson County Managing Editor Brian McLean can be reached at 360-385-2335, ext. 6, or at [email protected].