• Shock as Golf Links loses $413,000

    By Marge Ann Jameson

    Shock and awe isn’t limited to the battlefield. It also might be used to describe everyone in the City Council chambers Wed. night, Sept. 21 as City staff presented unaudited financial results for the Pacific Grove Golf Links for the fiscal year which ended June 30, 2011. The City has lost some $413,000 on the goose that laid its golden egg.

    The City’s reserve for the golf course of $625,658 is now down to $143,658.

    The dollar amount pretty much blindsided the members of the Golf Links Advisory Committee, who have been hounding staff for a financial report for some months. It also surprised and angered the City Council members, one of whom – Dan Miller – said he hadn’t been as angry in 22 years of watching and participating in City Council meetings.

    There was blame enough to go around for the losses. The economy has forced golfers to play less, either because they no longer have the discretionary funds or because they are working harder to make ends meet and do not have time to play 18 holes. In fact, the 20% reduction in rounds played by full rate players (“rack rates”) was listed as the primary reason for the decline. While there was a decrease in the number of rounds played by golfers paying discount rates, it was not as sharp.

    The City had to operate the Pt. Pinos Grill for about six months in the absence of a concessionaire.

    There were 19 more bad weather days than anticipated which cost an estimated $2,000-$3,000 each.

    The fleet of leased golf carts had to be replaced at a cost of $22,000.

    The marketing plan – with a budget of some $71,000 – went to marketing to out-of-town golfers who would pay rack rates, and little, if any, was spent to entice locals.

    Holding of the US Open in the area affected the number of rounds played adversely.

    Nationally, golf courses are experiencing similar problems, with Santa Cruz’s municipal course, DeLaveaga, showing a $2 million loss recently. But other nearby courses have slashed their discount rates and some go as low as $5 for twilight play. While Pacific Grove used to be one of the lowest priced courses in the area, courses such as Rancho Canada, Salinas fairway and Laguna Seca have undercut the local links and golfers willing to play at odd hours are dwindling away.

    But it was more the surprise factor than the actual loss that seemed to anger Councilmembers and GLAC members most.

    After the feathers quit flying around and staff had been chastened for not reporting sooner, by every member of the Council as well as the members of the GLAC who were on hand, the Council agreed to delay action until a report and recommendations could be had from Golf Convergence, the new consultant hired to help the City out. The current marketing consultant’s contract will not be renewed. A monthly Profit & Loss will be required, and some cost-cutting measures will be implemented, but there will likely be no salary cuts or requests for early retirement.

    Revenue enhancement strategies will be explored as well. With warm “weather for locals” coming, it is hoped some of those revenue enhancement programs can be put into place at once, before the golden egg becomes merely more zeroes on the profit and loss statement.

     

     

     

    posted to Cedar Street Times on September 22, 2011

    Topics: Current Edition, Front PG News, Marge Ann Jameson

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