Needles, CA: Review of the River’s Edge Golf Course operations finds problems related to discounts, free rounds of golf, and subsidizing.
During a Needles City Council Meeting being held on Tuesday, October 27th, 2015 in Needles, California, members of the Needles City Council approved to ensure the previous approved rates are charged, which would make up for lost revenues, eliminating giving discounts, and to have the Needles Parks and Recreation Commission review the rates at River’s Edge Golf Course, also known as the Needles Municipal Golf Course, located at 144 Marina Drive in Needles, California.
The decision came after members of the Needles City Council learned that fewer golfers are golfing, and after finding out what happens when the amount of money it undercharged patrons through deep discounts isn’t collected, and what’s the cost of providing rounds of golf free of charge.
According to the City of Needles, the River’s Edge Golf Course is a valuable asset to the community and the regional economy which should be preserved. The Needles City Council directed that a review of the golf course be conducted in order to assure that the golf course be sustainable into the future and to eliminate or dramatically reduce the current excessive subsidies.
The annual cost to operate the golf course during 2014-15 was approximately $793,570. The total revenue for the golf course was approximately $519,343. Both have reduced significantly over the last decade. The golf operations required a taxpayer subsidy of $274,227 in 2014.
The City of Needles cannot continue to subsidize the golf course at the expense of other more pressing needs of its residents such as street maintenance. The average revenue per round is $25.21, yet the cost per round is approximately $38.51. All but 195 of the 20,603 rounds were steeply discounted or donated.
If the City of Needles would have collected the amount it undercharged patrons through deep discounts from the Needles City Council approved daily rate, or not provided rounds of golf free of charge, there would be sufficient funding to operate the course, make quality of play improvements, and routinely replace the golf carts and maintenance equipment.
Failure to address this financial problem will require additional and increasing subsidies or continue the decline of the golf course as the golf experience deteriorates which attracts players.
– Fiscal Impact: Creates $275,000 of annual funding opportunities for community improvements to facilities and services and repayment of the past due $1.5M of subsidies.
– Recommendation: City of Needles staff should;
- Reduce all practical costs including staffing while maintaining a quality golf experience for the golf customer,
- Complete the proposed course improvements including cart barn,
- Eliminate complimentary rounds,
- Hire Marshalls for times when they are essential,
- Establish an Equipment Asset Replacement Fund at 10% of the gross value of equipment and carts,
- Create a list of Needles based private, non-profit organizations or regional nonprofits that serve the Needles community which are eligible to receive charitable donations,
- Increase the 9 hole cart rate to $10 and charge the 18 and 9 hole rates year round,
- Implement a Needles Resident Rate discount of $5/round for up to 12 rounds, and
- Eliminate the annual, six month passes, loyalty points, and market wide local rate.
In the long term, the City of Needles should determine the best management structure to assure the long term well-being of this asset. In order to do so the City should embark on developing a community based long term strategic plan for the golf course. City staff will initiate a process to develop that plan including the following:
- Inventory all assets (land, equipment, usage, and improvements), assess its condition, determine life cycle, and establish replacement funds.
- Create a vision for the course,
- Determine financial requirements and fiscal capabilities to achieve that vision, and
- Develop an implementation plan which investigates all options including sale or leasing the operations, in addition to continued City operations.
After discussing the agenda item, including discussing if eliminate the annual, six month passes, loyalty points, and market wide local rate was a good idea or not, and after listening to comments from a few of the winter visitors addressing their concerns to changes in the price for golfing, members of the Needles City Council voted on the agenda item.
** The Vote: **
– Needles City Council Member Shawn Gudmundson: Yes
– Needles City Council Member Louise Evans: No
– Needles City Council Member Tony Frazier: Yes
– City of Needles Mayor Edward T. Paget: Yes (Tiebreaker Vote)
– Needles Vice Mayor Jeff Williams: Yes
– Needles City Council Member Tom Darcy: No
– Needles City Council Member Robert Richardson, M.D.: No
– Agenda Item #10: Review of River’s Edge Golf Course operations.
(Action Needed Agenda Item)
** Agenda Item #10 Packet: **
** Video from ZachNews on YouTube: **
– Needles City Council: 10-27-2015: Agenda Item #10.
For more information regarding the Needles City Council Meetings, please contact Dale Jones in the City Clerk’s Office at the City of Needles at: 1 (760) 326-2113 Ext. 345.