August 2014 - Parks & Recreation - 73

Operations
Evaluating Your
Community's Golf Course
By Larry Hirsh

here are two poles when it comes to describing the manner in which municipal golf facilities are operated: They are either run like businesses or like toys.
Of course, these are the extremes, and most community-owned golf assets fall
somewhere between the poles. But how do cities and towns determine where their
facilities fall in this spectrum? And once they find out, what's to be done about it?
Municipal golf-course facilities
have become politically hot potatoes
in recent times, as many communities struggle with declining property
values and lower tax revenues. With
the built-in advantage of typically
being exempt from real estate taxes, scrutiny of these facilities is that
much greater and community leaders
bear the burden of subsidizing a facility that serves a limited portion of
the community. Thus, it's more important than ever for municipal golf
courses to be self-sufficient, which requires them to be run like businesses.
To be honest, the scrutiny is warranted. Many of the municipally owned
golf courses we see are undermanaged
and undermarketed. In some cases,
these facilities are conceived and operated as either recreational amenities
for the community, or have become
the domain of some politician or municipal employee, as in the toy scenario. Worse yet is the scenario where it
seems nobody is paying attention and
the golf course becomes forgotten
and/or neglected - a toy lost under a
bed for years. The toy route, while all
too common, is not a path that tends
to encourage operational efficiencies.
When a municipality indicates its golf
course is a business, and should be run
like a business, that's a great first step.

Evaluating Municipal
Golf As a Business
It's good practice to begin by conducting an independent review of the operation to understand not only the raw
numbers and whether the golf course is
making money, but also to measure its
performance relative to the competitive
market and the facility's potential.
Operational reviews are something
most everyone understands, but they
don't mean very much without a
thorough market analysis. This is
not something many cities and town
consider when they are examining
their golf operations. But without
market context - understanding the

competitive universe for the property
in question - no reliable conclusion
regarding operations can be reached.
Business operations cannot be assessed in a vacuum. When area golfers are deciding where to play, what
factors are they considering? The market pool can include other nearby municipal courses, privately owned daily-fee facilities and even some private
clubs. A thorough review will entail
visits to competitors, because we need
to know if the course being evaluated
is getting its fair share of the market
rounds and whether the green fee rate
is both competitive and consistent
with its market position and facilities.
Determining a facility's share and
market penetration can be done
with a simple analysis. If the market
penetration is less than 100 percent,
there's work to do. If it's more than
100 percent, it's good to know why

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Parks & Recreation

August 2014 - Parks & Recreation

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