BANGOR — The City Council has started a study focused on whether leasing Bangor Municipal Golf Course to a private operator is beneficial to the city.
“Is the golf course better off in private hands than municipal hands? We don’t know. That’s why we want to study it,” said councilor Pat Blanchette earlier this week.
She was quick to point out “there has been no commitment on anybody’s part. No decision has been made.”
And there is no private company pushing for such a decision, either.
“We have not been approached by any outside operator,” said said Bangor Parks and Recreation Department director Tracy Willette, a member of the study group.
One obvious possibility is Hollywood Slots Hotel and Raceway in Bangor. Hollywood Slots has been periphally involved with the golf course as a supporter of the Greater Bangor Open golf tournament, including being the major sponsor for a couple of years recently.
But John Osborne, vice president and general manager of Hollywood Slots in Bangor, chuckled and said, “The last place I worked did have a golf course, but we have no plans for Bangor in that area.”
The door is not permanently closed, however.
“It’s not inconceivable, but there is nothing in the works,” Osborne said.
One or more members of the study group could still approach Hollywood Slots to gauge the company’s interest, and Osborne is fine with that.
“We’re always available to the city council to discuss anything they want to discuss,” said Osborne.
For the past six years, Blanchette and other members of the City Council have wondered if leasing the golf course to a private operator would benefit the city.
“The only problem was it has always been thrown on at budget time,” said Blanchette, “and that’s too late.”
This year, the council got ahead of the budget curve as the Business and Economic Development Committee started the process following its meeting in late September.
It may still feel like a quick turnaround.
“We have to make a decision between now and January,” said Blanchette, pointing out that the city manager has to submit a proposed budget by mid-April.
“There is still a lot of information being gathered,” said Willette.
The topic was introduced as part of the process of the annual review of the golf course, which consists of an 18-hole layout and a nine-hole one.
“We have a lot of discussions (about the golf course) and review it every year,” said Willette. “There is no particular reason pushing us toward (leasing).”
Most reviews center on expenses, green fees, membership rates, golf course projects, equipment purchases, etc. On occasion, leasing out operation of the golf course gets added to the list.
“It’s not an easy process to go through, but we go through it,” he said.
Part of the reason it isn’t easy is because there are very few similar operations, especially in Maine.
“Riverside (in Portland) is the only other 27-hole municipal golf course in the state,” said Willette.
Riverside is a particularly appropriate example.
Harris Golf, a Maine golf management company that owns or operates nine golf courses in the state, offered Portland a deal to run Riverside twice, but neither offer has been accepted.
Willette said his department understands why an outside vendor is considered.
“We want to be as efficient, as competitive as we can be to offer the best product,” he said.
With the number and variety of golf courses in the Bangor area, the competitive aspect is always a challenge.
“This particular market is very competitive. Going forward, we’ll have to see how that changes and develops,” said Willette, who pointed to Penobscot Valley Country Club in Orono, Rocky Knoll in Orrington and Hermon Meadow as 18-hole examples, plus there are more than a half-dozen nine-hole courses within 20 miles of Bangor.
“From the feedback we’ve been getting, the course is in good shape and we offer a good product,” said Willette. “As long as we can do that, that’s our ultimate goal.”
Blanchette wants to consider how operation of the golf course would be affected by an outside company.
“If we go with a private (company), that puts upkeep and maintenance in their hands,” she said. Those could be expenses the city would not have to incur.
Blanchette is an admitted nongolfer.
“I think Austin Kelly (the original head pro who held the position for more than 30 years) would have paid me to stay away from the golf course,” she said with a laugh.
So she was surprised to discover how much work and equipment, and the corresponding expense, it takes to run a golf course.
“There’s a lot more that goes into a golf course than I realized,” she said.
And those expenses — for equipment, maintenance, fertilizer, water, etc. — aren’t fixed. They usually go up.
Brian Enman, head pro at Bangor Muni after Kelly’s retirement in 1994, said that green fees and membership prices will probably have to rise next year. How much is still up in the air.
“I’m going to recommend they go up but stay as low as they can,” Enman said. “(Green fees) haven’t been adjusted in three years.”
Current green fees are $30 for 18 holes, $15 for nine holes with a 10 percent discount for Bangor residents. There also some lower prices based on time of day, for students and veterans, etc.
Season memberships are, for example, $630 for a resident single, $700 for a nonresident; $845/$935 for a couple, $890/$990 for a family and $540/$600 for a senior couple.
The other factor in pricing is that the golf course is an enterprise fund, which means it must raise enough money each year to cover its expenses. Over the years, a “rainy day” fund has been built up to cover lean years. It also covers exceptional equipment purchases or course renovations such as rebuilding bunkers and adding cart paths.
“We never want to dip into the (city’s) general fund to recover costs,” said Enman.
That has been important in recent years because there have been operating losses in recent years, although that may not mean there were actual losses.
“That may include repayment of debt or outstanding purchases,” said David Little, Bangor tax assessor and deputy treasurer.
On the books, the golf course has operating losses for three of the past four fiscal years — about $12,000 in 2008, $109,000 in 2009 and $50,000 in 2010.
“It looks like there will be a surplus for (fiscal year) 2011 (which ended June 30),” said Little. “It looks like about $5,600, but that’s approximate, not final. There are still expenses coming in.”
Revenue, mainly from memberships and green fees, has been strong, though. Part of that was attributed to a reduction in membership prices for people from outside Bangor. The change about doubled the number of nonresident memberships from 49 in 2009 to at least 95 in 2010.
The cash received from Bangor Muni rose from $514,000 in 2009 to $658,000 in 2010.
One reason that Hollywood Slots could be considered a possible contender as a lessee is that the city wants to make greater use of the golf course by attendees at functions at the new Civic Center as well as Hollywood Slots.
“We’re going to try to market it with activity at the new arena,” said Willette.
Blanchette would like to see a direct connection between the arena, civic center and hotels and the golf course.
“I’d like to see cart paths put in so they could get a cart (at the arena, etc.) and drive up there. It would make it easier for people not familiar with the area,” she said.
The key for any study of leasing will be trying to figure how private ownership would affect any of these numbers, would it remain as affordable and would it remain in the same or better condition?
The city does have a previous example of privatization, said Blanchette.
“We ran the Bangor City Hospital for 20 years, and it only showed a profit once,” said Blanchette. Since it went to a private company, “It now makes money. They turn a profit every year.”
Even if it’s decided to go with an outside vendor for the golf course, that just starts the process of actually picking one.
There will be a bid process that includes sending out or asking for requests for proposals, checking the proposals and eventually picking one.
“It’s going to be a long, tedious process,” admitted Blanchette.