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HomeMy WebLinkAboutIR 8630 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8630 PA-Tit, August 31,2004 To the Mayor and Members of the City Council Pagel of SUBJECT: Golf Program Update and Request to Issue an RFP to Assess 1473 the Potential for Leased Management of the City's Golf Courses The purpose of this informal report is to provide the City Council with an update on the progress of work related to determining an appropriate and viable means of offering golf as a recreational service to the residents of Fort Worth. Staff has worked diligently with the Golf Advisory Committee (GAC), Parks and Community Service Advisory Board (PACSAB) and the Government and Neighborhood Relations Committee (GNRC) to evaluate the golf program and determine best practices for golf operations by benchmarking public golf operations in other Cities and evaluating our local market. In FY 2002-03, in an effort to bring expenses more in line with revenue expectations, the City reduced the golf division staffing from 63 positions to 40 positions (31.7%) and reduced the expenditures budget by over$1.6 million dollars. The decline in revenue is directly attributable to: 1) A decline in the number of regular golfers from 14% of the local recreation market in 1.997 to 8% of the market in 2003. 2) A dramatic increase in the number of available golf courses. Since 1989 there has been a 174% increase in the number of daily fee courses that are in direct competition with Fort Worth Municipal Golf. These local negative trends in the golf business environment are also being experienced nationwide. In order to be more competitive in this market and provide the best value golf experience, the Parks and Community Service Department has taken the following actions: 1) Conducted a needs assessment and marketing study of the local golf market, which was completed in December and presented to the GAC, PACSAB and the GNRC. A marketing and promotions plan was developed and implemented from this study. 2) The management of the Golf Division was reorganized to affect efficiencies in management, customer service delivery and heighten the awareness of golf issues in the organization. The position of Golf General Manager has been reclassified to that of Assistant Director. A national search to fill this position will be conducted when a determination is made on the most appropriate operational model for golf. The Pro Superintendent position has also been reclassified to a Superintendent of Golf Maintenance and Operations. 3) Management Options were reviewed and evaluated by staff with the results presented to the GAC, PACSAB and the GNRC. General management options presented to the GAC, PACSAB and GNRC included the following: gp 1) Privatization Contracts ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8630 Ir-F August 31,2004 To the Mayor and Members of the City Council Page 2 of 3 SUBJECT: Golf Program Update and Request to Issue an RFP to Assess the Potential for Leased Management of the City's Golf Courses a. Non Profit Municipal Corporation b. Leased Management (R-FP) c, Contract Agreement for Pro Shops Only 2) Enterprise or Performance Fund 3) General Fund Subsidy of the Golf Enterprise Fund Pros, cons and observations were outlined for each operational model. The staff report included benchmarking of other cities to determine the most prevalent and successful models of operation for municipal golf courses. The benchmark information also indicates that the majority, (23 of the 25 cities surveyed), were managed by a Parks and Recreation Department. Only the City of Baltimore operates as a Non-Profit and Salt Lake City operates under the Public Services Department. The national standard for operation is for Golf to be managed as a recreational service delivered by a Parks and rRecreation Department. Of the 25 Cities surveyed 4 were operating at a profit. All four profitable golf renterprises were operating under a private leased management contract. As a result of the benchmarking, GAC, PACSAB, and GNRC review and input combined with the staff analysis of management models for golf, staff recommends that: 1) The City Council confirms that the Golf Program is a combination of a business and a recreational service. 2) The Golf Division remains under the management control of the Parks and Community Services Department, which would conform to the national benchmark standard. 3) That City Council authorizes staff to issue a Request for Proposals (R-FP) for the purpose of evaluating the current local market for leased management of all City Golf facilities to a private management company. The reason to pursue th�s action is to test the market viability of the private leased management option of the operation of the golf operation and to understand how effective this model would be when compared to other models and organizational structures. 4) An the evaluation of the feasibility of reducing or reconfiguring of the number of golf holes and or golf courses be completed. As noted above the golf business environment in Fort Worth and the surrounding area is extremely competitive. The City's golf courses have seen a continued decline of rounds and revenue, which make it ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS ^ INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8630 August 31,2004 r To the Mayor and Members of the City Council Page 3 of 3 SUBJECT: Golf Program Update and Request to Issue an RFP to Assess the Potential for Leased Management of the City's Golf Courses difficult to operate the golf enterprise fund at a profit. Staff continues to review and analyze other options to enhance the success of the City golf program, including reducing the number of golf holes, altering maintenance practices and increasing rounds and revenues through additional promotions. Soliciting proposals for the leased management of the City Golf courses is part of the overall continuing process to test the market viability of different models of golf course operation. At the May 4, 2004 meeting the GNRC voted to recommend to the City Council that it consider authorizing the City Manager to seek proposals for the management of the City's golf courses. Unless City Council has any objections, a Mayor and Council Communication will be placed on the September 7, 2004 City Council Agenda to authorize the RFP evaluation process. If you have any questions, please don't hesitate to call Randall Harwood at 817-871-5743 or Libby Watson at 817-392- 6183 rles oswell nterim City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS