City of Albuquerque golf courses theoretically operate as “enterprise funds.” That means that they are supposed to be self-sustaining from a budget perspective. As the Albuquerque Journal points out, that has not been the case in recent years with golf running big deficits due to declining play.
The decline in play has at least temporarily been reversed due to the COVID 19 lockdowns as golfers (including yours truly) flock to the golf courses in search for outdoor recreation options, but in his new budget Mayor Keller has proposed placing golf courses back in the general budget where they won’t face the pressure of attempting to “break even.”
There ARE worthwhile approaches to improving the financial management at municipal golf courses. These ideas have been implemented in cities all over the nation including New York, Los Angeles, and Cincinnati (as this report from Reason Foundation points out).
- Cost Savings. Government rules and practices can drive up costs. For example, golf-management firms typically enjoy discounts on everything from fertilizer to insurance, a concentrated buying power advantage that local governments do not usually possess.
- Increased Revenues. From better advertising to programs that speed up play and allow more golfers to use the course, private operators often institute management practices that increase revenues.
- Increased Quality. Most golf-course privatizations require the private contractor to make capital investments in the course to improve its quality.
- Risk Minimization. In many golf-course privatizations the city gets a guaranteed rent even if the course revenues do not increase. This ensures that during the term of the contract, taxpayers will not be subsidizing the course.
- Community Outreach. Most private operators can afford to expand a city’s community golf programs and are required to strategically plan these programs as part of the privatization contract.