Source: Duluth News-Tribune
Here's some good news for Duluth golfers and for the city's two public golf courses.
Green fees aren't expected to rise in 2005. And the courses are expected to begin turning a profit, Mayor Herb Bergson and parks and recreation director Carl Seehus announced Monday.
Duluth city councilors had voted on Thursday to restructure the city's golf debt. Bergson and Seehus announced Monday the city also will reduce the number of golf course managers from three to two.
Both moves are intended to assure golf profits beginning next season.
"The city shouldn't have to subsidize golf," Bergson said. "I'm excited about this."
City taxpayers have been subsidizing golf to the tune of about $1.26 million, cumulatively, between 1994 and 2003.
About $50,000 to $60,000 from the city's general fund was used this year to offset golf course losses. Last year, the number was $182,000. In 2002, taxpayers' money was used to nullify a $264,000 shortfall.
A big reason for the deficit is a loan taken out in 1989-90 to expand Lester Park and Enger Park golf courses from 18 holes to 27 holes apiece. The city still owes about $1.3 million on that loan and is making annual payments of about $365,000.
Restructuring that debt includes extending the life of the loan an additional five years, to December 2012. It also includes lower interest rates ranging from 2 percent to 3.8 percent. Previous interest ranged from 6 percent to 6.1 percent, said city finance director Les Bass.
Because of the reduced interest rate, the city won't pay more on the loan even though the life of the loan was extended, Bass said.
The restructured financing will save Duluth about $180,000 a year, with annual loan payments declining from about $365,000 to about $185,000.
Restructuring the way the golf courses are managed could save anywhere from $50,000 to $100,000, the mayor said.
Instead of an overall golf manager and a club pro at each course, Enger and Lester will be run by two club pros beginning next year. Club pros employed this year resigned recently, one for a new job, the other because his wife found new employment outside Duluth, Seehus said.
Duluth's current golf director Paul Schintz will be offered one of the two club pro jobs, Bergson said, adding that he has been pleased with Schintz's employment.
"We've just got one too many positions," the mayor said.
Schintz operated the past two years under a contract with the city that paid him a percentage of green fees, pro shop sales, food and beverage sales and other revenues, This year, that percentage equaled about $197,000. The money paid Schintz's salary and the salaries of his clubhouse employees. It also covered insurance and other expenses.
Schintz didn't return phone messages left by the News Tribune Monday at his home and at both the Enger and Lester courses.
The financing and management changes should result in annual golf profits for Duluth of about $300,000 to $400,000.
Once the city begins to realize that surplus, golf improvements will be considered, Bergson said. They could include a new clubhouse with a top-notch restaurant at Enger, new houses lining some of the fairways at Lester and a nine-hole executive par-3 course at Enger. Enger and Lester host about 100,000 rounds of golf per year.
"I'm very optimistic," Bergson said of the future Duluth's municipal courses.
