City moving forward with golf course management negotiations

City officials have opted to move forward with negotiating a potential management contract with CourseCo for its two municipal golf courses.

During Wednesday’s City Commission work session, city staff reviewed the two proposals that were submitted earlier this fall.

CourseCo manages about 30 courses, primarily in the Pacific Northwest, 22 of which are publicly owned.

The Great Falls Baseball Club, otherwise known as the Voyagers, also submitted a proposal.

The city has been struggling with the golf courses, which owe the general fund roughly $1 million. The courses have not been generating enough revenue to keep up with expenses and the general fund, which is supported by property taxes, has been subsidizing the program for years.

City Manager Greg Doyon has publicly stated for years that the golf debt is a significant concern and during the budget process this year he said the debt was impacting the city’s financial stability and flexibility. He said over the summer that he was directing staff to release a request for proposals for management of the courses and depending on the responses, he might recommend closure of a course. He’s also said on numerous occasions that he’s not sure the city can support two municipal golf courses.

On Wednesday, Doyon told commissioners that it was good to see the interest in taking on the city’s two courses.

He said staff was recommending CourseCo because of their depth of experience in managing public courses.

“I think it’s just rolling the dice a little bit to keep two courses open anyways,” Doyon said.

But if that’s what the commission wants to do, Doyon said, he encouraged them to choose the more experienced vendor and if they can’t make it work with two courses, then they can come back to the table and discuss closing a course.

Staff will work with CourseCo to negotiate a management agreement, which would need commission approval.

“The hard work begins now,” Park and Recreation Director Steve Herrig told commissioners about negotiating an agreement.

Herrig and Doyon said the Baseball Club has a longstanding history in the community and already has a lease with the city for Centene Stadium, but lacks experience with golf operations.

The club’s proposed staffing model didn’t include a golf pro and “they were quite a bit lower than where we’re at” on wages, Herrig told commissioners.

But Doyon and Herrig said they appreciated the club’s proposal and would hope to work with them more in the future.

“There was a lot of heart behind their proposal,” Doyon said.

CourseCo is “very robust” in their experience and resources, Herrig said and indicated they’d develop a capital improvement plan within six months.

The CourseCo staffing proposal included a golf pro at each course for lessons and programs and has a 95 percent employee retention rate when they take over a course, Herrig said.

Under the proposals, the city would make an estimated $5,403 and the Baseball club would make $148,633 in the first year.

The CourseCo proposal includes an $80,000 management fee for the first year that would increase with the consumer price index the second year, as well as an optional $2,000 monthly accounting fee.

After those fees are factored in, Herrig said under the CourseCo proposal, the city could make $123,306 and the vendor would make $104,000.

“I think they had a very realistic budget,” Herrig said.

Doyon and Herrig had said earlier this fall that they would not consider a management fee, but during the Wednesday meeting they indicated a willingness to consider it given the potential financial benefits. Herrig said that the management fee would be a discussion point during the negotiations for an agreement.

In their proposal, CourseCo wrote that they calculated their management fee with consideration for the city’s desire to reduce the debt, contribute to a capital fund and at least break even.

Under either agreement, the city would maintain ownership of the golf equipment and Herrig said revenues could potentially be driven back into a replacement program.

Maintenance plans would also be worked out during the negotiation process, Herrig said.

Commissioners indicated they supported moving forward with discussions with CourseCo and anything staff negotiates will come back before the commission in public meetings for final approval.