News & Awards
by John Edwards, Editor
There are no bad golf courses, only overpriced golf courses.... and those manipulated by city officials.
Golf courses are one of the few things in municipal government that can make money. They actually charge residents and visitors alike to play. They are not parks. For years they made money.
Political opportunists, however, prefer to think of them as just another park and swell toys they can use for free golf and for their own purposes.
That is what the respected Aurora Golf course system has been subjected to for the last six months.
It was an incredible waste of taxpayer-supported governmental staff time and money.
So watch out, this ploy could be coming to your town's municipal golf course.
The Aurora's newest golf courses, Saddle Rock and Murphy Creek, were created in a city/developer deal to expand the city borders and create a more affluent residential base. It sure worked with Saddle Rock Golf Course which is lined by luxury homes.
To build those golf courses, the Aurora Golf Enterprise Fund and the city had to sell revenue bonds. Everything was rolling along well until the recession arrived and rounds at all the courses declined.
Green fee revenue is down. Already established debt, overhead, gas prices, fertilizer and personnel courses are up. Competition for golfers is higher.
This had the effect of triggering a little known provision of the revenue bond agreement used to build Saddle Rock Golf Course. The provision was that if the revenue of all the Aurora courses (which was pledged to pay the bonds to build Saddle Rock) falls below a certain level, an outside consultant had to be hired to do a study and tell the city what was wrong and make recommendations.
For ultimate credibility, any consultant always must live two states away.
The National Golf Foundation in Florida was selected and paid $46,000 to do the study. Golfers remember them as the marketing company that advised cities throughout America in the 1990's to build a new golf course every day to keep up with the anticipated demand.
Aurora did its part by building two.
Actually the most knowledgeable and respected golf expert in Colorado is Dennis Lyon. He already knew the problems and possible solutions. But Aurora government blocked the solutions.
Lyon was set to retire as Aurora's only Director of Golf plus he was not a consultant or an outsider. He actually was on record as not wanting Aurora to build Murphy Creek Golf Course in the shadow of the massive Denver landfill. Mount Murphy, as it is now called, is the only Colorado mountain that continues to get taller.
The study was required to be done. But, nothing said they have to be actually implemented nor was there a required timetable.
Then, to the golfers' surprise, political hacks appeared.
Using the Washington motto of "Never Waste a Crisis That Can be Used for Political Gain" an effort to privatize the Aurora courses popped out.
Just before the National Golf Foundation consultant was scheduled to make his long-researched preliminary report, Hart Golf of Denver slid in a presentation to the Aurora City Council's Management and Finance Policy Committee headed by Councilman Robert (Bob) Broom.
Assisting company president Tom Hart and making the presentation to the city council study committee was political consultant Marcus Pachner, a familiar figure in Denver and Aurora political intrigue.
Aurora Councilwoman Marsha Berzins was the first to offer her support for radical changes to golf courses because Aurora Hills Golf Course is in her ward and the older clubhouse "looks ugly" as people drive by.
Well, yes, it is ugly. The restaurant staff leaves the doors to the trash dumpster open and park cars next to the loading dock. However that is not a good reason to turn over the best golf system in Colorado to a private management company.
She has not experienced "ugly golf clubhouses" until she has seen an American Golf Corporation managed municipal clubhouse in California.
Berzins should use her "immense city council power" to get the golf course restaurant employees to always close the trash dumpster gate and park their cars in the big asphalt parking lot like the "rest of us great unwashed golfers" have to do.
(While you're at it, take down all but one of those five "Reserved for Golf Staff" parking signs in the lot. The most important people at that golf course are the golfers still paying cash green fees.)
So Councilwoman Berzins requested that "staff" investigate other privatization options.
Chairman Broom let the privatization show continue.
"Let's see what ideas are out there, Berzins added.
Oh sure, get a private golf management cormpanies throughout the nation to do a full study to give Aurora, Colorado some "neat tips" for free to running their golf courses.
Golf management companies need to show a profit to their company and investors. The only way they do that is by raising fees, cutting staff, reducing water, cutting back on fertilizer and less mowing. Employees with benefits are bounced in favor of minimum wage clerks and high school kids.
So, more than 20 city staff people around the table had to start researching requirements for a "Request for Proposal" to be presented to City Council. Another incredible waste of time.
I had no doubt Hart Golf has the financial backing to guarantee a management contract, even one this big.
"It would be family money backing the management agreement," Hart admitted. That means casino and real estate holdings in Las Vegas.
Tommy is an enthusiastic and taller version of his wheeler-dealer dad Stacey--my occasional golf partner. Stacey once managed the Kennedy Golf Course restaurant, pro shop,carts and miniature golf. He built Deer Creek at Meadow Ranch and Cherry Creek Country Club. He still owns Plum Creek Country Club. He is not part of today's Hart Golf.
Tom's mom, Karen, is now doing a great job operating Cherry Creek Country Club after the divorce from Stacey.
When pointedly asked if he would keep the current Aurora head professionals such as Mickey Byrne at Saddle Rock, he assured me he would since "those guys know how everything works."
The disturbing thing about Hart Golf's intrusion was consultant and political opportunist Marcus Pachert.
He explained that golf course success is through proper marketing.
I wonder if Aurora Golf marketing director Karen Rivale,(formerly in marketing with little 50,000 watt KOA radio knows any of those techniques.)
What consultant Pachard does knows is how to get connected. And that is what scared Aurora golfers and me.
Pachart is the guy who pushed the nearby Lowry Vista "hazardous landfill purchase" deal off East Alameda that was sold to a developer for $10. That's not a typographical error. Ten dollars. Now the developer is preparing that "hazardous property" to become a shopping center across from an angry residents of Windsor Gardens retirement community.
He is currently the campaign manager for Aurora mayoral candidate Steve Hogan.
He has close ties to Councilwoman Brezins and has contributed to the campaigns of multiple Aurora councilwomen
Pachart and Hart are both listed in spending numerous reports as contributors.
(It is so heartwarming to see prominent Denver residents contriubute to good government in Aurora)
Aurora golf employees sayPachart is engaged to the daughter of Councilwoman Barbara Clealand.
Weren't Counilwoman Clealand and Mayoral candidate Hogan once married?
Is this a city government or a television soap opera?
Workers at the Aurora golf courses refer to the strange situation as "All in the Family."
Fortunately at the August 16 study session councilman Bob Fitzgerald, vice chairman of the committee, opened with the strong statement that he was totally against privatization.
The city attorney's office explained that currently privatization would only be possible at Aurora Hills and Meadow Hills courses, the top moneymakers for Aurora Golf.
Councilman Ryan Frazier listened and quitetly moved to table the further study and revisit the situation in 2015---when the Saddle Rock debt will be paid off.
Bet those guys won't get any Pachart contributions.
The sponsoring councilwomen, Tommy and Pachart were not visible.
But the study was not in vain. Aurora Water was forced to actually talk to Aurora Golf so that as Councilman Broom said, "one division is not bankrupting another."
Cutbacks and staff reductions have been made at the courses.
If you are still reading this, here are some of my recommendations. (I'm on a roll now.)
Close Springhill Golf Course starting October 3. Take another look in Spring 2012.
Fewer people are playing there. It lost $36,000 last year and Aurora owns the land. Springhill contributes minus 2 1/2% (minus) to Aurora golf course revenues. Put the experienced staff in other places.
There are no shortages of golf courses in that area. There once was.
Back in the 1960's a nine hole course and the Beck Center were a singles country club. When it went under, Aurora picked it up along with a the Beck Center--where parks money is now being lavished.
Then Centre Hills was built nearby for beginners and for lessons. Then Murphy Creek was built a couple miles east. Aurora is temporarily operating Fitzsimons Golf Course on a slightly profitable lease.
Springhill is a victim of competiution from its own brethern courses. It is a financial and personnel drain on the Aurora Golf system. Golfers can live without it this fall and winter. Maybe we proved we could live without it already.
I admit that I am prejudiced. I live on busy Meadow Hills Golf Course, the gem of the Aurora courses. Plus, I have strong preferences on who mows my extended back yard.
So golfers throughout Colorado should be on the alert for political opportunists that would like to get some immediate cash from your golf municipal course. They have better uses for your money.
The three key issues leading to economic hardship within the Aurora Golf system are water expense, debt service expense and the lease on Fitzsimons Golf Course, according to an analysis by the National Golf Foundation (NGF).
The report did not call for the closing of any golf course.
The analysis was a requirement of the municipal bonds issued for the construction of Saddle Rock Golf Course (pictured here). If revenues at the golf courses fell below a certain level threatening the rating of the bonds, an outside consultant had to be called in to provide solutions to the financial situation.
The $46,000, four-month study conducted by the NGF was done by Director of Consulting Richard Singer. He was assisted by local golf architect Mark Miller.
The National Golf Foundation study found that Aurora's seven high quality golf courses suffer from competitive disadvantages that are controllable within the city structure. The recommendations include: Volume of water used to irrigate golf courses and rates paid to Aurora Water (a separate City of Aurora Enterprise Fund) to irrigate golf courses. The terms of the lease for the Fitzsimons Golf Course, the system debt service and the system's fee structure that has not been updated in two years were also factors.
The NGF report gave a three-pronged approach to reducing the overall water expense.
1. Reduce water use through enhancing and expanding native areas and selective tree reduction.
2. Reduce water through upgraded and efficiant systems including more valve-in-head irrigation systems, modren irrigation heads and lining of lakes and ponds. (Meadow Hills is losing an estimated $60,000 each year through leakage from two ponds that need new linings.)
3. Work with Aurora Water on strategies and alternatives to address the costs associated with reuse and raw water. NGF recommends water rates be rolled back to 2002-2003 rates.
The Aurora Golf system has experienced a 14% decline in rounds activity, greater than the total U.S. average of 10%. Revenue has also declined 7% since 2005, but has declined 14% since a peak of $9.7 million in 2007. Revenues for 2011 appear to be trending favorably, with increases exceeding $100,000 over 2010.
The $7.88 million in on-site facility operating expenses (excluding administration) have increased about 15% since 2005 but decreased about 5% since 2008. Aurora Golf is estimating additional labor expense reductions of more than $400,000 for 2011.
In a comparison to other systems, such as the City and Country of Denver courses, utilities expense (especially water expense) represents a difference in total expense favorable to Denver of $1.01 million. The total labor expense is $696,000 higher in Aurora than in Denver. The combined administration and interfund cost is $527,000 lower in Aurora.
Other points in the report include:
Saddle Rock Golf Course is producing the highest revenue total of any individual facility in the Aurora Golf system at over $1.63 million in 2010 reduced from $2.5 million in 2008. The course is supporting an annual debt service payment of approximately $535,000 which is to be completed after 2015.
For Murphy Creek, the NGF study suggested reducing the debt burden since it is highly unlllikely that Murphy Creek can cover its debt in the next five years. It recommends complete physical upgrades to improve irrigation efficiency and reduce the volume of irrigation water. Additionally, the report recommended considering adding a Murphy Creek only pre-paid green fee arrangement such as membership or season pass.
Aurora Hills is the most active of the Aurora Golf courses hosting over 50,000 rounds annually. The lower fee, high volume producer has generated between $1.48 and $1.65 million in revenue each year between 2005 and 2010.
Springhill, once rumored to be in danger of closing, "may be in a no man's land" in that it is too difficult for beginners and yet too easy for better players, thus limiting its appeal. It shows a higher labor cost at the facility due to experience and seniority in the top two maintenance positions.The NGF report recommends the course be staffed with less experienced staff since the facility is not likely to benefit from strong experience in key positions. Also, rounds and revenue have been declining rapidly at Springhill with fewer than 35,000 rounds played and under $620,000 in revenue in 2010.
At Fitzsimons Golf Course, the city pays the Fitzsimons Redevelopment Authority $150,000 a year to lease the golf course, which the NGF feels is high compared to other leased facilities and is not consistent with golf industry standards. However the course produced a net income of $82,000 in 2010 and has been in the black about $60,000 to $80,000 for several years.
Meadow Hills is one of the most popular golf facilities in the market but is producing a large amount of wasted water at a cost of $2.96 per 1,000 gallons resulting in possibly a $60,000 lost per year. Meadow Hills produced $1.6 million in revenue on 47,000 rounds, leading to a net income of $238,000.
The NGF physical recommendations for Meadow Hills are the highest priority in the Aurora Golf System and center around repair of the inefficient irrigation and lake system.
In conclusion, the NGF recommends reducing water use at each facility by between 2% and 20% depending on the facility with Meadow Hills the most significant beginning in 2011. Next reducing the cost of re-use water to $0.96 per 1,000 gallons and finally adjusting the lease at Fitzsimons to $25,000 per year (down from $150,000) beginning in 2012.
The report also calls for the city to make invstments in Aurora Golf properties of as much as $1.9 million to improve maintenance operations and reducing the volume of irrigation water used on the city golf systems in the years these investments are made.
In the discussion following the presentation, outgoing Mayor Ed Tauer said "If we put the money into the golf courses, which firehouse do I close?"
He also asked how Aurora Water determines its rates to charge the courses since Denver is charging less for their recycled water.
Comments from other city council members questioned the courses paying less for water while Aurora citizens would have to pay more for their water.
After reviewing the operation and management of the Aurora Golf System, the consultants felt that the present self-operation system should be continued and that none of the privatization options reviewed clearly placed the system in an improved economic condition. Some council members did suggest that Requests for Proposals be made to private golf management firms.
Aurora has already been reducing operation and personnel costs, according to Interim Golf Manager Doug McNeil.
Three assistant professionals and a maintenance employee from the Aurora Golf Division were placed into vacant positions at Aurora Parks and Recreation. Additionally two superintendents and long-time Manager of Golf Dennis Lyon have retired. In all, eight positions were not filled for a savings of $400,000 over last year.
Still the major of expense of water continues to hit Aurora golf courses hard, especially at Meadow Hills which is paying $2.96 per 1,000 gallons. That is among the highest rate paid in Colorado by golf courses. Meadow Hills can not use recycled water because of the possible run off into nearby Cherry Hills Reservoir, a Denver water supply. The popular course even drilled a well in the middle of their parking lot a few years back searching for underground water.
"We spent nearly $1 million on water for our courses last year, McNeil added.
(Following the meeting, I spoke with Tommy Hart of Hart Golf, who has already made a preliminary presentation to take over the operation of the Aurora Golf Courses.)
Tommy Hart and his family operate the private Cherry Creek Country Club in Denver. His uncle Scott Hart and Matt Hart now operate Plum Creek Golf and Country Club in Castle Rock and Deer Creek at Meadow Ranch Golf Club in Littleton on a lease basis. Tommy's father Stacey, who built Cherry Creek Country Club and Deer Creek plus operated Denver's J.F. Kennedy Golf Course for several years is now living in Fort Worth. He owns golf courses in other parts of the country.
When pressed about where the financial backing to guarantee the private takeover of the Aurora courses would come from, he replied it would be "family" money. The family money, which has been a part of previous Hart family operations for many years, is believed to be from ownership of hotels and other properties in Las Vegas.
When asked about staff reductions normally done by private management firms when taking over golf courses, Hart stated that his company would need those experienced senior employees to continue to run the courses.
"They know how to operate the courses and where everything is hidden," he added.
Tommy Hart spends his time operating the local Hart family golf properties such as Cherry Creek Country Club but occasionally teams up with Denver Broncos legend John Elway in amateur team tournaments in Colorado.
While the National Golf Foundation has now presented its $46,000 study, a 149-page report and the 10-page "Executive Summary City of Aurora Golf System Financial and Operational Analysis" some city council members want the Aurora Golf staff to send out Requests for Proposals (RFP's) to golf management firms nationally to "get all the ideas we can."
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