City golf course options dwindle
Several convictions were affirmed at Monday's special Two Harbors City Council meeting to discuss the state of the Lakeview National Golf Course.
Yes, the course is in bad shape, all of the 32 people in the room agreed. No, the management team led by Kyle Ness and groundskeeper Nate VanSanten can't be fully blamed.
Yes, golfers in the area want to keep a course here. No, they don't have the money to take over for the city.
Overriding all of the agreement made at the meeting was that one hard fact on money. There isn't any. The city can't operate the course at a profit and its options for paying for a bond on the property and the fixed costs are running out.
The turf problems on greens and tee boxes that led to the closing of nine holes at the course this month pale compared to the overall financial future of the course.
City administrator Lee Klein laid out that dire assessment after presentations from Ness and VanSanten, reaction from city council members, and comments from an audience of a couple dozen golf club members.
Klein said "there is no revenue source out there" to pay for what is now more than $650,000 left on the bond and costs at the course that aren't covered by revenues.
In the past, the city has used revenue from its liquor store to pay off the lending for improvements at the course. Now it is using that money to cover revenue shortfalls. "It was a race to pay off the bond," Klein said of the liquor money, but using it to pay off operating debt has tapped that source. "The liquor fund lost. There is no money there."
"Any other source would be a loan," Klein said in response to the idea of borrowing from the city's utilities revenues to help at the course.
Next year's budget reflects how cash-strapped the city is. The council plans to allocate just $24,000 for some equipment purchases and some have hinted that it may mean the course has to close.
"If we're not going to budget for a golf course next year," frustrated city council member Jason Kuettel said, there's "no sense in putting the time and effort in" to keep the course in shape.
Groundskeeper VanSanten said a break in the irrigation system at the course led to the burned greens and tee boxes in July when not enough water could be put on the course to keep up with withering heat. He said he tried to order new parts but was told by the supplier that past unpaid bills would hold up delivery. It took nearly two weeks to fix the problem and by that time, the turf damage was done.
Revenues are down $150,000 from the break-even point on a course that in a perfect world would pay for itself. The city would need to find more than $250,000 to keep the course running next year. Ness said August greens fees were down 50 percent and are 20 percent down for the year. "Right now, people aren't buying our product," he said.
The closures on the course spurred the council to action. It hired a turf consultant last week to assess the problems and wanted to talk with Ness and VanSanten about why they haven't been able to keep up.
Ness said he simply overlooked some things and "I caught myself making excuses." He's frustrated with revenues as well, and expects a cut in his compensation this year of $30,000.
"I've become part of the problem," Ness said. He volunteered to open his management contract with the city in the hopes of restructuring the staff and finding some savings. He asked that the management have complete control over course maintenance and cutting one of two full-time positions.
Ness proposed that a new labor budget could slice $18,000 from the budget. "We need to operate more lean," he said, and offered to start a volunteer program so those who want to help can. "I think we all need to work together," he said. "It won't be long and nobody will be golfing."
VanSanten said he hasn't received enough support from the city. "I simply want to do my job and have the products I need." He was upset when he learned that work to save the greens and tee boxes would come out of his budget.
Two written assessments of the course by supervisors in Duluth and Lutsen were brought to the meeting. The one hired by the city, Jud Crist of Duluth's public golf courses, painted a stark picture of the course. He went hole by hole and found the obvious burned turf and also weeds and general disarray at the course.
VanSanten had Mike Davies from Superior National in Lutsen look at the course last week as well. He said better turf management, namely thatch control, was needed, along with reseeding.
Neither of the assessments offered a cost analysis on making fixes.
Council members said they appreciated the passion of the golfers who want to keep the course but were mindful of those who want the city to stop funneling resources to it.
"Taxpayers can't keep paying the bill," council member Steve Detlefsen said.
Council member Chris Swanson said its likely time to admit the city can't make a profit at the course -- that it can't put the money in to keep it in shape and draw golfers. "Maybe the golfers need to own this," he said. Even with management running things in the most efficient way in "many years," Swanson said, "we still can't make it work."
He wondered aloud whether the course should go back to nine holes. Dan Jones said the city should consider putting the course up for sale again. A $2.75 million deal in 2007 fell through when the economy tanked.
Others said creating housing, much like the prospective buyer had planned, might bring in revenue. "We have to start making tough decisions," Swanson said.
Kuettel said no one would buy the course in the shape it's now in and wondered how the city could convince city residents of the value in moving more city money for operations. The city wouldn't qualify for a loan on the course in the open market, Kuettel said.
The council agreed to open the floor to the audience and those who spoke said the management team worked hard and deserved praise. They also expressed deep desires to keep the course open and public.
The council is working to form a subcommittee this week with golfers to discuss options for the upkeep of the course. The course could be a "money-maker" if it could be "brought up to snuff," Frank Thompson said.
"We need to do it as a group with one goal in mind," said Harold Ek. "To have a decent golf course."
Klein reminded the people in the chamber that the "gap between revenues and expenditures gets wider every year no matter who's running it."
"Does it mean no golf course next year?" Klein asked. "The council has to answer that."