Once we get past that bond payment, we should be able to cover our operational expenses. Without the bond payments, we would be profitable. —Jeff Rasmussen, deputy director of the Utah Division of Parks and Recreation
SALT LAKE CITY — A Utah County lawmaker wants the state to issue bids to privatize the operations of its four golf courses, including arrangements that could allow leasing the land to a private operator.
HB145, sponsored by Rep. Kay Christofferson, R-Lehi, and unveiled Tuesday, demands that the expertise of a "golf course consultant" be utilized and that a request for proposal process be initiated no later than Oct. 15.
The four courses — Green River, Palisade, Soldier Hollow and Wasatch Mountain — lost revenue in fiscal year 2013, mirroring a national trend in which consumer spending on golf is down but operational expenses are rapidly inflating.
In Utah, for example, golf play has stayed stable since 2009, yet the total revenue of the four golf courses has declined 4 percent, according to a consultant's report.
The losses for the four golf courses total $1 million, but part of that includes annual bond payments that must be made for Soldier Hollow and Wasatch Mountain.
"Once we get past that bond payment, we should be able to cover our operational expenses," said Jeff Rasmussen, deputy director of the Utah Division of Parks and Recreation. "Without the bond payments, we would be profitable."
Wasatch will be paid off in 2017, but Soldier Hollow still has 10 years to go before the debt is gone, Rasmussen said.
The division has been in the fiscal crosshairs of Utah lawmakers since a 2011 audit by the Office of Legislative Auditor General found that few of its 43 parks in general and only one of its golf courses made enough money to be self-sustaining.
The widest range of profit and loss per visitor was found at the golf courses, with the audit pointing out that the Green River Golf Course required a subsidy of $43 per nine-hole round of golf played.
Several parks were recommended for closure, and auditors said golf courses in particular should be an option for privatization.
Since then, the division has cut down on its operational expenses and reduced its staff with an eye toward becoming self-sufficient. It contracted with the National Golf Foundation to deliver a list of recommendations on what to do with the golf courses.
"We hired them to give us an unbiased view on what makes the most sense," Rasmussen said.
The report made an array of findings about the state golf system, including that it offers a high-quality, low-cost experience for its players, but it is challenged by the remote location of its courses. The addition of 10 new golf courses in the state since 2001 has created further "unfavorable" market conditions, which is made more daunting by a short golfing season, according to the report.
Still, the foundation found that the state parks division could get over those hurdles with better marketing and recommended that it stay with its golf courses at least until the end of fiscal year 2015.
The foundation's report noted that turning the management of the golf courses over to a private company would actually drive up losses even more, with operators charging up to 6 percent of the gross revenues, while the state will still be tasked with needed capital improvements.4 comments on this story
Rasmussen noted that the division is in the early stages of implementing some of the foundation's recommendations, such as doing more with marketing, better management of tee times and turning Solder Hollow into a friendlier course for all golfers.
"They felt pretty confident with those changes that we should be able to get it turned around," Rasmussen said. "So it is a bit of surprise that we have this sort of push at this time."