CALGARY’S CITY-OWNED GOLF COURSES HAVE EXCEPTIONAL YEAR, BUT COUNCIL KEEPS THEM ON TRACK FOR RFP ON PRIVATIZATION
For the City of Calgary, this golf season was akin to winning the coveted green jacket at Augusta National.
But the early season started out in the waist deep rough.
Calgary was already subsidizing city golf courses to the stroke of $700,000 annually. They’ve adopted a plan to get it to net neutral. Meanwhile, plans are ongoing to contract out operations of the city’s seven golf operations.
COVID-19 restrictions shut down recreation around Alberta, including golf courses. For a city recreation department already beleaguered by annual deficits, it was devastating.
Then things changed.
“On Tuesday, May 12, I was like, ‘how do we potentially lay off or not recall all of our seasonal employees,” said Jennifer Duggan, manager of golf and sport development for the City of Calgary.
“By Friday, we were allowed to legally open again.”
Duggan said since they were the first city recreation unit to reopen after COVID-19 public health measures went into place, they were the first to figure out protocols.
“We had to chat with the legal team, with the HR team, with our learning and development team and our occupational health and safety team. The list could go on forever,” she said.
They sought out knowledge, information and best practices before launching into the season. People were needed to assist with procedures, training and resources for staff.
Everything from carts, pins and cups, to how grounds crews were delegated tasks needed to be implemented. Duggan said 150 staff plus 150 volunteers were trained, vetted, deployed within three weeks.
Banner year on the links
Fast forward six months and city-owned golf courses had one of their best years in recent memory. It followed an Alberta-wide trend.
More than 300,000 rounds were played. That’s up from a typical 240,000.
Tee sheets, typically filling between 60 and 80 per cent of time, hit a stunning 85 per cent filled across the board. The hold back on the other 15 per cent is weather – a typical golf buzzkill.
Revenue at city courses was 32 per cent higher than last year. Calgarians looking for an escape from the confines of COVID-19 rekindled the love for a game they may have somewhat forgotten, Duggan said.
The city releases tee times at 6 a.m., four days in advance of the playing day.
“Tee sheets were sold every day, all summer long within that first 30-minute window,” Duggan said, adding that they also implemented a new software system to help.
“It went really smoothly. The only major complaint we got was, ‘I can’t get the tee time I want.’”
Tee to green, they took a step closer to realizing that net neutral cost to the city. In fact, Duggan said this year, they were “deep in the black.”
“This year, we required zero dollars in tax,” she said.
They also implemented a software system “to meet our customers where they are in 2020,” Duggan said.
More than 32,000 Calgarians signed up, created a profile, book tee times – and it can be done from a cell phone.
“Now we can slice and dice our data and we’re going to be able to better understand our customers, our demographics,” she said.
The software allows them to review tee sheets in real time and make price adjustments based on demand and things like weather.
Abandon the RFP for golf operations
At the Nov. 2 to 4 Combined Meeting of Council, Mayor Naheed Nenshi brought forward a motion to stop the Request for Proposals (RFP) to outsource city golf operations.
The mayor pointed to the lack of uptake in a recent expression of interest (EOI). Duggan had told them in that meeting that they’d received little interest.
“We only had a couple of tire kickers on the EOI,” said Mayor Nenshi.
“So, the odds of having a fully competitive RFP in place are not great.”
Roughly $750,000 has been earmarked to conduct due diligence and to build a proper RFP, councillors heard.
Nenshi said that given the cost, the extra work for the team at a time when they’re trying to reduce wasted work and improve efficiency, why continue the work? He also said that they’ve started the process that council asked for (the EOI to find out if the RFP was worth it), and they’ve found out it might not be wise to go ahead.
Coun. Diane Colley-Urquhart said she “fundamentally disagreed” with the conclusions reached by administration on golf operations.
“To think that this spark that we’ve had, and this sense of optimism, in operating revenues this year is a reason to not proceed with an RFP is to me myopic,” she said.
That’s not the long-term vision for sustainable operations that they set out to find, Coun. Colley-Urquhart said.
After all, from 2015 through 2017, the city golf operations were roughly $2 million in the red.
Is there interest in Calgary’s golf operations?
In discussions with city golf consultants earlier this year, we found that there likely wouldn’t be much interest in the city properties.
David Forma with Calgary’s Venture Vision Consulting, specializing in golf management strategies, said the two big issues were inflexible (dynamic) pricing and the labour costs.
“I think when you look at the general marketplace, as far as public golf is concerned, in order to compete today, you have to look at more progressive strategies around what I phrase, ‘the right day, right time, right price, right golfer,” Forma told LiveWire Calgary at the time.
While the city does allow for dynamic pricing, council annually sets the range. The labour succession rights would require legal wrangling to figure out.
Duggan said they’ll continue with the due diligence to see if it’s worth farming out the operations to private interests.
She said it would be tough. Golf isn’t a lucrative business; they’ve gotten it to a break-even point. But, potential suitors would have to overcome one big element the city doesn’t have. There’s an average $375,000 annual property tax bill on the green spaces.
Duggan also said that these recent financials – which will be firmed up by early next year – aren’t just the result of COVID. They’ve found operational efficiencies and revenue opportunities. And Calgarians aren’t just going to up and leave golf next season. We could still be dealing with the pandemic.
She said even with COVID-19 and Calgarians’ desire to get outdoors to recreate, the city’s golf operations were already on track to meet the net neutral goals.
“It nothing but a good news story,” Duggan said.
“Golf is, for once, my beautiful silver lining.”