The Oak Ridge City Council on Monday will consider approving $120,000 to continue operating the Tennessee Centennial Golf Course in east Oak Ridge off Edgemoor Road.
The request comes about one year after Council approved, in a 6-1 vote, a $325,000 transfer for operations at the golf course. About $225,000 of that transfer, a cash infusion, was for outstanding accounts payable, including for expenses that included clothing in the pro shop, a management fee, fertilizer, and irrigation costs. Another $100,000 was operational funding for the winter, including maintenance of the greens.
The request is smaller this year, but the golf course is still short of money needed to operate, despite all marketing efforts, Oak Ridge City Manager Mark Watson said in a Wednesday memo to City Council members.
“The slow winter season now requires funding to pay necessary costs and salaries through the winter quarter (January-March 2017),” Watson said.
Most of the $120,000 in funding—or $70,024 of it—would be used for accounts payable. The rest would be used for cash flow and salaries, Watson said.
He said the city’s current contract with Billy Casper Golf says that all golf course expenses are ultimately a city responsibility. The course is owned and operated by the city, and it’s managed by Billy Casper Golf.
Watson said the City Council reviewed the financial stability of Centennial Golf Course last year.
“Efforts were coordinated with the City Council’s Budget and Finance Committee to examine a path forward to have the golf course pay for annual maintenance and operational costs,” Watson said. “Due to declining markets for golf, the city’s contractor (Billy Casper Golf) was directed to enhance marketing and regain past market share over a two-year period.”
There has been some limited growth at the golf course in the past year, Watson said, but revenues have not exceeded expenses. The course has had an excessively long sporting year, yielding more rounds played, especially with the time-of-day pricing used by Billy Casper Golf, Watson said.
He said the Budget and Finance Committee and Finance Director Janice McGinnis continue to review the cash flow at the course, and he has told Billy Casper Golf to provide an analysis of a “price floor” for golf as the spring season approaches.
“In the coming budget year, the city manager will budget for an allocation to be available for use for keeping payables and expenses current until a sufficient fund balance is achieved,” Watson said.
The previous transfer, approved by Council in December 2015, was the first non-debt related transfer from the city’s General Fund to the Golf Course Fund since the golf course was built. In December 2015, officials said the city still owes about $3 million in debt-related bond payments on the golf course, and it was then expected to be paid off in five years.
Oak Ridge City Council member Trina Baughn cast the only vote against the operating transfer in 2015. All six of the other City Council members voted “yes.” It’s not clear how the new Council might vote. Baughn is no longer on the City Council because she did not seek re-election in November. Neither did former City Council member Charlie Hensley. Council has two new members elected in November: Jim Dodson and Hans Vogel.
The golf course, one of two in the city, remains controversial two decades after it was built and opened in 1996, part of the Parcel A development in east Oak Ridge. Some critics raise questions about whether the surrounding residential development has been significant enough to justify building the golf course and continue paying debt on it. But current city officials point out that the decision to build the course was made under a former City Council and former city manager.
There has been debate about whether the golf course is profitable or sustainable, and City Council members raised questions last year about whether they would be asked for more money later.
During the 2015 meeting, Baughn advocated for selling the golf course. She called it “an elitist recreational facility that most of the community can’t afford.”
But other city officials—including Watson, Rick Chinn, and Council members Chuck Hope and Ellen Smith—suggested that selling the golf course is not a viable option.
Officials said the city still owes $3 million on Centennial and would probably get a fraction of that if the course were sold, citing another East Tennessee course that sold for less than $1 million.
Most of the residents who spoke at the 2015 meeting seemed to be in favor of the operational transfer, pointing out that the golf course is another recreational facility. Other recreational facilities in Oak Ridge don’t make money, even ones that do charge fees, they said.
Hensley said the golf course needs to make reasonable money, but it doesn’t have to make money. He suggested it’s an important asset to help attract new residents and young families.
The City Council meeting starts at 7 p.m. Monday, January 9, in the Oak Ridge Municipal Building Courtroom at 200 South Tulane Avenue. See the agenda here. The agenda includes the golf course resolution and additional information.
More information will be added as it becomes available.