City officials hope for mulligan (w/video)

Marina Riker By Marina Riker

July 15, 2017 at 8:57 p.m.
Updated July 16, 2017 at 6 a.m.

Wendel Foerster, 30, of Victoria, tees off at Riverside Park Golf Course. "I play here about once a week," Foerster said.

Wendel Foerster, 30, of Victoria, tees off at Riverside Park Golf Course. "I play here about once a week," Foerster said.   Nicolas Galindo for The Victoria Advocate

Landscaping crews are busy mowing and trimming trees at Riverside Golf Course - a job the city took over July 1.

The 27-hole course was turned over to the city after the Victoria Parks Improvement Association, which managed the course for more than 60 years, terminated its lease. The association's decision marked the end of more than a year of financial struggles - including failing to pay back $180,000 to a local bank.

Many Victoria residents were relieved to learn the city, which owns the course, wanted to keep it running. But that raised a big question: How is the city going to get its finances out of the rough?

Nationwide, more than 600 golf courses have closed since 2006, according to the National Golf Federation, as participation has dwindled and maintenance costs continue to rise.

In Victoria, it's no different - membership numbers have dipped, but expenses stay the same.

The Advocate obtained the previous management agency's financial statements dating to 2004, which show the situation started to go downhill after the Eagle Ford Shale bust. The golf course took on debt, revenue dropped and by spring 2017, the association was about $180,000 in the hole.

Officials with the Victoria Parks Improvement Association have refused to comment.

Despite the association's financial situation, the city decided to take on the course, which costs anywhere from $800,000 to $900,000 to run each year.

The city is teeing up to manage the course for the next six months until it asks a private company to take over. Meanwhile, taxpayers will be on the hook to fund the course, which could cost about $450,000 during the next few months if it isn't profitable.

Golf course finances

For the most part, the association generally made ends meet. Revenues from membership and tournament fees paid for expenses such as employee salaries and maintenance, according to financial statements.

Records show the golf course's annual income was anywhere from $1.1 million - during its peak in 2008 - to $828,000 in a one-year period ending in April 2017. During that time, it cost anywhere from about $800,000 to $930,000 each year to run the course.

The golf course was able to save on water bills by pumping out of a private well, according to the city.

The largest expense was salaries and wages for the course and its golf shop, which cost about $325,000 during the most recent fiscal year.

Insurance, depreciation and credit card expenses were other large costs.

Records show the Victoria Parks Improvement Association started borrowing money in 2010 - first $25,000, but eventually hundreds of thousands of dollars during the next seven years. Still, that wasn't a problem until revenues started dropping in 2015.

In the year before the association shut down, it had taken out a $180,000 line of credit from a local bank, which budget documents said was used to keep the course running. The course was having a "cash flow problem" - for example, in 2016 there was a $137,000 shortfall - and had trouble finding the money to pay bills.

If the course didn't find a way to get more money or reduce spending, it would be forced to close, the association reported in May.

Just weeks later, the association announced it would stop running the course after more than 60 years.

City's responsibility

The Riverside Golf Course is like dozens of municipal courses nationwide struggling to turn a profit or even make ends meet.

During the past couple of weeks, the city council in Huntsville, Ala., voted to turn its municipal golf course into a multi-use park, while city officials in Detroit are currently debating what to do with the city's courses, which are in desperate need of repair.

In Victoria, the city has decided to keep the course open despite dwindling membership. In fiscal year 2016-2017, the association had 268 members, according to the city. If all of them had the most expensive membership offered, the city would earn about $241,000 per year.

The city estimates taxpayers could be paying almost $450,000 during the next six months, which could be offset by memberships and fees.

City Manager Charmelle Garrett said she is hopeful the golf course will be successful. She doesn't look at the situation as a challenge; she sees it as an opportunity.

"It's such a wonderful golf course, and it has so much potential," Garrett said. "I don't see it as a challenge. It's just a lot of things we're needing to do in a short time."

Garrett said the city is calculating exactly how much to charge golfers in the future, in addition to figuring out how much to spend on temporary staff to run the golf shop and the course.

Within the next month, the city will release a formal request for private companies to compete to run the golf course, Garrett said. Once companies submit those plans, city officials will have a better idea about how much the course will cost in the future.

"We're just asking the companies for their ideas on how to manage it," Garrett said.


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