Skeptics greet St. Paul's effort to turn golf courses over to private management

The city of St. Paul is looking at a way to keep two of its golf courses from losing so much green -- the kind you find in your wallet -- and is scheduled to vote next week on a proposal to privatize the management of Como and Phalen golf courses.

Those city-owned courses have lost money for years, but some argue they could be profitable. But many of the golfers and city employees who turned out at a Parks and Recreation Commission meeting last night on the proposed contract were skeptical.

The Como and Phalen golf courses together lose about $400,000 every year. Prom Management Group, the Oakdale-based catering firm that has offered to pay the city at least $65,000 dollars a year to take over the operations, promises to erase that deficit.

For St. Paul Parks and Recreation Director Mike Hahm, the case for privatization is a simple one.

"Our golf enterprise has been in trouble financially, and this is an opportunity to maintain golf and do it in a way that turns the financial performance of the system around by $400,000 a year," he said.

But St. Paul resident and former city hall staffer Jane Prince says there's a downside to privatization. She was one of about 50 people to attend the meetintg and she argues private companies are less responsive to the public.

"If you don't like the way your city is running, you can call your City Council. And maybe they'll fix it and maybe they won't. And if they don't, you have the opportunity to elect a new city council person," Prince said. "But if you don't like what a private business is doing, you don't have the option when it's your public golf course to vote with your feet."

The city also has two golf courses at Highland Park, which together lost more than $600,000 dollars last year. But those aren't part of the privatization plan because of legal restrictions associated with the tax-exempt bonds used to finance improvements there several years ago.

Bo Saatzer is the assistant superintendent at the Highland Nine Golf Course. He says the privatization plan will hurt his colleagues at Como and Phalen.

"Now these city employees, that are going to get nailed, are going to lose their health insurance and benefits," he said. "You know as well as I do that if a private contractor comes in, he is not going to give any of that to any of those people."

Como and Phalen have 20 full-time employees. The city says most of them will be moved into open positions at Highland or other jobs in the parks system. Some will have to take pay cuts. But the parks department doesn't have jobs lines up for most of the managers or for the 20 or so seasonal employees who work at the two courses.

Prom Management Group plans to spend less on payroll, and use more part-time employees. But the company promises to provide the same level of service to the public.

The city would still control the price of a game of golf. But there's more to the golf business than pro shops and green fees. Prom owner Bill Given sees an opportunity to make money on catering. His company currently provides that service at two publicly-owned Minneapolis golf courses.

"We operate Theodore Wirth. We operate Columbia in Minneapolis, and both of those operations are doing four and five times more food and beverage revenue than they are at Phalen and at Como," he said.

In spite of all that catering business, neither the Theodore Wirth nor Columbia golf courses posted a profit for the Minneapolis Parks and Recreation Board in 2012. The books aren't closed on 2013 yet.

Data from the Minnesota State Auditor's office show almost all public golf courses lose money. Edinburgh USA, which is owned by the city of Brooklyn Park, used to turn a profit. But Parks Director Jon Oyanagi says it hasn't for years.

"It's the downturn in the economy after 9/11 that really sent golf and other industries kind of on a tailspin."

The sport is also declining in popularity. The National Golf Foundation says the number of golf rounds played in the U.S. has been dropping for more than a decade. Thirty million Americans identified as golfers in 2005. Now, only about 25 million do.

In spite of that, Brooklyn Park decided to pour $2 million into its golf course this year. Oyanagi predicts that will return the course to profitability. If it doesn't, he says the city may follow in St. Paul's footsteps, and consider hiring a private management company.