A business plan implemented last January for the city's five municipally owned golf courses has cut by half the city's subsidy to golf and increased the rounds of golf played by almost 10 percent.
Several changes recommended by the plan have improved golf's financial picture from a year ago, city officials said.
Courses sell loyalty cards that give $5 off for each time a golfer plays, offer range memberships for $150 for unlimited range balls, and introduced winter rates on Dec. 1. The age for senior rates was dropped from 60 to 50, and lower ladies-day fees are offered Monday through Friday. Each course now sells beer, which has boosted concession revenue.
Officials have used social media sites including Golfnow.com and Facebook, and email to attract more golfers to the courses.
"We haven't been through a full fiscal year, but we saw such a huge, positive impact in six months it's gotten us really excited about moving forward," said Justin Mullannix, head golf professional at Kearney Hill Links.
In addition to increasing revenue, the golf courses reduced expenses. One major reduction was in personnel. Four workers were transferred from golf to parks maintenance, the overall golfing staff was reduced by two positions, and the Meadowbrook Golf Course superintendent works only half time at that course.
"It has been a great year. We have reduced expenses, increased revenue without cheapening the golf experience people expect on our courses," said Sally Hamilton, the city's commissioner of general services.
The city's golf subsidy was reduced roughly in half, from $1 million in fiscal year 2011 to $574,000 in fiscal year 2012.
Hamilton said that Mike Fields, recreation manager for golf services, will continue to seek ways to cut the subsidy figure further, but his main focus in 2013 will be to drive revenue.
As a result of increasing golf traffic, Meadowbrook, the city's smallest course, has been taken off the chopping block, Hamilton said. The 18-hole, par-3 course has been targeted more than once in recent years to close when the city faced budget shortfalls.
In fiscal year 2009, the course lost $43,000; in 2010, it lost $58,000. Mayor Jim Gray proposed in his 2011 budget address to close Meadowbrook as one of several measures to deal with a projected $27 million budget shortfall.
Shari Gatewood, Meadowbrook's superintendent, said recently that the loyalty card and lowering the senior age had had a positive effect.
"Traffic has definitely increased," she said.
Questions on the subsidy
Questions about the city's subsidy of golf intensified in 2010. City revenues had declined, division budgets were frozen and fire stations were browned out on a rotating basis to save money.
At the same time, private golf courses — overbuilt in the 1990s when the economy was strong — saw fewer players come out. Several private course owners complained to the Urban County Council that it was difficult to compete with city courses that were being subsidized by taxpayer money.
Also in 2010, Jerry Hancock, director of parks and recreation, told the council that contrary to rumor, the courses did not operate at a great loss. "We lost $11,000 in 2009," Hancock said.
But Hancock's profit and loss figures did not include debt service, utility costs, golf operation salaries and superintendent salaries. It turned out that the city spent approximately $3.2 million to operate and maintain its golf courses. The courses generated $2 million in revenue, but the city had to pick up the $1.2 million difference.
In fiscal year 2011, parks and recreation agreed to create a business plan and closely chart golf's expenses and revenue.
Council member Jay McChord pressed his council colleagues to come to grips with how much the city should subsidize its five courses.
McChord said recently, "It took three years of pushing to get to a place where we had a business plan and figures to see what the expenses and revenue were for golf."
Even with a business plan in place, McChord said, the council, the administration and residents need to have a discussion of how much taxpayer money should be used for golf. "Then put that in a policy so everyone can see it," he said.
Hamilton, the general services commissioner, met with McChord to listen to his concerns."He brought up some very, very good points that focused us," she said.
"What was the revenue from the courses? How much money does it take to subsidize golf? What can we do to reduce expenses and make the golf experience better?" she said.
Effects of business plan
The business plan for the operation of the golf courses called for several changes.
The council gave golf course superintendents the flexibility to change rates to be more competitive with the market, Fields said. Previously, rate changes had to be approved by the council, a process that sometimes could take a month.
New loyalty cards offered "substantial savings" for those who play a lot, said David Schwendeman, assistant manager at the Tates Creek Golf Course.
The 2013 cards are selling briskly, Schwendeman said.
Another major change was lowering the senior discount age to 50 years old. "Lexington is a pretty good retirement community. When you add an age range of 10 years, that makes a big difference," he said. "You open yourself up to a whole new market."
A golfer who is 52, for instance, would have paid $31 during the week for 18 holes last year. This year, that golfer pays $23. Combined with a discount card, the golfer gets $5 more off, so now he or she pays $18.
"That's a 42 percent savings with the discount card," Schwendeman said. "The senior discount is where most of our traffic increase has come from."
Selling beer has also brought in new revenue. Food and beverage sales have gone up progressively, Schwendeman said. Two years ago, the average golfer on a city course spent $3.50 on concessions. This year the figure was close to $6.
All courses but Meadowbrook remain open in the winter, and between Dec. 1 and early March, they offer winter rates. "Last winter was mild. We went from making zero dollars in January and February to bringing in $600 or $700 a day," Schwendeman said.
So far this winter, "The weather has been good. But if we get 10 inches of snow for 20 days, the whole picture changes," he said.
Parks and recreation will need one more year "to see if this is where golf settles out," Hamilton said. "When it does, we want everyone to know, 'This is as low as we can go.'"