Lexington’s public golf courses still losing money after years of belt-tightening

Lexington’s five public golf courses have shaved expenses and cut losses but are still running more than $800,000 in the red, according to numbers released Tuesday.

The city has been trying to stem losses from its golf program for more than three years. Those efforts include raising the eligibility age for a senior citizens discount from 50 to 57, eliminating some other discount rates altogether, bumping up the price for an annual pass to driving ranges, and adjusting cart fees. Those changes went into effect Jan. 1, 2018.

For the fiscal year that ended June 30, the golf program lost $842,621. That’s a substantial improvement from the prior year when the program lost $969,961. In 2017, the program lost more than a $1 million.

“We are excited about the direction that we are heading,” said Curtis Mitchell, the director of the city’s golf program.

City officials told the Lexington-Fayette Urban County Council during its Tuesday General Government and Social Services Committee meeting that it is not recommending any additional fee hikes or changes at this time.

Nor is it recommending closure of any golf courses. Earlier this year, the city permanently closed Picadome pool to cut expenses from its aquatics program, which also loses upwards of $500,000 a year. That closure was done to help the city balance its current $373 million budget.

Mitchell said the golf program has upped its outreach, particularly to youth. In 2017, there were 60 participants in its youth program. It now has 385. The city is also looking at different ways to use its golf courses, such as for 5K races and outdoor movies.

“We have a lot more opportunities for sponsorships,” Mitchell said. Corporate events are also up, he said.

Louisville, which has 10 public golf courses, is also struggling with how to reign in costs at its courses. Last week, the Louisville Metro Council voted to increase green fees. Kentucky’s largest city is also considering hiring an outside agency to manage its courses.

Private golf courses are also struggling. Several private golf courses including Andover golf club in Lexington have closed as the number of golfers declines across the country.

Lexington’s discussion comes in light of a late June internal city audit of the pro shops at the city’s five courses — Lakeside, Kearney Hills, Tates Creek, Picadome and Meadowbrook. The audit found lax inventory and cash tracking systems at several of the golf pro shops.

In one instance, a Titleist Driver was borrowed by a seasonal employee at Tates Creek who was trying out the club but kept it for a month in his golf bag without purchasing it. The golf club was eventually returned, the audit found.

Another problem — several items in the golf pro shops were priced below the minimum advertised price. For example, there were five new Titleist Drivers priced at $479 even though the minimum advertised price was $499. The audit noted that only Lakeside had moved to a perpetual inventory system, which better tracked all inventory. The other pro shops took monthly inventory using spreadsheets.

Moreover, it appears that only Lakeside is able to move its inventory at a rate that meets most pro shop standards. The remaining courses were either overstocked or did a poor job tracking merchandise.

In response to the audit, the golf program made several changes, including tightening its financial controls and oversight. All golf pro shops went to an electronic perpetual inventory system in February, according to the audit.

Mitchell said the golf pro shops are now tracking what sells and what does not. The shops are also considering more discounts to help liquidate some of its inventory if the merchandise does not sell well, according to a response in the audit.

Lakeside, which is adjacent to Jacobson Park on Richmond Road, has made the greatest strides in cutting losses in the past two years, according to figures provided Tuesday. Its losses were at $47,483, a substantial improvement from 2017, when it lost $210,343.

“That’s a 77 percent improvement,” Mitchell said.

But Picadome has seen its revenue plummet over the past several years. In 2017, its revenue was $562,750 but that declined to $469,746 last year.

Mitchell said that decline may be due to rate changes, particularly eliminating some discounts for seniors.

Councilman Fred Brown praised the changes made over the past three years and said he didn’t think it was time to start talking about selling or converting a golf course.

“Some people think you have to make money on it or break even; but I don’t,” Brown said. “I think it’s a service and an amenity.”

Councilman Jake Gibbs said he was disappointed Tuesday’s report did not include the number of rounds played compared to prior years. Gibbs pointed out that only a few golf courses have opened across the country but hundreds have closed.

“This game is not catching on,” Gibbs said. He also wanted to know about the environmental impact of the use of fertilizers on the property.

“We may not be able to sell a golf course but we can turn it into other usable green space,” he said.

Lexington Parks and Recreation Director Monica Conrad said the number of rounds played was down this year, mostly due to a particularly wet spring and summer.