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The work session was attended by members of the men's and women's golf clubs, several of whom volunteer at the facility to help keep payroll costs down. Members of the Citizen Financial Task Force were also interested to hear what Elzi had to say in his preliminary report. Several of those in the audience are both golfers and members of the Citizen Financial Task Force, which was formed to come up with revenue-enhancing and cost-cutting ideas for the 2013 budget.
Since it opened in 1999, Devil's Thumb Golf Club has relied on transfers from the city's municipal light and power fund to offset revenue shortfalls. Annual transfers of $400,000 to $550,000 have been slowly draining the municipal light and power fund to the point where the fund is in danger of being completely depleted by 2014.
Then, as councilmember Bill Raley points out, both the golf course and the municipal light and power fund will be bankrupt.
Elzi cautioned against looking solely at the numbers, because a golf course can be a great asset to the community. It provides employment, scenery and open space, and it can stimulate economic development and recruiting efforts. A community doesn't close its parks or libraries because they cost money, he said.
"With that said, we don't believe that the utility fund can continue to subsidize this course at the rate at which it has in the past four or five years to the tune of close to a half million dollars a year," he said. "At some point the utility fund will run out of adequate resources to continue that subsidy even if they wanted to."
Elzi estimates the subsidy to the golf course costs every municipal power user in the city $22 a month.
Having analyzed staffing levels, maintenance, equipment and the need to maintain the quality of play, Elzi said the problem is not one of expenses, but one of revenue.
He stressed the need to increase greens fees and annual passes, and recommended tripling the marketing budget to draw folks from outside the area with discretionary income. The local population is simply not large enough to support the golf course, especially since participation rates lag behind state and national averages. We've not only got fewer golfers, those golfers have more options. To illustrate that point, Elzi compared the number of holes in our trade area to the number of residents. In Delta County, the ratio is 676 persons to a hole. In Colorado, the ratio is 1,146 persons for every hole.
"That's the real crux of the problem," he said. "We can't count on just the Delta and Delta County resident to support this facility."
The rate increases proposed by Elzi are significant, particularly for peak times. While most golfers said they'd be willing to pay a bit more for greens fees and annual passes, they preferred to focus the discussion on marketing the award-winning course. Others thought the pricing should be a better value, citing the draw of Walmart.
Elzi said the rate increases would have to be gradual, to avoid driving off too many golfers. But between raising fees and "capturing" golfers from other facilities, Elzi believes the golf course could go from an anticipated loss of $261,643 in 2012 to an anticipated loss of $65,364 in 2013. Those figures don't include the $142,000 that's budgeted annually for debt service on the golf course.
Several in the audience questioned the $200,000 turnaround, particularly since it was agreed the fees can't be increased as drastically as Elzi initially proposed. As for capturing other golfers, golf course manager Rob Sanders said none of his colleagues are looking for huge increases in play at their golf courses.
Councilmembers Robert Jurca and Bill Raley turned the discussion back to expenses.
"When we start working on the 2013 budget we're going to be between a rock and a hard place," councilmember Bill Raley said. "We need immediate relief."
Sanders pointed out that golf course expenses have been cut every year since 2004. "Can we cut more? Sure, but it would be an ugly picture."
Before issuing his final report, Elzi said he would come up with specific suggestions for marketing Devil's Thumb.
"This golf course has been ranked seventh in the state [Golf Week magazine], and people can walk onto the course without reserving a tee time. That's a problem."
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