The Palm Coast City Council this morning approved a pair of contracts that the city hopes will be the next-best thing to diminishing, or at least dissimulating, financial losses at the city-owned Palm Harbor Golf Club, which has been losing money, at taxpayers’ expense, since its inception in 2009.
The council approved a lease agreement with Flagler Beach’s Golden Lion restaurant’s owners, who will run the Palm Harbor concessions and bar as the Green Lion, and will do so by paying the city $500 a month.
The council also approved a contract for groundskeeping and maintenance of the golf course with Billy Casper Golf, Inc., a national golf course management company based in Reston, Va. The contract doesn’t include a bottom-line dollar figure, which suggests it would be open-ended, with Casper required to submit invoices monthly for services rendered. City Manager Jim Landon told the council that “the estimate for this program is about $630,000 a year. The idea is that we believe it will be more efficient this way than what we did with Kemper.”
KemperSports, the management firm in charge of the golf course since 2009, will be ending its presence at the course and at the city’s tennis club later this month. The city hopes to save some money by no longer having to pay Kemper a management fee, among other costs. But the city has already hired eight of Kemper’s employees, thus considerably expanding the city’s payroll. Those employees will continue doing what they did under Kemper, tending to golf carts, the front desk and so on.
The cost to the city of employing the new workers would be in addition to the contract with Casper Golf. The city will now take in the revenue from green fees directly.
The city’s budget projected $787,000 in salaries and wages for golf course employees this year.
The cost the city will shoulder by taking on Kemper employees will be added to the cost of the contract with Casper, for a total cost to the city of $1.4 million. But the labor cost in the current budget represents the totality of employment at the golf course, and Palm Coast is only absorbing a portion of those employees, so the cost to the city should be lower.
Asked for details about the city’s absorption, a city spokesperson conveyed the following statement from Wendy Cullen, the city’s human resources director: “We have not yet finished staffing the golf course. Current Kemper employees who have applied are all being considered for positions with the City. Currently there are 8 or 9 in the on-boarding process for Facility/Guest Attendant and Golf Cart Attendant/Starter. The positions are all part-time, non-benefits eligible, so providing an annual salary will be dependent upon the number of hours worked. Starting rate for the Facility/Guest Attendant is $15.30 and Golf Cart Attendant/Starter is $12.86.”
The city was projecting revenue at the golf course of $1.2 million this year.
In 2015, the city stopped accounting for the golf and tennis clubs as separate “enterprise” funds, set up as such independently from other city operations, and intended to operate on their own, supported by their own revenue—like the utility department or the stormwater fund, which have their own sources of revenue. Tennis and golf never made money, so the city folded them into its parks and recreations department, thus making the losses less glaring, since the two operations were now part of the general fund. That fund had subsidized them all along, through transfers. The subsidy was now more direct. But with Kemper still running the operations, the losses were still glaring. Now, with the city running all but the concessions and groundskeeping, the operations will look more like an integral part of the parks and recreation operation even though use of the two facilities is fee-based, unlike all other parks in the city.
The food and drinks operation had previously been under Kemper. It will now be an independent entity at the golf course, with Green Lion assuming responsibilities for spiffing up the facility (it expects to invest about $100,000 to that end, according to the city’s Beau Falgout) and reaping whatever revenue it generates there. Its $500 a month lease agreement is modeled after the county’s arrangement with Captain’s BBQ at Bings Landing in the Hammock, when it opened in 2011. The arrangement there was for $500 a month, then an additional $30 a month each subsequent year. Palm Coast will add $25 in each subsequent year’s lease at the golf course.
The food operation is not expected to be a big money-maker. “If we make any money from rent that’s more than what the concession currently makes under Kemper,” Falgout said. However, Green Lion expects to open a bar there, which could improve revenue considerably. But the operation will have to make it on its own, without city subsidies, as had been the case with Kemper’s concessions.
The concessions area is expected to open in September. Former Mayor Jon Netts addressed the council to share his concern that workers in the concessions area, who have not been hired by the city, should not be out of work for longer than necessary as Green Lion prepares to open. Green Lion is expected to interview those employees and possibly employ some of them. “There are people who routinely use that facility,” he said–himself among them.