Golf course seeks help

The Pebble Lake Golf Course is making every effort in 2014 to not lose money, according to Aaron Sletten, vice president of the board of directors for the golf course.

The course is requesting $33,750 from the general fund of the city of Fergus Falls to provide funding for the month of March. As of this Friday, the golf course will have $2,700 in its checking account, according to Sletten.

The golf course lost money in 2013, but so did 93 percent of public golf courses across the state, said Sletten, who presented the golf course update and funding request Wednesday at the Finance, Personnel and Development Committee meeting.

“It’s not a pretty outlook as far as golf courses in Minnesota right now,” Sletten said. “Especially when you throw a bad summer on top of it.”

Pebble Lake Golf Course lost about six weeks of its golf season last year due to weather, which translated to an income loss of about $35,000 to $40,000. The hope is for the course to be up and running by April 15 this year, Sletten said.

With the restaurant included, the golf course lost about $106,000 in 2013, compared to losing about $35,000 in 2012 without the restaurant included. In 2012, the restaurant space was leased to a private business, and in 2013, the golf board managed the restaurant.

For 2014, the course has budgeted about a $112,000 cut in expenses, resulting in a net income of $5,539.49. Labor represents most of the cuts. The head pro and head maintenance staff will take pay cuts, and staff overall is cut down “to the absolute minimum,” Sletten said.

“We were very conservative,” Sletten said of the budget. “If we can maintain our budget, we’re trying to do what we can to make this thing work. It would be a huge success for us to be making money this year.”

It’s a realistic budget, but there are also no guarantees because it’s a seasonal business, Sletten said.

Covered in the $33,750 request of the city would be the following: approximately $3,000 for utilities, $13,000 for maintenance payroll, $1,500 for miscellaneous maintenance bills, $5,500 for clubhouse payroll, $5,000 for fire suppression repairs, $500 for stainless steel backing for the kitchen, $250 for tile repairs in the kitchen and $5,000 for an initial beverage order that will likely last until the end of April.

Though this was Sletten’s preferred request, he added that they could cut it down to about $24,000. The extra money in the larger request would make sure golf course employees would get paid on time following a March 29 fundraiser, where some of the transactions might not come through in time.

The golf course would be able to reimburse the city with the extra $9,000 right away if the full request is granted.

The city has $58,235 in funds available that have been allocated to the golf course that it can use for the request. This includes capital outlay funds from the 2014 budget of $39,250 plus the 2013 capital outlay carry forward of $18,985.

No recommendations were made and no action was taken at Wednesday’s committee meeting. But it was clear the end goal would be finding a way to address the situation with something other than a “Band-Aid.”

“2013 obviously showed a significant loss,” said Anthony Hicks. “My problem… is that it’s kind of like a black hole.”

Hicks said he appreciates the changes the golf course is trying to make, but with the debt the golf course has with the city, there’s not hope it will get paid back.

“It’s a distressed business as it sits today,” Hicks said.

Sletten agreed that they are struggling to break even year after year, and that the Band-Aid needs to stop. After the fundraiser in March, they can begin to work on a more long-term plan and look at working it into the 2015 budget, Finance Director Bill Sonmor said.

One of the things the course is doing differently this year is in the management of the restaurant and bar. New tenants signed a deal in January to bring the Three Guys menu to the golf course. The restaurant will be renamed Three Guys on the Green.

In the past, either the golf course ran the whole thing, or there’s been a tenant running both the restaurant and bar. This is the first time where a tenant will run the restaurant and the course/Tavern 59 will run the bar, Sletten said.

“The great thing about that is Three Guys is very good with their inventory on their food,” Sletten said. “We don’t have to worry about inventory of food. We don’t have to worry about waste of food.”

That’s the most difficult part, he said.

When looking at the rate schedule for 2014, the golf course will implement the usual 3 percent increase on most annual rates. Items that will stay the same include family rates, punch cards, handicap fees and locker rentals. The numbers are right in the middle of what other courses in Otter Tail County offer, according to Sletten. Pebble Lake Golf Course had more than 300 members in 2013, and that number has usually stayed between 275 and 325 over the years.

As far as other ways the keep costs down, even the condition of the course might be different. It was in exceptional condition last year, but “it won’t be as nice as it was,” Sletten said. They are at a maintenance stage right now, rather than an improvement stage.

“We’re doing what we can so that the tax payers do not have any extra expenses,” Sletten said. “We’re trying.”

He added that they’ll take suggestions from anyone on how to improve the long-term solution.

“We do have a good golf course,” Sletten said. “We need to keep it that way.”

The city council will discuss the golf course financial request and 2014 rate schedule at its regular meeting Monday evening at 5:30 p.m. in council chambers at City Hall.

(original http://www.fergusfallsjournal.com/2014/02/27/golf-course-seeks-help/)