Modesto panel will examine budget, management for golf courses

02/23/2014 3:58 PM

02/23/2014 3:59 PM

Modesto is considering closing parks, selling its convention center and reducing its financial support of the McHenry Museum and McHenry Mansion as it looks to cut $9 million from its $113 million general fund budget over 28 months.

But city officials are recommending one cost-cutting option be taken off the table for now: closing or selling Dryden Park Golf Course. Officials will talk about this and other golf-related business today at the City Council’s Finance Committee meeting.

The discussion will include adjusting the budget for KemperSports, the golf management company that took over operations of Dryden and the city’s other 18-hole golf course, Creekside, in mid-October because the city was dissatisfied with the performance of FM Golf, the previous management firm.

The adjusted golf budget shows revenues of $2.38 million against expenses of $3.04 million in the current budget year, which ends June 30, according to a city report. A general fund subsidy will make up the $665,000 deficit, and nearly $500,000 of the deficit is for the annual debt payment for building Creekside about two decades ago. It’s not clear from the report how revenues, expenses and the deficit are changing. The golf fund had a deficit of nearly $565,000 in the previous budget year.

The golf budget includes the city’s third course – the nine-hole Modesto Municipal Golf Course, which is managed by the youth golf nonprofit The First Tee and the Del Rio Country Club Foundation.

But the city says KemperSports, which manages three dozen municipal golf courses across the nation, is reporting promising financial results and has taken positive steps to improve the two courses. Kemper also is operating under a different type of contract with the city than its predecessor, FM Golf.

For these and other reasons, city officials recommend postponing any decisions on Dryden. “We need to wait this out,” Deputy City Manager Dee Williams-Ridley said. “We are seeing good numbers right now. We need to give KemperSports an opportunity to at least establish some trends. We need to get some history before we make any decisions.”

Acting Parks, Recreation and Neighborhoods Director Steve Lumpkin said KemperSports has about 18 months left on its contract with the city. He said in about a year, the city should know whether it makes financial sense to seek proposals from golf management firms for the continued operation of the two courses once Kemper’s contract expires.

Lumpkin said the city may save even more money if it picks one company to provide both golf course management and maintenance. While KemperSports manages two city courses, ValleyCrest provides the maintenance at all three courses, at an annual cost of $1.56 million.

He said the city would need to work out an arrangement with the Dryden family if it decides to close or sell the course. He said the family provided about half of the land for the course in the 1950s with the stipulation that the land be used for an 18-hole golf course.

The general fund pays primarily for police and fire services and makes up roughly one-third of the city’s $344 million operating budget. The operating budget’s two other funds are in better shape than the general fund, which is heavily reliant on sales and property taxes.

City officials say they need to cut roughly $9 million from the general fund to bring its expenses in line with revenues in wake of the failure of Measure X in the November election. The measure was a 1 percent sales tax that was expected to bring in about $26 million annually to the general fund over six years.

The Finance Committee is expected to consider other cost-cutting measures in subsequent meetings, some of which they will recommend the City Council adopt. The committee recently recommended the council cut about $950,000 from the current police and fire budgets.

The committee meets at 5 p.m. in Room 2005 on the second floor of Tenth Street Place, 1010 10th St.

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