When a golfer played the Ocean County Golf Course at Atlantis last year, county taxpayers had a stake in the game — the equivalent of a $14-per-round subsidy.
In Atlantic County, the subsidy per round at the county-owned John F. Gaffney Green Tree Golf Course amounted to about $4.70.
And, in Egg Harbor Township, where golfers whack the ball around atop an old landfill at the township-owned McCullough’s Emerald Golf Links, local taxpayers subsidized each round by about $5.
As the deep economic recession and bad weather have made it difficult for all golf courses, the financial pain at government-owned courses has become a burden for taxpayers.
Revenues generated last year at several area public courses weren’t enough to cover costs and payments on the long-term debt incurred when the facilities were bought or built, according to government records and officials.
So taxpayers have been called on to make up the difference — helping other residents and even golfers who live elsewhere enjoy their games. At the Atlantic County Green Tree course, for example, greens fees during the winter months are the same for residents and nonresidents.
Natural and economic conditions have reduced business at the six government-supported golf courses in Atlantic, Cape May and Ocean counties. A review of financial records provided by the courses shows:
- Revenues at the John F. Gaffney Green Tree Golf Course went up slightly. But the Atlantic County-owned course ended the year with a $128,344 deficit once operating expenses and debt payments were accounted for. The debt included a $421,810 bond and a $625,000 Green Acres loan. The difference was paid with money from the county budget intended for capital projects, said Jerry Del Rosso, the county administrator. The taxpayer cost for each of the 27,489 rounds played last year: $4.67.
- Expenses and debt for the Ocean County Golf Course at Atlantis exceeded revenues by $346,430 in 2009 and $276,020 in 2008. Julie Tarrant, the county’s chief financial officer, said money was set aside in the county budget to fund Atlantis, which is in Little Egg Harbor Township. The taxpayer subsidy for each of the 24,518 rounds played last year: $14.17.
- At the Ocean County Golf Course at Forge Pond in Brick Township, 2009 revenues totaled $575,310, but there were $824,616 in expenses. With 31,550 rounds played, the taxpayer cost per round was $7.90.
- The Links at Brigantine Beach made $320,836 less than projected last year, said Chris Johansen, the city’s chief financial officer. Johansen said it was the second year in a row that expenses and debt exceeded revenues. Johansen said the golf course avoided a 2009 loss by using surplus funds from prior years to cover a $54,661 gap.
- McCullough’s Emerald Golf Links in Egg Harbor Township posted a balance of $43,825 at the end of 2009. However, the golf course would have lost money if the Township Committee had not contributed $150,000 from the 2009 municipal budget last November to help the golf course cover part of a $700,000 bond payment due in May. With 29,852 rounds played, the taxpayer subsidy was $5.02 per round.
- Only one public course ended 2009 in the black: the Ocean City Golf Course, a 12-hole facility on Bay Avenue. The Ocean City course made $33,927 in 2009. Still, that was down from $63,130 in 2008. The golf course, which was created in the 1960s on city-owned land, benefited from having no bond or loan debts.
Factors in revenue losses
Government officials said harsh weather and the recession caused the revenue declines.
Tarrant said Ocean County officials treat the golf courses as a public service to make golf affordable for residents.
“It’s not a profit-loss situation. We will fund it no matter what,” Tarrant said. “We would like it to be self-sufficient, but in the situation you’re dealing with, you can’t predict and deal with a weather-driven item.”
Johansen attributed the Brigantine decline to the poor weather, the economy and a change at its restaurant. The city used to handle all revenue and expenses of the restaurant, which was managed by an outside company. Now, the city gets only rent payments from the company, which has taken over responsibility for revenue and expenses of the restaurant, Johansen said.
Egg Harbor Township Business Administrator Peter Miller said the nonprofit golf corporation that runs the township’s Emerald Golf Links course experienced financial difficulties and asked for help last fall. The money, which came from extra funds in the township’s debt service line, had to be used in 2009 and could not be used in the 2010 budget due to state finance laws, Miller said.
McCullough’s Emerald Golf Links opened in 2002, and it was built on a former landfill with about $11 million in township-backed municipal bonds. The course was supposed to be self-sustaining. The township’s decision to help with the bond payment was the first time taxpayers directly funded the golf course during its eight-year history, said Miller and Mayor James “Sonny” McCullough.
“The Township Committee thought they would try a different approach, and it’s not working right now because of the economy, weather and general condition of the golf industry,” said McCullough, the golf course namesake who also serves on the golf corporation’s board.
Miller, who is also the golf organization’s treasurer, said it was better to take a “small bite of the apple,” pay off part of the debt and hope the golf corporation can reimburse the township later rather than risk the chance of defaulting on the bond, which would then put the entire debt on the township.
A burden or not?
Carl Mason, a lifelong EHT resident and retired Verizon worker, was upset with the bond payment. He doesn’t think local governments should own golf courses because it puts a burden on taxpayers when they are not generating a profit.
“Here, you’re using your tax dollars to maintain it and keep it in business,” said Mason, who doesn’t play golf. “It shouldn’t happen.”
In some cases, the tax dollars are subsidizing golfers who aren’t local residents, and most courses give local golfers a break on greens fees. But not always. Atlantic County’s Green Tree course charges the same fees from Nov. 1 to March 15 regardless of whether players have county identification.
Del Rosso said the Atlantic County freeholders allow the green fees at the county’s golf course to be reduced, including for non-residents, during the winter and for certain special events to attract more customers.
“It has nothing to do with fairness. They are looking to increase the play at the golf course,” Del Rosso said.
Over the past couple of years, revenues from non-county residents have increased, county golf course manager John Lamey said. He said the golf course’s debt will be paid off in 2014 and the golf course has made an overall profit over the entire span of its operation.
Mason suggested selling the public golf courses and leaving it “up to whoever owns them to make a living out of it, or not.” Mason also said all residents should be getting free access to them, as with other public parks.
Golfers Carmen Rescigno, a retired electric lineman, and Arthur Coleman, a retired construction worker, said they think municipal courses provide important services to the overall community, and they support funding them. The two are self-described “golf junkies” from Egg Harbor Township who try to play four times a week. Coleman said during a recent interview that he had played only five games each in January and the first two weeks of March at Emerald Golf Links, but didn’t play at all in February because the course was closed for snow.
Rescigno said he believes McCullough’s Emerald Golf Links revitalized the area around the former landfill and created an “economic business generator” on what would have been fallow, polluted land.
“I know a lot of people complain about McCullough’s and the money spent. But you have to realize the good McCullough’s did,” Rescigno said, pointing to a nearby mall and several other businesses. “Not to get carried away, but look across the street. That’s new construction. If this was a dump, would people spend the money to build it?”
Coleman said he thinks municipal golf courses provide an affordable venue to play the sport, and the courses fulfill the public’s demand for creating and preserving more open space.
“Whatever needs to be done to keep the golf course open, I’ll do it,” Coleman said.
Planning for profits
The American golf industry overall is struggling economically, according to the National Golf Foundation.
One 2009 foundation report found half of 1,500 public golf courses were doing well, but 10 to 15 percent were “at risk” and experiencing financial losses. The number of golf players nationally fell from 29.5 million in 2007 to 28.6 million in 2008, according to another foundation study.
A National Golf Foundation survey of 4,000 golf courses found that the total number of golf rounds played nationally dropped from 489.1 million in 2008 to 486.2 million in 2009. The foundation estimated that the New Jersey courses in their survey saw their golf rounds drop 4.6 percent between 2008 and 2009.
All six public golf courses in this southern New Jersey region experienced a drop in the number of rounds played last year. The year-to-year trend ranged from a 4.2 percent drop at the Brigantine course to 14.1 percent at the Ocean City course. Government officials attributed the lower turnout to heavy rain, especially in June.
To recover from the setbacks, officials said they have been cutting expenses at the courses and making other plans to lure more customers.
Johansen, Brigantine’s chief financial officer, said the city is monitoring expenses as much as possible and is ready to scale back to ensure a profit this year. At the same time, Johansen said, the golf course manager is booking more functions. The first week of March looked good, Johansen said, and the golf course generated $27,000.
The Atlantic County Green Tree golf course will open a new green later this spring, expand one of the tee areas and keep greens fees the same, manager Lamey said.
Ocean City proposes to redesign its golf course to reduce flooding and consolidate some holes, Donato said. The city set aside $15,000 for a study on the proposed design. The layout for the project and a cost estimate should be done by the end of the summer.
The Atlantis golf course will try to keep the same rates. Better employee scheduling and retirements could help save on expenses, said Mike Fiure, assistant to the Ocean County Parks director.
Tom Sullivan, general manager at McCullough’s Emerald Golf Links, said the course will continue to offer discounts and reduce its peak greens fee from $86 to $79.
The “silver lining” is that all the bad weather led to more “pent-up demand” to play golf, Sullivan said, and the course recently had many players come down from Philadelphia, northern New Jersey and New York. Sullivan hopes the enthusiasm continues and that area golfers stay close to home.
“That’s one thing that can help us out a bit,” Sullivan said. “People may rethink their summer vacation. Instead of a trip to Mexico or Europe, people may be spending time in Ocean City or Atlantic City.”
- Five of the six municipal or county golf courses in this area of southern New Jersey were not profitable in 2009, with four having to be supplemented by taxpayer dollars and the fifth avoiding a loss by using surplus funds.
- The number of rounds played at all area public courses dropped from 2008 and 2009.
- Taxpayers ended up subsidizing rounds of golf played by $5 to more than $14 per round at area public courses.
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