With input from the community and staff, the Park Board established a new strategic plan for the Park District that is responsible for providing recreation and wellness programs, facilities, and green space for the health and well-being of residence in DeKalb. Two goals of the strategic plan are to improve the District's financial sustainability AND determine a plan for the financial viability of the District's golf operations, which are requiring increasing annual subsidies due to revenue losses.
We are not alone in these challenges. Many other park districts in Illinois are facing similar financial strains due to the increasing costs of maintaining golf courses, and to the decreasing numbers of rounds of golf being played by the public. To help the Park District understand what we can do to address issues related to our golf operations, we contracted with Billy Casper Golf. They are a national golf consulting and management firm providing expertise and an outside perspective on golf operations. Their team did a deep assessment of our two golf courses and operations. On October 17th they presented their findings and recommendations for the Board to consider and evaluate in the coming weeks. The Park District's goal is to provide quality golf amenities for our residents and to do so in a way that is financially sustainable and responsible.
Throughout the process of developing plans for the future of golf operations for the District, this page will be updated with information on the process.
Q. Why is the Park District addressing this issue now?
A. Committed to proactively addressing financial issues, the Board and staff are following the District's new strategic plan with goals to: "improve the District's financial sustainability" and "determine a plan for the financial viability of the District's golf operations." The Park District commissioned Billy Casper Golf to do a study on its golf operations after it lost money every year over the last 14 years.
Q. What is the plan for golf operations for the 2020 season?
A. Both River Heights Golf Course and Buena Vista Golf Course will be open for the 2020 season.
Q. How long has the trend of declining revenues at the golf courses been going on?
A. As has been noted by the District's auditors and in the District's budget documents, the revenues in golf have declined over the past several years. In fact, golf revenues have declined nearly every year since the peak in 2006 at $966,111.
Prior to 2014 the Golf Course Fund had operated as an Enterprise Fund. Enterprise funds are set up by government entities when they have a part of their operation that functions as a self-supporting business that sells goods or services to the public for a fee. Enterprise fund operations for a District would cover their own capital expenses and would not require a subsidy from general fund tax dollars. Depreciation also is charged to enterprise funds.
In 2014 the District changed the Golf Fund from an enterprise fund to a special revenue fund. This was done by the District with the advice of the auditors in recognition that the golf course fund was no longer operating as an enterprise fund. The auditors had noted that declining revenues, increasing expenses, and growing capital needs meant that the golf courses were no longer operating as a stand-alone business and had been utilizing tax dollars in their operations for several years and that the forecast seemed likely that this would continue.
Q. Has the District done anything to try to reverse this trend prior to 2019?
A. The District has worked to be fiscally responsible while attempting to reverse declining golf revenues. In 2012 the board established a Golf Committee that worked on addressing this trend. This resulted in infrastructure and equipment investments of over $1.1 million in capital dollars in the past 10 years. While staff levels had been cut from 2006 to 2016 in line with declining revenues, in 2017 additional full-time staffing resources were allocated back to golf, raising the full-time equivalency of staff assigned to golf operations from 3.75 to 5. Despite these efforts, revenues continued to decline.
This year the Park District invested in the operational analysis by an outside contractor for the purpose of addressing the golf course operations in recognition of the declining revenues. The request for proposals called for the contractor to:
"Provide an overview of the current golf market (US, Midwest, and Northern Illinois) including demographic trends and how they impact the local golf industry. Provide analysis on opportunities to grow market share, revenues, change management or maintenance practices and provide different and alternative programming based on local demographic trends." and "Provide recommendations for operational/organizational changes to optimize the potential for increased revenue."
Q. Will DeKalb residents have a chance to voice their opinion to the Board before a decision is made?
A. The Park District is committed to communicating openly and honestly with the community as it studies options to help make golf financially sustainable.
Q. Will the Park District consider seeking a management company to take over the golf operations if it would eliminate or reduce the financial losses to the District?
A. The Park District Board and staff are looking at several options that could address the increasing deficit created by declining golf revenues. The Board will seek public input before making a final plan of action.
Q. How much money do the District golf courses lose each year?
A. During the 2018 season, the Park District's golf operations required a subsidy from the District's general fund of $145,341 in order to cover the gap between revenue and expenses. Annually the amount of subsidy being required continues to increase. In the last 5 years, the subsidy for golf operations from the general fund to the golf fund was $342,447. Also, an additional $444,217 was taken from the District's capital fund to pay for golf course projects during the last 5 years. When money is taken from the District's general fund to cover financial losses in the golf course operations, it severely limits the District's ability to maintain and improve other park facilities and provide additional programs and events for residents.
Q. If the District subsidizes many of its programs and facilities, why can't the District continue to subsidize the golf courses as well?
A. The annually increasing subsidy to golf is not sustainable and is straining the District's ability to finance programs and facilities that a majority of residents say are important to the community. It is the responsibility of the Park District and its Board to be fiscally responsible and address financial challenges and threats. The District budgeted to subsidize golf operations with $65,000 from the general fund during this fiscal year. However, there are nearly $2 million in capital project needs identified at the golf courses. The District needs to consider the annual operating losses to the golf courses as well as the other project needs at the golf courses and balance those with the needs throughout the park system and with the needs of our diverse community.
Q. Is the Park District considering selling a golf course?
A.There have been no conversations about selling or transferring the golf courses. If the golf course were to be re-purposed in the future, selling the land would require approval by the voters. The Illinois Park Code (state law) states that the land cannot be sold or transferred unless approved by a majority of voters of the District on the question at a regular election.
Q. What are the next steps?
A. It is on the agenda for the board meeting on 11/7/2019 to take action to establish an advisory committee. Advisory committee members will not be appointed at that time but will be shortly following the authorization of the committee by the full board. Based on the timing of being able to make decisions to move forward with the operation of the golf courses in 2020 the committee will need to begin meeting very soon and will be meeting frequently in the coming weeks to complete their tasks. The committee will be tasked with evaluating the options for running the golf courses and will make recommendations to the Board regarding how they should be staffed or managed moving forward and providing their assessment to the board in the form of a report. The committee will be made up of staff, board members, and citizens. Those interested in being on the committee should contact Amy Doll at email@example.com with name, email address, and phone number.