Contributor Opinion by Martha Klasing: Will Our Mayor And Council Take Time To Evaluate The Best Course Of Action For Redgate?

What will RedGate’s future be? Our Mayor and Council may decide this on Monday night, as RedGate is once again on the agenda. City staff recommends following the National Golf Foundation’s (NGF) suggestion to outsource the management of the course. This would certainly bring in the needed expertise that has been lacking thus far. RedGate has suffered over the past several years under City management due to lack of marketing and lack of care. The negative rhetoric about its poor financial performance, cost to taxpayers, and possible closing of the course has kept golfers away and resulted in lost rounds of golf and revenue.

For anyone who had the patience to read my lengthy posting back in September, I attempted to explain exactly what the City (and others) were calling “RedGate’s Deficit”. For those who did have the patience to slog through the numbers, hopefully you understood that the majority of any accumulated deficit attributed to RedGate did not stem from RedGate’s operations, but rather from the City’s allocation of administrative and overhead charges. Costs that weren’t a result of operating RedGate and costs that the City would have to pay whether RedGate existed or not. If anyone is still laboring under the idea that RedGate is costing taxpayers a large sum each and every year, here is a figure for you. Over the past decade, the accumulated deficit in the RedGate fund – which includes over $1.3 million of City overhead not directly attributable to RedGate’s operations– amounts to just $6.97 per household annually.

This past week, an article in the Gazette states that the City could save more than $200,000 a year by outsourcing the management of the course. This is the management option that NGF recommends. I’ve studied NGF’s financial projections and I tend to disagree that outsourcing would save the City up to $200,000 per year. This is what it boils down to: The City would terminate its employees that work at the golf course. In turn, the City would hire an outside company to manage the course. So, rather than pay our current City employees, the City would pay a comparable amount (slightly more, based on their projections), to a 3rd party management company. The numbers are as follows: over the projected 4 year period FY 2012-2015, the City would save $1.452M on salary and benefits by terminating the city employees. They would then spend $1.488M on additional line item expenses related to the management company – NO NET SAVINGS! So, where do any projected savings come from? Here’s the answer, and please think about this carefully - if RedGate is outsourced to an outside management company, the City anticipates reducing the allocation of CITY admin/overhead charged to RedGate from a total of $1.359M to a mere $240,000 over the same 4 year period. There’s your savings. But, it isn’t really savings to the City, because those amounts of City admin/overhead represent City costs for running the City government and still have to be paid. They will just tuck it away in some other fund. So, as a city resident and taxpayer – and I am not a golfer so I’m not floating these ideas to preserve my hobby – I ask, how does this make sense? I can’t see that outsourcing is really saving any money at all –it’s just moving numbers around on a piece of paper. And, people will lose their jobs.

What outsourcing would do for RedGate is to bring in professionals who operate in and know the golf business. This would be a plus, and it is needed. Per the NGF study, the market favors golf operators in this area. RedGate is well situated to capitalize on an improving economy, increasing population, and a shake down in the industry, as some courses close. It highlights what RedGate has going for it – attractive venue, dedicated staff, and a core group of loyal customers. It provides the basic steps to take in order to get the course back on track. The study points out that RedGate needs to be able to operate competitively without decisions being made by those who don’t know the golf business (like City Hall). Outsourcing is one way to do that. If you read the RedGate Advisory Committee’s response to the NGF study, there is another way to do this, which could be a lower-cost alternative. Hire a golf director that has the experience and golf business acumen to run a golf business. Sure, this would require the city to create a new position, but it may be a more frugal approach to full outsourcing. Herndon has taken this approach with their course (a comparable facility to RedGate) and has been quite successful. Herndon’s golf course expenses track similarly to RedGate’s, but they enjoy nearly half a million more dollars of revenue than RedGate. This is something RedGate could do with the right direction and control. Do we really need to lay off City workers and take their livelihoods away? And then take those savings and pay an outside 3rd party to do something the City could easily do with the right expertise? I hope not – a very sad statement indeed when the entire nation is talking about job creation and job preservation.

If it is all about saving money, then outsource the care for all our passive parks - that costs a significant amount more than the golf course. The City could lay off even more workers and just hire a 3rd party landscaping company to do the same job for a lot less money. I hope our Mayor and Council have more of a vision than this.

By Martha Klasing

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

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