Supervisor Jake McGoldrick

1 Dr. Carlton B. Goodlett Place, Room 284 
San Francisco, Ca 94102-4689

ATTN: CASSANDRA COSTELLO

Dear Ms. Costello:

      This letter contains the analysis of three different models for moving forward with Municipal Golf Course Management in San Francisco which Supervisor McGoldrick requested at our meeting on August 31, 2007 that I prepare. These models are: Institute, foster and maintain adequate managerial competence within the Recreation and Parks Department (the Department); the Department contracts directly with a private management company to operate the golf courses; and, a non-profit corporation with a board of directors composed of a broad group of interested and informed San Franciscans assumes full responsibility for the courses under a long-term lease and insures adequate return to the City as well as long-deferred capital maintenance and ongoing high quality operation of the courses. It is the opinion of the Lincoln Park Golf Club and the San Francisco Public Golf Alliance that the third option is best for the City, its residents, the golf courses and golfers.

      The Lincoln Park Golf Club is a public golf club based at Lincoln Park Golf Course. The club was formed in 1907. Membership is open to all. Our bylaws provide: “Section 6: Non-Discrimination. Members will be admitted without consideration of race, religion, color, gender, national origin, age (so long as they are 18 or older), sexual orientation, or disability.” (See, http://www.lincolnparkgc.com/by-laws.htm). Our 2006 club champion was an associate club member, (under age 18 or other special, non- dues-paying members) Enada Jang, who will shortly be returning to NYU for his sophomore year.

      San Francisco Public Golf Alliance is a group of concerned golfers and other citizens created to preserve and improve the City’s golf courses and the opportunity for all San Franciscans to enjoy and advance the game. Lincoln Park Golf Club is an organizational member of the San Francisco Public Golf Alliance.

Both organizations are convinced that a solution needs to be implemented as soon as possible. As long as the status quo is in place, the courses will continue to deteriorate while the City loses money. To this end, we would propose that the initial plan cover only Lincoln Park and Golden Gate golf courses.

Isabell Wade of the Neighborhood Parks Coalition and the Equitable Use Coalition recently indicated that Sharp Park was the most realistic option for the alternate uses those organizations propose. Accordingly, we would suggest that the task force study proposed in your Ordinance, (FILE NO. 070961) be focused solely on Sharp Park. The narrow focus would produce a more in-depth study and would not place all of the courses on a “status quo hold” when proponents of the task force admit that Sharp Park is the most suitable for the alternate uses they propose. (Neither LPGC nor SFPGA agrees that alternate use of the Sharp Park golf course is in any way warranted. Alternative uses of the additional non-golf dedicated portions of Sharp Park might be appropriate.) Continuing the current inadequate operation of Lincoln Park and Golden Gate golf Course while the task force study of alternate uses at Sharp Park is done is unwarranted.

IMPROVED RECREATION AND PARKS DEPARTMENT MANAGEMENT OF THE GOLF COURSES

      The first model is to continue the management of the courses by the Department, but with improvements to insure that the courses are properly managed. It is our position that this option faces insurmountable obstacles. In our view, the steps needed to insure competent management by the Department include:

      First, the Department would have to hire a competent and qualified person to head its golf operations. Such a position exists on the Department’s organizational chart, but has remained vacant for years; Second, the Department would have to give this person sufficient authority and autonomy to operate the golf courses in a rational manner in order to achieve the objectives of public golf. The history, culture and current organization of the Department all indicate that this would require a major restructuring of the Department. The political, personnel, and practical obstacles to such a restructuring of the entire Department, with the attendant disruptions to the lives of employees and the operations of the Department’s many other recreational activities in order to straighten out the operation of the Golf Courses, is not a solution proportionate to the problem. There may be other considerations in other aspects of the Department’s operations that would warrant such a drastic solution, but the golf situation can be resolved much less obtrusively and more expeditiously. Finally, the golf courses are in desperate need of an infusion of capital to repair deteriorating infrastructure and make up for years of inadequate capital investment and deferred maintenance. The current political and financial realities in the City make investment of sufficient public funds an unrealistic option. The truth of this assertion is affirmed by the pending $185 million Department Bond Measure. Not one cent of this money is earmarked for golf.

PRIVATE FOR-PROFIT OPERATION OF THE GOLF COURSES

      The second operational model is to turn the operation of the golf courses over to a private, for-profit enterprise. This model solves most of the problems associated with the Departmental Operation model, but creates a whole new set of difficulties.

      While a private operator could be required by lease terms to provide appropriate capital improvements, these would come at a price. Such an operator would expect a reasonable return on such an investment, which would inevitably result in substantial fee increases. These increases could well price a significant portion of the population out of the municipal golf game. This very process is now occurring at Harding Park; even though the money for the capital improvements was put up by the City, which only needs to pay itself back, without a profit sufficient to compensate for the substantial risk undertaken included in the pricing.

      The example of Harding Park illustrates another pitfall in the for-profit model. The Department currently has no one who is qualified to negotiate such a lease, as the agreement with Kemper vividly illustrates. This agreement is so one- sided in favor of Kemper as to defy belief. Unless the Department brings in a qualified professional to negotiate the terms, the City, taxpayers and golfers will very likely be taken to the cleaners again. We don’t need to use invaluable City resources like the golf courses and the money of taxpayers and golfers to unjustly enrich a for- profit operator, which could be the result of another agreement like the one at Harding.

      Finally, utilization of the for-profit model would tend to “solve the problem” on the backs of labor, the union gardeners currently working at the courses. A private operator would likely replace these union workers. 

NON-PROFIT OPERATION

 This is the model proposed and approved by the Lincoln Park Golf Club Board of Directors in March 2007. We believe that this model, with an appropriately constituted Board of Directors in charge of the non-profit could protect the interests of all municipal course golfers, provide a profit to the City and, most importantly, raise substantial sums in the form of tax deductible donations to finance needed capital improvements to the courses without primary reliance on City funds or inappropriate rate increases for users of the courses.

The City would sign an agreement with a non-profit corporation leasing the golf course for 30 years, with provision for cancellation for specified causes. The lease would relinquish all right of management and control to the non-profit which will be responsible for hiring a professional management company to run the course. The agreement between the City and the non-profit should be broad and general by design, as the agreement should allow for the flexibility to adjust to changing circumstances. 

The City will have authority to set maximum rates for resident golfers, based on the recommendation of the non-profit, which may be adjusted from time to time by vote of the Board of Supervisors. All other rates and any discounts of the then-established maximum for residents will be at the discretion of the non-profit (which could delegate some are all of this authority to the course operator in order to maximize revenue through discount programs and other market-driven mechanisms designed to maximize revenue while maintaining affordability). Protection of rates and access for junior and senior golfers would be the responsibility of the non-profit within broad parameters. (As an example, junior and senior special rates might not be available for prime weekend tee times).

      The lease would also obligate the non-profit to make a designated level of capital improvements to the course, measured in dollars. Specific details of the contract would have to be negotiated, but the lease should leave maximum possible discretion and flexibility to the non-profit. The board of the non-profit would be designed to protect the various constituencies of the public golf community in San Francisco. 

Board of Directors

      The Board of Directors would have designated seats for appropriate groups within the golf community along the following lines: Junior golf (The First Tee to appoint one member, High school golf teams should also be represented), Seniors (SIRS or other appropriate group), Lincoln Park Golf Club, Associate Clubs in the City (one or more slots), other golfing constituencies and some at large seats to accommodate specific needs of the board for expertise (business operations, accounting, fundraising, etc.) Board members would serve without compensation. The Board would engage an operator who meets certain characteristics required by the agreement with the City, but the City would have no say in choosing or overseeing the operator.

Labor

      The lease should specify that the non-profit will require the operator to meet certain standards for its greens keeping crew. Current greens keepers (gardeners) who wish to remain would be able to do so under the same terms and conditions of employment except that they would be supervised by the course operator and would have more flexible job descriptions that are generally similar to those of greens keepers at other unionized courses. The specific terms of the job description would be a matter of negotiation with the union. New greens keeping hires would be members of (or join) an appropriate union. Terms and conditions of employment for new employees would be negotiated with the union. Any current greens keepers who wish to remain in or return to City employment would be given transfers to equivalent positions within the department.  Non-maintenance staff (managers, golf professionals, other pro shop employees) would be hired at the sole discretion of the operator.

Consideration

      The non-profit would agree to make a guaranteed minimum level of capital improvements to the Course over specified periods, with a gradual ramp-up in amount over the first few years of the lease. The non-profit would have discretion to make additional capital improvement expenditures as its finances and judgment indicate and to maintain an account for future capital improvements. In addition, the non-profit will pay a specific lease amount to the City, again, with a ramp up period. Any excess funds, not needed to perform appropriate capital maintenance or repairs to the Course would be paid to the department or the City or their designee (the Parks Trust?).

      The City would have the right to adequate financial documentation and to audit, but all expenses, including time spent by employees, accounting or legal professionals retained by the non-profit and any consultants necessarily retained by the board of the non-profit in the event such an audit discovered no material discrepancies, would be borne by the City.

      It may be that other details will have to be added, but the specificity of the agreement should be the minimum allowed by prudence. Maximum flexibility will allow for easy and quick adjustment to changing conditions. The makeup of the board, composed as it would be of municipal golfers and others dedicated to the goals of municipal golf, will ensure decision-making which keeps the interests of golf and golfers as its central focus.

Thank you for this opportunity to present our views on the future of Municipal Golf in San Francisco. Contact us if you have any questions or if we may otherwise be of assistance. We look forward to working with you to achieve a fair and workable resolution to this problem.

Sincerely

Tom Weathered

Secretary, Lincoln Park Golf Club