KMGA Newsletter - Sept. 13, 2005

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KALAMAZOO MUNICIPAL GOLF ASSOCIATION
4200 Lovers Lane
Kalamazoo , Michigan 49001

August 22, 2005

Kalamazoo City Commission
241 West South Street
Kalamazoo , MI 49007  

Re:  Proposed Sale of Eastern Hills Golf Course

Honorable Mayor and City Commissioners:  

The KMGA Board of Governors is writing this letter to express the unanimous opinion of elected and appointed members that Eastern Hills Golf Course should not be sold.  Please note that there are three City Staff members on the Board who are of great help to us but on this issue they officially remain neutral. 

We are greatly sympathetic with the City Commission’s problems in developing annual budgets.  It is understood that each City Commissioner has the best of intentions in making difficult budget decisions and that the City is as well governed as it could be.  It is our privilege to be a Board of the City. 

Our goal has always been to efficiently manage operations of the three City owned golf courses and to annually return to the General Fund all revenues above expenses.  In recent years this has amounted to $1,475,000.00 in direct payments.  In addition the courses have covered the annual cost of debt service on the capital improvement bond issue.  We are seriously considering ways of increasing revenues by seeking more leagues and outings, expanding food services, and obtaining a beer and wine license.

Eastern Hills is a great golf course in excellent condition.  Because it has been recently improved and is well maintained, players choose it for their preferred course when they have plenty of opportunities to go elsewhere.  Nearly 50,000 rounds were played last year. We estimate that this number would have been larger if there had not been disruptions because of the sewer construction project for Pfizer’s Gull Road plant.  The highest number of rounds ever achieved at Eastern was 67,416 in 1998.

Like Milham Park and Red Arrow, Eastern Hills has no restriction on who may play except that they must observe the common courtesies expected of all golfers.  In any two hour period, from dawn to dusk, the course can provide recreation to 216 people (8 players x 9 holes x 3 nines).  Young can play with old; scratch can play with hackers, all at the same time and having fun.  The best part is that the City doesn’t have to contribute a dime to the running of these courses, either in cash dollars or time spent by City employees.

Our golf courses are a great selling point for recruiting new businesses.  Companies looking at Kalamazoo would like to know that all of their employees could have access to great recreational golf, not just the senior management who would likely go to a private club. 

The Board’s pride in the course has been well reinforced by the numerous queries we have received following the August 7 article in the Kalamazoo Gazette regarding the possible sale of the course.  Clubhouse staff estimates that inquiries are being presented at the rate of two dozen per day. A typical comment is that the City would be “nuts” to sell the course.  Literally thousands of people would be disappointed if the course were sold and not available for play.

Publicity about selling the course has already affected possible revenues for next year.  Some league managers have begun to look for a different course.  Others who buy annual memberships understandably will not buy a membership at year end.  If the normal amount of year end revenue is reduced there will be a problem in covering off season expenses, like repairing equipment, trimming trees, and attending professional classes.  

Employees would lose their jobs if the golf course were sold.  During the summer there are forty people that cover field and clubhouse operations.  The seemingly high number is needed because the course is staffed during the long daylight hours seven days per week without interruption. Some are college students who appreciate having a summer job.  Others are young people on their first job.  Five are full time with families.  If a sale were imminent, it would only be fair for the Board to inform the employees so that they could look for jobs elsewhere.

Sale of Eastern Hills would necessarily reduce the number of golf services sponsored by the KMGA for young people.  Examples are Junior Golf where 435 kids participate,

Competitive Golf Camp where high school players train for high school teams, support for Links to the Future, Golf Clinic for selected kids, Middle School League played at Eastern Hills west nine, and High School and College practices and competition.

Red Arrow might not survive as a golf course without the financial support it gets from Eastern Hills and Milham Park .  Having Red Arrow as a separate course for beginners has been useful for instruction and practice that otherwise would take place on the larger courses.   Professional staff members from the two larger courses donate their time to provide free golf lessons to disadvantaged children at Red Arrow.

There has been an economy of scale by having Eastern Hills.  If it were sold the full cost of the Golf Director, Business Manager, and Greens Superintendent would shift to Milham Park .  Equipment purchases and operating expenses would not be shared by the two largest golf courses.   

SUMMARY:

The KMGA Board of Governors recommends that Eastern Hills Golf Course should not be sold.  It is further recommended that the decision should be made as soon as possible in order to avoid a year end revenue loss, estimated at over $100,000 through uncertainty by members and leagues on whether the course would be available in 2006.  The Board has a sense of anxiety that an early decision should be made and publicized.

Eastern Hills should be retained as a highly regarded public asset that adds much to the quality of life in Kalamazoo, thousands of players will lose their preferred course to play golf, there is a high potential for returning revenues to the General Fund, employees would lose their jobs, services to young people would be reduced, and an operational economy of scale would be lost.  There are plenty of developable properties available in the area without using the land occupied by the golf course.

For additional information please contact the Golf Director, Jim Roschek: the Business Manager, Don Brinks, or any Board member.

Respectfully submitted,  

Orlin K. Loen, President,
KMGA Board of Governors 

Board Members

David Ballingall
Vic Callahan
Chuck Clinard
Quincy Franklin
Orlin Loen
Rick Margelis
Noel Ocen
Teresa Snook
Lee Stuart
Tom Vanderberg 

City Staff Board Members

Ken Collard
Frances Jewell
Mark Stuhldreher

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Subject: PRAB & Eastern Hills Golf Course

Dear Mayor Jones,

This e-mail is to let you know of the recommendation the Parks and Recreation Advisory Board has made relative to the issue of the possible sale of Eastern Hills Golf Course.

Below, is the wording of the recommendation:

The City of Kalamazoo Parks and Recreation Advisory Board unanimously approved the following:

"The Parks and Recreation Advisory Board (PRAB) recommends not selling the Eastern Hills Golf Course.  Further, PRAB recommends that the Kalamazoo Municipal Golf Association's (KMGA)  'Plan For The Future' regarding increasing their revenue stream, be given significant attention.  Lastly, PRAB recommends the Kalamazoo City Commission make a decision as soon as possible, on both items, so as not to impact negatively on KMGA's current and future revenue streams."

The recommendation followed pro and con presentations made by the President of KMGA, Orlin Loen and Special Projects Coordinator for the City, Bruce Minsley.  After the presentations there was a lengthy discussion of the information presented.  From both the presentations and discussions came the recommendation noted above.

Also, it should be noted that KMGA is paying the debt on its bonds, making a profit on its operations and has already, in 2005, turned over $50,000 to the City.  KMGA and its golf operations, including Eastern Hills, is one of the few operations the City has that is producing revenue to off set the cost of other operations.  Further, it should be noted that the alleged bail out of KMGA, $500,000, was not a bail out, but rather a technical accounting procedure based on the City using the accrual method of accounting.  For specifics on this item, please contact Orlin Loen of KMGA.  In addition, PRAB felt KMGA should be given the opportunity to change its mission and have 3 years to implement their "Plan of the Future" for producing positive revenues.

It is our hope that the City Commission will act rapidly to make their determination on Eastern Hills Golf Course.  We look forward to a positive result of this issue.

Sincerely,  

John D. Hilliard
Chair, Parks & Recreation Advisory Board

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