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Dave Olson, Published January 28 2011

Moorhead examines fate of city-owned golf courses

As the city of Moorhead strives to maintain services and keep valued workers in a time of uncertain finances, a question is getting asked: Should Moorhead sell its two golf courses?

The issue surfaced at a recent City Council retreat, where officials talked about challenges Moorhead will face if state lawmakers continue to slash local government aid.

Under one plan proposed in the Legislature, Moorhead would lose $1 million of its anticipated state aid this year, even as it tries to maintain essential services like police, fire and snow removal.

In addition, the city is looking to give a 1 percent raise to all city workers this year, including many whose pay has been frozen the past several years.

Officials hope the boost, which will cost about $100,000, will discourage essential employees from looking elsewhere for better pay.

Operating Moorhead’s golf courses, which includes paying down the debt incurred in constructing them, requires an annual subsidy from local property tax dollars.

Over the past 10 years, the amount has fluctuated from as low as $155,503 in 2002 to as high as $546,529 in 2009. Last year, the city subsidized its golf courses to the tune of $488,529.

Moorhead City Manager Michael Redlinger said that after the last golf course bonds are paid off in 2021, the courses are expected to break even or return a small profit.

All options on table

City Council member Luther Stueland said selling The Meadows and Village Green golf courses should be on the table, along with other items he said would be better delivered “via the private sector.”

Those items, he said, include a building housing the Rourke Art Gallery Museum, the Hjemkomst Center and hundreds of acres of farmland the city owns.

Council member Brenda Elmer said the city needs to consider all options.

“We were very fortunate this last budget cycle that the city was able to prevent a tax increase despite increased costs, flood fighting and uncertain state funding,” Elmer said.

“We need to brace ourselves to a new reality of declining local government aid and redouble our efforts to engage Moorhead residents to prioritize services they value most,” Elmer added.

Diane Wray Williams said she sees no immediate need to sell off public infrastructure.

“We have been very conservative in managing tax revenue in the past – I see no reason why we won’t be able to continue on that track,” Williams said.

Fellow council member Nancy Otto said she isn’t interested in selling the golf courses, as entire housing developments have grown up around them.

“I am open to looking at a private company to manage the courses, to see if that would improve the bottom line,” Otto said.

Council member Mark Altenburg agreed.

“I am supportive of investigating a public-private partnership, which will increase the quality of play, decrease city investment and allow for the city to balance its budget moving forward,” Altenburg said.

Fargo competition

Moorhead competes for golfers with other cities in the region, including Fargo and Mapleton in North Dakota and Hawley in Minnesota.

The Fargo Park District built its five golf courses with tax dollars that won’t be repaid from income from their operation.

Excluding construction costs, Fargo golf courses can roughly break even in a given year, according to Jim Larson, director of finance and human resources for the Fargo Park District, which has its own governing board and taxing authority.

He said flood years are an exception and, in 2009, Fargo’s golf courses ran a deficit of $770,000.

Last year, Fargo courses required about $500,000 in additional tax dollars to operate because of revenues lost to flooding.

Moorhead’s golf courses can benefit when Fargo courses close due to flooding. But, overall, Moorhead’s courses have been hurt by increased competition, according to Holly Heitkamp, Moorhead recreation division manager.

“We used to be a solid 34,000 rounds per course, per year. That has just dwindled,” Heitkamp said.

“When they (Fargo) brought Rose Creek in and Mapleton became stronger, Hawley became stronger, you’re just diluting your market,” Heitkamp added.

Dollars and cents

In 2010, the adult fee to play 18 holes on one of Moorhead’s public golf courses was $26.50 on a weekday. The price was $19 to play nine holes.

The prices went to $30 and $20.50, respectively, on weekends.

Those numbers play a role in Heitkamp’s theory as to why it is difficult for public golf courses to pay for themselves.

“I just think the local market doesn’t allow you to charge what the true cost would be for that amenity,” Heitkamp said, adding that one way private golf courses achieve profitability is by charging yearly membership fees.

According to the city’s budget information, the largest cost involved in running the golf courses is personnel, including grounds keeping and other duties.

Since 2006, that cost has topped more than $600,000.

Despite the expense, Heitkamp said she believes public golf courses are one of the things that make Moorhead a place where people want to live, work and play.

“My opinion is they are an asset that is absolutely fundamental,” Heitkamp said.

TEEING IT UP: ROUNDS PLAYED in 2010


Readers can reach Forum reporter Dave Olson at (701) 241-5555