London turns around its munis — or does it?

River Road Golf Club

London’s River Road — and yes it looks pretty, but it isn’t much fun to play.

So the staff at the city of London, where I’m now living, has put a recommendation forward that River Road Golf Club, a horribly designed course that has haemorrhaged money for more than a decade, should stay open based on the best season for golf in recent memory.

That’s quite a turnaround, though I wonder if those new numbers tell the whole truth.

Let me explain. Here’s what was said about River Road in a report that suggested it be closed:

Notice that, even before the reserve money was set aside, River Road lost $176,032 in 2010. Then came 2011, with its horrible spring. The numbers weren’t any better.

Fast forward to yesterday. The city said rounds were up throughout its courses by 17,000. That’s pretty solid, even in a great year for weather. But that’s also spread out over four and a half courses. So it is almost 4,000 rounds per course, which is also very positive.

However, there’s this comment from a London city bureaucrat:

Scott Stafford, division manager parks and community sports, explained how a situation that appeared dire in 2009 now sees city courses running at a surplus and contributing to a revitalization of the sport.

Stafford said the plan staff, with the assistance of the golf community, saw a number of changes put into place. Among those changes, a renewed focus on customer service, improvements to all municipal courses, an increased number of rounds played and twice as many junior programs put into place.

However, it is the system’s financial health that shows the turnaround in the most easily understood terms.

“It has literally resulted in over a $500,000 turnaround from 2011. We were in the hole $250,000 some odd last year and we predict close to $300,000 in the good this year,” Stafford said. “All three golf courses are profitable before the contribution to reserves. We are predicting $293,000 to reserves for future life cycle renewal and golf course system modernization.” (source)

Pardon me, but this doesn’t add up to me. Two years ago the courses (Fanshawe and Thames) were losing almost $270,000, and they lost, by their own admission, $250,000 last year over all the courses. Yes, revenue of 17,000 rounds at an average of $30 would be about $500,000. That’s good news. But I just don’t think it is that simple. For starters, few golf operations calculate on rounds any m0re — they calculate on overall revenue. And 17,000 rounds — depending on where they come from (member rounds, discounts, etc) doesn’t necessarily add up to $500,000.

Interestingly, the 2010 report has Thames Valley at 35,186 rounds. The London Free Press said that number was down last year to 34,694, or basically flat. So that would suggest almost all of the new play was at the weaker two facilities — River Road and Fanshawe Park. That means both facilities added more than 8,000 rounds each last year. Sorry, but that doesn’t make much sense given the overall industry. Or at least I find it hard to imagine they were paying rounds. Maybe more member rounds — but that wouldn’t add up to $500,000 in revenue.

Now, one thing is clear — Steve Bennett, the pro who came in two years ago to run the municipal system — has undertaken some interesting initiatives. He’s forced members to spread out their play — and not limit it to Thames Valley, which is the best of the courses. That’s certainly spread revenue around and probably brought more paying public rounds to Thames. But I don’t understand — nor does the city full explain — how they bucked a trend seen industry-wide to declining play. How did they come up with 17,000 new rounds, where most places were up slightly year-over-year? If they pulled this off they should be speaking with munis across North America — most of which are seeing declining rounds. If there’s a secret here, I think many want to know what it is.

And the bigger question is this — if the London municipal system made some money — by my estimate, based on past figures (which indicate a $290,000 loss last year) it made a little bit of a profit during the best year in recent memory —  is that the new normal? They jumped 13% in rounds using the figures disclosed — and that’s a big leap. Can they expect that to remain there? I find it hard to believe.

But break even isn’t a bad place to be — so if this normalizes — and it will — then that’s not a bad figure. I don’t think anyone can argue that muni golf is a bad thing if it doesn’t cost the taxpayer anything additional.

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Jeff Lancaster

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    More data here if you are interested. Looks like there was some reduction in expenditures too and big jump in memberships.

    Your “little bit” of profit is 300K.

    Your article appears to get Thames and River Road confused in a few cases.

    You might also have considered acknowledging that you were wrong about this issue when you weighed in on it a couple years back.

    You might also have mentioned some of the work done at River Road this year, which as I understand has been well-received by golfers.

    As to how and why the London munis are “bucking the trend”, the answer surely relates to a number of things — but reduced fees and the fact that London golfers as a whole overwhelmingly support the maintenance of the current system (with River Road) surely tops the list.

    Finally, I wonder what private courses in the area, in the same price range, you would consider superior to River Road or the Fanshawe courses. From here, they both appear to provide good value relative to their competition.

  • Do you mean privately owned? I’d say Tarandowah is vastly superior to everything in the city, and Firerock and Forest City offer deals that put them very close to the city courses for a much higher quality. Frankly, Thames is a good course. River Road is horrible, regardless of what they do to it and Fanshawe is somewhere in the middle.

    And I’ll believe a $300,000 profit when they bring final numbers out — and I’ll be more surprised if they can maintain it.

  • Yes, privately owned, open to the public is what I meant to say.

    You will get no argument from me re Tarandowah, even tho it is 1/2 hour out of town and a little more expensive than the London munis.

    But Firerock and Forest City’s rates are in different league re greens fees then the London munis. Firerock: $48 twilight; $75 top rate — FC $40 to $69 — River Road $20 twilight; $32 top rate — Thames $28 and $40.

    At these rates, the real comparators with the munis are the likes of Westminster Trails, the Fox, Oxbow Glen, Maple Ridge, throw Echo Valley and Pine Knot into the mix, if you like. Without pretending that River Road is akin to Oakmont, it at least sits comfortably in the middle of this pack. That’s why I hope and expect it will be around for a long while, unless the local private golf course owners, with your help, get to a majority on Council one of these years.

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