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SDMGA received REPORT NO: 10-037 the Golf Division Update on Resident Identification Program, Costs Associated with Special Events and Low-Income Fee Waiver one day before the NRC meeting. Click here to read the report. SDMGA immediatlely responded to the NRC in a letter written by Paul Spiegelman which is shown below.

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Dear Members of the NR&C,

Because of its late arrival, I have only had to time read through the Report # 10-037 regarding Agenda Item 7 and have time to make only the following brief comments. I urge the NR&C to include this item on the April agenda because it the City’s report is not complete and because there is so little time before tomorrow’s meeting to review it. Unfortunately, my faculty duties at Thomas Jefferson School of Law make it impossible for me to attend tomorrow’s meeting. Thus, I submit the comments in this email for whatever assistance they may be in hearing item 7 if it is heard tomorrow.

The failure of the staff to come up with cost recovery figures for the City Resident card, particularly the renewal of that card should not obscure the fact that when it comes to City residents, we pay more than the cost of the services. The City resident card costs $25 per year. The initial set up of a resident card requires a photograph taken on a computer by a city employee; the process takes two to three minutes. Even assuming three minutes and $100 per hour of employee/computer time, the cost is $5.00. The renewal is done at the starter’s window and involves a less than 30 seconds; its cost on the same scale would be 83 cents. Nonetheless, local golfers pay $25, the full list price.
In contrast, the USGA, the PGA tour, Farmers Insurance, Buick and the Century Club get sweetheart deals. The list price for complete course buyouts is $170,000 per day. ($105,000 for the South and $65,000 for the North). Thus the full list price of the Farmers’ tournament is $1.7 million. The Century Club has been renting the course for $200 K for the Farmers Insurance Tournament, $1.5 million below list price.
The City’s “hard line” approach is to charge the Century Club the cost in lost revenues for taking course which is estimated at $400k. See San Diego Union Tribune, “City pays a price to host PGA play,” January 27, 2010 http://www.signonsandiego.com/news/2010/jan/27/city-pays-a-price-to-host-pga-play/ Thus, this tournament has received a $1.5 million discount from list prices and the proposal is to reduce to $1.3 million discount. Similarly, the U.S. Open cost the City millions, just on a cost recovery basis and that does not count the full list price of the of the course rentals. Compare San November 24, 2008 , http://legacy.signonsandiego.com/sports/golf/20081124-9999-lz1n24usopen.html [U.S. Open cost City as a whole $1.7 million more than revenues] with SDMGA, “Watchdog or Whitewash,” http://sdmga.com/WhoPaid.htm [Lost greens fees from closing of North not included in estimates, nor is fact that Friends of Torrey Pines expropriated $3.2 million out of the Open proceeds from the City by paying themselves back for the “gift” they supposedly gave to the City of the original renovation costs for the South Course.
Ignored in Report 10-237 is the key point that the expenses for Special Events come out of the Golf Enterprise Fund which is raided to pay for the costs of special events, but the claimed economic benefits of the special events go not to the Enterprise Fund, but to the General Fund (in terms of estimated increased hotel and sales tax revenues) and to private economic interests, such as the hotel, restaurant and tourism industries. Basic accounting principles and simple fairness dictate that if the General Fund and private interests are the beneficiaries of any revenues claimed from these events, then they should pay the costs in direct relationship to their revenue benefits.
Thus, although it is heartening to learn that the “For future budgeting and contract purposes, it is the City’s intent to increase future reimbursement by sponsor in order to ultimately achieve 100% reimbursement of the actual and incurred loss revenue and costs associated with holding this event” (Report p.2), this does nothing to reimburse the Enterprise Fund (and local golfers) for the literally millions of dollars that have siphoned out of the Fund to support the U.S. Open and the Buick and Farmers’ tournaments. The charitable contributions made by the Century Club were in large measure paid by the Enterprise Fund by the subsidies given to these golf tournaments.
Councilman DeMaio’s statement at the February meeting to the effect that the purpose of this public park is to be available to all citizens regardless of wealth was an important one. The impact of the U.S. Open, including the renovation of the South Course, in particular has been to dramatically raise the rates that local citizens must pay to play the South Course at Torrey Pines (raises as high as 55.8% on local residents were instituted in FY 2010 and they will rise again in FY 2011.) The result has been a dramatic diminution of the number of rounds played on the South Course by local citizens, far below the 70% of rounds that the Council has set as a target. Staff should be asked to report the percentage of rounds played by City residents on the South Course. This issue has been swept under the rug by lumping play on the North and the South together.
It is unfortunate that staff did not respond to the Committee’s request for a plan that included a low-income fee waiver in addition to junior and senior rates. The cost of a low income fee waiver of the size originally proposed by staff ($350,000) could be paid simply charging the Century Club full cost recovery for the events it sponsors. Without the cooperation of the staff, it will be difficult for this Committee to explore and implement changes in the fee structure to make golf more affordable. Staff may be right that the best way to consider changes in the fee structure may be as part of the five year plan for 2012 through 2016. It may well be that the best way to make golf financially accessible to more San Diego citizens is to roll back the exorbitant fees on the South course to FY 2009 levels rather than targeting low income golfers.
I agree with Councilmember DeMaio that it is critical to the mission of the golf courses to keep the course accessible to the general public. Right now access to the South course is being rationed by wealth. Country Club golfers already enjoy their private facilities which ration access by wealth. Municipal golf courses exist for those who cannot afford country clubs. Many San Diegans cannot afford the high greens fees on the South Course at Torrey Pines. Other raises in fees, including the trebling of fees on Balboa nine holes and the 250% rise in the cost of the resident card have hit low income golfers hard (particularly a group of seniors living on Social Security who have been forced off Balboa nine hole course). These inequities need to be addressed.
Ultimately, the NR&C needs to examine how the Golf Enterprise Fund is being administered. The Fund is running huge surpluses, but prices keep going up for local golfers. The purpose of the Enterprise Fund is to protect the General Fund from being raided by golf activities and put golf on a pay-as-you-go basis. Lowering fees to local golfers can be done without running a deficit.
The NR&C needs the input of a Golf Advisory Council with members who are knowledgeable about golf and golf finance on all of these issues. I hope that Committee acts to direct staff to re-establish the GAC so the NR&C can get the benefit of a citizen point of view on all of these issues.

Paul Spiegelman

Co-founder, SDMGA