lip of the cup

Tight municipal budgets throughout Michigan have officials examining their balance sheets for ways to save money. Government golf courses — many bleed revenue each year — may be privatized in at least three Michigan communities. The cities of Lansing, Ann Arbor and Royal Oak have all had discussions about either selling off their properties or contracting out for their management.

In Lansing, the potential closure of two courses almost led to a court battle between Mayor Virg Bernero and the City Council, but that was avoided in April with a short-term agreement that would raise fees at all four courses. As part of the deal, the City Council promised Bernero a thoughtful review of his proposal to sell two courses (Red Cedar and Waverly) outright.

In Ann Arbor, the city’s two golf courses have been bleeding revenue as the number of rounds played by local residents has plummeted 57.6 percent since fiscal year 2000. City Administrator Roger Fraser told The Ann Arbor News in April that the city would be happy if the courses just broke even financially. In just the last few years the courses cost the city "about $1 million," according to Fraser. Such losses will not likely be tolerated ad nauseum, which brings some sort of privatization option to the forefront of the debate.

In Royal Oak, the city is debating whether to sell Normandy Oaks Golf Course to help eliminate an expected $3.9 million deficit. While the city-owned course currently generates positive cash flow, the lump sum expected from the sale is attractive to officials who would use it to close the deficit and establish an endowment that would pay the city interest in the future.

As of May 10, a subcommittee of the city council was reviewing proposals from interested purchasers to determine whether or not the sale of the course would be in the city’s best interests.