Round Rock sinks millions into little-known golf club
The city of Round Rock is spending millions to upgrade a loss-making golf course owned by the city but branded more as an exclusive ‘club’ than a municipal service.
Taxpayers are shouldering the $5.1 million cost of upgrading greens at the ‘Forest Creek Golf Club’ to improve the playability of the course, create an optional 19th hole, renovate the driving range, install irrigation, improve sand bunkers, and clear trees to make the course easier on golfers.
Renovations have been underway since December. City accountants classify the golf club as a “business-type activity,” though in fact the new expansion is funded by the city and not by fees generated from golfers, whose contributions do not come close to covering the investment cost.
According to the city’s 2017 financial report, Round Rock last year spent $1.86 million on the golf club compared to less than $0.8 million in program revenues, meaning the club operated at a loss of more than a million dollars.
In prior years, before the renovation began, Round Rock consistently lost money on the golf course, according to a municipal bidding document released by the city in 2016: “the City has incurred an average net loss of $46,806 in managing this asset” for the years 2013–2015, the document says.
The $5.1m new investment adds to an estimated $2.8m in bond debt for the golf course that the city reported owing as of 2016. According to the 2016 bid document, the golf course has historically generated insufficient income to fund both its bond debt and fully pay management fees to the course’s contracted operator.
Last year the city exercised its option to terminate its agreement with long-time operator On Course Strategies and hire a new operator, KemperSports. This company is overseeing the upgrade, running the course, and trying to attract more revenue to reverse the revenue declines of 2013–2016.
Under the new arrangement, the municipality bears all the investment risk while KemperSports stands to be awarded with a variable incentive based on gross receipts of the golf course. KemperSports had been asked by the city to advise on how much to invest in upgrading the golf course.
Forest Creek Golf Club is nestled into an upscale residential development on the east of the city. The ‘club’ is not listed by the city’s Parks and Recreation Department as a city service. Instead, it is overseen indirectly by the city’s new Sports Management and Tourism department, which relies on KemperSports for the day-to-day management.
Membership requests in the club can be submitted via the Forest Creek website, although the site cautions that membership options and pricing are not yet available due to the course renovation.
Many Round Rock residents do not even know that they have a municipal golf course or do not make use of it. In a survey carried out by the city in 2016, residents ranked Forest Creek Golf Course lowest in importance compared to other recreation services, with only 4% calling it important compared to 48% for city parks, 34% for trails, and 23% for youth recreation programs. The club also ranked lowest among all the parks and recreation categories (trails, pools, athletic facilities, parks, etc.) in terms of resident satisfaction.
The $5.1 million investment in Forest Creek dwarfs the cost for most other recreation projects in Round Rock. For example, the amount being invested in the golf course is nearly four times the cost of the city’s Play for All Abilities Park, which opened in 2012, and eight times the amount the city itself invested in that project, since the majority cost was paid by Play for All Foundation, a not-for-profit organization.
Currently, the golf course is closed for the renovations and is scheduled reopen in late Summer 2018.
