The Port of Ridgefield began building the 18-hole Tri-Mountain Golf Course in Ridgefield in 1994, but could not afford to continue. Clark County had guaranteed the project, so they took it over in 1997 and issued $7,985,000 in 30-year municipal bonds to pay for the Golf Course, finish a clubhouse, and other improvements. Golf Resources Inc, based in Lakewood WA, was selected to run the golf course for 5 years via a competitive bid process. In 2002, the county sent out a Request for Proposals, (RFP) for management of the facility. Twenty-two companies were identified as potential respondents, over half from the Portland Vancouver metro area. Six proposals were reviewed, including Golf Resources Inc., 2 local firms, and 3 companies based out of state.
Billy Casper Golf Management Inc. (BCG) based in Virginia, was ultimately selected for a 10-year contract. Staff noted, “BCG primarily operates courses along the east coast with recent contracts in the Chicago area.” The BCG website boasts, “If you’re an owner of a golf course, private club, or resort, Billy Casper Golf will make you money.” However, according to county records, since they began in 2003, mostly losses were reported. This Profit-Loss Table shows a history of these losses. Debt was also incurred in 2003 for $300,000 of equipment over 8 years, costing $41,678 in interest.
Under the management of Billy Casper Golf, financial irregularities and accounting issues were reported by both the county auditor and state auditor. A BCG manager at Tri-Mountain was arrested for alleged embezzlement and, and a review of financial transactions for the years 2003-2007 was triggered. Tighter oversight was established and BCG re- paid the county for losses that were tracked.
No Competitive Bids
At the Sept. 4, 2012 Clark County Commissioner meeting, county administrator Bill Barron explained that Commissioner Steve Stuart, who was absent, had requested an early 10-year contract renewal for the golf course. The only written information provided was on the consent agenda, “Request approval of a 10-year management agreement with Billy Casper Golf (BCG) to manage the Tri-Mountain Golf Course on behalf of the county. Fiscal impact, yes.” In contrast, staff reports for public hearing issues were readily available.
The consent agenda may be passed without any discussion. Prior to the meeting, I requested that the contract renewal be pulled for discussion, and asked for written information, which wasn’t provided. County staff presented sparse details on the renewal and lauded the financial management of BCG. Public comment was permitted, and I urged Commissioners Boldt and Mielke not to approve this unnecessary early renewal, given Tri-Mountain consistent losses, and to put the contract out for competitive bid. Staff explained that a bid process could take 2-3 months, adequate time given the Dec. 31, 2012 expiration.
Nevertheless, the commissioners approved the 10-year no-bid contract early. In comparison, the city of Portland runs 5 golf courses and follows a competitive bid process with 5-year renewal options, except for one course that is under a long term ground lease. Different groups manage the courses, some are local.
Lewis River Golf on the scenic river in Woodland is the closest golf course to Tri-Mountain Golf and has been in business since 1967. The owner, Stading Family LLC, includes second and third generations of the family. Senior family member Ralph J. Stading serves on national and regional golf association boards and was surprised to learn about the no-bid renewal. He indicated that an open and fair bidding process that included local operators could have potentially produced a significant improvement for the county. Area courses contribute property taxes to the community, offer outreach like fundraiser tournaments, and space for large gatherings. Some also compete with the county golf course that can operate at a loss for years, buoyed by taxpayer dollars. Other privately owned golf courses in the area that are open to the public include, Green Mountain, The Cedars, Camas Meadows, Fairway Village, Beacon Rock, and more.
Lengthy Substantial Contract
Contract information provided after the meeting specified that the county will pay the Billy Casper Group starting at $ 1,150,000 in 2013 and increasing annually by the Portland Consumer Price Index, up to a maximum of 2% per year. The previous base contract included annual increases as high as 3.93%. Over 10 years, the base contract with a 2% annual increase adds up to $ 12,592,179. In addition, the new contract also offers more generous annual incentive fees of up to 20% of the aggregate annual compensation.
Incentive payments made to BCG are based on Gross Golf revenues from greens, practice range, and putting course fees, membership and annual fees or passes, carts, and golf club rentals. Other incentives apply to revenue from food and beverage sales, rental, golf shop sales and golf instruction. A $5000 maximum annual travel budget is set for airfare, car, lodging, and meals for BCG employees not based at Tri-Mountain to travel here to provide services. The county has paid for capital improvements, equipment, food costs, and inventory costs, which is a major advantage over private businesses that fund their own operations. At the county golf course, the management company prospers and taxpayers are still in the red. Under the new contract the management company is to:
- Invest $ 600,000 in new course maintenance equipment over the 10 years.
- Renew the cart fleet twice during the 10 years. In February, 2012, Commissioners
approved BCG to enter into a 5- year lease for 45 new electric golf carts “to provide
the best golf experience possible, and maintain or increase golf patronage.” the
carts were delivered in March 2012. Perish the thought of an older cart or walking.
- If certain revenue targets are met, they may contribute $25,000 per year to a capital
Who profits most?
Given the long contract term, the substantial amount, the consistent red ink, and the many local golf companies that offer quality services, a competitive process is warranted. Should the county subsidize “the best golf experience possible” or a for-profit golf management company at taxpayer expense? Nationally, it is estimated that about 9% of the population plays golf. Could a local operator run the course more efficiently? We may never know, since the locals were not invited to participate in this round.