By DANIEL TAUB
Los Angeles is not exactly known for fiscal responsibility when it comes to government projects. But there is one area where local government has made some smart decisions: the running of golf courses.
That was the conclusion of a recent study by the Reason Public Policy Institute, which said that L.A. County has become one of the nation's leaders in golf-course privatization by contracting out the operation of all 17 of its public courses.
As a result of privatization, the study said, most courses enjoyed increased revenues, lower costs and better upkeep.
At the county's Mountain Meadow course in Pomona, for example, annual revenues went from $569,233 before the course was privatized in 1989, to $708,704 in the first year it was privately operated, to about $1.4 million annually over the last few years.
"L.A. was one of the pioneers because they had some of the earliest contracts with (private operator) American Golf," said Lisa Snell, a policy analyst who authored "Getting Greens in the Black: Golf-Course Privatization Trends and Practices" for Reason, which advocates the privatization of many government services.
Along with more money has come better-maintained courses even though golfers aren't necessarily paying more to play than they were before. Because most municipalities continue to set greens fees even after privatization (L.A. County courses charge $20 on weekdays and $25 on weekends for an 18-hole round), private operators must improve course conditions to attract more golfers.
In fact, courses are often privatized with the goal of improving conditions, Snell said, because many municipalities are too cash-strapped to invest in golf-course maintenance and upgrades.
"If a golf course wants to attract tournaments and attract players, in order to upgrade the facilities they almost have to privatize," she said.
Steve Duron, administrator of golf operations for the L.A. County Department of Parks and Recreation, agreed that the county's golf courses have seen major improvements both in upkeep and revenues since privatization began in 1982.
"Basically, in the (early) '80s we were losing money operating golf courses," Duron said. "As a matter of fact, we had an offer from a private management firm at the time that they would run all of our golf courses for a million bucks (in rent paid to the county), simply because we were losing money."
The county didn't accept that offer today it's making considerably more than $1 million a year from its courses. But it did start privatizing its golf courses, a process that ran through 1994, when the operation of the county's 17th and final course was contracted out.
L.A. County is now in the black on its golf courses to the tune of $11.8 million in the 1997-98 fiscal year. "That's a good net," Duron said. "That helps run a lot of programs throughout our parks system."
Sheri Clarke, director of acquisitions for Santa Monica-based American Golf Corp. which operates 15 municipal courses in L.A. County, including six county courses and others owned by Long Beach, Pasadena and other cities said her company has seen more and more municipalities become comfortable with privatization of golf courses.
"It's almost an assumed part of the way a city will be run," Clarke said, adding that with an operator paying a minimum annual rent, it minimizes the risk to the municipality. "They want the operator to assume the risk and to guarantee them a rent payment."
Brad Beanblossom, acquisition analyst for San Francisco-based Arnold Palmer Golf Management LLC, which operates two L.A. County-owned courses, said companies like his often have an easier time running and maintaining courses, as well as attracting golfers and tournaments to them, than municipalities.
Municipalities would rather "focus their energies on other government issues rather than be golf-course operators," he said. "It's been an economic motivation as well as a motivation from the standpoint that it's not their competency really to run golf courses."
One municipality that has not followed the privatization trend, however, is the city of Los Angeles. Although pro shops, snack bars and driving ranges at the city's 13 courses are run by private concessionaires, the courses themselves continue to be run by the city.
Steve Soboroff, president of the city's Recreation and Parks Commission, said his board considered privatization about five years ago, but ran into opposition from the city's labor unions. Instead, it contracted with the United States Golf Association to inspect the city's courses every six months and advise the city on needed improvements.
Given that contract, Soboroff said the city of L.A. has no need to privatize its courses.
"If you look at the numbers we do in Los Angeles, if you look at the number of people that are put through the system, and the profit that is made, it rivals any private organization in America," he said. "We couldn't do any better if we privatized It is not on the table; it is not necessary."
The city takes in between $5 million and $6 million a year in profits from its golf courses, according to Craig Kessler, a member of the city's Golf Advisory Board.
Snell of Reason said municipalities like the city of L.A. feel less need to privatize services like golf courses during good economic times when they feel less need to find new sources of revenue.
"In the last couple of years, with surpluses, budgets in general have been in better shape," she said. "Things tend to be privatized when the city or county needs revenue."
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