Operational Review and Recommendations For City of San Francisco Golf Operations San Francisco, California Prepared For: San Francisco Nonprofit Golf Foundation Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306-2155 Prepared By: 1150 South U.S. Highway One, Suite 401 Jupiter, Florida 33477 (561) 744-6006 February 2007 Operational Review and Recommendations For City of San Francisco Golf Operations Table of Contents Introduction ................................................................................................................... 1 Executive Summary ...................................................................................................... 3 Organization of City Golf System...........................................................................................3 How the System Evolved to its Present State........................................................................4 Golf System Expenses ..................................................................................................................4 Management Issues...............................................................................................................6 Recent Municipal Golf Success Stories .................................................................................6 Possible Solutions for San Francisco Municipal Golf System................................................7 Continue As Is ...............................................................................................................................7 Close Course(s).............................................................................................................................7 NGF Consulting Management Recommendation .........................................................................8 Funding Options for Improvements and Working Capital .............................................................9 Business Model .............................................................................................................................9 Revenue Enhancement Opportunities.................................................................................10 Enhanced Marketing....................................................................................................................11 NGF Financial Projections...........................................................................................................11 Summary Statement ............................................................................................................12 Market Environment.................................................................................................... 13 Market Area Overview .........................................................................................................13 Demographics Summary.............................................................................................................13 Economic Overview.....................................................................................................................14 Golf Market Overview ..........................................................................................................15 National Trends in Golf Demand and Supply..............................................................................15 National Trends in Municipal Golf ...............................................................................................16 Public Golf Operational Norms....................................................................................................17 Estimated San Francisco Area Golf Demand 2006-2011 ...........................................................21 San Francisco Area Golf Supply Inventory .................................................................................23 Golf Market Summary..................................................................................................................24 Market Environment Summary ............................................................................................25 Competitive Golf Market ............................................................................................. 27 Golf Market Dynamics..........................................................................................................27 Local/Regional Municipal Golf Market.........................................................................................27 Daily Fee Market .........................................................................................................................31 Alternative Length Facilities ........................................................................................................34 National Premier Municipal Golf Courses ...................................................................................35 Regional Case Studies ........................................................................................................38 Regional Municipal Golf...............................................................................................................38 Public Utilities Commission (PUC) Golf Courses ........................................................................38 Regional Case Study Summary and Observations.....................................................................43 Other California / National Case Studies .............................................................................45 Summary Observations...............................................................................................................45 Summary Table ...........................................................................................................................47 Competitive Golf Market Summary ......................................................................................48 City of San Francisco Municipal Golf Operations Review....................................... 50 Overview Of Golf Operations...............................................................................................50 Administration..............................................................................................................................50 Golf Enterprise Fund ...................................................................................................................51 Golf Course Maintenance and Staffing .......................................................................................51 Capital Improvement Program ....................................................................................................53 Harding Park Renovation ............................................................................................................53 Agreement with PGA TOUR........................................................................................................55 Summary of System-wide Historical Performance......................................................................57 Marketing.....................................................................................................................................59 Golf Fees .....................................................................................................................................59 Labor Expenses and Issues ........................................................................................................59 Accounting...................................................................................................................................61 Individual Facility Analyses ....................................................................................... 62 Harding Park Golf Course....................................................................................................62 Harding Park GC Location and History .......................................................................................62 Inventory of Facilities...................................................................................................................63 Golf Course Physical Review ......................................................................................................64 Operations Overview...................................................................................................................68 Golfer Survey...............................................................................................................................73 Facility Performance and Data Analysis......................................................................................76 Other Issues at Harding Park ......................................................................................................81 Harding Park Best Case “As-Is” Financial Projections................................................................81 Sharp Park Golf Course.......................................................................................................84 Sharp Park GC Location and History ..........................................................................................84 Inventory of Facilities...................................................................................................................85 Physical Review ..........................................................................................................................87 Operations Overview...................................................................................................................90