Forty-eight years after its construction, Killeen’s Stonetree Golf Club could face a new reality as the city plans to pursue outside management of the course while retaining ownership of the facility.
On Tuesday, Killeen City Manager Ron Olson told the Killeen City Council he was in the process of preparing a Request for Proposals for the course’s management — a major shift for the city as the course has bled out an average of about $318,000 annually each of the past five years.
The city’s best hopes, Olson said, is that an outside management company would leverage “economies of scale” to run the golf course profitably and take a significant money pit off the city’s books.
However, the question for the course’s average 234 annual members is this: How will my experience change?
If the city does pursue an outsource, it could come with a more efficient management that hasn’t seen the sort of staff cuts that have plagued the course in recent years. A new manager could also install a golf pro on site, a luxury Stonetree cannot currently afford.
However, rate increases could be part of the package, according to the city, leaving the possibility of a higher price to play.
On Tuesday, city staff revealed to the council the golf course lost an average of $317,957 in each of the past five years, putting a significant strain on the city’s finances at a time in which budgets are lean across the board.
The community services department, which currently administers the course, has been the target of recent cuts as the city has worked to draft a balanced budget the last two fiscal years.
In 2017, the council agreed to a swath of community services cuts that included reduced hours at the Killeen Community Center and a reduction in community classes at Lions Club Park among other measures. While those cuts stabilized during budget deliberations in June through September, the department as a whole continues to see a decrease in funding for public facilities and community events.
The golf course has not been immune to those cuts.
Because of a reorganization of community services and staff cuts, the course has seen its 19 full-time equivalent positions trimmed to 12, including the conspicuous absence of a “golf pro” to handle lessons and other responsibilities. The pro position was eliminated in January 2018.
In fiscal 2018, the city projected a $352,000 loss at Stonetree, which had a budget of about $1.43 million.
On Friday, Community Services director Brett Williams was nonspecific on what factors led to those continued shortfalls, but did say the city was avoiding rate increases in an effort to retain players.
“We have reduced the budget over the last two years by identifying efficiencies and cuts,” he said in an email. “Our rates are really competitive with other area golf courses. Rate increases could be considered, but we would run the risk of losing golfers.”
The 18-hole course currently charges $38 for a weekday round and $46 for a weekend round. Annual memberships cost $900.
With all those factors against, Olson told the council he had been working on a plan to seek outside management for the course, suggesting the course could be returned to profitability with an expert hand.
On Tuesday, Williams said companies had indicated to the city that outside management would be profitable, but Williams said Friday the companies were nonspecific on what measures they would put in place.
“Companies have made the statement but have not disclosed actual actions they would implement,” he said.
Olson’s primary concern — and the reason he briefed the council on the request, he said — was he wanted to prepare council members for what he expected to be a loud outcry from course patrons.
Olson said he had previously worked on changing management at municipal golf courses throughout his tenure in other cities and said residents were vocal in every one of those decisions.
“In every case that I’ve dealt with, there has been resistance up front, but on the back end, they see the course and management improve, and it works out,” he said.
Another question for staff would be what to do with the city’s agreement with the Bell County Water Control and Improvement District No. 1 to provide reuse, or “gray,” water for the course’s irrigation.
In May 2015, the city completed a nearly $1 million infrastructure project to run treated wastewater to the course for irrigation. Previously, the city used tap water to irrigate the course, which was about triple the cost.
At the time, Killeen used 500,000 gallons of potable water on average per day to irrigate the course. By using reclaimed water, the city estimated it would save about 182.5 million gallons per year of potable water out of Belton Lake.
City officials said the move saved nearly 43 cents per 1,000 gallons on treatment costs, equating to about $215 per day.
Williams said Friday a management company would likely be expected to pick up the cost of purchasing that irrigation water, pending negotiations.
Although Olson warned the council about what he expects will be spirited push back from golfers, council members appeared receptive to the plan and open to the possibility of freeing money in the general fund.
“I think the city has done what it can do,” Councilman Gregory Johnson said. “This is a business, and sometimes things don’t work out.”
Councilman Hugh “Butch” Menking said the course was on obvious drain on the department’s finances and supported a push to outsource.
“We really owe it to the citizens to do whatever we need to do to get this thing done,” he said.
Councilwoman Debbie Nash-King raised concerns over what would happen to the club’s staff if a management outsource took place.
Williams said the city’s request would include language asking a potential suitor to at least consider the existing staff for hiring, if not requiring them to offer positions. Williams said the department had also met with staff and told them they were working on options to keep them on with the city.
“The RFP will be designed to require the management company to offer opportunities for continued employment,” Williams said. “Those desiring to remain with the city may have the option ... to transfer to equal/similar positions within the department to fill vacancies that currently exist. We would also encourage them to apply for other positions within the city for which they are qualified.”
If the city receives a workable proposal from an outside firm, the council will likely be required to vote on the arrangement at a later date.