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Sunday, June 20, 2010

Sharp Park Golf - profitable, popular, and subsidizing San Francisco salaries and services.

As indicated in a recent post, the Tucson based Center for Biological Diversity, and the Wild Equity Institute (founded by ex-CBD staff attorney Brent Plater), are actively engaged in a disinformation campaign about the finances, popularity, and historical importance of the landmark Sharp Park golf course. This is apparently an effort to con the people of San Francisco into giving away 400 acres of valuable coastal park land that was a gift to the people of San Francisco.

This post is an attempt to explain the financial reality of Sharp Park Golf in terms that even a journalist might understand.

The Arithmetic Explanation
This is a simple math problem. If you can do 3rd grade arithmetic, you can understand that green fees from Sharp Park subsidize San Francisco government salaries and services and The City is not subsidizing the course as claimed by those who would destroy the course.

In round numbers, Sharp Park operational revenues exceed expenses by about $100,000. The City of San Francisco charges Sharp Park $200,000 in overhead charges that are used to fund non-golf related SF government salaries and services. On an accounting basis, Sharp Park then looks like it is suffering a $100,000 loss. But, if Sharp Park was to disappear, the $200,000 in overhead expenses would still exist in San Francisco and the shortfall from Sharp Park would have to be made up by higher taxes or cutting salaries and services. It is pretty simple really.

But some people (see Destroy Sharp Park Golf Advocates) do not trust arithmetic. So as a supplement - I offer a couple of other explanations.

Phil Ginsburg's Explanation
Phil Ginsburg is the new Director of San Francisco's Recreation and Parks Department. Phil Ginsburg explains it to Supervisor Ross Mirkarimi during the Audit and Oversight Committee meeting chaired by the Supervisor on 12/16/09:

As Ross Mirkarimi says in this clip - the number are actually "de minimus". In the context of the Rec & Park budget, the profit (or loss) of around a $100,000 is not that meaningful. Nevertheless, it shows that Sharp Park is helping not hurting the San Francisco budget shortfall. If Sharp Park were to disappear, the SF budget shortfall gets worse.

Nancy Wuerfel's Explanation
Nancy Wuerfel is a professional fiscal analyst and member of the San Francisco Park, Recreation and Open Space Advisory Committee. Nancy Wuerfel's explanation in the San Francisco Chronicle:
"Claims that city golf courses lose money are just not true. I analyzed the financial information for the first six years of the city's Golf Fund. The Recreation and Park Department's accounting practices have created the appearance that Sharp Park golf course is losing money when it is not. These findings were submitted to the Recreation and Park Commission and the Recreation and Park Department."
And her more detailed explanation in the referenced report [PDF]:
"The golf revenue was understated due to internal practices that allowed operating expenses to be paid off the top. When this bad accounting is corrected, it is evident that revenue has been sufficient every year to pay the first priority costs of golf operations and maintenance. The bad accounting has been used to promote Prop J privatization of the golf courses and, potentially, the give away of Sharp Park to the federal government. When this bad accounting is corrected, different questions emerge as to why these actions are even considered."
More on Current Operating Expenses vs. Future Capital Expenditures
To be sure there are significant future capital expenditures in Sharp Park's future. The important point is that those capital expenditures exist regardless of whether or not the golf course is around to continue subsidizing SF services on an operating basis. Those who would destroy the course deliberately obfuscate and confuse the issue by conflating current city operating expenses with future capital expenditures. Some of these capital expenditures must be taken regardless. Most significantly the berm must be armored to protect the current habitat of endangered snakes and frogs, local neighborhoods, and Highway One, regardless of whether the golf course is there. This is the conclusion of Karen Swaim, the leading scientific authority on the endangered snake and frog habitat in the bay area:
"You need to protect the sea wall. You need to have a fresh water managed habitat currently for this species to recover it, and that is all there is to it." - Karen Swaim
The remaining capital expenditures in the Park & Rec plan to modify the course pale in comparison to the costs that would be incurred by destroying the course. This is well documented in the Sharp Park Conceptual Restoration Alternatives Report [PDF]. Of course, it is a little difficult to compare these alternatives to the Restore Sharp Park Destroy Sharp Park Golf "vision", as the advocates of the "vision" have never explained or detailed the costs for their massive "destroy the course" project. Where does the money come from to bulldoze the course, remove all of the beautiful "non-native" cypress trees, kill and dispose of the kikuyu fairway grass (which is invasive and aggressive if not cut and managed by the golf course), destroying the seawall and rebuilding a new seawall on the other side of the course to protect the neighborhoods and Highway One? At no point has anyone explained how all of this "restoration" is paid for, or how the revenues that flow to The City from 55,000 green fees/year will be replaced.

How Golfers Can Help The City Budget Crisis
There is a common sense solution that would permit Sharp Park Golf to help City finances even more than it does now. First a caveat - I am speaking only for myself, and don't know if other golfers would agree with this solution.That said, in my opinion, Sharp Park green fees are too low.

San Francisco could impose a modest increase (or temporary multi-year surcharge or both) in the green fees at Sharp Park. A 10 or even 20% across the board increase (approximately $3 -$7/round) could help both The City and the course. I could be wrong, but doubt that those who play the course would oppose such an increase, as long as half the additional revenues raised stayed at the course to improve the course. An improved course will draw even more golfers and revenues for the city. With modest improvements, the landmark Alister MacKenzie course could live up to its reputation as the "Workingman's Pebble Beach". Rather than City taxpayers subsidizing Peninsula golfers as falsely claimed by those who advocate the destruction of the course, this would be an easy way of increasing the contribution of the course to The City, from both resident and non-resident golfers alike. This is a win-win solution for The City, the course, Pacifica, San Mateo County, and bay area golfers.

Tomorrow (Monday - June 21), the San Francisco Budget Circus will once again be on display at City Hall. Most of the public comment will be from those who are begging/demanding more money from The City budget during their one minute of public comment. As a bad golfer and an appreciative patron of San Francisco public golf courses, I plan to be there and offer something different with my one minute of advice. Specifically I'll be suggesting that we Sharp Park golfers can and should contribute even more to help the course and help The City out of its budget crisis.

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