GolfPDX
Growing the Game in Greater Portland
The Rates Are Too Darn High!
“Portland’s fees are about average […] but future hikes could make Portland less competitive.” – Portland Golf Audit, 2019
One of the least enjoyable experiences for golf course guests and staff alike, is the start of “peak season.” No guest wants to be told that green fees went up from last year, and no pro shop assistant wants to have to break the bad news. Guest frustration is understandable and often justified, but don’t shoot the messenger. It’s not the frontline staffer who makes that decision. But WHO does set the rates and why do they seem to increase every year? Do they NEED to?
Until 1999, the Portland City Council had the direct authority and responsibility of setting green fees for all of the PP&R golf facilities (via City Ordinances). Starting in 1995, the Council began delegating its authority to PP&R.[1] By 1999, the Council amended City Code 20.20 to fully authorize and task the Director of Portland Parks and Recreation (or their designee), with setting fees and policies for the golf facilities. The goal behind this change was to “protect the public interest and allow the flexibility necessary to operate the program on an efficient and profitable basis.”[2]
The process typically involves recommendations from and discussion amongst the PP&R Director of Golf, the GAC, and the course operators, with the Director of Parks making the final approval. There are certainly several benefits of having the Council less directly involved in the management of the municipal golf facilities, but the pre-1999 governance ensured a certain level of transparency and direct accountability that is lacking under the current system.
Prior to 1999 when the City Council directly passed ordinances, they were required to publicly explain the rationale behind their decisions. In 1994 for example, there was heated controversy over the Council’s decision to apply a $2 per round surcharge for non-residents.[3] Since 1999, there has been little to no public record of rate and policy discussions, aside from the occasional mention in GAC meeting minutes.
When West Delta Park Golf Course (Heron Lakes Greenback) was opened in 1971, the City Council determined that it was “desirable that the rates be the same for all the municipal courses.”[4] That policy was followed for decades, with the exception of separate rates being set for the Heron Lakes “Red 9” (Great Blue Back-9) and the Great Blue course once fully completed in 1992.
This “uniformity” policy apparently changed at some point after 1999, because Eastmoreland, Greenback, RedTail and Rose City are not all the same price and have not been for several years. Further inconsistency between the courses is evident when looking at senior rates/times, twilight rates/times, Fridays being considered as weekdays, weekends or a separate rate itself, and whether or not advanced reservation fees are charged for group outings and tournaments.
A City Golf Operations Manual has existed and been edited several times since 2000, but it is evidently not always followed.[5] For example, Peak Season is not supposed to start until May 15th, and yet for 2022 Heron Lakes started charging Peak Rates on May 6th. It was even earlier in 2021 (April 23rd). Shoulder Season is not supposed to start until October 1st, but multiple times in recent years, Peak Rates were in effect through most if not all of October. Shoulder season is supposed to end October 31st, and yet for most years Winter Rates didn’t go into effect until December. Who made these decisions and why? What’s the point this Operations Manual if it is to be regularly ignored and not updated to adapt to constantly changing circumstances?
“The City’s recreation programs, including the golf program, are market-based activities. The golf marketplace requires flexibility in setting fees in order to remain competitive, adapt to changing market conditions, and balance revenue needs with customer demands.” – Portland City Ordinance No. 173286
The above quote is not necessarily inaccurate, but the city-owned, public golf courses exist to provide affordable access to the game for the common people. After all, very few people are fortunate enough to have the financial means to join a private club. At what point does the municipal golf program try too hard to function as a business, that it no longer serves its fundamental purpose of being an accessible public community resource? Constantly increasing usage fees only further hinders the ability to grow an already expensive recreational activity. As the 2019 Audit warned, “Increases in fees charged for golf rounds, cart rentals, and using the driving range may improve revenue, but higher costs also may work against the program’s goal to increase rounds and diversify its customer base.”
“The golf fund is an Enterprise Fund… and must operate on a self-sufficient basis in order to maintain and improve its physical assets”[6]
Simply put, golf revenue offsets expenses, and surpluses end up in the Golf Fund to be used for capital improvements, program enhancements, and in case of emergencies (like in 2017 when revenue was down, mostly due to record rainfall). If revenue is not only offsetting expenses, but generating surpluses, then why would rates need to be increased? Inflation? Nope.
According to the 2019 Audit, “Recent greens-fee increases have outpaced inflation, and the program had two increases in just the past year.” This fact didn’t stop rate increases in 2020, 2021, and again now in 2022. In 1971, the most expensive rate for an 18-hole round of golf at all of the City courses was $4.50 (weekend morning). When using an inflation calculator, that $4.50 value would be roughly equal to $32 today.[7] And yet, the comparable green fee is currently set at $50 ($53 on Great Blue). That’s an inflation rate of over 1000%, compared to the established historical cumulative inflation rate of roughly 600%. That’s a 70% increase from what rates SHOULD be, if increases were to simply stay on par with inflation. Why such a discrepancy? Shouldn’t expenses also stay on par with inflation? Increases in operator fees (in addition to actual operating costs) via concessionaire and management fees are certainly partly to blame.
Has there been a massive decline in revenue intake? Quite the opposite, actually. According to the Golf Program page on the PP&R website, “The current [Golf Fund] balance is $965,000. In fiscal year (FY) 2019, the Parks Golf courses made $517,000, its most profitable year in over five years.”[8] This was in 2019. Yet rates increased in 2020, 2021, and in 2022, despite all-time record rounds thanks to the “Covid Golf Boom.” When asked why the rates increased, one course manager replied “because the parking lots are full.” High demand does not always justify increased prices, especially not during chaotic economic times for many people. One might have expected to at least get a free roll of toilet paper with their increased green fee in 2020.
More recent numbers paint an even brighter financial picture. GAC minutes from 2020-2022 are filled with reports of increased rounds and increased revenue, with expected and real surpluses. The most recently posted March 2022 minutes report that February rounds were the most since 2005, up 61% since last year and 73% over the 5-year average, and greens fees were up 69% YTD passed last year. Most importantly, fiscal year (July ‘21-June ‘22) revenue is projected to hit $12.4 million for a net gain of $1.8 million and an expected ending Golf Fund balance of $6.6 million.[9]
This past April was the rainiest on record for Portland. The courses are still quite swampy, at best comparable to typical March conditions, and yet Peak rates are being charged. This would be similar to charging full price for spoiled milk or moldy bread (kind of like aeration “specials”?). Nevertheless, if the sun is out, the parking lots are full. If the courses are making plenty of money and if the program is in great shape financially speaking, then why do rates keep getting increased? Are these surpluses being put back into the facilities to significantly improve the guest experience?
Most golfers won’t mind occasional minor price increases so long as they result in improved course maintenance and facility upgrades. But it’s hard to evidence that any of the City properties have significantly improved over the past 10 years or the past 20 years, despite 30-35% and 45-50% rate increases, respectively. The Heron Lakes clubhouse has remained a glorified trailer for 50 years. The local golf community deserves to see their money being used effectively and responsibly to benefit their experience and keep their costs down.
GolfPDX firmly believes that above all else, public golf must be affordable for the common people. Keeping rates low is the single most effective way to increase rounds, reach minority demographic groups, and ultimately grow the game. Should we be fortunate enough to be awarded the contract to manage the City eastside courses, we pledge to work closely with PP&R to ensure that owner and operator profits never be prioritized over patron experience.
[1] 1995 – Ordinance 168909 (Parks Director can set winter and twilight rates); 1996 – Ordinance 169794 (“economy rates” days/times); 1998 – Ordinance 171987 (tournament and advanced reservation fees)
[3] Ordinance 167902; repealed within a year due to significant public backlash (Ordinance 168909)
[7] Average taken from 4 inflation calculators: AIER.org ($29.94), BLS.gov ($32.69), calculator.net ($31.45), smartasset.com ($33), usinflationcalculator.com ($32.12). Historical rate data compiled based on City Ordinances (see e-files) and rate sheets posted to course websites (starting in 2000).
[8] https://www.portland.gov/parks/sports/golf
[9] GAC Meeting Minutes – March 9, 2022
As an avid retired golfer, I find myself playing city courses less and other courses more often. This smells of city greed and lack of understanding the situation. The burning question of no new club house for Heron Lakes is a prime example of poor leadership, but if you live in Portland you know poor leadership has become a way of life.
Great background info BJ. Hope you are awarded the contract and soon.
I think it’s time for a change. We golfers have been taken advantage of so the city needs to seriously consider a new operator of the city courses.
Of course I am disappointed when rates keep climbing, but this is a reflection of what is called a Market Economy. If demand outstrips supply (parking lots are packed), then the price goes up. When the price increases finally lead to a decrease in demand, then the prices are supposed to decline (or stop increasing) until people indicate, by voting with their wallets and feet, that the value justifies the price.
We’ll done, BJ! Good luck!