City-run golf courses in debt

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This article was published 2/5/2011 (2911 days ago), so information in it may no longer be current.

Winnipeg will consider selling some of its golf courses or converting them into parks after auditors discovered city-run golf courses are in a "downward spiral" and have racked up massive debt.

In a report released Monday, city auditors recommend Winnipeg moves to get out of the golf business to avoid further financial losses. Winnipeg Golf Services is a special operating agency that runs 12 public golf courses and is currently $8 million in debt.

Auditors say financial losses will continue to mount unless Winnipeg takes swift action to contract out the management of Crescent View, Kildonan Park and Windsor Park golf courses. The report said Winnipeg should consider selling Assiniboine, Wildewood and Canoe Club golf courses when their leases expire.

In the long-term, auditors suggest, Winnipeg should stop operating golf courses and sell some of the property for commercial or residential development. The report said the city should review consolidating St. Boniface and Windsor Park golf courses into one championship course.

The recommendations must be approved by executive policy committee and city council, and will be presented to council's audit committee on Friday.

Winnipeg Golf Services lost $1.1 million last year, and is projected to lose another $1 million in 2011.

"Without immediate action, massive losses will continue, and deferred capital investment will mount," the audit report states. "The city's golf courses are in an accelerating downward spiral."

Part of the problem, the report states, is the supply of golf courses in Winnipeg outstrips the demand by 10 per cent, and some city-owned facilities are in need of significant upgrades. Fewer people are golfing at city-run courses, as competition from privately run facilities has increased.

Iain Day, acting chief operating officer for Winnipeg Golf Services, said the agency has struggled in recent years and the audit's recommendations came as little surprise. He said there is an over-supply of golf courses in the Winnipeg area, and municipal and private courses have suffered in recent years from a declining demand and poor weather.

Day said it's too early to speculate how golfers will react to the potential sale of some city courses.

"If you play one of these courses obviously it means a lot to you," Day said. "If you grew up playing Windsor and Kildonan, there's an emotional attachment."

Auditors suggest contracting Crescent View, Kildonan Park and Windsor Park courses to management firms, so the city could receive annual rents of $100,000 along with property taxes and investments nearing $1 million for each 18-hole facility.

Winnipeg has already contracted out the management of its other courses, though the report states the city has lost money on some of these agreements. Winnipeg leases Assiniboine, Canoe Club, Rossmere, Transcona, St. Boniface and Wildewood golf courses to semi-private clubs. Auditors say the arrangements are "significantly adverse" to the city's financial interest since the contracts cost the city in excess of $500,000 per year.

The report suggests Winnipeg should identify courses under lease or contract that could be put up for sale or converted to open park space.

"It'll take a while for that to happen, we'd have to get direction from council to do that," Day said, noting Winnipeg must give leased courses five years notice.

 

jen.skerritt@freepress.mb.ca

 

 

Fraud hotline

 

WINNIPEG will consider setting up a fraud hotline to increase the number of tips about possible waste in city departments.

A new city audit report, released Monday, says many cases of waste and fraud likely go unreported since the City of Winnipeg requires staff to report it to a supervisor. Fraud and waste includes things such as a misuse of city funds or resources, duplication of work, unethical behaviour and confidentiality breaches.

Since Winnipeg first created a fraud reporting policy in 2006, only three incidents have been reported, including two incidents in 2007 and one in 2008. Auditors say tipsters would be more likely to report fraud and waste via a hotline since they can remain anonymous. The report says a typical Canadian organization loses five per cent of its annual revenues to fraud every year. Other cities such as Calgary, Ottawa, and Toronto have implemented fraud hotlines.

Auditors estimate the cost of the hotline would be $25,000 annually.

The idea needs to be approved by executive policy committee and council. The report will be reviewed by council's audit committee on Friday.