Whether or not the City of Cold Lake should remain in the golf course business is a question councillors are pondering.
“What the challenge has always been is how much is the city going to subsidize the golf course in terms operational expenditures and things like that,” said Coun. Kelvin Plain. “Those were questions raised three years ago when the city took over the golf course. Now we've been in it three years and we're really starting to see some ramifications around that.”
The issue was raised at their March 8 council meeting, when the decision to enter into a one-year contract extension for the maintenance of the Cold Lake Golf and Winter Club was in front of council.
As of Feb. 1, 2013, the City of Cold Lake took over operation of the Cold Lake Golf and Winter Club. Prior to the city assuming responsibility, when it was operated by 4 Wing, maintenance of the golf course was contracted out to the Grand Centre Golf and Country Club. Since the city didn't have the resources in place to perform maintenance themselves, they entered into a three-year contract with the Grande Centre club to continue golf course maintenance.
With the contract ending in 2015, city administration issued a request for proposal for the maintenance contract but, since then, has decided their best option is to extend the existing contract with Grand Centre for a cost of $375,000 – an additional $57,000 from the 2015 fee.
As per their contract, the city must provide one years notice if they are going to no longer operate the golf course. While it's too late for this summer, councillors expressed that it's something they need to start taking a serious look at.
“I know that council went ahead with the golf course and I respect that. My position has always been that I don't know too many municipalities nowadays that are in the golf course business. Personally, I would like to see us bow out of the golf course,” said Plain.
Since taking over operation of the golf and winter club, the city's expenses have climbed from $810,000 in 2013 to $995,999 in 2015. The revenue, however, isn't keeping up.
In their first year of the city operating it, the golf and winter club brought in $719,571. Last year's revenue for the club was just under $717,000 – resulting in an almost $280,000 deficit.
While councillors questioned the numbers, Cold Lake CAO Kevin Nagoya explained that they are hit with some unforeseen expenses throughout the year, such as bridge that needed to be constructed in 2015.
“Administration pulled out budgets for other golf clubs in the region. Their expenses are much higher, their revenue is also greater, but their expenses are higher,” said Nagoya. “We'll have to look at what level of service the city wants, and if it's going to be cost recovery or generating revenue…We do have to go ahead with this agreement regardless, but we can have a conversation about next season.”
Council voted in favour of entering into an agreement with the Grand Centre Golf and Country Club for the maintenance of the golf course at the Cold Lake Golf and Winter Club for 2016. However, council will be having further discussions surrounding the future of their role in operating the golf course.
“It's a big issue and there needs to be lots of discussion around that,” said Plain. “You take a look at the population of the City of Cold Lake and the surrounding area. Can you support two, three golf courses? It's something that has to be looked at over the next year.”
