FARMINGTON — Farmington City Council in a Tuesday morning work session switched management of the Piñon Hills Golf Course to the city's general fund, an account primarily funded with gross receipt taxes.
The change will allow the city to fund backlogged improvements to the golf course, officials said. Cory Styron, the city's Parks, Recreation and Cultural Affairs director, said the city has been unable to fund the improvements because the golf enterprise fund often doesn't break even.
"Back during the boom of golf in the late '70s and early 2000s, people were making money hand over fist with golf courses," he said.
But since 2005, the National Golf Foundation has noted a 7.3 percent drop in golf rounds played nationally. Now, most golf courses operate at a loss, Styron said. Farmington's golf course opened almost 25 years ago, and it has lost money during 21 of those years, according to Styron's presentation to council.
According to the presentation, the course in 2013 had $955,826 in revenue but $1,139,145 in expenses, operating at a loss of 19.2 percent. In 2012, the course's expenses exceeded its revenue by more than $48,000. In 2011, expenses were nearly $297,000 higher than revenue. The course has lost money the past 10 years, according to the presentation.
To afford improvements, the city has had to shift money from other accounts. City council voted in July to pull a $170,000 loan from the parks account to cover a $113,000 deficit from the past fiscal year. A $112,000 loan was made to the golf enterprise fund the year before.
Now under the management of the general fund, gross receipt taxes -- instead of loans -- can bolster losses and fund capital improvement, Administrative Services Director Andy Mason said.
The golf course needs $2.6 million in improvements, according to Styron's presentation. Pumps, pipes and valves for an irrigation system will cost $1.5 million, according to the document. And upgrading bunkers, sand traps, cart paths, the pro shop, the kitchen, the dining room, tee boxes and greens will cost $1.1 million, according to the documents.
Most of the equipment at the golf course has never been replaced, said Chris Jones, the golf course's manager. He hopes the city will now include in the general fund a line item for the course's capital projects.
"It's not going to be a big change in how we operate day-to-day," Jones said. "We still will go with the philosophy of trying to provide the best golf course for the community and make it affordable."
City Manager Rob Mayes said the golf course is a service the city provides -- like the Farmington Public Library and Farmington Aquatic Center -- and those services don't generally generate enough revenue to support themselves.
The city couldn't charge the necessary fees to cover the loss because it would be cost prohibitive for users, he said. A "proper balance" of user fees and taxes pays for almost all the city's services, he said.
"Everything we do, with the exception of the electric utility, is subsidized with taxes," he said.