41st Anniversary Special: Bilking the links - Page 2

Public-golf revenue is up millions of dollars. But a costly public-private contract has swallowed most of the money
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Citing this seasonal variability and "competitive reasons," he did not break down those numbers between management and nonmanagement, as we requested.

Both Argo and Katharine Petrucione, Rec and Park's chief financial officer, attributed much of the added costs at Harding to the opening of a new permanent clubhouse there in late 2005. Argo said the increased revenues from the clubhouse have "more than covered the city's increase in payments." But while Rec and Park's ledgers do show that concessions revenues at Harding and Fleming have gone up since the clubhouse opened, the increase in Kemper's bill has gone up nearly as much. All in all, with Kemper's multimillion-dollar deal and loan payments for the over-budget remodel at the course, accounts still put the course at more than $500,000 in the red — even though a round of golf there now costs well over $100 and Kemper is still making a handsome profit.

It doesn't end there. Petrucione said Kemper's contract costs taxpayers even more than meets the eye. Because the company submits monthly and yearly budget projections as well as reams of invoices and expenses for reimbursement, Rec and Park staffers spend hours examining Kemper's paperwork and activities — essentially managing the manager. When we asked her for an accounting of how much the Kemper contract costs the city in staff hours for these oversight duties, Petrucione replied, "It definitely requires more time and effort ... than a lease agreement [like those at every other course] would."

During a recent radio interview, Sup. Jake McGoldrick called Rec and Park's deal with Kemper "the worst contract I've ever seen." He added, "We don't have a golfer problem. Golfers are coming out and playing. We have an accountancy problem."

The golf insider we spoke with echoed McGoldrick's sentiments: "Business is up like 30 percent this year, but Kemper's contract is jeopardizing the whole department.... If we redid the greens, tees, and fairways [at the other courses], just Band-Aid stuff like that, we would have the premier municipal system in the country. But instead they've given this cushy deal to a company from Chicago with no connection to San Francisco. It's so unfair."

Despite the controversy over Kemper's all-expenses-paid arrangement, Mayor Gavin Newsom, Rec and Park general manager Yomi Agunbiade, and others at City Hall have been using the deficits largely brought on by Kemper's contract to push for more private control of the city's links. In June the Mayor's Office put forward a plan to outsource not just clubhouse and pro-shop management but all golf operations at the city's premier courses, including Harding. The proposal was tabled after several contentious hearings at the Board of Supervisors, but many observers expect that it will make its way back to the board in the near future.

"In a perfect scenario, the city could [manage the courses efficiently], but the city has proven that it doesn't have the ability to do it," Sup. Sean Elsbernd told us in July. Elsbernd has been one of the most vocal supporters of bringing in private golf management.

But McGoldrick, Killian, and other opponents of the idea point out that the city provided quality, inexpensive golf for nearly 100 years. They worry that private managers will find profit in higher greens fees, more part-time workers, and lower salaries and fewer benefits for full-time staff. But beyond those concerns, they see the mayor's plan as yet another example of publicly owned assets being offered up for private gain.

The courses, McGoldrick told us, are "priceless....

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