By Eric Francis
KILLINGTON – No matter how well it does, and it is already doing well, Killington’s golf course is never going to generate enough revenue to pay down the outstanding debt that the town has taken to cover previous operating losses at the facility.
That was the sobering conclusion of a report released this week by a South Carolina-based golf course consulting group that conducted an extensive study of the Green Mountain National golf course’s accounts and operations this summer.
The full report has been posted on the town’s website and John Brown from Brown Golf Management will be on hand to discuss the report with the public this coming Tuesday night at 7:30 p.m. as he presents it to the selectmen at a special meeting.
The report by Brown gives Killington’s course high marks for both the professionalism of the staff and the quality of the customer experience there, noting that Green Mountain ended last year with a net of $195,000 in what would have been profit if there weren’t a larger long-term debt involved and calling that result “a sign of a successful facility in today’s market, especially when you factor in the seasonal nature of Vermont’s golf market.”
However, when that net operating income is stacked up next to the now more than $590,000 required each year to service the debt on the town-owned course which saw the town borrow $2.5 million last year on a 10-year note to cover costs, the consultants weren’t able to see any realistic revenue-generating schemes to bridge across that gap.
“The operation is run well,” the report states before adding, “(But) it is highly unlikely to squeeze an additional $400,000 of positive cash flow from seasonal operations.”
The report does list several areas where the consultants thought additional revenue can be generated at Green Mountain, with suggestions for more aggressive marketing of group packages to play golf and efforts to get golfers to buy more food from the catering department; however, the report also broached the possibility of making cuts in the overall number of workers at the course and cutting both the health care and retirement benefits of those that remain.
Brown described the Killington course’s health and retirement budgets as being “well above the industry average” and suggested the town should look at offering more “market driven” rates to golf course employees in the future as a way of saving money.
Finally, the report poses the question of whether the golf course should be run with strictly seasonal employees, a move it acknowledged would almost certainly involve a steep tradeoff in the quality of a long-term staff familiar with the course for a less costly, but more difficult to manage, alternative. The consultants suggested that if the town was to decide to switch to purely seasonal employees that at the same time it should hire an outside management company to run the course in order to lessen the pitfalls of doing so.
“There’s an element of town that feels that all we have to do is cut costs but there aren’t enough costs to cut to cover the loss,” Killington Selectman Bernie Rome said Wednesday after having given an impassioned speech on the golf course topic the night before at the regularly scheduled selectboard meeting. “We couldn’t possibly make up $600,000 and what I’m saying is that amount of money is available in the Economic Development Fund, and we actually only need about $400,000. We have the rest covered.”
Rome said that what also struck him about the consultant’s report was the conclusion that when the original proponents of the building the course developed their budget numbers they did so wisely, it’s just that the economic reality nationwide, for resorts especially, has shifted so dramatically in the meantime.
“He’s saying the projections 18 or 20 years ago at the time the golf course was initiated, which did include being able to cover the cost of the bond and the interest from operating income, were correct. He is letting the original guys off the hook,” Rome said, adding that it made sense to him because, “Fifteen years ago we were a rich town.”
This article first appeared in the October 20th print edition of the Vermont Standard.