City staff is recommending that City Commissioners approve a contract amendment and second extension of the golf course management agreement with CourseCo during their Jan. 21 meeting.

Staff are recommending the agreement for a term Feb. 1 through Jan. 31, 2030.

The city has been in an agreement with CourseCo since February 2019 for management of the city’s two municipal golf courses, Anaconda Hills and Eagle Falls.

That agreement ran through Jan. 31, 2022 and commissioners approved an extension through Jan. 31, 2025.

The city golf fund has struggled for years, running an roughly $1 million debt to the general fund.

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The golf fund is designed as an enterprise fund, meaning it’s supposed to be self-supporting through user fees. But over the years, golf suffered and the general fund subsidized the program.

In 2019, the city issued a request for proposals for course management in an attempt to make them financially stable and reduce pressure on the general fund.

The city received two proposals, from CourseCo and the Great Falls Baseball Club.

In their staff report for the Jan. 21 meeting, Park and Recreation staff wrote that CourseCo has extensive experience managing golf courses and working with municipal governments.

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“CourseCo presented a dynamic and progressive plan for development of the courses as community assets. They have a robust corporate structure and resources including sales, marketing, human resources, finance, customer service, promotions and industry involvement. They provided a proforma that showed they would have a positive impact on the financial success of the courses. They also had a policy and good track record in retaining the majority of existing employees,” staff wrote, leading them to enter into the management agreement with CourseCo and subsequent extension.

CourseCo has provided cost savings opportunities and generated new revenues for the golf courses, helping reduce the golf fund’s debt to the general fund since 2019.

During their Dec. 3 work session, city staff discussed the golf program with commissioners as part of their budget review.

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Steve Herrig, Park and Recreation director, said that in 2023, there were 47,483 rounds played at the city’s two courses.

Under CourseCo’s management, $1.3 million was brought into the city and $1.2 million went toward the golf debt with some going into the taphouse renovation and course equipment, he said.

Herrig told commissioners that staff was looking into a long term agreement with CourseCo and eliminating the rest of the golf debt.

Commissioner Rick Tryon asked if closing a course would help cut costs.

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Herrig said that CourseCo officials had told them they share resources between the two courses and closing one wouldn’t significantly reduce expenses but would reduce revenue overall with less opportunity for memberships, rounds and tournaments.

Herrig said that closing a city course doesn’t mean all of that revenue will come to the other city course and golfers might instead leave for another local golf course.

Anaconda Hills closes in the winter and resources shift to Eagle Falls, he said, and CourseCo has said the two course model works keeping it more affordable and profitable.

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Herrig said the city can’t sell Anaconda Hills so if they were to close a course, it would be Eagle Falls, representing a bigger hit to golf revenues.

Tryon said that his question wasn’t about closing a golf course, but whether they were bound to keep both open in the CourseCo agreement.

Herrig said it’s not in the contract, but CourseCo would prefer to maintain both courses, but if that’s not sustainable, they’d adjust.

He said that CourseCo had shown staff they could sustain the two courses and be profitable.

Mayor Cory Reeves asked when staff projected the golf fund would be debt free.

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Melissa Kinzler, city finance director, said that depends on if the city used a 10-year agreement with CourseCo and if they applied funds from the sale of city land to Pasta Montana toward the golf debt.

She said that when the city sold the Pasta Montana land, they’d talked about putting the funds in the parks special revenue fund, but realized later that according to city records, it was actually golf course land, so that $300,000 is sitting in the golf fund.

Kinzler said that as of December, there was about $678,000 of remaining golf debt to the general fund.

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She said that using the Pasta Montana funds would cut cut the gof debt in half and the new CourseCo agreement will affect how quickly the remaining debt can be paid off.

She said that CourseCo looks at their rolling cash flow and when they have additional revenue, it goes to the city to pay down the golf debt.

“We’ve come a long way,” Kinzler said.

Herrig said the goal was to pay down the golf fund debt in about five years.

Kinzler said there’s still a lot of deferred maintenance at both courses that the city is responsible for.

Herrig said they’ve started the process of replacing golf carts and putting them on a replacement schedule.

He said they’d refurbished some and trying to replace about 20-25 carts at a time.

Under the agreement with CourseCo, the city pays any deficit in the operations, pays a management free, and retains all liability for the golf courses.

Reeves asked when was the last time the city had adjusted golf fees.

Herrig said commissioners had approved an increase earlier that year.