Friday, April 22, 2005 | 9:46 a.m.
Las Vegas should sell off a city golf course that a recent audit found has lost millions since it opened, the councilman whose ward includes the course told a committee meeting on Thursday.
"My opinion is...we should get out of the golf course business as soon as we can," Councilman Larry Brown said at the meeting of the city's Audit Oversight Committee.
But Brown said his opinion wasn't based on the Durango Hills Golf Course's financial situation -- rather, it was a philosophical objection to the city's operating a golf course at all.
"We don't build public facilities to drive profit," he said. "We build public facilities to serve the public."
The committee heard a presentation on the audit from its author, Senior Internal Auditor Philip Cheng. The audit found that the course lost $2.8 million in its first two years of operation, 2003 and 2004.
The facility, which is operated by an Arizona contractor, also overpaid taxes, let more than $25,000 worth of food go bad, and had a former supervisor who used its employees and equipment for his private business, according to the audit.
The audit recommends various measures to tighten the golf course's management, mostly by requiring more city monitoring and control over the contractor, IRI Golf Management. Deputy City Manager Steven Houchens said talks have begun to implement the recommendations.
"We've already met with the contractor to deal with those issues," he said. "The first thing we're going to do is stop the bleeding."
The problem, Cheng told the committee, was that no oversight was built into the contract with IRI. Whether or not the company met its projections, it still earned its fee, he said.
"There's no accountability in terms of meeting the budget. It's just an exercise in putting numbers down," Cheng said. "We have no control over the fees (charged at the course), we have no control over the number of rounds. We just take whatever comes in."
Committee member Paul Workman said he believed Durango Hills could still be turned into a profit generator.
"This will be a jewel for the city of Las Vegas in time," he said. "I would strongly recommend that you look at the long term for a business like this." The city's water shortage is leading to fewer golf courses being built, increasing demand for the ones in existence, Workman said.
But Brown said the golf course should be thought of like a public park or recreation center. The issue is not whether such a facility costs the city money but whether it is believed to be a public resource. And while he indicated that he thinks the course will indeed emerge into the black, he said he didn't think it was an appropriate facility for the city to own.
"The bottom line is, should we be in the golf course business?" he said. "That's a policy decision the council's going to have to make."
The $12 million, 18-hole Durango Hills Golf Course in northwestern Las Vegas opened in late 2002. It is one of four Las Vegas municipal courses.
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