City of Polson looks at ways to cut costs at golf course

BY MICHELLE LOVATO

Lake County Leader

Polson commissioners are not certain about how to proceed with the financially anemic Polson Bay Golf Course restaurant operation that ran at a loss in 2014.

The restaurant’s operation and its all-beverage liquor license has been a subject for discussion for the last several months at Polson commission meetings. Each time the subject arises, council members decide to put more study into the subject before making a decision.

Polson City Manager Mark Shrives introduced the subject during a fall workshop and asked the commission to make a decision about the restaurant’s operation last November.

Two issues captured commissioners’ attention: The all-beverage liquor license that can be sold and the restaurant running at a loss in 2014.

Polson Bay Golf director Roger Wallace, golf board President Dave Cottington and golf maintenance superintendent Pat Nowlen were invited to make presentations at the city commission Nov. 3.

At that meeting, Wallace told city commissioners that one of the most important things to remember when talking about the restaurant and its all-beverage liquor license is that the money it uses and generates is not attached to the city’s general fund. It is in its own fund.

“Let’s be clear, everything that we’re talking about tonight is golf fund,” Wallace said. “As a matter of fact, the golf fund sends about $30,000 a year to the general fund.”

Wallace told commissioners at the Nov. 3 meeting that the golf fund purchased the liquor license in 2004 for $55,000, because at the time of purchase, the golf course had gaming available.  

“At that time it was a pretty good buy for us, to be honest. We did well,” Wallace said. But once gaming was removed at the golf course, the need for the license disappeared. Selling it for a profit, however, would prove to be a challenge. 

Wallace, who was asked by a previous city manager to find the license’s value last year, learned that the city would likely only fetch between $10,000 and $15,000.

“For $12,000, it was a little too painful for council to accept that and I had a hunch that was going to be the case,” Wallace said.  “With food and beverage being a part of the new hotel coming in, that license is going to be integral to somebody’s business model.”

Wallace’s hunch might have been right.

Shrives said at the city’s Jan. 21 commission meeting that current market research on the license’s value appears to be about $75,000, according to the Department of Revenue, which in November 2014 sold an all beverage license to the Ronan Golf Course. 

Shrives told commission members that because Montana allows a limited number of licenses per area and is based on factors like population, the city might have an even more valuable item to sell.

Polson is at full quota for licenses, which adds further potential value to the license. Shrives said Polson’s license is the only one up for sale now.

Shrives recommended the commission deem the all-beverage liquor license as surplus property and to hold a live auction for the license, setting the minimum bid at $55,000, a motion unanimously approved at the Dec. 15, 2014, city commission meeting.

City commissioners are also looking at the continued operation of the city’s golf course restaurant, which lost money in 2014.

The restaurant had $62,000 in employee salaries, Shrives said, making the restaurant’s operation unprofitable. 

“The restaurant did lose money, not as much as in previous years, but it did lose money,” Shrives said. “Bottom line the restaurant will not see a profit … this coming year.” 

The restaurant employs two cooks and six wait staff.

“The main focus is providing service for the golfers,” Shrives said. “If the city continues to run the restaurant, then the service will have to change. From a business point of view it will be the right thing to do, but from a customer service point of view it will not be a good thing.”

Wallace said looking at this year’s operation model might mean a snack bar. The menu would be cut to six-to eight-items. Also, the catering of events would be stopped. 

Shrives said he wants to consider restaurant-related options and ideas with the golf board.

“The important thing is that we give the best service that we can,” Shrives said.

Other ways the restaurant might be able to change is by eliminating fresh food products that create too much waste, Wallace said.

Overall, commissioners supported the ongoing examination of the golf course restaurant’s operation.

“This is a good direction to be moving in; serving the individuals that come in on a daily basis, choosing the items that they would most likely want to eat and then provide for the walk-ins,” mayor Heather Knutson said. “That is a good way to go. That should help in becoming more efficient in the operations.”

An invitation to bid on the city’s all-beverage liquor license is available for review at cityofpolson.com. The public auction will be at 3 p.m. Feb. 20 in the City Commission Chambers, 106 First Street E. 

The bid minimum is $55,000 and bidders must have a certificate of good standing issued by the Montana Secretary of State. The winning bidder will be required to purchase the city’s current inventory at a wholesale value. 

A back-up bidder will be chosen.

Upon purchase, the successful bidder will be responsible for fund transfers within three days.