Golf in the Hole

Will the city turn over our golf courses to the very people who are making them lose money?

During the past couple months, staffers in Mayor Gavin Newsom's Department of Recreation and Park have been telling anyone who'll listen that the city is so inept at managing golf courses that it must get rid of the best ones it owns.

"The city has clearly shown it doesn't have the expertise to manage golf," said Sean Elsbernd, who carries water on the Board of Supervisors for Mayor Gavin Newsom. "Just look at the numbers."

Elsbernd is referring to the Board of Supervisors' recent demand that Park employees figure out a way for the city to stop paying $1.5 million per year to subsidize municipal golf courses.

Last Thursday, Park accountant Dawn Kamalanathan announced a new proposal by which the city might stop this money-letting by leasing for 20 to 30 years to a nonprofit corporation San Francisco's two best municipal golf courses, Harding Park Golf Course on Lake Merced, and Lincoln Golf Course, overlooking Golden Gate Bridge.

This proposal was the latest incarnation of a scheme, generated by Palo Alto lawyer Sandy Tatum, recommending that the city hand over control of its golf courses to a 501c3 corporation Tatum created last fall for this purpose. Tatum and former city attorney Louise Renne are this nonprofit corporation's sole directors.

For reasons I can't explain, park staffers seem desperate to sell Tatum's plan.

To this end, they have proffered a misleading narrative about how city employees are vaguely incompetent and ignorant, and must thus be relieved of the task of handing out golf carts, selling golf caps, and preparing lunch for duffers at the city's marquee courses.

Yet the reality behind the city's money losses associated with golf is exactly the opposite of supposed wasteful spending by government officials. It's private, not public, mismanagement that's strained the finances of S.F. municipal golf.

The losses can be traced to an expensive sweetheart deal cut in 2003 with a private golf management firm, a deal that apparently involved at least peripherally Tatum and Renne.

In 2003, after a bidding process reviewed by a committee that included Renne, Kemper Sports Management was given the concession to manage the Sandy Tatum Clubhouse, Harding Park Golf Course, and at the nine-hole Fleming Golf Course abutting Harding. Somehow, the contract between the city and Kemper was written in such a way as to allow extravagant expense associated with this task. According to a document titled "Kemper Sports' Harding Park Team" included as part of a 1999 bid proposal, Tatum is listed as part of Kemper's "Golf Dimensions Construction Management Project Administration."

Tatum said that the fact his name is on a 1999 Kemper organization chart is "news to me," and that "I have no association with Kemper."

The spend-what-you-want language in the Kemper contract created the equivalent of a city credit card. And Kemper pushed the card to the maximum.

During the current fiscal year, Kemper will accrue $3.6 million in expenses, under a contract that offers no incentive whatsoever to be frugal with the city's money.

"There's no cost containment at all," said Justin Hetsler, a private accounting consultant knowledgeable about golf who helped me review more than 1,000 pages of bidding documents, contracts, invoices, and receipts related to Kemper Sports Management's agreement to manage Harding Park.

"The way this contract is written, and the haphazard way their expenses are documented, they might as well write a single annual operating expense number, leave it at that, and never do any accounting for the rest of the year," Hetsler said. "This contract doesn't give anyone whomsoever an incentive to manage the Harding Park operation, in the terms of what the word "manage" means. It just gives an incentive to be there and spend money." (Kemper's Harding Park General Manager Steve Argo did not return a request for comment by my deadline.)

In 2005 the company's controller submitted invoices, reimbursing himself thousands of dollars to cover expenses such as driving hundreds of miles to Mountain View, Daly City, and elsewhere to shop for groceries and office supplies.

Such direct requests for reimbursements, by a company controller, for the type of expenses a controller exists specifically to independently review "is in violation of the most basic principles of accounting controls," Hetsler said.

Kemper racked up thousands of dollars in charges to the city for employing itself as a consultant — the kind of conflict of interest that would seem to violate prudent management principles.

The city golf accounting division overseeing the Kemper contract, meanwhile, included in a budget proposal $13,500 in consulting fees to Sean Sweeney, a city employee who directs maintenance of golf courses.

"I never saw it," Sweeney told me.

Why is the mayor's Park director peddling a misleading narrative to explain away San Francisco's golf budget woes when the real problem is simply a spendthrift city contractor? The answer can be found in the mysterious sway octogenarian duffer Tatum seems to hold over city parks policy. Tatum is a former president of the U.S. Golf Association. He is also reportedly a pal of financier Charles Schwab, who backs the Committee On Jobs soft-money operation that helped elect Newsom as mayor. But none of this begins to explain for me how Tatum has managed to employ city officials in seeking to have San Francisco public assets passed his way.

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