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the same time the Department of Interior indicated they were perfectly willing to turn these courses over to the District Recreation Board if we could show we were able to finance them.
The Chairman of our Board has previously mentioned that we have given thought and study to this matter. I would like to say that the administrative staff for the Board and the budget examiner for the District have given some help to us in this whole matter.
We have studied cities like Minneapolis; Chicago; Akron, Ohio; Baltimore; and Milwaukee; cities which have had long years of experience in the administration of public recreation. In this particular case it is golf.
The justifications show what the trends are in the operation of public facilities. There is a definite trend in the administration of recreation by the public agency charged with that responsibility.
In the years past, because of financial difficulty, many of the facilities had to be subleased to a private operator." That is the reason why some of the facilities had to be financed by a private operator.
În that report in the justification, of some 340 municipal courses throughout the United States, only 7 are operated by a private corporation or a private operator.
If you will read further in the justifications, with the quotation from the National Reclamation Association, it substantiates the fact that the public agencies believe they can render a greater service, eliminate duplication of responsibility, and place the responsibility where it should be, on the agency that has that responsibility.
RESPONSIBILITY OF OPERATION
Mr. Bates. May I interrupt you, Mr. Christiansen?
As I understand it, the Department of the Interior, which is an agency of the Government, has the responsibility now, and they leased it out to somebody else.
Mr. CHRISTIANSEN. That is right.
Mr. BATES. In Chicago and Minneapolis and these other cities they could not, if they chose to do so, get them to take it, could they?
Mr. CHRISTIANSEN. No, but they could have a private operator.
Mr. BATES. The Department of the Interior could operate it, rather than lease it?
Mr. CHRISTIANSEN. That is right, if they wanted to operate it themselves, they could do so.
I think most of the members of the committee know, and the District officials as well as the members of our Board know and recognize that golf is one of our finest forms of recreation.
Mr. Bates. My primary interest is in seeing that the District's finances are taken care of. I do not play golf myself.
IMPORTANCE OF EXTENSION OF SERVICE
Mr. CHRISTIANSEN. I think one of the matters that is important in addition to the financial aspect of it, that the chairman referred to, is of vital concern to this committee and to our Board, and that is the service rendered, the greater service that can be extended, the service that could be made available by our operation, as the result of our operation.
On this map before you we have had placed the locations of the five public golf courses.
We have Rock Creek here [indicating on map), with 18 holes, we have Langston here (indicating] with 9 holes, Fort Dupont here indicating] with 9 holes, Anacostia over here [indicating] with 18 holes, and East Potomac here [indicating) with 27 holes.
I would like also to point out some other important factors with relation to those golf courses and the other programs here in the city.
Take Langston, for instance, we have the Langston Junior High School there, and we also have the new Spingarn High School, and we also have a vocational school on the same properties, and then we operate here under our own program four tennis courts, one baseball diamond, two multiple-use areas.
At Fort Dupont you have the new Sousa Junior High School which is almost straight across from the course, the new Kimball Elementary School, and there are indoor facilities now available, and outdoor facilities under construction.
At Anacostia we have the big Apacostia High School, and the Kramer Junior High School. We have there the Anacostia course with 18 holes, 8 softball fields, 3 baseball diamonds, 9 tennis courts, a shuffleboard court, 4 horseshoe areas, 2 handball courts, 1 multipleuse area, and a swimming pool.
At the East Potomac Golf Course at Hains Point we have 27 holes, a driving range, and a miniature golf course.
Rock Creek is right near Sixteenth and Kennedy Streets, one of our large recreational centers, where we have tennis courts, two baseball fields, two softball fields, and other facilities.
I say this to show that this whole thing does, in some degree, coordinate as far as our responsibilities are concerned.
We have no relation to the golf-instruction program in our public schools. The Recreation Board would work out cooperative programs with the schools, and we would make those available to the schools for instruction purposes.
You can see what effect the whole program would have by the expansion in the service and the service that we could render because we are a service activity, and not a profit-making activity.
Now, a little bit on the financial side of it, Mr. Chairman. We have made comparisons, and we have now and have for the past several months obtained cost-accounting reports of the present operator.
Mr. Schwab has done a good job analyzing the essence of the cost-accounting reports, and our staff has worked with him on that showing that with our operation forces, as far as a year's operation is concerned, that we could show a margin of approximately $88,000 over expenses.
Now, we think that is significant. That includes the additional costs we would have to apply to employment by virtue of the Federal and the District regulations.
You see, what happened last year was the increase was reflected somewhat by the fact that the rates for playing golf on the courses
were raised, and the volume of business was increased. We think those records and statistics bear that point out.
I want to make a special point of the fact, for the benefit of the committee, that the employment of these people would be all in conformity with existing regulations with respect to overtime, and the payment of time and a half, so that there will not be any misunderstanding about that.
Now, $175,000 of the $275,000 will be used to liquidate the present operator, namely, to buy out his equipment and stock inventory and to pay for his unrecovered cost for capital improvements.
The other $100,000 requested will be used in the revolving fund or trust fund for operating expenses, and we expect out of each year's business to repay the District the money that it had advanced on this operation.
We firmly believe without any hesitancy that this Board, and certainly the evidence that has been brought before this committee and the District officials shows that we have done a good job, and that we can do a good job. We know it will be plenty difficult, but that is a job Congress gave us to do in the beginning, and we can do it.
Now, I know that there are a lot of if's, and's, and but's about this thing, but if we take the courses over in January, the months of January, February, and March, and sometimes even April are in the slow season, if we do that the Board has ample opportunity between now and that time to set up the right procedures to be followed, and to benefit from the past practices in the administration of golf. We will have that period in the wintertime to set up all of our regulations and procedures to make sure that this thing can function properly. Also we will have an opportunity to sift out the best personnel now employed on the golf courses. We know that there have been the mass meetings Mr. Wilson mentioned. In fact, we have had letters from the public saying why were not these improvements made in years past? We believe that there have been more improvements made in the last year and a half than in the past preceding 25 years.
I would like to just say one other word in conclusion. If there is any other data or information that we can get for the committee that is not available at this time we would be very glad to get it, but we are convinced that we can do this job and do it well and the committee will not regret it.
RELATIONSHIP BETWEEN INTERIOR DEPARTMENT AND
Mr. BATES. What is the reaction of the Interior Department, do they want to get rid of it?
Mr. CHRISTIANSEN. The Interior Department has indicated that they are willing to turn the courses over to us. In fact, we had a meeting with Mr. Chapman in March, and at that time he asked us how we were getting along in preparing to take over the golf courses on January 1.
REPAYMENT OF LOAN
Mr. BATES. It is your plan, as I understand it, to reimburse the District this $275,000 that you mentioned?
Mr. CHRISTIANSEN. Yes, that is right.
Mr. BATEs. At the rate of so much each year?
CURTAILMENT OF SERVICES
Mr. Wilson. What will happen to the service out there if we should pass this legislation and it became publicly known that it was going to change hands on the first of the year? I wonder what would happen to the service rendered during the rest of this year.
Mr. CHRISTIANSEN. Very probably there would be naturally some people disturbed or concerned, but I think many of the people who have been very close to the situation will welcome it.
Mr. Wilson. Do you think that they will go along with the present organization and offer the golfers real service?
Mr. CHRISTIANSEN. Yes, I am sure that they will, because the Interior Department has clamped down on the present operation very definitely in view of the investigation that was made last year, and I have no doubt that there would continue to be good service rendered.
Mr. Chairman, I think Mr. Schwab would like to add a few comments to what I have said.
Mr. Bates. Who will maintain the courses in case you take them over?
Mr. CHRISTIANSEN. Up to this point, Mr. Chairman, we are talking about, at least, doing all of the service under our own board.
Mr. Bates. Do you think the National Capital Parks could do it cheaper?
Mr. CHRISTIANSEN. I think they could do it in connection with the regular maintenance, yes. I would not say that they could do it any cheaper in general.
Mr. BATEs. What is your plan in reference to the concessions?
Mr. CHRISTIANSEN. I would say on the matter of the operation of the concessions insofar as they relate to service is concerned, I would say this, that at the present time, as far as I am concerned, I would like to recommend that we operate every facility that is on the public property. If, however, our later studies reveal that the complexities are such that we cannot operate them then we would be in a position to sublet them to a concessionaire that is, as to food only, not golf and maintenance.
Mr. BATES. Who will supervise it?
Mr. BATEs. Do you have a business manager on your board, or someone who has had experience in this field?
Mr. CHRISTIANSEN. We will have a person in charge of the administration of the golf program. That will also include the regular staff
on the courses to handle their management and maintenance in addition to the greenskeepers who would be, of course, in charge of the general maintenance of the courses.
LENGTH OF TIME LEOFFLER LEASE HAS BEEN IN EXISTENCE
Mr. YATES. How long has the Leoffler lease been in existence?
Mr. CHRISTIANSEN. That lease expired last year. He had it for 28 years. It had been renewed at intervals of 5 years. He has been there or has had the lease for close to 30 years.
Mr. YATES. The lease expired last year?
Mr. CHRISTIANSEN. Well, it is just an interim agreement. He is carrying on under the provisions of the old agreement, but on a year by year basis.
Mr. YATES. On a year by year basis, so that the lease would expire January 1?
Mr. CHRISTIANSEN. Yes, sir.
PAYMENTS TO BE MADE ON EXPIRATION OF LEASE
Mr. Yates. What are the provisions of that lease with respect to any payments that should be made to him upon the expiration of that lease; are there any provisions made for that?
Mr. CHRISTIANSEN. I will refer that to Mr. Schwab.
Mr. Schwab. The lease provides that at the termination of Mr. Leoffler's agreement there would be an appraisal made of his equipment, and whoever took over would pay him for his equipment on the basis of the appraisal made. That is one thing contained in the lease. Now,in addition to that lease there were letters exchanged with reference to the improvement of the courses-capital improvements.
Mr. YATES. Letters exchanged between whom?
Mr. SCHWAB. Between the Secretary of the Interior and Mr. Leoffler, by which he built one golf course at Fort Dupont, and a club house. The Interior Department agreed to waive franchise fees or its share of the profits to eliminate the cost of those two improvements, and Mr. Leoffler advanced the money for them. Now, the balance of those two improvements that we must liquidate is some $60,000.
Mr. Yates. So that all you are paying for in this agreement with Mr. Leoffler is the cost of those two improvements, plus the appraised value of his equipment?
Mr. Schwab. Yes, the inventory of stock, the merchantable stock.
Mr. Yates. There will be no payments for good will, services, or intangibles of any kind?
Mr. SCHWAB. No, sir, there will not be.
Mr. Schwab. He has had one made. The lease provides that he shall have an appraisal made, and that the Interior Department would have one made, or the new concessionaire would have one made, and