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COVID-19 Governmental Affairs

SCGA Governmental Affairs Updates

Per the “opening” in Governor Newsom’s “Roadmap to Modify the Stay at Home Order” that we suggested last week, Placer County’s 27 golf courses in Northern California opened for play Friday per a set of “social distancing best practices” supplied at that county’s request by the GCSAA.  Over the weekend some non-public golf courses in Orange County opened per similar social distancing restrictions, presaging an extension to public facilities in the near future.

Preparations for opening in other Southern California counties is rumored to be taking place internally.  Specifically, Los Angeles County Public Health Director Barbara Ferrer is quoted in Saturday’s Los Angeles Times discussing recreation, trails, and beaches as having reopening strategies in place “as we begin to lift our health officer order, Safer at Home, later on in the month in the month of May, in most likelihood.”

Riverside County Board President Manuel Perez, whose county had been scornful of the desert golf community’s invocation of the same compatibility arguments a couple of weeks ago, spoke openly on Friday of taking the matter up in the coming week.  Chambers of Commerce and business groups are openly briefing to begin the process of moving from the dampening of the curve phase of the pandemic response to the second phase involving the reintroduction of activities like golf that are capable of practicing the social distancing necessary to keep the pandemic curve bending downward.

The most significant pivot in this direction was announced Saturday evening in a Ventura County press release.  Quoted verbatim from that release:

  • The modified Order allows exceptions for limited business operations allowing nonpublic serving businesses to operate using no more than 10 employees, allows for gatherings of up to 5 people, modifies some essential businesses, allows for gatherings in motor vehiclesreopens golf courses and other forms of recreation with appropriate restrictions, allows bike shops to open and permits in-person sale of vehicles.

Click here to read the release.  Click here to read the entire Order issued by the Ventura County Health Officer.

Following is that part of the modified Order that adds golf back to the lives of Ventura County residents:

To provide accommodations for persons who wish to golf as a form of outdoor activity, public and private golf courses may operate provided they strictly enforce Social Distancing Requirements and enforce the following additional protocols:

  • Motorized carts are not allowed;
  • No more than four golfers are allowed per group and each group must be stable (i.e., persons may not substitute in or out of the group);
  • A distance of at least 30 feet shall be maintained between groups of golfers at all times;
  • All ball washers shall be covered, and flag pins shall be removed and the cup on each green shall be inverted or otherwise installed to eliminate high-frequency touch services on the greens and tees;
  • Persons may use a driving range provided that range balls are properly sanitized before distribution to customers (stand-alone golf driving ranges may also operate);
  • Practice putting greens shall remain closed;
  • The “Pro Shop” or similar facility designed for the sale of golf-related equipment and supplies shall remain closed; and
  • The snack shop(s) and restaurant(s) shall remain closed.

We have been pressing the case to a sometimes impatient golf audience that having won the argument about golf’s amenability to strict social distancing protocols at the dawn of these various “Stay at Home” directives, golf need just bide the time necessary to allow policy makers to take the steps required to ensure that the pandemic curve doesn’t overwhelm the public health system’s capacity to treat critically ill patients in order to arrive at the other side of that curve ready to be among the first activities reintroduced.

Events would seem to be unfolding to justify the wisdom of that strategy.  It is now incumbent upon the golf community to perform – to rise to the challenge of executing the strict social distancing protocols we have asked policy makers to put their trust in.  While there is evidence emerging that the mortality rate of COVID-19 may be much lower than epidemiologists first surmised, there is also evidence that COVID-19 can re-infect patients who appeared to have successfully beaten the virus upon initial exposure.  Viral infestations always have a second wave; it was the 2nd wave of the Spanish Flu pandemic that did most of the damage.

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As expected, the Paycheck Protection Program (PPP) has exhausted the $350 billion appropriated by Congress just two short weeks ago.  There is another $250 billion in the offing once Congressional Democrats and Republicans break their impasse over the Program’s efficacy for the smaller of the nation’s small businesses and specific allocations to the health sector.  Expect the impasse to melt in a few days through compromise; with so many businesses teetering on the edge of insolvency, there is little public appetite for dawdling.  Expect Congress to replenish the coffers of the EIDL as well; it’s the less generous of the two major business relief programs, but a program available to the private golf clubs that have been excluded from the PPP, an exclusion we expect to maintain when Congress heaps another $250 billion atop it.

Congress made direct provision in its massive unemployment relief package for independent contractors and others not ordinarily eligible for unemployment benefits.  California initially balked because of obvious contradictions with AB 5 and California’s separate course re independent contractors; however, California has now relented and agreed to process the 39 weeks of additional $600 federal largesse to independent contractors, the self-employed, part-time workers, and “gig” workers.

Speaking of AB 5, a massive set of organizations and interests, including some labor unions, have come to agreement with AB 5 author Lorena Gonzalez (D-San Diego) on allowing musicians, artists, and certain types of writers to be exempted from the Dynamex Test in determining whether they are employees or independent contractors; they will revert to the 1989 Borello Test.  When the legislature gets back from its pandemic hiatus, the “agreement” will be translated into a bill that amends AB 5 in accordance therewith.  Because this “agreement” was close to completion before the pandemic forced closure of the Capitol, it may not presage further amendment of AB 5 this session, as the legislature is going to have its hands full revising a budget that has gone from healthy surplus to woeful deficit, as well as dealing with a state that has been economically hallowed out by the pandemic.

Speaking of economic carnage, State Legislative Analyst Gabriel Petek told members of the State Senate’s Budget Committee last week to prepare for a projected deficit of as much as $35 billion with an extra $85 billion in the fiscal years to come.  From a $21 billion “rainy day” fund to a whopping deficit in just 30 days.The federal government can print money.  The states, counties, cities and special districts cannot.  They are all now freezing hiring, cutting programs, furloughing workers, and all the other techniques of economic triage.  Golf is a discretionary activity requiring disposable income and a high level of confidence in future economic growth.  We are in for some hard times.  How long they last is anybody’s guess.  How long they last is anybody’s guess.

One of the oldest civilizations on Earth has a long-standing curse that comes to mind:  May you live in interesting times.

Federal Disaster Loans for Businesses, Private Non-profits, Homeowners and Renters

 

Over the weekend we reported extensively on the Paycheck Protection Program (PPP) component of the CARES Act.  While the $349 billion for the nation’s businesses interrupted and otherwise distressed by forced closure may not in the end be enough to sustain as many businesses and their payrolls as touted by lawmakers, it is the most generous and expansive of the relief programs to date.  But it is NOT the only one, which is good news for those non-charitable non-profit organizations that were excluded from PPP, among them the state’s equity country clubs and the various associations that support the infrastructure of the game, including the SCGA and SCPGA.

The “COVID-19 Economic Injury Disaster Loan Program” is an alternative, a less generous alternative, but an alternative, nonetheless.  Verbatim from the eligibility criteria:

  • Applicant is a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.

Unlike the PPP, which restricts eligibility to those 501 (c) corporations that are charitable [e.g., (3)], this program includes (c) (6)’s and (7)’s.

There is no cost to apply and no obligation to accept if approved.  Up to $2 million can be borrowed; however, no more than $25,000.00 can be unsecured.  The monies come directly from the United States Treasury.  Repayment is automatically deferred for 12 months.  Standard interest rate for private non-profits is 2.75% for a term of up to 30 years.  Funds can be used for fixed expenses such as rent, payroll, accounts payable, and debts that might otherwise have been satisfied but for the COVID-19 “economic disaster.”

Click here to read the SBA’s 24-page summary cum application.  Again, it is not as generous as the PPP.  We are informed that the WGF’s We Are Golf team in Washington D.C. is continuing to advocate aggressively for all of golf’s eligibility for some of the more “generous” relief/stimulus programs that will come under consideration in the coming weeks.

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As we are sure all of you are aware, 10 million Americans have filed for unemployment the last two weeks.  According to every credible account we read, that number does not reflect a huge pool of persons whose applications have just not yet been counted, nor does it account for the many more sure to file in the next few weeks.  Economists differ about almost everything, and they are certainly all over the map with respect to what the forced shut down of the American economy may mean in the long run.  But they are of one mind on one thing; this implosion is unprecedented.  The United States has endured financial panics, great depressions, stagflations, hyper-inflations, and great recessions.  But we have never simply voluntarily shut down the economy.

There would seem a good news-bad news aspect to this.  The panics, recessions, inflations, etc., were all caused by severe imbalances in one or more sectors of the economy, requiring re-balancing salves that necessarily take some time to work their magic.  Our current descent is not structural; it is not the result of imbalance.  Of course, a rapid descent can get out of control and lead to a deflationary death spiral.  Last week’s injection of $2.2 trillion of liquidity with promises of more to come should keep that from happening; at least, that’s what most economists say.  To the degree to which that is indeed the case, a rapid recovery would seem in order.

On the other hand – economic discussions always come in the form of two hands – printing trillions of dollars unrelated to any economic output must come at some cost; economists agree about that too.  Of course, they disagree about the cost.  Will those costs be in the immediate in the form of a consumer confidence driven recession?  Will inflation reign once the debt gorging is done?  A combination of the two a la the mid 1970’s?  We’re sure there are other possible future scenarios; we’re just not as smart and creative as the economists who will no doubt be opining about them incessantly in the coming weeks and months.

Time will tell; it always does.  But while we’re waiting for it to tell us about the long run, there is a short run to get through.  Golf’s way of getting through is going to come in two forms – the relief packages we have reported about the last couple of days to be sure, but much more importantly, by effectively pursuing a strategy to ensure that golf takes its rightful place among those activities that can be reintroduced safely and sanely at the earliest possible moment.  Not one minute before, but not one minute after either.

COVID-19

As we predicted in our last update, as the pandemic curve continues to go up, so do the number of golf course closures – some by directive, others by choice of ownership.

Also rapidly going up are other forms of closure – playgrounds, ball fields, walking trails, wilderness areas, and beaches. Yes; golf is much easier to operate per the strict social distancing mandates of current directives, but that is not the dispositive point at this moment. Hold the thought and the moment. The “thought,” or more accurately the argument in favor of golf’s amenability to social distancing, will soon meet a moment that if golf plays its cards right now will accrue to the game’s great advantage in the near future.

Waiting for a later moment may frustrate many of you convinced that golf is perfectly capable of disciplining its players and members to hew to those strict social distancing mandates. We know, because many of you have regaled us with directives from other American States that have permitted golf in their statewide directives.

But as with so many other things, California is just on a faster track than they. These states have done nothing more than secure the same dispensation that golf was able to accomplish in virtually every Southern California jurisdiction last week when the cities and counties that issued draconian directives declaring “stay at home” policies and proscribing a whole host of activities and businesses opened the golf courses they owned, setting an example that permitted daily fee and private courses to follow suit content in the knowledge that the authors of the rules were construing the language of those rules to permit golf.

That “dispensation” was accorded golf as part of a panoply of outdoor activities deemed capable of practicing the social distancing protocols also embedded in those rules. However, as newspapers and TV stations amply reported over the course of the next few days, citizens availing themselves of the “permitted” activities – walking/jogging trails, wilderness parks, ball fields, playgrounds, beaches and yes, golf courses – proved that in an urban environment what made eminent sense on paper about the capacity to practice social distancing didn’t work out in practice, which engendered a huge public backlash that led to the strict prohibition of ALL of these activities, including golf, by the very government agencies that had permitted these activities in their initial orders/directives.

If you forgive the not entirely apt comparison, the above scenario might be described as follows. What golf secured in the court of law it soon after lost in the court of public opinion, which is the court elected leaders care most deeply about. Not the argument but the reaction to it based on a combination of lax execution and public resentment. And because golf did not lose the argument on the merits, it is positioned to be among the first activities that can be safely permitted once we are on the other side of the pandemic curve and policy makers begin to relax restrictions on certain activities. A pandemic is not like a hurricane or earthquake; there won’t be an “all clear” signal that allows everything to go back to the status quo ante. There will be a slow roll back to normality.

If golf plays its messaging cards right and practices a combination of subtlety and forbearance while continuing to press its case re amenability to social distancing protocols, it should be able to make a powerful case that it is considerably better positioned to do so than the myriad open space recreational activities referenced above, not because it is superior in any sense, but because it is in fact and practice considerably more amenable. To the degree to which golf focuses more on those facts and continues to communicate them, it can position itself for the best possible outcome, which is going to be different in every jurisdiction.

That is precisely what has happened today in Monterey. Well after Monterey County shut down “all private and public golf” in the county, its Health Department issued an opinion that its closure announcement did not preclude the use of golf course property as “open space.” That is, as long as members played using their own equipment (carts, clubs, etc.), did not require any assistance whatsoever from staff, otherwise hewed to ALL binding social distancing protocols, these activities were not the equivalent to the course “being open” and would not be in violation of the County Health Order. This wouldn’t seem to provide any opening for a daily fee course, which has to offer access to persons beyond “members,” strictly control their behavior, and somehow complete a financial transaction, all without human contact.

We suggest this not as a specific example you should follow; SCGA’s stance throughout has been and will continue to be the dissemination of the information necessary to make fully informed choices, the choices being the province of each club or course so long as those choices are within applicable law or directive. But we do suggest this as an example of how golf might best prosecute its case that it is among the safest of outdoor recreational activities – a case that will allow the game to proceed when it is safe under certain conditions to do so as determined by the county authorities invested with the discretion to make that judgment.

Subtlety, nuance, discretion, judgment, optics and respect for public sentiment – this is the stuff of golf’s best course. That and an overriding concern for the health and safety of staff, golfers and community. Aggressive advocacy not so much.

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The House of Representatives still needs to pass the $2 trillion emergency relief/stimulus package the Senate passed late last night before the President can sign it into law. That is expected to happen tomorrow. No changes are expected, which is why everyone is now busy trying to figure out exactly what is in the 1,000-page beast. The World Golf Foundation’s (WGF) lobbying arm (We Are Golf) has three Washington lobbyists busy picking through the bill to see what of a golf specific nature is in there and plans to issue a comprehensive report that we will share as soon as we have it. There is one piece of good news they’ve already discovered. In this emergency relief package golf businesses are not categorically excluded as has often been past practice, most recently after Hurricane Katrina in 2006. This makes golf businesses eligible for the $367 billion in the package for small businesses (less than 50 employees). “Eligible” is not entitled, but one step at a time.

With today’s announcement of 3.3 million unemployment insurance applications it would appear that last week’s dire predictions regarding short-term unemployment weren’t dire; they were spot on. Whether this presages a deep recession is anybody’s guess. But what it does all but guarantee is that California is going to burn through the $21 billion rainy day fund it took 6 years to acquire in a matter of weeks, even with the $10 billion the state anticipates receiving in direct federal assistance. And as you have read countless times in these reports, California’s tax receipts are heavily dependent on both the income and capital gains of its affluent citizens. When markets tank and recessions reign, the state’s tax receipts plummet considerably more than in most states. Throw in unfunded pension liabilities and the costs associated with fighting the COVID-19 crisis, and California’s budget situation could be on the edge of a rapid collapse, which will dredge up all sorts of ugliness that will affect governments and public services down to the most local of levels.

It will be a while before the economic detritus shakes out. But it won’t be a question of whether business in general and the golf community in specific suffer, but only a question of how bad the damage will be. Even if the damage turns out to be less than many now predict, given that the already challenged municipal sector is appended to the very local governments sure to be strapped, the “existential” dangers we’ve been writing about are only going to become more acute. Now would be the time to begin trying to get out in front of that.

Lost in all the current reporting is the matter of the 2020 legislative session. Like so many other things, 2020 is going to be a “lost year.” The legislature has already made clear that the vast majority of the 2,000 bills that were filed before the world changed will not be taken up this year. April 24 remains the date by which bills must pass out of committee to remain alive for the session, and that means that the only bills likely to pass out of committee are going to involve direct responses to the current crisis as well as other crises like fire and utility bankruptcies that were already in the hopper. With respect to the subject of our all-consuming passion, AB 5, we do expect that it will be taken up; however, expect the scope of the engagement to be less than we had anticipated a few short weeks ago. Whether that means our confidence in securing further protections for PGA Professionals in the “Business to Business for Professional Services” exception protocols needs to be taken down a notch is not yet knowable.

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Finally, please know that our effort to provide you with information and analysis regarding COVID-19’s impact upon golf facilities is not made to distract you from what should be the overriding concern of everybody at this moment – health, safety, and community. Stay safe. Remain vigilant. Be ever mindful of family and community. And remember that these things always trump the exigencies of any moment.

CRAIG KESSLER l Director, Governmental Affairs
SOUTHERN CALIFORNIA GOLF ASSOCIATION
3740 Cahuenga Blvd. l Studio City, CA l 91604
818/980-3630 ext. 320 l 310/941-4803 (cell) l scga.org
Your Passion. Our Purpose.

The Day After The Day After

Or more accurately, two days after the day after.

When we last updated you early Friday evening, we reported that after watching various press conferences late Thursday afternoon, including one by Governor Newsom, we had concluded that golf was on its way toward being shuttered throughout California.

We also reported that a funny thing happened as the evening hours wore on. We began hearing that the very cities and counties that had issued the directives we found so conclusive were concluding otherwise by determining to keep the golf courses they own open Friday and by implication beyond – “beyond” in the context of a universe susceptible to an abrupt change of course at any moment, that is. We also began to scrutinize the language of the Executive Order that Governor Newsom promulgated only to discover that what had seemed so definitive when he described it at his news conference was anything but. In fact, it was being characterized far and wide as a nullity. It engendered incendiary headlines in America’s newspapers, but it didin’t add anything of additional substance, heft or enforcement to the various city/county directives already in place. Governor Newsom had in fact if not necessarily in word kept to his pledge that unless and until the situation merits a draconian state response (e.g., martial law), the state would se minimum standards and allow each locality to add thereto based upon local need, want and circumstance.

And then those very localities, counties and cities, that had indeed issued much stronger set of standards interpreted those standards to allow for golf on the courses they owned under certain strict guidelines and restrictions capable of guaranteeing the “social distancing.” We suggested that while no on could definitively construe the language of the various directives and orders as a way of providing definitive guidance as to what the language actually enabled or proscribed, golf course operators could reasonably assume that for the purposes of golf, they could rely on the actions of the authors of those directives to provide guidance as to what the authors thought the language meant. A convoluted way to say that if the county or city issuing the strict directive opened their own golf courses to play on a certain basis, one could assume that “basis” complies with the terms thereof. Monkey see; monkey do; monkey compliant.

Given that a number of cities, most prominently Los Angeles and San Diego, and the County of Los Angeles, the largest municipal operator in the nation, opened for business Friday, a number of daily fee and private clubs followed suit. Not all certainly; there is much more than legal permissibility that goes into a decision like this in a time like this.

In the spirit of the caveat we issues Friday night about living in a “universe subject to an abrupt change of course at any moment,” let us inform you that the universe we described that evening has indeed experienced an abrupt change of course. Municipal systems in the City of Los Angeles, Los Angeles County, San Diego and myriad smaller jurisdictions have now closed their doors to all form of golf. Indeed, the County of Los Angeles has issued a directive that closes their parks to anything other than solitary walking, running or biking – no congregating or sitting of any kind even in groups of less that 10 separated by 6 feet. Similarly, the Governor, who most acknowledge as having issued a virtual nullity Thursday evening, has strengthened the vague standards therein by specifically defining what an “essential service” is and what it is not, and regarding what is not, he hewed very much to the very strict recreational standard just issued by the County of Los Angeles. One can walk, walk the dog, hike, bike or run – but only on a solitary basis with strict separation enforceable by public safety authorities.

In short, the Southern California golf universe is now on hiatus. Not all courses are closes; it will take a bit of time for that to happen. But it would appear that what we initially concluded Thursday evening will soon be a reality.

But what we also reported Friday night about ample provision for protecting and maintaining golf courses during the tenure of the hiatus still appears in the directives issued by we believe all Southern California counties, but not necessarily certain Northern California countries, which is a distinction that makes a difference ONLY if what the Governor just issued regarding specific definitions of “essential services” is not preemptive. If it is, then the following language from the Southern California directives that we found comforting may now be meaningless:

Plumbers, electricians, exterminators, custodial/janitorial workers, handyman services, funeral home workers and morticians, moving services, HVAC installers, carpenters, landscapers, gardeners, property managers, private security personnel and other service providers who provide services to maintain the safety, sanitation, and essential operation to properties and other essential activities discussed in this subsection. [Section 5, VII, i]

If golf courses and clubs cannot guard shuttered facilities from trespass, encampment, vandalism and theft and perform the maintenance functions necessary to keep the courses from falling into complete disrepair, then the California golf industry is in real trouble. Given that the social distancing involved in maintaining an empty golf course is infinitely more “distant” than most if not all of the “essential service” functions outlined in the Governor’s Order, to the degree to which this fear is founded, the allied golf industry (CAG) should be able to secure language to enable it. It’s not as if this Executive Order hasn’t been amended and “clarified” multiple times in tis 72-hour life. And it’s not as if an idle golf course cannot be maintained by less than a full crew.

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