Top 10 Water Law Issues Every Golf Course Operator Should Know

Our Golf Law practice continues to explore the most pressing legal issues for golf operators. We attended the 2015 Golf Inc.™ Strategies Summit, a select gathering of some of the foremost leaders in the golf industry.

We spoke with dozens of owners, operators, consultants that were extremely concerned about their water rights and water use. Many asked for guidance on navigating California’s new regulatory schemes for groundwater management and urban water conservation, while others sought advice on how to interact with water districts, regulators, and policy makers.

In response to such concerns, we compiled a list of the top issues that golf course owners and operators should keep in mind as they manage their course’s water supplies and use. Because each golf course’s water situation is unique, not all of these will apply to every course. Nonetheless, they represent trends we’ve identified throughout the industry.

1. Water restrictions, especially in drought-affected Western states, are real and they are immediate. Have you or your board of directors completed an assessment of how to meet mandatory water restrictions? Even if you have, did your plan factor in existing water rights and future legal restrictions? Your water management plan should be a “work in progress” and remain current with anticipated state and local government regulations.

2. Regardless of climate, water is an expensive line-item cost for any course. While water scarcity is not a pressing issue everywhere, water remains a costly yet indispensable resource for any golf course. There are certain measures that can affect your course’s water budget including efficient irrigation systems and selling excess water rights for a profit.

3. Different sources of water carry different sets of rights—learn your rights and defend them when necessary. Does your course have a creek running through it? A lake? A groundwater well? In most states, different sources of water carry different rights. Understanding and defending such rights should be a key component of your water management plan and could positively affect your course’s bottom line.

4. Have a lawyer review your drought contingency plan. Contingency plans are a good strategy to effectively manage water during shortages; however, your plan to conserve could unwittingly affect your future rights to such water. Have an experienced attorney familiar with your state’s water laws review your drought contingency plan to make sure you aren’t unknowingly affecting your course for future years. 

5. Baselines are tricky; get credit for previous conservation efforts. If you have previously reduced water use, make sure that your course receives credit for those past reductions in any future efforts by local or state regulators to reduce use. Accurate documentation and recognition of water saving efforts is critical to avoid calls for unrealistic and damaging water reductions. Using the most accurate data from prior years will dramatically impact your baselines for future measurements.

6. If you operate in California, the new groundwater regulations will be profound.The Sustainable Groundwater Management Act is already in effect. Expect growing pains as local water districts regulate your groundwater usage for the first time. Having your voice heard and rights recognized during the preparation and implementation of groundwater sustainability plans is essential in the next few years.

7. Work with a team of professional service firms to determine whether you can turn your water rights into a profit-generating asset. Depending on your course’s specific set of facts, you may have senior water rights that could be sold for a profit. Collaborating with developers to trade your course’s water rights for usage in a residential development is one example of a potentially lucrative and successful business partnership. Gathering a trusted team of attorneys, accountants and consultants will allow you to maximize the benefit of a high-demand property right in your course’s possession.

8. Band together with other operators to present a united voice to regulators and policy makers. The most effective way for the industry to sway water policy is to present a unified front. Get organized and

involved with fellow owners and operators to demonstrate that golf is an important industry that creates jobs and drives economic development. In so doing, policy makers will be more inclined to work with golf operators rather than isolate them as easy scapegoats in the water debate

9. Turfgrass reduction is a symbolic measure of golf’s commitment to conservation. Many operators and golf architects agree that modest turfgrass reduction programs will not conserve a large volume of water. However, the real value in implementing such plans is to stake a leadership claim on behalf of the golf industry. By leading the way through landscaping innovation, the golf industry will be seen as part of the solution rather than as part of the problem.

10. Water is only one component of assessing the long-term sustainability of a golf course. While water remains the most pressing component of golf course sustainability, there are numerous other issues affecting the long-term future of the game. Pesticide control, green architecture for clubhouses, sustainable supply chains, and many other factors are challenging operators to brand themselves as conscientious stewards of the land. The public now places a premium on businesses that are able to effectively demonstrate their commitment to sustainability and golf is no exception.

Newly permanent Tax Code provision allows for tax-free charitable contributions from IRA Accounts