The city owns the 18-hole golf course, clubhouse and some other buildings, but the independent golf board manages the facility’s operations and budget. For the past several years, Powell City Councilmen and golf leaders have wrestled over how to fund the cash-strapped golf course and address its lingering debt.
The Powell Golf Board of Directors requested $70,000 toward the course’s operations for the 2012-13 fiscal year beginning July 1.
“We can’t afford $70,000,” Mayor Scott Mangold said during a budget session last month. “I want to know if there’s any future plans — are they changing at all or are we encumbered for $70,000 every year. Are we stuck with that?”
Councilmen went back and forth about how much money to give the golf course, whether a certain amount should be matched and how much should go only toward paying off debt. The mayor and council eventually agreed on a proposal for $50,000. Of that, $25,000 is unencumbered money that can go toward the golf course’s operations, and up to $25,000 is matching funds toward debt reduction.
“All of our match has to go to the debt,” said Councilman Eric Paul.
Councilman Don Hillman said deciding how much money to give the golf course is difficult as the city faces a tightening budget and cutbacks in departments.
“It’s pretty tough for us to sit here and give away thousands and thousands of dollars and then go to John Q. Public and say we need an extra 1-cent,” Hillman said, referring to the proposed 1-cent tax for infrastructure and maintenance that will be on the November ballot.
Of the course’s $415,944 operating budget for next year, the city’s funding only accounts for about 15 percent of the course’s total budget, noted Susan VandenBoom, the board’s secretary/treasurer, in an email. By comparison, she said, the city provides 100 percent of the parks department funding and more than 40 percent of the aquatic center’s overall budget.
The council makes its final decision on the 2012-13 fiscal year budget Monday night.
Second time around
This is the second time in less than a year that councilmen have asked golfers to match city funds. Last October, the Powell Golf Course Board requested an additional $55,000 to cover a budget shortfall after a dreary season dampened revenues. The council agreed to give up to $50,000 in matching funds — providing a dollar toward every dollar the golf board raises by June 30, the end of the 2011-12 fiscal year.
As the end of the current fiscal year approaches this month, the golf board is nearly there.
“We have a couple of checks still outstanding, but we believe we will raise the $50,000 we set as our goal in the next two weeks,” VandenBoom said in an email.
City Finance Director Annette Thorington said the golf board was $3,175 shy of its $50,000 goal on Tuesday.
VandenBoom credited individuals and businesses for the golf board’s success in raising the funds.
“The golf club members and community all came together in different ways,” VandenBoom said.
That included business sponsorship of tee markers, donations toward the debt reduction and raffles that raised money for matching funds, she said.
“You told them to go out and raise money this year, and they did it. They raised $50,000 on top of the $50,000 we gave them, so they’ve shown they’re willing to go out and work and invest in the course,” said Councilman John Wetzel, who serves as the liaison to the golf board.
If the city provides the full $50,000 match, its total contribution toward the golf course in 2011-12 will be $112,250. The council had approved $62,250 for the golf course in regular funding during the current budget, which took effect July 1, 2011.
Dealing with debt
Being in the hole financially has resulted in continued fiscal struggles for the golf course.
Currently, the golf board faces $198,745 in debt, VandenBoom said. The debt was accumulated through equipment purchases and years when golf rates were too low to support the operating costs. The course’s budget for next year designates $37,000 toward debt payments. In the past year, the golf board has paid about $57,000 toward its debt.
For years, the golf board has struggled to get ahead. They would borrow money from the next year to get through the rest of a season.
Though the city’s funding plus golf board’s fundraising could total up to $75,000 for next year, VandenBoom noted that the majority of that money — $50,000 — will likely be raised slowly over months through the June 30, 2013 deadline (the end of the next fiscal year). Only the $25,000 in unencumbered funding from the city would be readily available for the current golf season.
Without the city’s $70,000 commitment as the golf club had requested, they must wait for matching dollars to come in over the next year, VandenBoom said.
She said golf board members were hoping for another $50,000 match “so we could further reduce the debt. We would have liked to see at least a three-year match to further the debt reduction.”
The golf course likely will face further cuts this season in a budget that’s already scaled back, VandenBoom said.
“Our purpose in approaching the city for $70,000 is that’s what’s needed to complete our budget. We have not replaced the position of greens superintendent, because there’s no money in the budget for that position. We are going to have to trim the budget by $45,000 if we are to finish the season with this year’s money,” VandenBoom said. “Our problem in the past was having to borrow from the next year to get through the winter. We had hoped the matching funds this year would take care of our cash flow problem, but cutting the $45,000 will put us right back where we were.”
Golf leaders and councilmen have said they want to see the golf course get ahead, rather than struggle from year to year.
“Do you feel there’s a new paradigm out there?” Councilman Paul asked. “Or is it just, we’re going to do this to Band-aid it up and then go kinda back to business as usual?”
“No, I feel there’s a paradigm of people who came forward and said that if you’re making an effort to retire that debt, we’re on board,” Councilman Wetzel responded. “We need to say, ‘X amount of this money has to be matching toward debt ... because if we don’t retire that debt, we’re right back where we started from.”
Even though the city’s match toward the debt is capped at $25,000, Councilman Paul said golf board members don’t have to stop there in how much they raise.
“Our match is going to debt, but if they want to go out and raise $100,000 — great,” Paul said. “There’s nothing stopping them from raising more.”
As in the past, city councilmen also discussed the golf course’s rates when looking at its funding contribution for next year.
“People think our rates are high, but in order to maintain the budget and pay our bills, we need income generated to match our expenses,” VandenBoom said.
The golf course went into debt from years when the rates were too low, she said.
This season, the course has 185 paid memberships, brining in $185,100. By comparison, the course had 173 members last year, totaling $168,550 in revenue.
Most of those memberships are sold at family rates, VandenBoom said.
For daily rates, the golf course previously offered only a $49 rate for 18 holes, which included a cart and the driving range. Councilman Wetzel said that during weekdays, the course should offer a reduced rate for local golfers who don’t want a cart.
On Tuesday night, board members did just that.
Golfers who show their identification proving a Powell residence will be able to golf for $25 for nine holes and $35 for 18 holes on Tuesdays, Wednesdays or Thursdays. Those rates are for walkers only, VandenBoom noted.
The special rate for Mondays still is $35 for 18 holes. Weekend and holiday rates remain at $39 for nine holes and $59 for 18 holes. Those rates include a cart and the driving range.
“The only way for us to offer further rate reduction would involve additional city support,” VandenBoom said Wednesday.
As in the past, some councilmen questioned the golf course’s future.
“Maybe it’s time to retire it then if you’ve got no money for it,” Councilman Jim Hillberry said at last month’s budget session.
“I don’t think you can let your golf course go,” Paul responded, “unless there’s just absolutely no other choice.”