Golf course needs infusion of cash
By Hank Lohmeyer
Published Thursday, October 27, 2016 10:59 am
Money paid by Cedaredge residents for their water and sewer service is being used to keep the golf course open after the town enterprise ran out of operating cash.
At its regular Oct. 20 meeting, the town board adopted a measure transferring $8,000 cash from the water fund and an additional $8,000 cash from the sewer fund to the golf course fund because it ran out of money for operations at the end of its busiest summer season.
Town administrator Katie Sickles explained to trustees at an Oct. 13 work session that golf management has been cutting expenses "but revenues are way down." She added that the golf course is not allowed to operate with a negative cash operating balance.
A resolution adopted by the town board on Oct. 20 makes the emergency cash transfer effective Sept. 30, the end of the third quarter. Town hall has also been considering cash transfers to the golf course from residents' water and sewer payments totaling $30,000 in the 2017 budget. But the day of financial reckoning came earlier than expected and golf operations were not able to complete the 2016 budget year without cash subsidies. The money was needed now "to advance 2017 transfers to the golf course fund due to deficit cash reserves Sept. 30, 2016," according to the resolution adopted by the town board. Additional golf subsidies are still possible in 2017.
In addition to the immediate cash transfers, trustees voted to write off a total $97,950 in loans made to the golf course from the water fund and the general fund. On a 4-1 vote with Dayton Myers voting "no," trustees discharged an $81,950 loan to the golf course from the water fund, and the board also wrote off another golf course loan of $16,000 from the general fund.
The loan from the water fund was made originally to purchase golf equipment in 2011. The $16,000 general fund loan was balance remaining from a $32,000 loan for restaurant remodeling in 2012, town staff reported.
In the past, the golf enterprise's financial problems have been addressed by shifting ownership of water shares among budget funds and transferring their dollar values through ledger accounts. But unless those water shares are actually sold yielding cash from an outside buyer (something the town is not willing to do) the practice can also drain taxpayer and ratepayer reserves.
The board's resolution making the budget transfers to golf also made 2016 budget transfers for other items including a trails project and for in-town water system re-work. Trustees Bob Michael and Larry Smith were absent from the trustee meeting and did not vote on any of the measures.