Cedaredge trustees meeting on Aug. 14 discussed the golf course operation’s lack of “long-term soundness.”
Mayor Pat Means noted that the golf course has lost money in seven out of the last 10 years.
In addition, with four and a half months to go in the current year, golf pro Larry Murphy projects that course operations will come up an additional $25,000 short. The trustees discussed ways to fill this funding gap, which is in addition to the $36,000 infusion being provided to the golf course by a loan and cash transfer in the 2014 budget.
The $36,000 infusion consists of $15,000 from the Lottery Trust Fund, and a $21,000 loan from the town water fund to “pick up a portion of the equipment loan,” Town Administrator Katie Sickles explained. She added that the $21,000 loan will have to be paid back by the golf course.
Finding more cash for golf operations will have consequences. The town’s utility ratepayers will likely subsidize the golf course indirectly for the additional $25,000 needed this year. The town’s water utility fund will buy water shares owned in the golf course fund. In the complicated financial transaction, the town’s water fund will buy $35,000 worth of water shares owned in the golf course fund for cash, thus providing the golf course with additional money needed this year.
The town’s water shares move through the town budget among the various funds to provide a funding mechanism where needed. This year, the sewer fund, which needs money for the treatment plant project, was to sell $70,000 worth of the water shares to the water fund, which has extra money to buy them.
But now, in order to solve the golf course’s need for cash, the water fund will buy $35,000 of water shares from the sewer fund, and another $35,000 in water shares from the golf course. The transaction will deprive the sewer fund of $35,000 this year that it needs for the sewer plant capital project, and the money instead will go for paying current bills at the golf course.
The transaction, expected to be approved on Aug. 21, will move cash from one town enterprise fund (water) to another one (golf).
The town’s practice of transferring money among funds via water share sales is limited at present to its business enterprise funds (golf, sewer, and water). By state law, public tax money in the general fund is strictly limited in supporting the town’s business enterprise funds.
Town Administrator Sickles told the Delta County Independent in an e-mail, “The General Fund does not currently own any water shares. When the general fund did have water shares it did [so] based on the Board’s approval after any legal advice was sought.”
As of the end of July, Mayor Means noted, the golf course had spent $296,000 compared with $283,000 at this time last year. “I thought we wanted to lower expenses,” she said.
Murphy and Sickles explained the increased expense items have come from maintenance and repair including ditches, irrigation system, and greens.
Murphy is also considering closing the pro shop from Dec. 1 through Jan. 31 to save money. He said he is cutting hours in the pro shop now and making other cuts. The golf course 2015 budget will “cut less than this year’s did,” Murphy told trustees, because “you can’t keep cutting and cutting.”
Trustee Ray Hanson said, “We need to get through this year, figure out what we are going to do in 2015, and then take a long-term look five to 10 years down the road.”