More trouble is par for the course

Dan Kulin

Tuesday, Aug. 5, 2003 | 8:30 a.m.

The Boulder City-owned Boulder Creek Golf Club continues to be in the rough.

The city is withholding a $35,000 management fee from course-operator Triad Golf Management because the private company has provided inaccurate and incomplete information, and provided it late, City Manager John Sullard said Monday.

Triad President Scott Jones, who is also general manager of Boulder Creek, did not return telephone messages Monday.

This was the latest piece of bad news for the golf course, which opened Jan. 4, and was one of the focal points of the recent mayoral election.

After months of city officials saying the course seemed to be doing well, a week before the June 3 election Jones presented figures showing course operations cost about $480,000 more than it brought in through the end of April. The figures were contrary to preconstruction projections that showed course operations turning a $60,000 operating profit after its first six months.

A few days later, the Phoenix company that had the $12 million contract to build the golf course filed an $842,933 lawsuit against the city. Wadsworth Golf Construction claimed it was owed the money for finishing the course, but city officials said there was still work to be done, such as fixing leaks in lakes on the course.

During a July presentation to the City Council, Jones handed over financial information that seemed to show the course operating deficit had grown to more than $525,000 through June 30.

But Sullard said Monday that at this point he's not sure exactly what's going on with the course's finances, or whether any of the past financial reports were accurate.

For example, some past financial reports listed money received through the city as revenue and not as a debt to be repaid, which it is, Sullard said.

City Finance Director Bob Kenney said reports from Jones show operating losses greater than the amount of money the city has advanced to the course.

Also, financial reports that were supposed to be received monthly were not turned in for months earlier this year, and contingency plans for cutting costs were incomplete so far, Sullard said.

"We are not willing to advance additional management fees pending discussion and resolution of serious deficiencies in your management of BCGC," Sullard said in a July 30 letter informing Jones that the city would not be sending him the $35,000 he had requested.

"They need to take charge and show us timely and accurate information with contingencies. We need to stop the bleeding," Sullard said Monday.

Jones and the council are scheduled to meet Monday to discuss the financial situation at Boulder Creek.

Also, the city is launching its own audit of the course and its operations, which should take a couple months to complete, Sullard said.

Kenney said course has not needed a city general fund subsidy so far. There is still about $1 million in a golf course budget that was started with the roughly $22 million borrowed to build the course, buy equipment, and subsidize operating expenses and loan payments until the course turned a profit, Kenney said.

But Sullard and Kenney said they don't know how long that $1 million will last.

Sullard said no matter what the actual financial figures are, "the fact is we need to cut costs."

City Councilman Roger Tobler, who was elected in June, said he supported the city withholding the management fee until the financial situation at the course is unraveled.

Bill Smith, a former city councilman, said it is about time the city took a critical look at the course's finances.

During his unsuccessful mayoral bid in June, Smith had warned that Boulder Creek was not doing well, and that the city would end up having to pay off most of the debt taken to build the course.

Mayor Bob Ferraro, who beat Smith by 18 votes, has said he was surprised when he learned in late May that the course was losing so much money. But Ferraro, who was out of town Monday and did not return telephone messages, has said he is still convinced the course will eventually show a profit and be a strong tourism draw for Boulder City.