Council aims to reduce golf course budget

Dan Kulin

Monday, Aug. 25, 2003 | 11:19 a.m.

The Boulder City Council on Tuesday will look into financial issues surrounding the troubled Boulder Creek Golf Club, including whether to ask voters to approve the sale of land around the course to help pay off some of the $22 million used to build the course.

The council is also scheduled to consider a new budget for the city-owned golf course that calls for cuts such as a $202,000 reduction to the annual fee the city pays Triad Golf Management to run Boulder Creek.

City officials said the $202,000 now pays to have two touring pros affiliated with the course and for a marketing position that is not filled. All three positions would be cut in the proposed budget.

Triad President Scott Jones, who is also general manager of Boulder Creek, said the proposed budget cuts will not be noticeable to golfers. Jones said any change to Triad's management fee would have to be negotiated and that no discussions on the matter have taken place. He also said that Triad's $650,000 annual contract with the city does not require Triad to fill those positions.

City officials say they hope the nearly $1 million in proposed budget cuts will bring course expenditures more in line with revenue and lessen or eliminate the operating shortfall that threatens to force the city to find new money to subsidize Boulder Creek.

However, Boulder City Golf Course Manager Bob Conrad, who helped developed the new Boulder Creek budget, said the financial situation will be improved only by increased play at the course.

About $485,000 of the proposed budget cuts come from finding an accounting error that counted debt payments on equipment purchases twice, Conrad said. The rest of the proposed changes include reducing spending on fertilizers, not renewing the contracts with the touring professionals and not filling the marketing position.

"Nothing the council can vote on will really improve the budget picture," Conrad said. "It's dependent on increases in play."

Conrad said the cooler weather coming with the end of summer should lead to an increase in play.

Plans for a new budget come after city officials were given updated financial figures for Boulder Creek earlier this month, which showed the course continuing to lose money.

During its first six months open, from the beginning of January through the end of June, Boulder Creek ran an operating deficit of about $954,000, according to city documents. That figure includes a cash loss of $697,207, plus $257,205 in unpaid utility bills still owed to the city.

In addition to that operating loss, other expenses brought the total loss to almost $2.5 million through the end of June. That includes $320,916 in depreciation of assets, such as golf carts, $532,644 in accrued interest on the $22 million in loans, and $665,541 in pre-opening expenses. Pre-opening expenses, which included staff training and maintenance, were budgeted to cost $500,500.

Boulder Creek's finances are run through a special city account called the golf course fund, which was created to hold and disperse of the $22 million borrowed to build and equip the course. That fund is also where debt payments and operating subsidies come from.

The golf course fund was about $1.5 million at the end of July. City Finance Director Bob Kenney said he won't be able to tell until the new budget is in place for a couple months if that account has enough money to cover coming debt payments or if the city will need to find more money from elsewhere.

One potential source of funds is the land around Boulder Creek.

When the course was designed, development plans included space for 62 or so homes, Mayor Bob Ferraro said.

The Boulder City Charter requires that the sale of more than an acre of city-owned property be approved by the voters.

Ferraro said he thinks most city residents support selling the land. The mayor said he wants the city to hold a special election to put the matter before the voters soon, instead of waiting until the next election in November 2004 to put the question on the ballot.

City Manager John Sullard said voters would probably be asked two questions: whether to sell the land, and whether to use the proceeds from the sale to pay off some of the golf course debt.

Former City Councilman Bill Smith, who has long warned that Boulder Creek would become a financial boondoggle for the city, said when the golf course was built the public was led to believe the land would be sold in order to pay for something other than the golf course debt.

"Eventually the land was to be sold anyway, but most people wanted it to go toward something else, like a new swimming pool," said Smith, who lost to Ferraro in the city's June mayoral election.

Smith also said that the current state of Boulder Creek's budget leaves the city leaders in a bad position, because if they cut the budget to stop the financial bleeding at the course they risk making the course a less attractive place to play.

City Councilwoman Andrea Anderson said she hopes the expenses can be reduced without hurting the course.

Jones said he's confident the cuts won't hurt the course.

"The maintenance and quality will be the same, we'll work harder and do things faster," Jones said. "The new budget that's on the table isn't one that we can't live with."