Editorial: Golf course audit needs a follow-up

Wednesday, April 21, 2004 | 8:47 a.m.

The $22 million Boulder Creek Golf Club has been a problem for Boulder City ever since it opened as a municipal course in January 2003. Mayor Bob Ferraro, a supporter of the golf course, had been surprised to learn just before his narrow re-election last year that Boulder Creek had lost $480,000 in its first four months. That situation cost John Sullard his job as city manager in January of this year. Continuing losses at the golf club, which now total $3 million, sparked a heated recall election against Ferraro and a city councilman, which they survived earlier this month.

Now, as the result of an audit concluded this month, mismanagement has been documented at the club in addition to the financial failings. Conducted by a private accountant and paid for by the city, the audit revealed management abuses by the private company the city contracted with to run the golf club. The company, Triad Golf Management, had a $645,000-a-year contract, which the city bought out last month for $500,000.

The audit found that Scott Jones, who heads Triad, paid $120,000 of the city's money to a new firm started up by a business associate of his son-in-law. The expenditure was for the installation of surveillance cameras, but the work was never finished. The auditor said the firm, I-CamSM, was apparently created for the sole purpose of winning that contract.

The audit also discovered that Triad made claims on the city's insurance policy for items stolen from the golf course, including three mowers that had been purchased for $2,500 apiece. Triad, on the claim, however, reported the mowers were worth $6,305 apiece, according to the audit. The insurance company did not pay the claims on the mowers. Additionally, the audit found that the golf club's administrative manager received an interest-free loan of $7,500. The loan was later paid back.

Having bought out Triad's contract, the City Council seems willing to be done with the firm and simply blame the audit's findings on incompetency by the contractor. In our view, city officials also bear some culpability for the mismanagement because they failed to adequately oversee the privatized operation of the municipal golf course. For that matter, the city's contract with Triad was written so weakly that, even though the audit's findings would appear to have offered plenty of evidence to fire the company, the city ultimately was forced to buy out Triad's contract for a very large amount just to make the company go away. And while the city attorney doesn't believe the company did anything illegal, that's not his call to make. The Clark County district attorney's office should review the audit and decide whether something more than mismanagement occurr ed.