City hoping to right golf course woes

Photo By Kristen Luther
The Elizabethton Municipal Golf Course will be receiving help from the city to pay its debt service for this fiscal year.

By Thomas Wilson
star staff

  A proposal to salvage the debt problems of the Elizabethton Municipal Golf Course (EMGC) comes before the Elizabethton City Council on Thursday night.
   In a letter to EMGC manager Steve Howard dated Sept. 11, city Finance Director Brad Moffitt said he has formulated a financial recovery plan to fund the organization's $60,000 annual debt service. The existing debt payments would extend through August 2010.
   The current debt service payment has the EMGC paying $99,000 this year and $96,000 next year before the payment drops to $45,000 in the 2006-2007 fiscal year. The revised plan up for council review lowers a debt service payment to either $14,060 for the 2004 fiscal year or an $18,464 payment for 2005.
  The plan comes after the course's inability to pay its debt service bond payment in December 2003 forced the city to pay $87,826 from the city government fund balance to cover the payment. The unbudgeted item riled several City Council members.
  In an earlier letter to Howard in January, Moffitt discussed research he had done into the course's financial records in recent years.
   Howard had said earlier this year that poor weather conditions coupled with a limited economy stagnated golf course revenues in the past year. Moffitt acknowledged that weather affected the course's revenue problems "over staffing, or not adjusting staff in a timely manner to meet the reduced patronage" were cited as contributing factors to its overall trouble. He also found while maintenance problems with the course's irrigation system were mentioned as factors, Moffitt said his analysis did not find that to be the case.
  The course's total maintenance costs were $109,444 for 2003 with the highest cost over the four-year period being $116,247.
  The course's financial records indicate expenses increased 11 percent over the past four years while revenues decreased 1 percent over the same time period. The report also found the course's net assets had decreased by $271,000, or 38 percent, over the past four years.
  Howard also said earlier this year that the number of full-time employees at EMGC dropped from nine to six last year. The course had laid off one salaried employee in August, cut another full-time employee to part-time, and did not fill a position vacated by another employee who resigned to take a new job.
  Moffitt noted the EMGC had cut personnel this year. The superintendent hired in recent years was laid off in August, the golf course's pro shop hours were cut back to 30 hours a week, and one mechanic who quit in November was not replaced.
  Despite those reductions, the golf course was still unable to meet the $87,826 debt service payment paid by the city.
  The only year the EMGC ended in good financial condition was the 2001-20002 fiscal year, according to the review. Moffitt's review also noted several "red flags" in the course' financial management in recent years. Among those findings were the restructures of the course's debt two years ago to come under federal accounting standards, non-compliant GASB-34 audits in three of the last four years, and not providing information to the auditor in a timely fashion.
  The golf course derives 40 percent of its budget from membership dues and fees. Greens and cart fees paid by non-members comprise additional revenues brought in each year. Owned by the city government, the golf course functions as an enterprise fund.
   State law requires the golf course to be financially self-supporting.
   In its annual audit for the 2003 fiscal year, the Blackburn, Childers and Steagall accounting firm found that the golf course posted operating revenues of $613,000 and operational expenses of $661,000 resulting in a net loss of roughly $45,000.
  Moffitt also recommended the course submit a monthly financial statement to his department, keep a trend analysis on revenues and expenditures, and have the course held to the same accountability as other city departments.
  The city took ownership of the course after creating the Public Benefit Corp. in 1988. The golf course shares the same health insurance provider with the city and its debt service, which comes from the golf course's equity fund.
  Howard was not available for comment about the plan on Monday. The council will decide whether to accept the debt service recovery plan.
  The council also could decide whether to buy three parcels of property located on Hattie Avenue and South Sycamore Street near Elizabethton City Hall.
  Council will determine whether to extend an offer of $199,500 - representing 95 percent of the property's appraised value - to purchase the three tracts identified under the estate of Patrick P. Kildoyle. The properties are identified as 212 S. Sycamore St., 609 Hattie Ave., and an unaddressed parcel at the corner of Sycamore and Hattie. The purchase would be conditional on a phase I environmental assessment of the properties.
  City officials said Monday that the property was not destined for a parking lot at any time in the near future if the council chose to purchase the land.
  "No one I know of in the city government has mentioned making that land into a parking lot," said Charles Stahl, Elizabethton city manager.
  City Planning Director David Ornduff said Monday the city established a long-term capital improvement program in 1990 regarding the city government's future growth. He said the property's future use could include a new public safety headquarters, a public park, or a number of other options.
  "Public use encompasses a whole multitude of things," Ornduff said.
  The Elizabethton police and fire departments as well as a city-owned building all sit in close proximity to the City Hall building.
  In other business, the council will review bids for the demolition and site grading of property at 613 N. East St., 615 N. East St., and 701 4th Street. The city purchased the property under the Federal Emergency Management Agency's hazard mitigation grant with the requirement that all structures on the properties were to be removed.
  City staff have recommended the project be awarded to K&M Construction of Elizabethton, which submitted the lowest bid of $12,751. Funding for the project is provided through a grant by FEMA.
  Thursday night's meeting will be the last for Mayor Sam LaPorte and Councilwoman Nancy Alsup. LaPorte, who did not run for re-election, will say goodbye to council after four years as mayor. Alsup lost her bid for a third straight council term in the Nov. 2 city election. New council members Curt Alexander and Charles LaPorte, along with incumbent Richard Sammons, will be sworn into office next week.