Taxpayers complained about the golf course tax throughout the 1990′s. It was the approximately $500 a year property tax that I and other village residents paid that sensitized me to non-referendum bonds.
At a village board meeting I was told that purchasing the golf course would not cost me a dime, that fees from the golf course would pay off the loan.
In whose dreams?
Then-resident Jim Bishop warned trustees that golf courses were not doing well in McHenry County.
But, a bond salesman convinced trustees that the interest rate would be so much lower, if the village issue the revenue bonds with a general obligation back-up.
So, we are coming up to the last year of the bond issue and the golf business is so bad that an amount that will cost 21 cents per $100 of assessed valuation was imposed upon Lakewood taxpayers. That will raise $486,000.
“Revenue are not sufficient to pay bonds,” Village Administrator Catherine Peterson said. Staff recommends the full extension be made.
A report showed income down 11%, a bit over $100,000, through November. And, there were increased expenses—up 54% or almost $140,000. Projecting through the winter, when little revenue comes in, and the golf course will have something over $200,000 left.
Best case projection for the coming year is to break even, rather than have a profit of $150,000 seen last year.
Both figures, of course, refer to operating expenses, ignoring the repayment of the bonds, which resident users of the course and those of us who have never set foot on it must subsidize. And $50,000 of capital improvements are said to be “needed” this coming year.
The bleak conclusion from the Village Administrator:
“If the 2011-2012 golf season is similar to the current year, Redtail Golf Course will simply not have the cash reserves to operate for an entire year.”
Blame for inadequate revenue was affixed on the lack of a club house, which was said to bring in food and beverage money.
Competition from the Huntley Park District’s Pinecrest Golf Club and the re-opened Turnberry Country Club was also cited.
“Most of the other municipal courses aren’t fairing much better that we are,” Trustee Gene Furey observed.
While the rounds have remained pretty constant at 30,000 per year (plus or minus 1,500-2,000), the cost has had to be discounted because of competitive forces. Income per round is down from $41 in 2007 to an estimated $33 next year.
After looking at the figures, Trustee Blake Hobson said, “I don’t see a new building (club house).”
Never having been a fan of the golf course purchase, I asked if it couldn’t be sold.
Turnberry resident and Village President Erin Smith reminded me that the value of the homes surround the golf course would depreciate if town houses were built on the golf course.
Of course, I did not suggest that town houses be built there.
But I certainly shall object if general taxes are used to prop up the golf course after the bonds are paid off, as I have objected to the golf course tax since it was imposed in the early 1990′s.
And, if it can’t pay for its expenses, it seems to me discussion of some exit strategy is merited.
Operating a golf course is just not a core function of municipal government.