Santa Rosa taxpayers began picking up the tab for the Bennett Valley Golf Club's clubhouse and pro shop Tuesday after it became clear golfers alone could no longer shoulder the hefty debt on the $9.6 million buildings.
The City Council approved a plan to use general tax revenue to make this year's $469,000 annual debt payment that helped fund construction of the two buildings in 2007.
The 18-hole course, which is supposed to pay for itself without general tax revenue, has been struggling in recent years to keep up with its expenses in large part because of the annual debt payments.
"We spent a lot of money on (buildings) without a long-range financial plan of how to fund that, and that's what we're wrestling with tonight," Vice Mayor Robin Swinth said. "You can't always count on the economy being rosy, and we're cleaning up after that here."
The city sold $5.5 million in bonds to fund construction of the buildings, and also borrowed nearly $800,000 in park development fees, which also need to be paid back.
City Manager Kathy Millison predicted the city would probably need to carry the debt for the next decade given the significant infrastructure costs needed at the course, which was built in 1970. That's a nearly $5million commitment, though she stressed that if the course's profitability improved, those payments could be reduced.
Most council members said they didn't see a choice, given that the city had backed the bonds with general fund revenues. But Councilwoman Julie Combs called it "remarkably frustrating" to be bailing out a golf course when there are so many other needs in the city.
"I will be voting for this under duress," Combs said.
The council voted 6-1 for the transfer, with Gary Wysocky voting no.
"I'm going to have to answer to people (who ask) why are you funding the golf course?" Wysocky said.
The council also struck a new five-year operating agreement with longtime course operator Bob Borowicz. Instead of paying Borowicz an annual fee to run the course, the new agreement aims to split the greens fees with him, creating a more equitable partnership, said Nanette Smejkal, the director of recreation and parks.
"It's really a new dawn for the golf course," Smejkal said.
Instead of 100 percent of the greens fees going to the city, as has been the case for years, the city will instead eliminate Borowicz's $840,000 annual operating fee and instead share the greens fees with him.
At first, Borowicz will receive 82 percent of the fees, the city 12 percent. Then, after hitting $1.9 million, the split becomes 70-30. The idea is to ensure Borowicz receives enough revenue to cover his expenses, but that once he has done so, the city collects a slightly larger percentage, Smejkal explained.
Borowicz would get to retain 100 percent of the revenue from merchandise and lessons.
The agreement also shifts a greater share of the expenses onto Borowicz. The city will retain the responsibility for major capital improvements to the course, such as the buildings and course irrigation system, which Millison said is aging and in need of a $2 million upgrade. But in addition to paying for the staff, golf carts and course supplies, Borowicz will now also be responsible for the course's utilities, computer and software system, and equipment repairs, Smejkal said.
A new business plan also will focus on drawing more golfers to the course by giving Borowicz more flexibility to offer special promotions not currently allowed under the existing contract. Improvements to increase the speed of play also are planned, as well as targets on the driving range to give golfers something to aim for.
The new agreement is for five years with a three-year option. That will allow the golf course agreement to run out in 2022, the same time as the lease for the Legends restaurant. This would allow the two operations to be run by a single operator in the future.
The council voted 5-2 for the transfer, with Wysocky and Combs voting no.
You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @citybeater.
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