Mayor and Council,
Neither Manager Kisela’s original memo of Feb 26th or his subsequent memo and e-mail of March 7th and March 10th adequately explain this whole Golf Course loan reversal “gimmick”. Several aspects are blurry at best and require clarification if Mr Kisela is not to be regarded as usurping the rightful authority of Council, AND if we are to have confidence in the veracity and completeness of the financial reports the Finance department is providing.
Accordingly Mr Kisela needs to provide:
1) The exact date and the exact amount of the adjustment to the Water & Sewer loan balance he authorized his Finance staff to make.
2) The adjusting entry or entries that were prepared to book this transaction.
3) The date and amount of the last Water & Sewer loan payment that was transferred from the Golf Course operating bank account.
4) A complete accounting of the Golf Course Clearing account, Golf Course R&R account, and the Golf Course / W&S loan account – since Sept 30th 2013.
5) The Manager’s authority to arbitrarily reverse out previously reported loan payments, and thereby increase previously reported loan balances.
6) The Managers authority to suspend any Golf Course loan payments in FY 2014
This loan payment reversal “gimmick” as it was so aptly coined at the last A&B Advisory Board meeting has exposed a serious deficiency in reporting golf course operations and that is, like all other financial reporting the City provides …. it is incomplete.
This loan restatement gimmick was not presented openly for public discussion, rather it was uncovered through questioning at a golf board meeting. It appears to serve the sole purpose of making additional loans to a golf course operation that has been unable to repay its original loan over the alleged useful life of the course more palatable. It does nothing to strengthen the Golf course’s working capital deficiency, OR address operating losses that have more than quadrupled from $ 20,544 for the first 4 months of FY 2012 to $ 97,237 for the same period in FY 2014.
Manager Kisela needs to likewise provide a complete accounting of Golf Course operations for the first 5 months of FY 14 including a realistic budget for the rest of this fiscal year, ALONG with pro-forma financials demonstrating the financial ability of the golf course to repay both the existing loan, and the new loan for the realistic cost of the proposed renovations.
Such reports should be provided as the minimum responsible disclosure necessary to begin discussion on the multi-million dollar golf course renovation that the manager is attempting to stampede Council into approving through loan gimmicks, incomplete reporting, AND understated renovation cost estimates that he is obtaining from a totally inappropriate and biased source . Inappropriate and biased if you consider that Kemper is the management company currently running the poorly performing golf course operation, and they stand to receive their city paid salaries and management fee during what in essence will be a 6 month paid vacation while the course is closed for renovations that they themselves are recommending.
I would urge Council to re-examine Kemper’s performance and their $ 86,000 annual management fee in light of current developments.
From: Kisela, Greg [mailto:firstname.lastname@example.org]
Sent: Monday, March 10, 2014 1:07 PM
To: City Council
Cc: Ted Noftall; Jack Wiles
Subject: FW: Cypress Head Cash Flow/Debt
Mayor and City Council:
See explanation to an adjustment that was made to the monies the golf course owed the water and sewer fund. As part of the analysis for the workshop last week Wayne Saunders and I reviewed the golf course cash report. Although it had been past practice neither Wayne nor I was comfortable with showing a significant negative balance in the golf course clearing account. Consequently, we reversed the debt payment to the water and sewer fund that was originally booked in FY 2013. This strengthened the cash balance in the golf course fund and increased the monies owed the water and sewer fund.
Sorry for the confusion.
From: Saunders, Wayne
Sent: Monday, March 10, 2014 11:55 AM
To: Kisela, Greg
Subject: Cypress Head Cash Flow/Debt
Attached is information requested regarding outstanding debt and cash flow for Cypress Head Golf Course.
Wayne Saunders, ICMA-CM