We're Hummin' Now!!
Letter to the City Manager and City Council
December 1, 2014
Dear Manager Harden,
Last Tuesday, November 24, the City of Port Orange received about six inches of rain in a short period of time. Water in the Halifax Canal got pretty high–I’ve attached a photo taken at about 7:30 pm that evening when it was near its high point and another taken at about 5:00 pm the next day when it had receded a bit. Both photos are of that section of the canal where it first overtops its banks and floods Dunlawton Avenue. The ground was too soggy to get close to the bank but water appeared to be 6-10 inches from the top.
During this particular rain event, there was some minimal ponding around individual storm drains on Dunlawton Avenue but by and large they remained clear and free-flowing. The retention ponds had been pumped down before the storm and handled the rain water with ease. Public Utilities vehicles were in evidence around the neighborhoods and I’m assuming protocol was followed to a tee at the Wastewater Plant.
Everything ran like it was supposed to and I’ve even heard a few City folk congratulating themselves on how well the system worked to prevent flooding on Dunlawton. This thinking is just flat out wrong. Dunlawton has NEVER flooded unless the Halifax Canal overtops its banks. It remained passable this past Tuesday simply because the Halifax Canal DID NOT overtop its banks, not because $3 million worth of pumps and pipes was humming along as designed. The project “works” well when it’s not needed and doesn’t work at all when it is needed. So where do we stand on the one component of the entire project designed to prevent the Halifax Canal from spilling onto Dunlawton, the mysteriously disappearing berm?
Who knows? Whenever talk turns to infrastructure improvements, such as for flood control, we hear about the need to borrow money to finance the projects and of course that money must be repaid with healthy interest. Yet when talk turns to Golf Club improvements we hear that the City can loan the Golf Club over $2 million, interest free, when the Club can’t even pay its current bills. Sounds like we are borrowing money at a high interest rate so we can loan it at a zero interest rate and with little chance of even recouping the principle. Ain’t government grand? Perhaps there is something wrong with my moral compass but I don’t see the rationale behind that kind of thinking. I sincerely hope the current City Council takes a good look at this ethical fork in the road and takes the path of fiscal responsibility.
Best,
Mike Gardner
618 Ruth St
Port Orange, FL 32127
386-527-1959
manddgardner@cfl.rr.com
Is this some type of sick joke?
Is it really true the council is going to increase the water and sewer rates for local residents so they can give the Cypress Head Golf Club an interest free $2 million loan that will never be paid back?
You have got to be kidding!
No decision has been made as to amount that will be needed. The best guess at this point is between 1 and 1.5 million. The numbers most commonly bandied about are 500,000 for course (greens etc.) repairs, about 250,000 to 300,000 in restaurant renovations and a carrying cost of between 250,000 and 500,000 to pay for costs while course is down.
The proposed source of funds is not the Water and Sewer Fund, rather the monies are proposed to come from existing monies in the City’s Internal loan account.
Another option is to pay off the existing balance on the current loan, pay the water and sewer fund back and consolidate the loan from the City’s Internal loan account.
As to payback that is an open question. In the past the golf course paid the loan back in only about half the years.
Is Councilman Ford trying to provide much need information or shill for this proposal. Sounds like the latter but I am willing to listen further. Glad to see him confirm that the numbers being bandied about are best guesses only. Sad if he believes guesses are any way to be spending taxpayer money.
The notion that Council could pay off the $1.5 million W&S loan on which payments are not even being made from the internal loan account and then loan the Golf course $3 million that will never be repaid from the internal loan account is pure snake oil.
I thought the new mantra was for greater transparency by reducing the number of Parker obfuscation funds such as this one rather than using them to mask pay-back political promises.
To inside joke: do you have any other plan or recommendation that will make our golf course viable again ????
Do you dishonor the agreement ? Did they dishonor it by not even paying the interest on the loan in many years ?
This entire scenario seems to be getting even deeper and more absurd.
Time to flush this turd and get out. It’s clearly a losing proposition.
Sadly, They are us. their is no they it is run by the city! Council is responsible and has accepted that the course has not made budget and been an expense. But then every park and sports field in the city is an expense. No one even has a record of how much it costs vs fees charged for parks and rec. It has never been asked for or thought of
So, they pay when they want to ?
And does ANYONE find it ludicrous to loan them even more considering their past repayment history ?
Can I get a loan at 3.5 percent APR and pay it sporadically ? Common damn sense must prevail here. Do we want to get this new Council off on the wrong foot for 2015 ?
This stinks to high heaven and the fact that is is even being given any consideration is beyond belief.
“and a carrying cost of between $250,000 and $500,000 to pay for costs while course is down.”
what exactly are these carrying costs of between $250K and $500K for the 6 months the course is closed…good grief Bob…..that is $1388 a day at the $250K rate and $2777 a day at the $500K rate. Is my math right on this? This daily cost is on the taxpayer for a course that is closed? Is there no way to reduce these costs?
How is it legally possible that the city is using the water and sewer accounts as a slush fund to provide loans to a country club What has a golf course got to do with water and sewer functions
Doesn’t the water accounts have outstanding bonds to support water operations in the city. Were do the bonding attorneys and holders of those bonds stand on this nonsense ???
The original payment for the golf course was from the sewer and water fund. The rationale was that the water utility would use the golf course to shed excess water — which it still does, this past year excess water was put into the golf course lakes. Again, no decisions have been made as to future expenditures. What has been discussed by the City Manager (Kisela) earlier this year is that The proposed funding for the golf course would not come from the water sewer fund, but from the City’s Internal Loan Fund. Another thought was to consolidate the old loan with the new loan through the internal loan fund and pay back the Water and Sewer Fund for their original investment.
Twenty some years ago our city leaders entered into an agreement to build and maintain a golf course for 30 years. There are about 8 years left on the agreement.
While I think and agree that a golf course/club is an expensive item for a public amenity and the city should have not done it in hindsight. Our city committed to it. So the question I want everyone to answer is, Do you want our city to dishonor it’s agreement? Would you be comfortable with our city breaking other contracts and agreements? Would you yourself violate or brake one you have signed?
I do not like the cost of money to be spent with many important needs, but it is a debt we as a city owe and I feel we are obligated to pay. Argue about paying for a better clubhouse and who runs what when the contract with Kemper is up. Ask where all the $2 r&r per round charges have gone, that money should be here now to pay for this work. Make sure the r&r money is not misspent going forward.
In 8 years when the obligation is over golf will be a renewed sport or it will be clear that it is still declining and the choices will be more clear as to the future of the sport and desire for a course. In the mean time if we are obligated to have a golf course we should have one to be proud of. Maybe when Kempers contract is up the HOA or other group my want to step up to run it. But for certain the city should not enter long term contracts to manage the course.
Newton
Do you dishonor the agreement ? Did they dishonor it by not even paying the interest on the loan in many years ?
This entire scenario seems to be getting even deeper and more absurd.
Time to flush this turd and get out. It’s clearly a losing proposition.
Newton, I only partially agree with you. We should continue to maintain the existing course per our contract. But I am sure there is nothing in the original contract that indicates we have to rebuild and reconfigure the course in 2015 or add or expand a restaurant facility that will be in competition with other non-government restaurants that pay taxes in the city
In addition we have paid out some serious money over the years for course employees to maintain the facility. So I now ask why was the course not maintained and why has it now falling into disrepair.
Maybe we only need to hire some new green-keepers that can perform proper course maintenance
As I have learned golf courses require this ground work about every 15 to 20 years, it was known when it was built and at some point they started the $2 charge and r and r fund that has been misspent or otherwise not here now. The course rehabilitation to original specs is proper maintenance. It is a normal cycle and to their credit the course is 22/3 years old. Crane Lakes is currently undergoing this and other local courses have recently completed the same.
The clubhouse improvements are optional, the thought between management and discussion is that an income from food and beverage and hosting events in an improved clubhouse that would be better suitable would offset more of the shortcomings of golf fees. Thus far I am skeptical of that has a plan. But the idea is to get the course to break even and not be a general tax fund burden. Until such time as the city can get out of the golf and beverage business.
My thought on F&B is a private entity to operate it and pay a steady rent to the city. Barring legal restrictions that could prevent this, the city could have a income stream to offset the cost and a private local business has a chance to make a success.
Without insult to. I do have sources outside the city and any one who can read a newspaper can see other courses have recently done the same. Before you say I do not know what I am commenting on do some homework and show me to be incorrect.
Don’t we risk losing a lot of clientele if the course is closed for 6 months? You would in any other business setting..retail, etc…people form new habits and they are gone for good……..do courses ever remain partially open when being renovated? Has that option even been discussed?
Yes it was discussed. The one time shutdown is widely the best choice (industry standard). The choice is to close 9 holes do the other 9 then repeat. Golfers I am told do not want to play half a course and will not pay for it. It was also said that it would have to be done in two years 9 one growing season and 9 the next year. leaving a loss of income over a longer time. Few courses choose that route, Some like Sugar Mill in New Symarna have 27 holes that they rotate and never have to shut down.
Newton and Mrs. Gardner – address the loan issue at hand. Is it at all prudent to continue funding this place ? They have not even made payments in several years.
I don’t mind a city municipal golf course – if indeed it’s a moneymaker. (Or at best a break even deal that makes our city more viable) But this entire scenario stinks.
I agree with you CC 100 percent..but this accounting insanity is going forward no matter what apparently….we are cooking the books big time……my question about partial closure asked only if there is any way to staunch the hemorrhaging…
Mrs. Gardner
Accounting insanity – good one. If this passes with a 5 – 0 vote I will lose respect for all of them. What am I missing, misinformed, or just plain ignorant about here ?
Even Councilman Ford readily said they made the loan payments in about half the years. Why would they loan even more now ? Do they feel by spiffing it up and dumping more money into the place that suddenly it will thrive ?
The City subsidizes a number of operations including recreation, Y, Chamber of Commerce, youth sports, tennis etc. After reviewing the golf financials for 4 years, it is clear to me that we will never make a lot of money on the golf operation, if we run it well we will brake even, with Kemper — staying on their tail, we will probably have to subsidize it by about 100,000 to 150,00 a year. To me to protect the integrity of the Cypress Head neighborhood, it is worth the cost — the amenity of a golf course increases the taxable value of the properties to the city by about that amount so it is basically a wash. Call me old fashion, but Cypress Head is an important part of Port Orange and I will not cast them to the winds. I also value Ruth Street and will fight for their berm, and a stop light for Crane Lakes, it is all about us taking care of each other.
Well said, Bob
Thank you Bob, you make good points, but I can quibble with them.
It is interesting that the city entered into a deal for a golf course with a real estate advantage to a local community. I wish here in Summer Trees we could have such a deal with perhaps 4 lighted shuffle board courts and a bigger pool. That’s not to say that people in Summer
Trees would use the shuffle board court or a larger pool, but just imagine how our real estate value will increase.
I demand that people in Cypress head start playing golf, once or twice a day, drinking and eating at the Golf restaurant once or twice a day!
And it pains me to bring this up, but some years ago the citizens of Port Orange voted to financially help older senior citizens who were over 65 yrs. old, had lived in their homes more than 20 years and were in danger of having their homes foreclosed. You sir voted “no” on that item, and the cost would have been far less than subsidizing a golf course which cannot be expected to turn a profit.
Perhaps there are deed restriction to what the city can do or not do with the golf course, and if so, it was a mistake a number of years ago to enter into this agreement. Was this something envisioned up by a developer to sell homes in his development? Just asking, no implication meant.
I guess no construction company or perhaps construction contractors or workers will make much money on redoing the country club structure, of which Kemper sports is proud to be compared to a country club. I have seen country clubs, and this sir is not a country club, but perhaps there are some who would like to think it is and or make one out of it. And something is wrong here if we are helping a certain community keep their home values up while others are doomed by the final realization that the drowned homes in the Dunlawton Ave/Power st neighborhood cannot be saved from future floods.
I do not live in Cypress Head because I do not need such a large home, am retired with limited resources, and prefer the rustic low key environment provided by my community developer , a certain Mr.Russel. My real estate value has also gone down. I have a very small clubhouse which has no bathroom.
It does not seem justified to ask tax payers to subsidize a country club for Cypress Head so that real estate taxes can be obtained. At what cost will be this winning idea that inflation and the economy will not eventually do us all in?
OH, oh, the diabolical twists, turns and messes a city find itself involved when they dabble in real estate. Weren’t the old cowboy movies based on that age old problem when the special interests in a town wanted to control and effect advantages in real estate?
We have already lost in a real estate battle in the Riverwalk Project, and here we find ourselves again losing in a real estate issue which
some say we are too much financially involved with to sever ties. Do we ever learn?
Bob perhaps you can answer another 2 question for us. According to Tommy Menocal the Golf Course property is owned by “The Golf Club at Cypress Head, Inc.” and is registered as a [FOR-PROFIT], Florida Corporation.
We have a 30 year agreement to operate a golf course on that land with a balance of 8 years remaining on that agreement.
(1) So what happens in 8 years after we spend millions for improvements — does “The Golf Club at Cypress Head, Inc.” walk away whistling Dixie with our newly upgraded golf course?
(2) Does the proposed $500,00 soft cost requested by Kemper include salaries for their employees during the reconstruction at the course (can we say vacation). Did we forget that the state runs a Unemployment Benefits insurance program were employees temporary laid-off can receive 2/3 of their salary during that temporary layoff
Yes Mr Ford, when you explain it like that I will agree. Please keep it high on the radar and hold them accountable (Kemper)
This entire golf couse deal,has the potential to spiral out of control if left unmonitored.
Could you possibly explain however why and how they pay back the loan in some years but not others ?
Lynn, The City of Port Orange directly owns the Golf Course itself. To make sure because I am not a trusting person given some of the hijinks I have seen, I had the City Attorney research the ownership, it is clear that the City does own the course, with a deed restriction that requires it to be operated as a golf course through 2023. In 2023 the City then owns the land free and clear of the deed restriction. The Corporation that Mr. Menocal mentioned was established independent of the City, only to hold the liquor license for the restaurant (Cities cannot hold liquor licenses). I as the Chair of the Golf Course serve as the Director of that Corporation with Mr, Harden (City Manager). Its only asset is the liquor license and that corporation does not own the course. ( I admit, the whole thing is unusual).
the Proposal by Kemper for 500,000 in soft costs consists of utilities, insurance, Kemper’s fees and salaries of personnel that Kemper feels should be kept on. It is essentially Kemper’s wish list. No one at the City has agreed to it, in fact we have not even seen the particulars until last night. It is my belief that it can be significantly reduced.
The employees are Kemper’s responsibility not the City’s. You have to watch Kemper like a hawk, someday I will share some of the interesting things that I have encountered out there…
Concerned Citizen: You are correct, Kemper must be watched and constantly monitored. The amount of free golf being given out, has been restricted significantly…more oversight is needed, You are absolutely correct, without a firm hand on the helm, the golf course could easily spiral out of control.
The amount paid on the loan each year is a function of how much the course is earning. In good earning years the loan gets paid back, in years where budget projections are not met, the loan is not repaid totally or only in part.