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Golf: Write off $1.4M loan

Manteca leaders being asked to forgive golf fund debt

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Golf: Write off $1.4M loan

A golf maintenance worker mows the fairways.

HIME ROMERO/The Bulletin/


POSTED June 15, 2014 11:09 p.m.

Manteca’s golf course is expected to come within $13,300 of covering of its operating expenses in the fiscal year that starts in 15 days.

The fund balance projected for June 30, 2014, though, will reflect a $1,113,756 deficit.

City Manager Karen McLaughlin has a simple solution to make that deficit disappear. She’s recommending the City Council to forgive $1,412,425 worth of interfund loans dating back to the 1990s. The last loan of $140,000 was made four years ago.

McLaughlin said staff is recommending taking formal action to forgive the advance “in order to secure the financial stability of the golf fund.”

If the loan is forgiven, the account would have a $300,000 balance on June 30, 2015 as the fiscal year in 15 days will start with a $1,072,489 deficit as the result of the loan being on the books.

The golf fund— established as an enterprise account meaning it is supposed to stand on its own and not be subsidized by general fund money — in the past has been at the center of major political squabbles in Manteca.

The promise was that the advance would always be paid back as two major debts were paid off.

Four years ago the final $175,000 annual payment was made on a lease-purchase arrangement to build the golf course clubhouse in the early 1990s.

Manteca took out a 25-year loan in 1978 to convert the old wastewater treatment plant to expand the golf course to 18 holes and built the tennis courts along Union Road.

The last payment was made in 2013 to free the golf course of a $52,000 a year obligation. 

Since the payments have ended golf play has hit a slight plateau. Even more daunting from a financial perspective are identified reconstruction and maintenance needed to keep the golf course viable.

The general administration and overhead charges that were suspended starting on July 1, 2007 are still not being assessed to the golf course. McLaughlin is recommending that process be continued for the upcoming fiscal year. Staff is reviewing an allocation plan in conjunction with the 2012-13 budget that could lead to a recommendation to reinstitute some charges.

McLaughlin is recommending those charges continue to the suspended. They may be reinstated in the 2015-16 fiscal year after a cost allocation plan is reviewed.

Critics in the past past have argued the blanket 20 percent cost recovery fee the city sought to impose on all enterprise accounts such as golf, water, sewer, and garbage collection was arbitrary and inflated and had the effect of staff expenses being paid for twice.

The budget for the golf course also includes $155,000 from the general fund to pay for the recreational benefit of the facility. The money has been designated in the past to pay for free youth play by high school students and reduced green fees for Manteca senior citizens. The only Manteca recreation facility that isn’t receiving an operating or maintenance subsidy form the general fund is the Big League Dreams sports complex.

The course is expected to generate $1,062,450 in revenue in the fiscal year starting July 1 against $1,075,717 in expenses.

The City Council is conducting a budget workshop this morning at 8:30 a.m. at the Civic Center, 1001 W. Center St.

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