>In our recap of Monday’s Mayor and Council meeting, we promised a full list of Art Stigile’s questions about RedGate Golf Course from Citizen’s Forum. Thanks to Art’s courtesy, here they are:

Image from RedGate Golf Course

[UPDATE: Art has provided backup for his assertions in this piece; they are here.]

Next week the RedGate Advisory Committee will present its recommendations for improving the financial condition of the golf course. In anticipation of the meeting, I have 10 questions that I would like to ask the Advisory Committee. I believe they are hard, but fair, questions that should be asked of the Committee, which after all, serves primarily as the golfers’s advocacy group. I won’t be able to ask all of them tonight, but I will start tonight and finish up next week. I have already emailed them to the Chairman of the Advisory Committee and to the Mayor and Council.

1. When Rockville agreed to establish the golf course in 1974, golfers promised to pay all of the expenses of the golf course and not saddle taxpayers with any of the cost. In exchange, RedGate would be run like a business that focused on meeting the needs of golfers, without a lot of meddling by taxpayers. Setting RedGate up as a separate Enterprise Fund was essential to carrying out this deal. Through 1999, golfers lived up to their bargain with taxpayers. However, Redgate has run deficits in each of the past 10 years, and taxpayers have been forced to fill the gap. Are today’s golfers willing to live by the original deal struck with taxpayers, and if not, why should taxpayers feel obligated to subsidize golf?
2. RedGate is expected to run a deficit of $674,000 this year, and taxpayers are once again going to have to fill the hole. If you do the math, that works out to a taxpayer subsidy of about $19 for every round of golf played at RedGate. Does the Advisory Committee agree that this is incredibly excessive? How would you define the appropriate level?
3. Redgate is expected to end the current year with a negative balance of about $2.4 million. This figure is more than double the revenue that we expect to collect from golfers for the entire year. The cumulative losses are expected to grow to $5.9 million by the end of FY 2015, which by then will be more than 5 times RedGate’s annual income. My question is this. How and when do you propose to repay taxpayers for this debt?
4. Rockville has operated for several years with a requirement to run a General Fund reserve equal to 15 percent of revenue. At the June 21^st meeting of Mayor and Council, staff testified that incorporating RedGate into the General Fund would immediately reduce the General Fund reserve to 13.6 percent in FY 2011 and reduce it further each year, leaving it at just 2.7 percent in FY 2015. This is a recipe for financial suicide. It would result in the loss of Rockville’s Triple A rating, make it extremely expensive to issue debt, and it would make it very difficult to operate the City budget. In light of this testimony, do you agree with the staff recommendation to keep RedGate as an Enterprise Fund, separate from the General Fund? If not, how do you suggest that Rockville deal with the dangerous drop in the General Fund reserve that would be caused by folding RedGate into the General Fund?
5. When RedGate was created in 1974, it provided Rockville’s middle income golfers with their first opportunity to play quality golf at an affordable price in the local region. Today, there are numerous public golf courses within easy driving distance, including several that are owned by the County. In light of RedGate’s declining customer base and large and growing deficits, wouldn’t Rockville taxpayers be justified, indeed, be smart, to say “let’s end this wasteful duplication of services, close RedGate, and direct golfers to any of the other public course in the area?”
6. The biggest flaw in the 2006 business plan was the assumption that fees would rise by about 5 percent per year. If fees had, in fact, risen by those amounts, RedGate’s revenues would be about $400,000 higher in FY 2011, and we wouldn’t be discussing the need for a new business plan. Instead, fees have stayed flat for five years, and they are likely to remain flat, given the over-saturation of the local golf market. But if fees stay flat, then the only way to eliminate the $924,000 deficit that is projected for FY 2015 is to double the number of rounds of golf played to more than 70,000. However, the number of rounds has not exceeded 50,000 since 2002, and the highest number in the past five years was 41,116 in FY 2008. Doesn’t this mean that under any realistic scenario, the only way that Rockville can continue to operate the golf course is through large and growing taxpayer subsidies?
7. Last year, you vigorously opposed consideration of an option to turn RedGate over to the Revenue Authority without a long list of preconditions. Now, several large golf course operators have expressed interest in operating RedGate. Given the sharp deterioration of RedGates finances, are you now willing to support turning RedGate over to some other management company without strings, or do you continue to insist on preconditions, even if it means that taxpayers would have to continue to pay large subsidies for golfers?
8. The 2006 business plan specified various measures of success, including that RedGate’s budget would return to surplus by 2009. However, it was totally silent about what would happen if these measures were not met and losses continued to rise. When I began in 2008 to point out that RedGate was off-track and the business plan would not succeed, the Chairman of the Advisory Committee advised me that I just needed to give it time to work. Now the flaws are abundantly clear, and we are considering yet another rescue plan for RedGate that, by necessity, would depend on large taxpayer subsidies for several years. My question is this. In exchange for continuation of taxpayer subsidies for a defined period of time, would the Advisory Committee agree to a business plan with hard targets that, if not met, would require closing the golf course?
9. RedGate has been operated by the same manager for many years. Despite his best efforts, deficits have risen, and they are projected to grow as far as the eye can see. Given the results, would the Advisory Committee agree to a new business plan that includes replacing the current manager?
10. Finally, from FY 2011 through FY 2015, taxpayers are going to have to spend about $4.2 million to cover RedGate’s deficits. That’s a lot of money, and there are many other ways to spend that money for the benefit of taxpayers. For example, we could put another 6-7 police officers on the street with that money. We could double our support of caregiver agencies, which certainly would make sense in this recession. We could use it to pay for replacing about 2.5 miles of water lines, instead of borrowing the money, or we could pay for about a third of the cost of converting the old Post Office to a police headquarters. We could actually fund the Mayor’s dream of creating a Rockville Science Center for our kids, which I have to say as a proud father whose daughter left Einstein High School a year early because she was bored, and who just graduated at age 20 with her Masters in Engineering, the Science Center would be the best new investment in kids that Rockville could start. Or, we could just cut the property tax rate and let taxpayers keep the money. My list could go on for an hour. My question is this. Could you tell us why golf should have priority over so many other public services that obviously would provide greater public benefits, and why the golf subsidy shouldn’t be the first thing on the chopping block in the FY 2012 budget?

Art Stigile

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