Commentary: City of Ventura Golf Courses Bleeding Taxpayers

 

 

Buenaventura Golf Course

We begin with the punchline: $13.8 million tax dollars wasted on unsuccessful city golf courses. 

That is what Ventura residents will pay over the next 15 years to cover accumulated and future losses at the Olivas and Buenaventura municipal golf courses – drowning in debt and unnecessary city overhead. 

Golf course losses are projected to continue accumulating at $600,000 per year for the next 15 years unless the Ventura City Council acts.

The scope of the problem seems to have first been realized by the council and revealed to the public in 2014. With losses and loans mounting and no plan to resolve the issue, council member Erik Nasarenko called the situation a “cautionary tale about what happens when councils are given something and things turn out wildly different.”

The Ventura County Taxpayers Association calls this a disaster that could have been avoided.

At the same time, Councilman Mike Tracy pointed out that the losses were not sustainable and the council needs to re-evaluate whether the city should manage golf courses in this community. The bottom line, Nasarenko told City Manager Mark Watkins at the 2014 council meeting, the goal was “to stop the drain to the general fund.”

Now we are three years down the road, and all the time accumulating more losses while Watkins continues to follow the misguided policy of loaning the golf courses millions of dollars from cash reserves to cover ongoing losses. This policy of lending hid the losses from public view as bureaucrats waited nine years, hoping things would improve and the loan would be repaid. 

Things haven’t improved. In March, Watkins finally made a decision – write off $4.6 million of loans made over the past eight years, plus an unspecified amount loaned this fiscal year, to keep the golf courses solvent.

How on earth did the city turn a once-profitable golf course business into this mess costing taxpayers millions of dollars?

This story of wasted public money began in 2002, when the council adopted an optimistic staff recommendation and agreed to borrow $15.9 million to renovate the two courses. The city manager at the time assured the council that the courses would make enough money to pay their bills, as well as the loan, and continue to earn a profit. What went wrong?

Simply stated, the loan required that the city become the operator of the golf courses and assume all the risk. The city now pays all the costs and receives all revenue, instead of leasing them to a contractor.

Government bureaucrats with no experience in the private sector dove head first into the deep end of a highly competitive business they knew nothing about, running golf courses with your money. The same bureaucrats who recommended borrowing millions of dollars ignored red flags that should have stopped the project. 

For example, Ventura County was already saturated with golf courses. Undaunted, the city rolled the dice and moved forward with the project. By 2007, when the renovated courses reopened, the sport of golf had declined in popularity and the city began losing money – a lot of money. Then-City Manager Rick Cole, believing the business would magically improve, developed the practice in 2008 of hiding losses from public view by “loaning” public funds to cover golf losses. Watkins, who replaced Cole, continued the practice of loaning more and larger amounts of public funds to keep the appearance the courses were solvent.

In 2014, Watkins commissioned an outside consulting firm to review the golf course operations. While the report was informative, it recommended this solution: “The best way forward is to continue to maximize revenues.” Finally in March of this year, after three more years of losses, Watkins recommended writing off $4.6 million in golf loans, plus an undisclosed amount loaned this fiscal year.

The City Council was reluctant to make difficult decisions three years ago that might have fixed the problem, so it did what city councils do best – kick the can down the road.

Monday night, the council will hear recommendations from the same consulting firm about the same issue: how to stop golf course losses that are projected to continue accumulating at $600,000 per year for next 15 years.

The Ventura County Taxpayers Association is accustomed to elected officials in this city avoiding difficult decisions. Doing so limits options and makes for harder choices.
Now is the time to act. We can’t afford millions of dollars in future golf course losses and wasted taxpayer dollars. 

Ventura County Taxpayer Association


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One Response to Commentary: City of Ventura Golf Courses Bleeding Taxpayers

  1. Robert Franks June 6, 2017 at 4:49 pm

    Speaking as an Oxnard resident, this story sounds quite familiar.

    Reply

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