NORWAY - Norway City Council has adopted the 2010-11 operating and capital improvements budget for the Oak Crest Golf Course.
City Manager Ray Anderson said the city received a letter from the Department of Treasury on March 22 giving notice that a debt elimination plan was required for the city's golf fund and the Norway Utilities Authority. This is because, by law, if a local unit of government ends its fiscal year in a deficit condition, the local unit of government must file a financial plan with the treasury within 90 days after the beginning of the fiscal year.
The Oak Crest Golf Course is owned and operated by the city. For the past four to five years, the course has cut its expenses in an attempt to address budget shortfalls.
"Unfortunately, we have had declines in revenues (mainly membership fees) that were more than the savings in our expenditures," Anderson said. "Under the plan presented to council, staff once again has proposed additional cuts in expenditures for the fund. This plan is a more conservative approach for estimating membership fees."
The five-year fiscal plan calls for the following:
- Membership fees estimated at $250,000, which is a reduction of $50,000.
- Personnel at 50 percent in the golf and 50 percent in the parks and recreation. Golf course superintendent Kurt Stromquist will have more responsibility in the parks and recreation area. Last year, responsibility was 80 percent golf and 20 percent parks and recreation.
- Operational expenses reduced. Anderson said over the long term, this will have a negative effect on the condition of the course. The city hopes that it will hold back on expenditures for the next one to two years and the situation will improve. This will be evaluated on an annual basis.
- Transfers from the golf fund to the general fund for administrative support have been suspended until the fund is positive. This will be reprogrammed after financial conditions improve.
"We really do not expect a drastic turnaround in the next few years due to the stagnant economy and, as we know, golf is a luxury sport," Anderson said. "We do think, however, that our five-year plan is realistic and obtainable. We also know the bond issue for the clubhouse will expire in 2014. This will enable the golf commission to help financially with our operations."
If the city did not approve this request by the state treasury, the state would withhold its revenue sharing payments to the city.
"Hopefully the economy turns," Anderson said.
Mayor George Bal said the council agrees no one wants to lose the golf course.
"The people feel the same way, and I certainly feel the council will do what they can," he said.
Since this was the first year the Utilities Authority was included and due to the fact that this was the first year the authority had an official audit, the authority was included in the treasury letter.
The audit was done at the request of Rural Development.
Anderson said after consulting with the city's auditor, a simple explanation will be given to the state and that will be sufficient. The authority was established in 1978 as a debt retirement fund and a financial vehicle for both the city and township.
The remaining debt is scheduled to be retired in full in 2018.
In other business, the council held a public hearing on a USDA Rural Development $95,000 grant/$50,000 loan application for the purchase of a new street sweeper and new rotary snow blower attachment.
Over the past 10 years, these two pieces of equipment have been targeted for replacement. With the additional funds available through the federal stimulus package, Rural Development has been able to obligate grant funding to help communities purchase equipment. Cost of the new rotary snow blower to be mounted on the city's existing front end loader would be $130,000. With the loan/grant, there would be a loan of $90,000 and a grant of $40,000. The cost of a new street sweeper is $145,000. This would be with a loan of $95,000 and grant of $50,000. Purchase of these items will be discussed at a budget meeting.
"These programs are extremely helpful for small communities, " Anderson said. "We can't afford to replace everything that breaks down."
Lisa M. Hoffmann's e-mail address is lhoffmann@ironmountaindailynews.com
