Watchdog: Lone Tree Golf & Event Center not paying its bills, adds to city’s deficit

Watchdog Logo Watchdog: Lone Tree Golf & Event Center not paying its bills, adds to citys deficitBy Barbara Zivica

Practical politics consists in ignoring facts.” – Historian Henry Brooks Adams

That’s exactly what the City of Antioch, which is projecting the potential of outpacing revenues in fiscal year 2015-16 and a significant increase in deficit by fiscal year 2016-17, is doing in regard to continuing to allow the Antioch Golf Corporation’s non profit board of directors to again maintain prioritization of payment of an ABAG loan until payments are current and defer payment of two construction loan payments made by the City until there are sufficient revenues to pay both.

FACT: The Lone Tree Golf & Event Center isn’t currently generating sufficient revenue to cover the ABAG bonds. The city bills the golf course after payment of the principal and interest is made by the city. The average annual principal and interest payment is $415,000. The golf course has only been paying $250,000 annually toward the ABAG debt and currently owes the city reimbursement of $830,026 for debt service for invoices dating back to November, 2011. If the bonds default, the city is responsible.

The two outstanding construction loan payments, on which the city has continued to allow the golf course to defer payment, are the parking lot improvement loan (original amount $296,220, outstanding amount $222,165 at zero percent interest) and the club house construction loan (original amount $900,000, outstanding amount $900,000 and $29,520 interest to date)

In addition, the City Council has agreed not to charge the golf course for irrigation water to order to make the ABAG bond payments first priority. (The 2002 extension of the operating agreement required the golf course pay $100,000 of the annual irrigation costs, subject to a maximum 4% annual increase and re-evaluation in 2010.) Last year the city’s General Fund paid $90,140 to Delta Diablo for reclaimed water for the golf course. The city doesn’t bill the golf course for any irrigation usage that occurs from the city’s water system ($69,905 in fiscal year 2013.) The city also has responsibility for road maintenance for the road from Golf Course Road to the golf course parking lot.

FACT: The county is replete with competing golf courses and the Lone Tree golf course isn’t the only one that can’t meet its debt payments. It’s a problem sweeping the nation as fewer people play due to the recession and changing priorities. Unfortunately for Antioch which has its own financial challenges, it’s the City itself that’s liable for the golf course’s escalating debt. Perhaps the city should seek bids for a sufficiently capitalized firm to take over management and operation of the Lone Tree Golf & Event Center, as it has decided to do with Humphrey’s Restaurant.

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One Comment to “Watchdog: Lone Tree Golf & Event Center not paying its bills, adds to city’s deficit”

  1. Publisher says:

    Publisher’s Note: The views expressed in letters to the editor or by columnists published in the Antioch Herald or on AntiochHerald.com do not necessarily reflect the opinions of the ownership, management or staff.

    First, in response to Barbara’s column, the Lone Tree Golf & Event Center is already contracted out by the City Council to a private, non-profit corporation whose board includes local, successful business people.

    Second, the challenges faced by the center are not of their doing, as the past City Council approved a larger event center than was originally planned, increasing the amount of debt that was financed.

    Third, the previous City Council increased the center’s challenge when it opened the Antioch Community Center at Prewett Park, which rents out space for sit-down events, up to 1,000 people. So the city went into competition with itself, as mentioned in the City Staff report of February, 2012.

    Fourth, the golf course part is generating a profit of about $250,000 a year, which is making the payment on the debt from the event center expansion. Try to find a municipal golf course in the area that’s accomplishing that, these days.

    To learn more, please see my article which mentions the challenges and finances of the Lone Tree Golf & Event Center, published in 2012 by clicking here: http://antiochherald.com/2012/08/city-of-antioch-vs-humphreys-a-whale-of-a-tale-of-competition-and-inconsistent-treatment/

    Allen Payton, Publisher

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