Because a deficit elimination plan approved by the Ann Arbor city council in 2008 has not erased the unrestricted deficit in the golf enterprise fund, the Ann Arbor city council has now moved the accounting for the city golf courses back into the general fund. The vote was taken at the council’s Dec. 3, 2012 meeting, with only Mike Anglin (Ward 5) dissenting.
The move is effective July 1, 2013, which is the start of the 2014 fiscal year, and will satisfy the need to have a deficit reduction plan for the golf enterprise fund. The condition of the separate golf enterprise fund had caught the attention of the state treasurer’s office in 2008, which had led the council to adopt the deficit reduction plan. That plan included a restructuring of the fee schedule to increase the number of rounds played, and the issuance of a liquor license to boost the sales of food and drink at the Leslie Golf course. [.pdf of golf fund deficit elimination plan]
The plan had a clear positive impact on the number of rounds played at the city’s two courses, bringing the total rounds played from a low in 2007 of 35,856 up to 54,500 in 2010. That outpaced the number of rounds projected in the 2008 deficit elimination plan. A slight dip in 2011 to 49,203 rounds has been followed by stronger numbers again in 2012, with 55,135 rounds through Nov. 12. But that compares with 58,571 rounds played back in 2003. [.jpg of chart showing rounds played 2003-2012] Leslie is now closed for the season, but Huron Hills will stay open in the winter as weather permits.
On the metrics used by the state treasurer’s office to evaluate a municipality’s funds, however, the golf enterprise fund is still in a negative position. Those metrics are: loss with depreciation, working capital, and unrestricted net deficit. [.pdf of golf enterprise fund data from pages extracted from the comprehensive annual financial report from 2007-2011] The city’s figures for the golf fund’s performance on a purely revenue and expense basis show that it’s improved from the 2008 fiscal year – when it needed a $507,000 subsidy from the general fund – compared to 2012, when that amount was reduced to $271,000. [.jpg of chart showing revenues and expenses] By moving the golf fund back into the general fund, the city expects to save on an accounting basis about $20,000 a year for the general fund, with that amount increasing to $120,000 when the golf fund’s debt is paid off, starting in fiscal year 2016.
The council’s decision to move the golf fund back into the general fund, made at its Dec. 3, 2012 meeting, was supported by Jane Lumm (Ward 2), who highlighted the increasingly positive performance of the golf fund. Before Lumm was most recently elected to the city council in 2011, after having served in the mid-1990s, she was active in opposing a proposal that might have led to the operation of Huron Hills golf course by a private company – Miles of Golf. As a citizen, she addressed the city council about the proposal on June 7, 2010.
The council’s support of moving the golf fund back into the general fund was based in part on the idea that the golf courses should be evaluated on the same basis as other recreational facilities.
The council’s Dec. 3 resolution about the golf enterprise fund included a similar action about the airport enterprise fund, which also shows a deficit, due to the classification of internal loans as unrestricted instead of restricted. The city’s plan for eliminating the deficit for the airport enterprise fund is simply to continue to make payments toward the outstanding balance, which is currently $943,659. Added after initial publication: The airport fund will remain a separate enterprise fund.
This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]