Burbank council to take a swing at DeBell backlog

The City Council on Thursday will consider how to tackle the backlog of unfunded capital improvements at DeBell Golf Club, with city officials having suggested a number of options that include forgiving two loans that together total $3.5 million or dipping into the General Fund.

The conversation will come three years after the city approved a $1-million loan to lead the cash-strapped club to financial solvency after it had depleted its $6 million in reserves and borrowed $2.9 million from the city to build a new clubhouse.

After the clubhouse was rebuilt in 2007, the recession hit, crippling the club’s cash flow.

An additional $1 million was set aside to be used if needed; though to date, the fund has not been tapped.

Even so, the fund can’t afford to address the club’s hundreds of thousands of dollars’ worth of capital needs, including the seismic retrofitting of several buildings and the demolition of three buildings on the golf course, as well as cart-path improvements and new lighting on the driving range.

Officials expect some cash reserves in the club’s coffers by 2016-17 to start some of the capital projects, such as improving the lighting on the driving range to the tune of $75,000.

City officials have suggested five options for tackling the capital improvements, which include dipping into the city’s General Fund or the $1 million set aside three years ago, forgiving one or both of the loans, or doing nothing.

If no changes are made, it’s projected that the golf fund will be operating at a deficit by fiscal year 2019-20 due to the cost of capital improvements and loan repayments.

In January, S.S. Golf, owned by Scott Scozzola, took over day-to-day club operations and leases the facility from the city for $300,000 annually — an arrangement city officials said has improved operations and the fund.

“In time, we’re going to find the new operating agreement is going to be a positive thing for the city to have pursued,” said Judie Wilke, director of park, recreation and community services. “It’s just going to take time to rebuild the financial wherewithal of that fund. You can’t deplete millions of dollars and come back in a year or two.”

Currently, the club is slated to begin paying back the $1-million loan in 2016 and the $2.1-million loan that helped pay for the clubhouse in 2019. A portion of the loan repayments is slated to come from the club’s $300,000 annual rent.

Forgiving both loans would ultimately save the golf fund $155,000 a year, but would hurt the city’s General Fund, as city officials have included loan repayments in its five-year financial forecast.

The meeting on Thursday will be held at 5:30 p.m. at City Hall, located at 275 E. Olive Ave.

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Follow Alene Tchekmedyian on Google+ and on Twitter: @atchek.

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