The City Council on Tuesday approved a $1 million loan to the city-owned DeBell Golf Course and agreed to defer loan payments on $2.1 million in outstanding debt for two years as the troubled course tries to recover from a drop in revenue.
The council also set aside $1 million as a possible cushion for the cash-strapped golf course, bringing the total package $2 million — far more than the roughly $567,000 in proposed cuts to public services as City Hall works to close a projected $8.7-million budget gap for next fiscal year. Those cuts include shaving around-the-clock firefighter staffing from 37 to 36, holding off on planned library improvements and reducing city youth jobs by roughly half.
City parks officials said the loan was needed to pull the golf course out of $718,215 operating deficit and no reserves brought on by a severe drop in the number of rounds being played, which hit an all-time low last fiscal year at 56,397. In 2001-02, the course registered 75,723 rounds of golf.
Parks officials said the golf course has been losing about $300,000 annually in recent years.
The drop-off, and the deprecation of a new clubhouse, combined to create an insurmountable deficit, but the golf course has a history of needing financial rescue.
The cost of the clubhouse, dedicated in early 2009, ballooned as construction expenses increased, forcing the City Council to approve an additional $1.4 million loan in 2007 to complete the project.
But even after Mayor Jess Talamantes last month called DeBell “too big to fail,” it was clear patience on the City Council had waned.
Parks officials had sought a full $2 million loan but the City Council was unwilling to go that far, instead approving a $1 million version, with another $1 million in a holding account, should more be needed. The council also requested monthly financial reports, and for the formation of an oversight committee to review statements.
“It’s an awful lot of money to commit on good faith, and I think we’re in an awful situation right now,” said Councilman David Gordon, who was the lone vote of dissent in the 3-1 vote. His colleague, Gary Bric, was absent.
Debell Golf Course Director Scott Scozzola could not be reached for comment Wednesday.
Park, Recreation and Community Services Director Chris Dasté acknowledged he waited too long to bring the red ink to the attention of the City Council, saying he hoped fee increases would be enough, but the course never rebounded.