Rockville Mayor And Council Saves Redgate

Photo courtesy Redgate Golf Course

In about as definitive a way as can be imagined, the Rockville Mayor and Council last night unanimously voted to wipe out Redgate Golf Course’s current accumulated deficit as well as the projected deficit for the next budget year (FY 2011), to the combined tune of $2.4 million using surplus money from the General Fund. The Mayor and Council also voted 4-1 to direct City staff to engage with the National Golf Foundation to perform a study (costing up to $25,000) of the best ways for Redgate to improve its operations and marketing.

In a highly anticipated Mayor and Council meeting that included a worksession, more than 30 people spoke at Citizens Forum, almost all of whom rose to express support for the City’s golf course or to tell of its positive impact on their lives. Speakers ranged from Redgate Advisory Committee members, to other City board and commission members, to golfers, to elected officials (Sen. Jennie Forehand), to nongolfers who support Redgate, and others. Art Stigile was the only citizen who spoke critically of the way course now fits into the budget. Even in his case, the main thrust of his remarks was to point out that taxpayers are subsidizing Redgate, and that this reality needs to be faced.

When the worksession began, Mayor Phyllis Marcuccio invited City staff to give a brief overview but cautioned them that “we have heard all the numbers. It is time for us to have our say.”

Councilmember John Britton suggested a framework within which to think about Redgate for the purposes of discussion:

First, on green space vs. development. I don’t think there is a mentality on the council to develop that site at all. I would hope that we would vote to maintain that green space. I would not vote for any of the options for development that have come up.

Second, we have green space in many forms, vs. green space with a golf course. I opt for the golf course, because it is green space and serves important community needs. Some people wanted to consider a different kind of green space for greater per capita benefit. But I don’t think that calculation is valid in this case. Closing the golf course is an irrevocable decision, we can’t say “oops” in four or five years.

Third, we look at what model do we use, what paradigm. I have done some additional research. I am comfortable with how the industry is looking. If we maintain Redgate as we are, we are poised to take advantage of three things that will happen: 1) an industry shakeout; 2) the economy will rebound; 3) latent demand and changing demographics. Being poised to do this is to our advantage. . . .

There are two issues: 1) How to deal with the outstanding debt; and 2) what to do going forward.

While other councilmembers disagreed on some specifics, the structure Britton proposed was the one the group used for discussion. Specifically, all councilmembers agreed that Redgate should remain green space – that is, should not be developed – and that it should remain a golf course.

Councilmembers did disagree on some particulars. Councilmember Piotr Gajewski said he believes Redgate is unlikely to be able to turn a profit. He said that the Mayor and Council should face that fact, and decide whether to support the course using taxpayer funds:

I personally think that with all the steps that have been outlined for us that we can take, I don’t believe that it will meet its expenses. There may be some reasons that we are different than the Herndon course. Whatever it is, I am not a believer we will narrow the gap. Frankly, I do not believe we can grow our market unless other golf course begin failing. The gap is something like $500,000. That is something we need to accept.

Once we accept that we have a budget gap in supporting the golf course, we can have a conversation about philosophy: Do we want to use tax money to support the golf course? We support other things with tax dollars. This can be another thing that we are proud of supporting. We need to face that decision — face the monster. . . .

If the answer to the question is yes, given that we haven’t done it before, there are really only three ways: 1) raise taxes; 2) find offsetting cuts in other programs; or 3) the way we have been doing it for the last several years, by spending down reserves. That third option is the only one I will not support. We need a permanent solution.

I do want to put one proposal on the table right now. The Enterprise Fund right now has an accumulated deficit. I would like us to use our General Fund to completely pay off that accumulated deficit. I think it is prudent for us to do that. It will give us a clear look at what we are doing.

Councilmember Bridget Newton expressed support for both positions, recommending that the City commission a study but being open to learning that Redgate will need subsidies going forward:

I was happy to hear the staff support of the Committee’s suggestion from many months ago to let the professionals tell us whether this is viable and how it can make us money. . . . IF there is still a gap after the NGF study, I would support paying for this out of our taxes. That is what we do. Let’s send it back to being fair. . . .

I think a thorough study would be good. I have no doubt we can make money.

I am not ready to entertain the idea of giving away the management of the golf course. I think we can do it, and I want the study to tell us how we can.

Councilmember Newton was also concerned that currently-budgeted funds for Redgate must get spent: “I would like to recommend . . . that we ensure the money is spent this fall that we appropriated for holes 9 and 11. ‘Appropriated’ does not mean spent. Those funds need to be spent, so we can get those greens up and running.”

Mayor Phyllis Marcuccio said that, in her view, the City’s treatment of Redgate had not been fair:

[W]e have benefitted many times over from the golf course, with little return coming back to the golf course. The golf course lost revenue from the monopole [cell phone tower], receives no credit for the 3 acres set aside for the City’s salt domes. Everything is going out, and nothing is coming in. That’s not a commitment to the course.

Ever since the business plan was made, there hasn’t been a commitment to making it go. It seems like it is a stepchild in many ways. That has come up over and over. We owe it an opportunity to try to make it work.

Councilmember Mark Pierzchala said that he was even more pessimistic than Gajewski about whether Redgate can turn a profit. Nevertheless, he supported the suggestion that the City erase the golf course’s accumulated debt using General Fund surplus, and also suggested (later in the conversation) that the City in essence pre-pay next year’s projected deficit.

By paying down [the debt], you are being honest with the taxpayers. That reserve is in some sense an IOU from the golf course. To leave the deficit is to hide the fact that that reserve is not really as big as it appears on paper. It’s in our interest to pay that off in terms of transparency. . . .

We’ve heard a lot of rosy scenarios. 60,000 rounds played years ago, half that now. Something’s going on. We know the course is well maintained.

Here is a way to get there in FY 2011. First of all, we need to pay down the debt. We have $1.7 million. We can do that. Additionally, you need to have time to do the study. You don’t want the deficit in 2011 to become debt. By the time we create the FY 2012 budget, we will have had our conversations about what to do. So we could cover the projected deficit too.

You may prove me wrong, but I think it is not going to get better. When it comes time to make the budget, we are going to face very hard choices.

Those people who want to use taxpayer money to support the golf course ought to be the ones saying, “Here’s how we are going to do it.”

I’m going to vote against the study, because I think it is a waste of money.

And that is how the vote to commission a study went: Pierzchala opposed, all other members in favor.

The way the deficit erasure will work is that City staff will return to the Mayor and Council on October 4 with a budget amendment that will include the Redgate instructions. The Mayor and Council will vote to adopt the amendment at that meeting.

The National Golf Foundation study will likely begin in mid-October and be complete in November or early December.

Redgate Golf Course now has breathing room to operate with a blank slate, and the City will have clarity moving forward about the choices that must be made. We will get expert advice on the best way to make money off of the course, or whether that is even feasible. Decisions will be able to be made without the weight of past recriminations.

Other Mayor and Council Action

While the vast majority of time and energy was taken up with the Redgate issue, the Mayor and Council did make one other very definitive move last night. The Historic District Commission and staff had recommended moving forward with a public process to establish historic designation for a house at 408 Great Falls Road (at Monument). If the Council had voted in favor, the issue would have gone to the Planning Commission for hearing. The property owner spoke against the move. Councilmember Newton recused herself, as her husband had placed an offer (that was refused) on the property in the past. Mayor Marcuccio said she wanted to recuse herself, too, as her sister’s home is very near the property in question. Councilmember Britton put forward the motion that they move forward with the public process, but it dies for lack of a second. The prospects for an historic designation of the property are now dead.

Finance And Budget Task Force Report

Councilmember Pierzchala, who is the chief liaison for the Finance and Budget Task Force (one of three task forces created by Mayor Marcuccio upon taking office) announced that the task force’s report was ready. It contains 58 suggestions. This is a significant document and deserves its own post, so watch for more on this.

Next Meeting

The next Mayor and Council meeting will be an open “town hall” style meeting on September 27. This one will be held in the courtyard in Rockville Town Square. See you there!

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