Contributor Opinion by Art Stigile: Using FOIAs To Intimidate Opponents Of Subsidizing RedGate Is Unacceptable

On Monday morning I sent a press release to the Gazette announcing that I was soliciting signatures on a petition condemning Joe Jordan’s attempt to silence my criticism of using taxpayers’ money to bail out the RedGate golf course, I also announced that additional information is available on my website (www.rocktrash.org).

Here’s a summary of what led me to take this step.

At Citizens’ Forum last summer (and here on Rockville Central), I posed 10 questions to the golfing community about the future of the RedGate golf course. The RedGate Advisory Committee largely ignored these questions on their quest to convince taxpayers that somehow we benefit from the privilege of paying huge subsidies for other people to play golf. September gave way to autumn, and I slipped into my normal budget season schedule of working 12 hours a day, 7 days a week. From October through the end of January, I was totally uninvolved in City issues and had no time to follow Mayor and Council action on any issue. I confess that I didn’t even have time to read Rockville Central!

I was gone, but apparently not forgotten. In late January, I was astounded to hear that Joe Jordan, chair of the RedGate Advisory Committee, had filed a FOIA request for all emails between me and Rockville City email addresses. I asked the City for confirmation and received a copy of Mr. Jordan’s FOIA request for my email, and a second FOIA request that he filed asking for email between the City Manager, the City Finance Director, and the Director of Parks and Recreation.

I don’t mind having a vigorous debate about the substance of public policy. It’s one of the reasons I enjoy and respect Rockville Central so much. But going on a fishing expedition for the email of your political opponent, and using City staff as a political punching bag go well beyond anyone’s definition of acceptable political behavior.

So, at the Feb 7th Citizens’ Forum, I spoke out against Mr. Jordan’s tactics, saying “You don’t have to be a political genius to see that Mr. Jordan’s action is designed to intimidate and silence critics of using taxpayers’ dollars to bailout the Golf Course.” I went on to say that his actions are “a perfect example of why many, if not most, Americans view politics with disgust.”

For anyone doubting my characterization of the intent of Mr. Jordan’s FOIAs, I refer you to his statement in the Feb. 16th edition of the Gazette:

“[I asked for it] because of [Stigile's] outspokenness on the golf course,” he said. “I don’t know [how it will be useful].”

I don’t care how you parse his statement, it says he targeted me because I oppose the golf course bailout.

I thought the public exposure might cause Mr. Jordan to rethink his political tactics. However, late last week, I learned that Mr. Jordan has expanded his FOIA request to cover email through Feb 12th of this year.

As I said at Citizens’ Forum, I fully support Mr. Jordan’s request for copies of my email. He absolutely has a legal right to see public records. In fact, I asked the City on Feb. 7th and again on Monday morning to post all of my email on the City web site, so that everyone can enjoy them.

But just because it’s legal doesn’t make it right. Mr. Jordan represents the City. His political tactics send the wrong message to any resident who wants to participate in the political process and isn’t a life-long fan of the Broad Street Bullies’ brand of hockey. (Sorry Caps fans.) I concluded my remarks at Citizens’ Forum by saying that this kind of politics is not acceptable from someone who represents the City, and I asked the Mayor and Council to discharge Mr. Jordan from his position on the Advisory Committee.

If you are appalled by political intimidation like this, I invite you to go to my website at www.ROCKTRASH.org and sign my petition condemning Mr. Jordan’s behavior.

I hate this kind of politics. It’s cheap and tawdry, and it taints all of us, even when we are pursuing honorable means. But turning our heads only encourages more of the same.

Art Stigile

p.s. I don’t send many emails, and I rarely keep email, so I don’t have copies of all of them. But I’ve posted a few that I have on my website. Enjoy!

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

Redgate Management, School Portables and Business Relations At The Mayor And Council Meeting 2/17/11

The Mayor and Council Meeting was officially over at 9:54 PM last night which is actually very early. Here are some highlights to keep you informed.

Socially-Responsible Investments

At the request of the Human Rights Commission, the City will be pursuing more socially responsible investments. HRC asked the City to look into a divestment policy pertaining to Sudan. City Manager Scout Ullery reported that staff reviewed State law and County ordinances but they only address actively-managed accounts which does not present an issue for the City. The Retirement Board will consider the issue at their February 18th meeting and come forward with recommendation.

The Rockville Chamber of Commerce gave a quick update including:

• Rockville Rewards Card has over 70 businesses participating for weekly and daily specials to help 15 nonprofits in the City. You can still purchase one.
• Sign Ordinance met with City Staff about recommendations for changes, gathering comments from members and working with Sign Review Committee.
• They have already started to plan the Taste of Rockville for Hometown Holidays.

Compensation Commission

Former Mayor James Coyle was reappointment as member until 2014 and Tom Moore was appointed as Chair until 2012. Congratulations to them both!

Guess What? We Need More Salt!

I’m sure it is not a surprise but all the ice means we’re using a lot of salt this year. The Mayor and Council approved a purchase up to $86,500 from the Eastern Salt Company, Inc. under a cooperative contract with Montgomery County. International Salt was unable to respond quickly enough to help meet the demand which would have been within the City Manager’s approval authority. It’s been that kind of winter.

Portable Classrooms Policy With MCPS

The City Manager asked the Mayor and Council to approve the policy on the placement of portables by Montgomery County Public Schools so it can be finalized. The policy was sent to MCPS and James Song, Director of Department of Facilities Management, commented.

The three points made by Mr. Song were:

1. MCPS doesn’t want to produce traffic reports for more than six portables so traffic reports would not be required no matter how many portables are added.
2. MCPS needed clarification of what the term “significant trees” meant.
3. MCPS emphasized that they can, through the mandatory referral process, chose not to comply with any part of the zoning ordinance.

During the discussion, Mayor Phyllis Marcuccio seemed dismayed that Mr. Song believed it would be premature to drop the proposed State bill MC11-11 even though MCPS and the City have been positively working together on a process for the placement of portable classrooms in the City limits.

The Staff recommended adjusting the Adequate Public Facilities Ordinance (APFO) in respect to the fire response standard and move forward to develop an agreement for new school construction, additions and remodeling.

The Mayor and Council unanimously agreed to direct the City Staff to proceed as requested by Mr. Ullery.

Hopefully MCPS officials and City staff will continue to develop a better working relationship as we go forward with all the projects necessary to alleviate our school overcrowding.

Community—Business Communication

Councilmember John Britton encouraged ongoing communication through an annual gathering or summit. REDI and the Chamber have agreed to participate in a forum to discuss ideas and he hopes at least 150 people representing a cross-section of the community would participate. About 15 years ago, the City had a half-day business summit and this is an idea to “come around again”.

The Mayor and Council directed the City Staff to identify the core planners, which should not just be Staff but also REDI, Chamber, and Councilmember Britton to begin planning the event. Staff will return to the Mayor and Council with a proposed plan for the Summit in order to secure feedback and support before implementation.

Redgate Golf Course

With two motions, the Mayor and Council voted to keep all their options open, which means they did not make a decision as to the exact course of action involving the management of the Redgate Golf Course.

The NGF recommendation was to outsource the golf course operation, which is the prevalent type of arrangement in the golf industry at this time and this is estimated to be approximately $120,000 per year.

The motion eventually passed by the Mayor and Council was made by Councilmember Bridget Newton and it followed the staff’s recommendation and contract with NGF for consulting services to development an RFP. The RFP will include a management services option but it also included an option to lease the Redgate Golf Course which was not supported by NGF. The motion was seconded by Councilmember Britton and passed unanimously. The fee to the NGF to develop the RFP would be approximately $6,000.

Councilmember Newton also made a motion to engage NGF for advice on establishing a new director of golf staff position, which was seconded by Councilmember Britton. The motion passed 3 to 2. Councilmember Mark Pierzchala disagreed because if you go with a management company then you don’t need a director of golf. Councilmember Piotr Gajewski could not support the motion without knowing the cost involved.

With these votes, the Mayor and Council could receive many proposals for outsourcing management, leasing the course, and hiring a new director. A decision still needs to be made.

The next meeting of the Mayor and Council is Monday, February 14, 2011.

Contributor Opinion by Martha Klasing: Will Our Mayor And Council Take Time To Evaluate The Best Course Of Action For Redgate?

What will RedGate’s future be? Our Mayor and Council may decide this on Monday night, as RedGate is once again on the agenda. City staff recommends following the National Golf Foundation’s (NGF) suggestion to outsource the management of the course. This would certainly bring in the needed expertise that has been lacking thus far. RedGate has suffered over the past several years under City management due to lack of marketing and lack of care. The negative rhetoric about its poor financial performance, cost to taxpayers, and possible closing of the course has kept golfers away and resulted in lost rounds of golf and revenue.

For anyone who had the patience to read my lengthy posting back in September, I attempted to explain exactly what the City (and others) were calling “RedGate’s Deficit”. For those who did have the patience to slog through the numbers, hopefully you understood that the majority of any accumulated deficit attributed to RedGate did not stem from RedGate’s operations, but rather from the City’s allocation of administrative and overhead charges. Costs that weren’t a result of operating RedGate and costs that the City would have to pay whether RedGate existed or not. If anyone is still laboring under the idea that RedGate is costing taxpayers a large sum each and every year, here is a figure for you. Over the past decade, the accumulated deficit in the RedGate fund – which includes over $1.3 million of City overhead not directly attributable to RedGate’s operations– amounts to just $6.97 per household annually.

This past week, an article in the Gazette states that the City could save more than $200,000 a year by outsourcing the management of the course. This is the management option that NGF recommends. I’ve studied NGF’s financial projections and I tend to disagree that outsourcing would save the City up to $200,000 per year. This is what it boils down to: The City would terminate its employees that work at the golf course. In turn, the City would hire an outside company to manage the course. So, rather than pay our current City employees, the City would pay a comparable amount (slightly more, based on their projections), to a 3rd party management company. The numbers are as follows: over the projected 4 year period FY 2012-2015, the City would save $1.452M on salary and benefits by terminating the city employees. They would then spend $1.488M on additional line item expenses related to the management company – NO NET SAVINGS! So, where do any projected savings come from? Here’s the answer, and please think about this carefully - if RedGate is outsourced to an outside management company, the City anticipates reducing the allocation of CITY admin/overhead charged to RedGate from a total of $1.359M to a mere $240,000 over the same 4 year period. There’s your savings. But, it isn’t really savings to the City, because those amounts of City admin/overhead represent City costs for running the City government and still have to be paid. They will just tuck it away in some other fund. So, as a city resident and taxpayer – and I am not a golfer so I’m not floating these ideas to preserve my hobby – I ask, how does this make sense? I can’t see that outsourcing is really saving any money at all –it’s just moving numbers around on a piece of paper. And, people will lose their jobs.

What outsourcing would do for RedGate is to bring in professionals who operate in and know the golf business. This would be a plus, and it is needed. Per the NGF study, the market favors golf operators in this area. RedGate is well situated to capitalize on an improving economy, increasing population, and a shake down in the industry, as some courses close. It highlights what RedGate has going for it – attractive venue, dedicated staff, and a core group of loyal customers. It provides the basic steps to take in order to get the course back on track. The study points out that RedGate needs to be able to operate competitively without decisions being made by those who don’t know the golf business (like City Hall). Outsourcing is one way to do that. If you read the RedGate Advisory Committee’s response to the NGF study, there is another way to do this, which could be a lower-cost alternative. Hire a golf director that has the experience and golf business acumen to run a golf business. Sure, this would require the city to create a new position, but it may be a more frugal approach to full outsourcing. Herndon has taken this approach with their course (a comparable facility to RedGate) and has been quite successful. Herndon’s golf course expenses track similarly to RedGate’s, but they enjoy nearly half a million more dollars of revenue than RedGate. This is something RedGate could do with the right direction and control. Do we really need to lay off City workers and take their livelihoods away? And then take those savings and pay an outside 3rd party to do something the City could easily do with the right expertise? I hope not – a very sad statement indeed when the entire nation is talking about job creation and job preservation.

If it is all about saving money, then outsource the care for all our passive parks - that costs a significant amount more than the golf course. The City could lay off even more workers and just hire a 3rd party landscaping company to do the same job for a lot less money. I hope our Mayor and Council have more of a vision than this.

By Martha Klasing

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

Comic Strip: ROCK’burb 1/15/10

This week’s comic is based on the National Golf Foundation presentation of their report on the Redgate Golf Course to the Mayor and Council on Monday.

About ROCK’burb: A few months ago we were tossing around ideas for new features on Rockville Central. We thought Saturday morning comics would be fun. Since I’ve always wanted to draw a comic strip, I’ve been imagining them in my head each week. Sometimes an idea pops up in my head and sometimes my whole family thinks up a panel about our lives here in Rockville.

Do you like to draw? We’re hoping we have other cartoonists who would be interested in submitting comic strips. If you have one about life in Rockville, please send it along! We’d love to see it and may even publish it. Remember, be nice! Email us: [email protected].

Recap Of The RedGate Report Presentation

The new report by nonprofit golf consultants the National Golf Foundation that was kicked off at a Mayor and Council meeting last September was formally presented to the Mayor and Council (see the report here) on Monday night.

(This recap is based on my own notes and may contain errors. Also, it is not comprehensive, though it certainly felt like I was typing a lot!)

Richard Singer of the National Golf Foundation gave the presentation:

In reviewing a golf facility, there are things you can and can’t control. Put bluntly, the City of Rockville is in the golf business. Right now, that is a very tough business. What the City is facing with RedGate is not at all unique. “You can’t control the economy, and you can’t control the long term trends for golf,” said Singer, who has 21 years of experience in examining municipal golf courses.

The report, said Singer, focuses on what can be controlled. This includes:

• Facility
• Condition of course
• Quality
• Staff
• Pricing
• Message given to the public

The City is small (one course) competing with large businesses (Montgomery County, which has a number of courses).

The City has a lot to be proud of — RedGate is an excellent facility with excellent staff that has dedicated itself to the facility.

Despite all that, Singer said, RedGate may not be sustainable under the current system. While it has potential, it is difficult to see it going forward without outside support. The City needs to make a commitment one way or the other as regards RedGate, he said: The rhetoric and negative news of the last two years has contributed to the sharp decline in rounds played.

Singer reported that “there is no tradition of marketing at RedGate,” which is common among municipal courses. However, the market has changed and it is now much more important to have a serious marketing program. That said, he said, “It certainly appears that in the last year there is a new commitment to marketing this facility more.”

RedGate needs investment, he said. “It needs TLC.” Some of the assets at RedGate are getting to the point where they are getting beyond their useful life. “You’re on borrowed time with your facility,” he said.

Key Finding

“I have to say that this is one of the highest overall expense structures I have ever seen in 20 years,” he said. “That in and of itself is the issue with RedGate. That is especially true in terms of personnel costs, but we did not see those direct costs to be out of line.”

Singer said that, even if every idea were implemented and successful, the course would still be short in terms of its ability to meet expenses. “Even if you get a couple of good years,” he said, “you might be back where you started in three to five years.”

The NGF’s best recommendation, he said, is to privatize the course so as to both control expenses and grow revenue. He recognizes this could be problematic when it comes to staff and good will.

Questions And Discussion

Councilmember Mark Pierzchala began the questions. “It’s a very good report,” he said, “and I’m the one who voted against doing the report.” Is RedGate a good candidate to capitalize on latent demand? He wondered. Singer responded that, even as a municipal course that is not necessarily a good beginner’s course, it is. This is in part due to the good beginner’s program at the course.

Councilmember Bridget Newton asked why other local municipal courses were not examined as competitors or exemplars (for instance, Herndon). Singer replied that his main focus was Montgomery County, but that more important the key driver is the high expense level. In addition, the report embodies the large experience the NGF has in examining other municipal courses.

She asked, “Did you look at taking it out of an enterprise fund?” Singer replied that he was not asked to look at that, but that it speaks to the decision the community must make about the course.

Councilmember Piotr Gajewski asked about the charge that the report got no input from the Advisory Committee, and also whether the report was altered in any appreciable way based on staff input. Singer said unequivocally that the draft review process did not change the tenor and tone of the report in any way. He also said he had expected to get input from the Advisory Committee.

Gajewski pointed out that the report calls for reducing costs and growing rounds by 7 or 8,000 per year. He said he thought that unlikely. “Can you provide any optimism?” he asked. Singer said yes, it is realistic, and RedGate has been at that level in the past. Furthermore, the growth is not 8,000 per year, but in the aggregate. “It’s not going to come easily, but it is a realistic target,” he said.

Councilmember John Britton focused on the staff expense issue. Compared to Montgomery County, RedGate’s expenses are high. “Do we pay our people that much less?” he asked. Singer said, “There are other expenses associated with retirement benefits from previous employees that are long gone that are on your books that are not on [Montgomery County's].”

Britton also asked about management issues and staffing. “What has worked and what has not worked in terms of management of this facility?” he asked. Singer replied that there are things to look at both in terms of on-site management and management by City. For instance, the lack of marketing is a City management issue. On the food service (which got low marks), “I am not sure anything jumps out at me in terms of mismanagement,” but the food service was given poor marks even by regular players.

Mayor Phyllis Marcuccio said, “Throughout the report, I saw pretty clear indication that we had done a poor job of keeping that course in good condition. There was a lack of caring. Is the only way we can get caring for the course is through an outside vendor?” Singer replied, “It is not the only way, but I think it may be the best way for you.”

She also asked whether NGF had looked at the costs of all the other recreation facilities in the City that do not recoup costs. Singer said “We did not think that was really a part of this study, but it is a valid question. Certainly there are many facilities that recoup far less than RedGate. You still earn over a million dollars in revenue, which has got to be a lot higher than other recreational amenities.”

Councilmember Pierzchala asked about hiring a golf management company. “What if we decided to do that, and started an RFP process. That will take a few months. That will take us into May. Have you had experience where this has happened in the middle of the year as opposed to over the winter?” Singer said he has seen it happen but it is a mixed bag. ‘It would be better to do it at the end of the season or beginning of the season. . . . We assumed you would finish a full golf season before doing this, and start it in October 2011.”

Pierzchala also asked about the role of pricing. “Aren’t we in a position where if Montgomery County wanted to drive us out of business they could just do it?” Singer replied that they may be able to, but they might also drive themselves out of business too. “Also, we are seeing that the number one objection among golfers for why they don’t play is not price, but the time they have to play.”

Councilmember Newton asked about the City’s business plan that had been put together for RedGate. “Did you look at it?” Singer replied, “We did review it very thoroughly. We addressed that on page 32. It looked to us that it was more just words on paper, not a plan per se. . . . A business plan needs to be updated on an annual basis, and have performance measures.”

She also said, “There is a statement that you make in the report that you do not see RedGate as a good value as compared to Montgomery County course. We thought that was one of the things RedGate had going for it. Is Montgomery County Revenue Authority operating in the black?” Singer replied “That’s actually two different questions. Our sense is that the relative value of the course has declined in recent years as compared to a Montgomery County course. As far as their profitability, it does appear on paper that they are operating in the black or close to even.”

Councilmember Gajewski asked about layoffs and whether we had reduced staff at RedGate. Burt Hall replied that 2003 was a bad year in terms of staff reductions.

Gajewski asked about the budget tables near the end. “On page 79, in the as-is scenario where we make no changes, the course is projected to lose approximately $750,000 per year, and administrative charge is almost half of that loss ($300,000). Moving forward and looking at other budgets, it looks like the administrative charge does not reduce at all. Basically the administrative costs are at par [whether it is private or not]. What really changes are the direct personnel costs, and enhanced revenue. Am I getting it? The takeaway is we will reduce our labor charge and increase revenue?” Singer replied, “Yes. The management company estimates we have put forth are based on what numerous management company expenses look like nationwide. There are a couple issues with your administrative charge in Rockville though. First is what is usual for a golf course to have? It is typically $180,000 to $200,000, and in Rockville it is estimated to be above $330,000. Second, what does it cover? What do you get for that? With a management company, the line item administrative expense includes some things that are now included in direct labor costs.”

Councilmember Britton asked, “Can we increase tournaments? It seems that they provide great revenue.” Singer replied, “I think there is great opportunity in tournaments. Washington DC is the golf outing capital of the world. But there are capacity issues. If you displace too many regular golfers, you can run into problems.”

Mayor Marcuccio asked about demographics. “You must have looked at the demographics of the area when doing this study, and at the Science City and White Flint developments going on around Rockville. What kind of an impact will that have?” Singer said, “I would suspect that to have a great impact. Everything we looked at in terms of demographics was very favorable for golf. That is what’s keeping you afloat now. Other communities do not have the kind of ‘fall out of bed’ market that you have.”

She also asked about the RedGate Advisory Committee report, and some of the possibilities it lists beyond golf (for instance, a learning center). “Would you suggest it?” Singer said, “We did review it and it was a great report. The suggestion we took the most seriously was the one about expanding the driving range and adding a learning center. The problem is that all of these suggestions involve investment, and you need to make sure the uses are complementary to each other. The benefit to the community must match the investment required.”

Councilmember Pierzchala asked about enhancement mentioned in the report. “Some struck me as why are they secondary priorities. You’ve identified over a million dollars of improvements. If these were to be made, and do them all at once, would that enhance the prospects versus doing them over a five year period?” Singer replied that it is a mixed bag. “Some of them need to be done all at once, such as replacing greens. Others, like patching cart path areas, they can be done piecemeal. Doing it all at once could have a positive impact, but you would have to close the facility down and lose revenue. You could then have a grand reopening.”

Councilmember Newton made a comment about other courses nearby. “NGF put out an article about the courses that survive and succeed are the ones that keep up on infrastructure, and RedGate hasn’t done that. It is frustrating to think we are in this position when, if we had been doing what we should do all along, we would not be here.”

Councilmember Gajewski said he had a question about the food business. “Under enhanced service to golfers, there appears to be an opportunity for more service to golfers, through on-course beverage carts.” Singer said, “Beverage carts are something that’s kind of expected by the golfers. In looking at the numbers, it did not look like it was doing as well as it could. It should be high margin, and beer and golf seem to go together well.”

Councilmember Britton said, “If we followed your advice and put out an RFP, the Montgomery County Revenue Authority could respond. Did you discuss what would happen if they did so?” Singer replied “We did not really look at that. I can’t comment one way or another as to how that would work. It is in the fine print whether that would work for you.”

Councilmember Newton said, “I want to come back to the idea of having a Director of Golf, which you don’t recommend. Why not?” Singer replied, “Let’s flesh it out. My original sense of the Director of Golf system was that it would be in the General Fund. The reason that is not in here is that goes beyond the golf business — we wanted to focus on your enterprise fund, the RedGate Fund. Looking at the enterprise fund, if we did it that way, we would add a new salary to the enterprise fund, and we might see greater revenue, but I don’t know how that changes the basic fundamental equation you are facing here. Perhaps if this individual is really strong, it could happen.”

Councilmember Gajewski said, “Let’s say we go ahead with the outside management. What do we require of the management company in terms of the present people working at the golf course? Singer said, “It is a tough situation, no question about it. Other places are looking at the same thing. In many cases, the RFP’s require that current staff be employed. On the other hand, any management company coming in will surely recognize the current value of staff.”

RedGate Consultants’ Analysis: Profitable By 2015

Click for report

In a report by the National Golf Foundation that was kicked off at a Mayor and Council meeting last September, the nonprofit golf consultants say they believe the City’s golf course can be made profitable by 2015 if its management is outsourced.

The report, set to be submitted to the Mayor and Council at their next meeting on January 10, says:

[T]he NGF Consulting cash flow model for the RedGate Municipal Golf Course, assuming a private management company and basic primary facility upgrades, shows the improved golf facility generating significantly improved revenue performance and expense reductions that should help the City replenish the RedGate GC Enterprise Fund over the longer term (2015). However, even with an improved financial scenario, RedGate Municipal Golf Course may still have to operate with Fund deficits for at least the next two or three fiscal years.

The outsourcing suggestion would have a private company manage the course, but they would retain existing staff.

There is little doubt that the upcoming Mayor and Council meeting will feature in-depth discussions on this question, so stay tuned!

See the full report here.

Contributor Opinion by Martha Klasing: Did the Mayor and Council really spend over $2 million on RedGate?

I would like to respectfully submit to the citizens of Rockville some clarification on the recent story in Rockville Reports on the City paying off “RedGate’s deficit”. There is no doubt that many were angered or disappointed with what they read. The story stated that the Mayor and Council voted to use more than $2 million in reserve funds to cover the existing $1.7 million deficit at RedGate and to cover the projected $674,000 debt for Fiscal Year 2011. The motion that was made, and unanimously approved, stated very clearly the funds would come out of surplus funds.

I put the term “RedGate’s Deficit” in quotes for a reason. Let’s not forget or overlook one critical fact about those numbers – the existing deficit of $1.7 million includes $1,342,000 of City Administrative Overhead costs that did not arise from the operation of the Golf Course. Those costs stem from the running the City and had to be paid whether RedGate existed or not. The costs of running the City – things like salary for the City Manager, City Clerk, City Attorney, costs of maintaining City Hall – get allocated to various departments. Based on some formula, the City charged the Golf Course over $1.3 million up through FY 2010. As you can see, the full $1.7 million is NOT attributable solely to RedGate and should not be portrayed as such, as was suggested by the article in Rockville Reports. The article was misleading and did not give Rockville Citizen’s the full story.

At the end of the article, it was mentioned that the accumulated deficit is projected to grow to $5.8 million over the next five years. Same story – that figure includes nearly $3 million of City Administrative Overhead costs that did not arise from Golf course operations. To give this perspective, the overhead charged to RedGate in FY2005 was $168K. In FY2012 this will have doubled to $335K, and increases every year.

Certainly, RedGate needs attention – the finances need to be shored up and the operating model needs to be scrutinized. The Mayor and Council recognized this, accepted the recommendation of the RedGate Advisory Committee, and voted to finally bring in the industry experts – the National Golf Foundation – to assess whether RedGate is viable and, if so, to render advice on the best operating model to achieve financial stability.

The National Golf Foundation (NGF) is considered the gold standard in terms of industry expertise. NGF is a not-for-profit organization with no agenda in terms of maximizing its own profits or increasing its footprint by taking over golf courses. Its mission is simple – to serve as an objective and independent resource dedicated to serving all the people, companies, facilities and associations that are involved in golf. Getting expert advice is the first, and sorely needed step, to get RedGate back on track, if that can be done. If not, the Mayor and Council will have another tough decision to make. I, for one, believe RedGate can operate profitably. Municipal courses in the DC metro area have demonstrated that this can be achieved, even in these current, difficult times. With appropriate marketing, the right operating model, and an appropriate business plan, RedGate can succeed. And, by the way, RedGate didn’t cost taxpayers $2 million.

Martha A. Klasing
Member, Redgate Advisory Committee

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

Please also note that Rockville Central does not endorse candidates in election campaigns. Supporters of all candidates are encouraged to submit opinion pieces for consideration.

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!

Editorial Opinion By Brad Rourke: My Thoughts On Redgate

Photo from Goodman and Farrelly of wildlife habitat which would be lost

For years now, a simmering (and sometimes boiling) issue for Rockville has been what to do about the Redgate Golf Course. Tonight, the Mayor and Council are slated to discuss and make decisions about it. A number of options are on the table, and still more may well be considered. Here’s my perspective.

Redgate used to make money, but for the past few years it has lost money. A business plan designed to turn things around has so far not been successful. In part, that may be because it has not been executed effectively, but the overall market conditions for golf are very poor right now.

Unlike other recreational amenities in Rockville, Redgate’s accounting has been separated out as its own fund, so the taxpayer subsidy and revenues are easy to identify. That has made it, in the words of the Redgate Advisory Committee tasked with making recommendations to the Mayor and Council, “low hanging fruit” in these times of belt-tightening.

(The Redgate Advisory Committee, ably led by Joseph Jordan and Martha Klasing, submitted a report to the Mayor and Council last week.)

How low is the fruit hanging? According to Rockville Central contributor Art Stigile, who has been very thoughtfully examining the numbers closely, over a number of weeks, the subsidy to Redgate is $883,740 (that’s its deficit plus administrative expenses). Compare that to the subsidy to the Rockville Swim Center, which is $675,323.

For perspective, the City’s overall budget is $104.9 million. So Redgate is less than 1% of the City’s budget.

Cases On Both Sides

Both sides in this debate make fair points.

On the one hand, running a golf course is expensive, and benefits relatively few people directly (roughly 35,000 rounds are played per year, compared to something over 110,000 visits to the Rockville Swim Center per year). We certainly could do other things with the money.

On the other hand, Redgate has developed a fiercely loyal following among many golfers, who say it is a course that is really only now “coming into its own,” and is viewed as one of the better courses in the region. It is an open space that is maintained and accessible to most anyone. And, the City has plenty of amenities that are used far less than the Swim Center, for instance one resident recently pointed out on a neighborhood email list that the Senior Center is frequently empty.

“Game Changers”

I’ve heard members of the Mayor and Council say that, if we are going to do something with Redgate, it ought to be a real “game changer” for the City. In other words, it ought to be something that places Rockville on the map such that, when folks in California or Michigan hear “Rockville,” they think of whatever Redgate becomes. I used to agree with this, but I thought about what a “game changer” would really look like. I thought about the small- and medium-size cities in other states that I know about in the same way we’re talking about. They are either college towns, or they are commercial or cultural destinations.

My favorite use for the Redgate land would be to create a small, highly selective, four year liberal arts college. But I’m told there isn’t quite enough land, and the climate to start a new college is tougher than it is for golf. Plus, we’ve got those satellite Universities-at-Shady-Grove establishments a stone’s throw away. They are not direct competitors to what I am imagining, but they do make the space crowded in terms of gaining a foothold. So, we’re not likely to get a new Swarthmore College here in Rockville.

Another possible new use would be to make Redgate a commercial destination. The best one I can think of would be to create an awesome, upscale mall. Yes, I’m serious. (I’m an odd duck: I actually like malls.) The Maryland side of the Capital region has nothing to match the commercial splendor that is Tyson’s. Montgomery Mall, the closest competitor, is sort of sad by comparison. This option, though, has myriad problems, not the least of which is the fact that probably none of my friends and neighbors would go for it. The main problems I see are that there isn’t enough room to really execute an awesome mall, and the road access is insufficient. (We’d need an I-270 exit onto Gude, and would need to beef that road up – not to mention the improvements to access we’d need to make on Norbeck/MD-28 from the Pike.) No, I don’t see a mall happening.

So that leads to a “cultural destination.” That means, in other words, and awesome performance space. People have pointed to Wolftrap as an icon for that. However, here again we’ve got a problem. There’s not enough space to create something like Merriweather Post Pavilion, and Rockville (adjacent) already has an awesome smaller performance space: The Music Center at Strathmore. I am hard pressed to think of something we could create that would go beyond what Strathmore offers.

Big Facilities

There’s one final “game changer” that has been discussed, in various forms. That would be some kind of arena-style event site. People have talked about a baseball stadium, a soccer complex, a high-school graduation venue, and more.

I can see the attraction of this idea. We could create something that fills a regional need and generates some revenue for the City. Done right, we could keep at least some of the open space the course now represents.

However, a site designed specifically for large-scale events would create more traffic hassles than even the crazy Awesome Mall idea would – because the traffic would all be happening at the same time. And, there are a number of behavior problems that come along with large event spaces that the surrounding neighborhoods would need to deal with.

Parks And Open Space

Another option that is on the table involves keeping the Redgate open space, but removing the golf component. That would mean either turning it into a park, or basically just letting the land go (after a few years of invasive species maintenance).

I see two problems with this approach. First, the park option is duplicative. There’s already a massive park right there – Lake Needwood. Turning Redgate into park would essentially make it invisible. It would be seen as part of Lake Needwood.

Letting the land go “back to nature,” in my view, is a non starter – and is the kind of move that cities do when they just have no other options. My hometown of Detroit recently did that with its Rouge Park, basically giving up on it. I would not want to visit the area now unless I were with others and packing heat. While a “back-to-nature” option for Redgate would probably not result in the same thing, I do think it is an invitation to a host of enforcement problems that we don’t now have. If we get into the same troubles that Detroit is in, maybe we might consider this — but not now. It’s a move we can’t easily undo.

My Take: Keep The Golf Course

Having considered just about all the options I could think of, here’s my perspective.

Redgate Golf Course is an unusual asset and, as municipal golf courses go, is an example of best-of-breed. There is an economic downturn that’s impacting everything, but it won’t last. In fact, word came out today that, officially, the recession ended June 2009.

As the economy picks up, Redgate’s revenues will bounce back. It may never support itself, and I don’t think it should be asked to. It’s one of the wonderful City amenities that makes Rockville a great City.

We should keep Redgate essentially as-is — an excellent municipally-owned golf course.

It is an open question as to who should run Redgate as a golf course. Maybe different execution could give us a bump in revenue. However, the current management and staff are part of what makes Redgate a City amenity and not just some golf course. So I would hesitate to contract out operations if that would mean suddenly the course gets a corporate feel.

(I do have one thought about a possible change. I don’t know how much space this would take, but if there were a way to develop a high-end conference center (a retreat-like atmosphere, not just a convention space) without impacting the course too greatly, I think that could be useful. Many corporate and other high-level retreats and offsite meetings benefit from being close to golf. And for the non-golfers, an easy shuttle to Lake Needwood provides other recreation activities.)

While we have budget problems right now, they are nowhere near those faced by other jurisdictions. We don’t need to take extreme measures – we need to figure out how to ride out the next five years or so until things bounce back.

If we trade away Redgate because we’re tightening our belts, I worry we’ll look back and find that a short-sighted move.

That’s just my opinion, and I welcome what other people have to say!

Note: This is just Brad’s personal opinion, not the institutional view of Rockville Central.

Contributor Opinion by Art Stigile: Golf Subsidies 10 Times Greater Than Swim Center Subsidy

This Contributor Opinion is by Art Stigile.

For the past two years, I’ve been challenging golfers to answer a simple question — why should Rockville taxpayers provide a $24 subsidy for each round of golf played at RedGate, when golfers are supposed to be paying the full costs?

A common answer from golfers’ is that we subsidize swimming, but we can’t see the amount because the Swim Center subsidy is hidden away in the General Fund. In contrast, the Golf Course stands alone in a separate enterprise fund where the costs are transparent. If you pull the Swim Center out of the General Fund and compared apples to apples, the argument goes, you would see the Swim Center subsidy.

Well, I like apples, so let’s do the math.

For RedGate, the total subsidy for the current fiscal year is the sum of the projected deficit ($673,990) and the 50 percent reduction in the charge for central administrative expenses ($165,750), for a total cost to taxpayers of $893,740. Divide this amount by the projected number of rounds played (roughly 35,000) to get the estimated subsidy of $24 per round.

The calculation of the Swim Center subsidy is a bit more complicated because of how the City accounts for it, but the formula is the same. According to page 14-44 of the FY 2011 Adopted Budget, the Swim Center will have $1.694 million of operating revenue in FY 2011 and $1.730 million of operating expenditures, for a net operating deficit of $36,430.

To be comparable to RedGate’s bottom line, you have to add debt service ($169,762), depreciation ($70,745), and administrative overhead expenses ($398,386) to the Swim Center’s operating deficit. These amounts do not appear in the regular budget document, but they are provided in a March 26, 2010 memo from Gavin Cohen to Mayor and Council. The memo appears as attachment G to agenda item #10, “RedGate Business Plan (Plan) Financial Update”, June 21, 2010 meeting of Mayor and Council, page G-2. The amounts are for FY 2009, but they are not likely to be much different for FY 2011. Together, they sum to $638,893, increasing the Swim Center’s total cost to taxpayers to $675,323.

This is the total taxpayer subsidy for the Swim Center. To calculate the subsidy per visit, you have to know the number of visits. In response to my request, the City Manager provided me by email with an estimate of the number of visits in FY 2010. ( Mayor and Council and Joe Jordan, Chair of the RedGate Advisory Committee, were copied.) The number includes 113,378 visits by people using membership cards, 53,206 paid visits, 57,002 for classes, 58,792 for the RMSC Swim Team and the Rockville Rays Swim Team, and some other odds and ends. Together they add to 296,251 visits. I’ll assume the same number for FY 2011.

When you divide the Swim Center deficit by the number of visits, you get a subsidy of $2.28. (For reference, the subsidy per visit in FY 2010 was approximately $2.50.)

To summarize, that’s $24 per visit to the Golf Course, $2.28 per visit to the Swim Center. That’s one-tenth the taxpayer subsidy per round of Golf Course.

Any way you look at it, that’s a lot of apples!

The next time someone uses the Swim Center to justify taxpayer subsidies for the Golf Course, remember these two numbers — $24 taxpayer subsidy per round of golf, which is 10 times greater than the Swim Center subsidy.

Art Stigile

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

Please also note that Rockville Central does not endorse candidates in election campaigns. Supporters of all candidates are encouraged to submit opinion pieces for consideration.

Contributor Opinion by Anne Goodman and Jim Farrelly: Redgate Golf Course Should Remain A Golf Course

Photo from Goodman and Farrelly of wildlife habitat which would be lost

This Contributor Opinion is by Anne Goodman and Jim Farrelly

Several proposals are on the table for future development RedGate golf course. Among them is one to build a 10,000 seat arena hosting 160 events a year. That is approximately one event every other day. Another is to build a low density housing development. A third is to let the property go back to nature. In my opinion, none of these proposals is acceptable.

Both an arena and low density housing would have adverse effects on one of the last areas in Rockville containing green space. RedGate houses kingfishers, several species of woodpeckers, blue herons, snowy egrets, and the Baltimore oriole, to name a few. Bald eagles have been sighted there. There are several wooded areas where other wildlife resides. There are plants that support insect life necessary for human life. Development would eliminate habitat for both plants and animals. As habitat is decreased, species are lost. The loss of wildlife habitat and its effects on our environment are presented forcefully in the book, “Bringing Nature Home” by Douglas W. Tallamy, 2009, Timber Press, Portland, OR, a book which we highly recommend.

Development would also adversely impact our local watersheds and, ultimately, the Chesapeake Bay. RedGate’s current impacts are significantly less than those of most golf clubs. We are informed that RedGate has adopted sound environmental practices, including the use of organic fertilizers and the collection and recycling of the City’s stormwater run-off. Not only does RedGate re-use the City’s stormwater runoff, it has in place processes to neutralize the effects of the contaminants contained in the runoff. The 140 acres of green space that RedGate occupies acts as a natural buffer between the City and Rock Creek Park. With the added imperviousness associated with development (construction of parking lots and sidewalks, reduction of many trees and understory plants), the run-off would enter surface waters more rapidly and contain more pollutants flowing into Rock Creek Park, the Potomac River, and, ultimately the Chesapeake.

While any development would impact habitat and water runoff, the arena would be a particular burden to the community. Just a few of the impacts would be increased traffic in an area already congested, noise, pollution, light, costs and extended responsibility for police and rescue, crime, and impervious surfaces that would increase stormwater runoff. Quality of life for residents near and far from the area would be reduced.

While the proposal to let RedGate “go back to nature” may sound good on the surface, it has its practical problems. Without some degree of maintenance, the course might be taken over by non-native invasive plants. We wouldn’t be surprised to see Bradford pears move in and take over.

In addition, although it has been argued that RedGate operates at a loss, it currently provides income for the City. A “back to nature” option would eliminate that revenue source, and the property would likely be sold for development, anyway.

In our view, the best option is to maintain the golf course and investigate ways by which income to the City can be increased.

The RedGate Advisory Commission is making a presentation to the Mayor and Council on Monday, Sept. 13. Please come and provide input to our City Council by participating in Citizens Forum. City Council will hold a work session on Sept. 20. It is possible that decisions will be made at that meeting.

The following are pictures of the golf course.

Site of the proposed arena. It is a wooded, hilly area that would have to be deforested and graded.

Photo from Goodman and Farrelly

Wildlife habitat. It would be lost.

Photo from Goodman and Farrelly

Anne Goodman and Jim Farrelly

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

Please also note that Rockville Central does not endorse candidates in election campaigns. Supporters of all candidates are encouraged to submit opinion pieces for consideration.

Contributor Opinion by Art Stigile: 10 Questions for RedGate (UPDATED)

>In our recap of Monday’s Mayor and Council meeting, we promised a full list of Art Stigile’s questions about RedGate Golf Course from Citizen’s Forum. Thanks to Art’s courtesy, here they are:

Image from RedGate Golf Course

[UPDATE: Art has provided backup for his assertions in this piece; they are here.]

Next week the RedGate Advisory Committee will present its recommendations for improving the financial condition of the golf course. In anticipation of the meeting, I have 10 questions that I would like to ask the Advisory Committee. I believe they are hard, but fair, questions that should be asked of the Committee, which after all, serves primarily as the golfers’s advocacy group. I won’t be able to ask all of them tonight, but I will start tonight and finish up next week. I have already emailed them to the Chairman of the Advisory Committee and to the Mayor and Council.

1. When Rockville agreed to establish the golf course in 1974, golfers promised to pay all of the expenses of the golf course and not saddle taxpayers with any of the cost. In exchange, RedGate would be run like a business that focused on meeting the needs of golfers, without a lot of meddling by taxpayers. Setting RedGate up as a separate Enterprise Fund was essential to carrying out this deal. Through 1999, golfers lived up to their bargain with taxpayers. However, Redgate has run deficits in each of the past 10 years, and taxpayers have been forced to fill the gap. Are today’s golfers willing to live by the original deal struck with taxpayers, and if not, why should taxpayers feel obligated to subsidize golf?
2. RedGate is expected to run a deficit of $674,000 this year, and taxpayers are once again going to have to fill the hole. If you do the math, that works out to a taxpayer subsidy of about $19 for every round of golf played at RedGate. Does the Advisory Committee agree that this is incredibly excessive? How would you define the appropriate level?
3. Redgate is expected to end the current year with a negative balance of about $2.4 million. This figure is more than double the revenue that we expect to collect from golfers for the entire year. The cumulative losses are expected to grow to $5.9 million by the end of FY 2015, which by then will be more than 5 times RedGate’s annual income. My question is this. How and when do you propose to repay taxpayers for this debt?
4. Rockville has operated for several years with a requirement to run a General Fund reserve equal to 15 percent of revenue. At the June 21^st meeting of Mayor and Council, staff testified that incorporating RedGate into the General Fund would immediately reduce the General Fund reserve to 13.6 percent in FY 2011 and reduce it further each year, leaving it at just 2.7 percent in FY 2015. This is a recipe for financial suicide. It would result in the loss of Rockville’s Triple A rating, make it extremely expensive to issue debt, and it would make it very difficult to operate the City budget. In light of this testimony, do you agree with the staff recommendation to keep RedGate as an Enterprise Fund, separate from the General Fund? If not, how do you suggest that Rockville deal with the dangerous drop in the General Fund reserve that would be caused by folding RedGate into the General Fund?
5. When RedGate was created in 1974, it provided Rockville’s middle income golfers with their first opportunity to play quality golf at an affordable price in the local region. Today, there are numerous public golf courses within easy driving distance, including several that are owned by the County. In light of RedGate’s declining customer base and large and growing deficits, wouldn’t Rockville taxpayers be justified, indeed, be smart, to say “let’s end this wasteful duplication of services, close RedGate, and direct golfers to any of the other public course in the area?”
6. The biggest flaw in the 2006 business plan was the assumption that fees would rise by about 5 percent per year. If fees had, in fact, risen by those amounts, RedGate’s revenues would be about $400,000 higher in FY 2011, and we wouldn’t be discussing the need for a new business plan. Instead, fees have stayed flat for five years, and they are likely to remain flat, given the over-saturation of the local golf market. But if fees stay flat, then the only way to eliminate the $924,000 deficit that is projected for FY 2015 is to double the number of rounds of golf played to more than 70,000. However, the number of rounds has not exceeded 50,000 since 2002, and the highest number in the past five years was 41,116 in FY 2008. Doesn’t this mean that under any realistic scenario, the only way that Rockville can continue to operate the golf course is through large and growing taxpayer subsidies?
7. Last year, you vigorously opposed consideration of an option to turn RedGate over to the Revenue Authority without a long list of preconditions. Now, several large golf course operators have expressed interest in operating RedGate. Given the sharp deterioration of RedGates finances, are you now willing to support turning RedGate over to some other management company without strings, or do you continue to insist on preconditions, even if it means that taxpayers would have to continue to pay large subsidies for golfers?
8. The 2006 business plan specified various measures of success, including that RedGate’s budget would return to surplus by 2009. However, it was totally silent about what would happen if these measures were not met and losses continued to rise. When I began in 2008 to point out that RedGate was off-track and the business plan would not succeed, the Chairman of the Advisory Committee advised me that I just needed to give it time to work. Now the flaws are abundantly clear, and we are considering yet another rescue plan for RedGate that, by necessity, would depend on large taxpayer subsidies for several years. My question is this. In exchange for continuation of taxpayer subsidies for a defined period of time, would the Advisory Committee agree to a business plan with hard targets that, if not met, would require closing the golf course?
9. RedGate has been operated by the same manager for many years. Despite his best efforts, deficits have risen, and they are projected to grow as far as the eye can see. Given the results, would the Advisory Committee agree to a new business plan that includes replacing the current manager?
10. Finally, from FY 2011 through FY 2015, taxpayers are going to have to spend about $4.2 million to cover RedGate’s deficits. That’s a lot of money, and there are many other ways to spend that money for the benefit of taxpayers. For example, we could put another 6-7 police officers on the street with that money. We could double our support of caregiver agencies, which certainly would make sense in this recession. We could use it to pay for replacing about 2.5 miles of water lines, instead of borrowing the money, or we could pay for about a third of the cost of converting the old Post Office to a police headquarters. We could actually fund the Mayor’s dream of creating a Rockville Science Center for our kids, which I have to say as a proud father whose daughter left Einstein High School a year early because she was bored, and who just graduated at age 20 with her Masters in Engineering, the Science Center would be the best new investment in kids that Rockville could start. Or, we could just cut the property tax rate and let taxpayers keep the money. My list could go on for an hour. My question is this. Could you tell us why golf should have priority over so many other public services that obviously would provide greater public benefits, and why the golf subsidy shouldn’t be the first thing on the chopping block in the FY 2012 budget?

Art Stigile

This is a Contributor Opinion. Rockville Central encourages readers to submit such pieces for consideration — the more voices the better. Simply send them to [email protected]. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

City Found In Violation Of Open Meetings Act

>According to the Gazette, the state’s Open Meeting Compliance Board has ruled that the when, at the end of its January 26 executive session, the Mayor and Council directed City staff to explore a lease agreement for Red Gate golf course, it “extended beyond the permissible bounds for a closed meeting under the act.”

The ruling was in response to a complaint brought by Rockville resident (and Rockville Central contributor) Joseph Jordan. “I didn’t have a problem with them discussing personnel matters or getting legal advice, but when they took a vote on what they were going to do I thought that was out of bounds,” he told the Gazette.

Mayor Susan R. Hoffmann told the Gazette she disagreed with the finding: “We were dealing with legal advice and legal advice was perfectly appropriate under [state law] to be in executive session.”

The compliance board decided that the Mayor and Council were OK getting legal advice from the city attorney, and that “much of the discussion involved matters properly considered under the personnel exception as authorized by the act.” However, the board said the they crossed the line when they told City staff to begin negotiations over a possible lease of Red Gate.

Rockville To Maintain Redgate Operations

This afternoon the City of Rockville announced that it would maintain its operation of the RedGate golf course. Discussions with the Montgomery County Revenue Authority over the MCRA’s possible management of the course have ended with the MCRA opting not to pursue the course.>

According to the City’s press release:

The possibility of the Revenue Authority leasing and operating the City-owned championship course has been the subject of negotiation since late January. The City’s interest in an agreement was aimed at keeping a top-notch golf course in Rockville and under the City’s ownership, while allowing the Revenue Authority to add a 10th course to the nine it now operates in the county.

Following discussions about a possible lease, the Revenue Authority opted against taking on RedGate’s operations at this time, but expressed interest in maintaining a relationship with the City. . . .

“We appreciate the Revenue Authority’s interest, and have great respect for their operation of Montgomery County golf,” said City Manager Scott Ullery. “Burt Hall did an outstanding job negotiating on behalf of the City’s interests. We will continue our efforts to improve RedGate’s financial performance and maintain it as one of the area’s truly outstanding courses.”

Contributor Opinion By Art Stigile: Response To Redgate Golfers

>This is a contributor opinion. Rockville Central encourages readers to submit such opinions for consideration — the more voices the better. We especially welcome people who disagree with us. We ask that all such contributions be civil and we reserve the right to edit (in consultation with the author) or reject. Contributor opinions should not be seen as reflecting opinions held by Rockville Central editors, as they are just as frequently at odds with our own views. That’s the whole point!

The following contributor opinion is by Art Stigile.

I read with interest Joe Jordan’s recent contributor’s opinion about the RedGate Golf Course, and I listened closely to the statements made by many golfers at the recent Citizen’s Forum. Golf is not my game, but I understand and respect their passion. I think hockey is life. But if golf is your passion, I hope you can continue to enjoy playing at RedGate for many years.

Unfortunately, nothing that I heard from golfers deals with one very important inconvenient truth. RedGate is drowning in a sea of red ink, and taxpayers are being asked to fork over increasingly large subsidies for as far as the eye can see. Over its first 28 years, golfers paid for all of RedGate’s operating and capital expenses. Since FY99, the golf course has operated in the red every year, except one, despite receiving $600,000 in taxpayers subsidies over the past three years. The current budget projects an FY09 deficit of $275,745 that grows to $388,479 in four years. By the end of FY13, RedGate’s cumulative deficit is expected to exceed $2 million – more than the expenses to run RedGate for one year. Red seems to be the appropriate color for the golf course.

Who’s paying for this? Taxpayers.

It wasn’t supposed to be this way. In May 2006, Mayor and Council approved a Five Year Business Plan for RedGate. (See here.) The Plan promised to put RedGate “in the black” by FY09.

By any measure, the Plan has failed.

The Plan identified two key ingredients to success – average dollars spent per round, and total rounds played. Below are the Plan’s projections for both measures and results to date. Results have fallen far short of the Plan, and the results for FY09 will not be any better, given the sharp drop in rounds played last summer.


I have 2 questions for golfers. Why should we taxpayers subsidize golfers? How much subsidy is enough?

The closest thing to answer that I’ve heard is that the City subsidizes other recreation, so why shouldn’t it subsidize golfers? I’ll tell you why. I pay high taxes, with no complaints, to fund services that benefit all of us – a first-class police force, good roads, conservation of our natural resources, snow removal – and to provide opportunities to less fortunate folks who are struggling to stay afloat in the worst economy in 35 years. I don’t expect to pay high taxes to subsidize middle-class adults who can afford to pay for their favorite recreation.

If golfers disagree, if golfers feel they are entitled to a taxpayer subsidy, then I have a suggestion. The Community Services section of the Rockville budget provides funding to nonprofits that provide social services to the needy. Let’s add a line for Taxpayer Subsidies to Golfers. That way, golfers can come down to City Hall each year and explain to Mayor and Council and to all taxpayers why they have a higher priority than folks who are finding it hard to stay in their homes and pay for their kids’ health care.

Frankly, I’d rather spend my tax dollars helping the truly needy.

There is an alternative. Increase fees immediately by $7-8 per round of golf, and it would eliminate the annual deficit.

Art Stigile