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The Prescott Daily Courier | Prescott, Arizona

home : latest news : latest news August 01, 2014

5/22/2013 9:55:00 PM
Shrinking green: City's money-losing golf course may close 9 holes
Les Stukenberg/The Daily Courier
Golfers play the south course at the Antelope Hills Golf Club in Prescott Wednesday morning.
Les Stukenberg/The Daily Courier
Golfers play the south course at the Antelope Hills Golf Club in Prescott Wednesday morning.
City property tax likely to decrease despite hike
PRESCOTT - Despite an anticipated increase in primary property taxes for the coming year, the recent pay-off of the $15 million debt for Willow and Watson lakes still should result in a drop in overall property taxes for Prescott property owners.

In an effort to diversify its revenue base, the City of Prescott has proposed increasing its primary property tax rate this year to the level allowed by the State Constitution.

The tentative budget that city staff members presented to the Prescott City Council on Tuesday included a proposal to increase the primary property tax rate to generate $422,609 more in revenue for the coming year.

While the city's primary property tax brought in $1.1 million in the current fiscal year, the projections for the next year have the total at about $1.5 million - a 4.9-percent increase.

Officials emphasized, however, that the change would not result in an overall city tax increase for Prescott property owners.

Because of the 2013 retirement of the bulk of the $15 million bond issue for the 1998 purchase of Willow and Watson lakes, the overall city tax burden would still go down, they said.

As of this year, the approximately $1.4 million annual payment that the city had been making to pay off the 15-year bond will go away.

That means that Prescott's property tax burden - combining primary and secondary taxes - would drop by about $1 million, after the $422,609 proposed increase.

Budget and Finance Director Mark Woodfill said that would translate to a decrease of about $29 in the city's property tax for the owner of $200,000 home.

Woodfill emphasized, however, that many factors affect a homeowner's final tax bill, including the tax rates of a number of other governments.

Councilman Steve Blair pointed out that the property tax increase could help to make up for the sales tax losses that the city expects after the projected early-2014 opening of the new Walmart store in Prescott Valley.

Although Woodfill told the council that numbers relating to the amount of sales tax that Prescott's Walmart stores generate are confidential, city officials have long anticipated that Prescott's stores would see a drop after Prescott Valley has its own Walmart.

Mayor Marlin Kuykendall said after the meeting that the property tax increase would improve the stability of the city's tax base.

"It's more dependable," Kuykendall said of property tax. "Sales tax is more volatile."

Although council members expressed little opposition or support for the increase during the meeting, Kuykendall said, "I've got to assume it's going to be included in the budget."

Other points that came up during the six-hour meeting included:

• Most of the city's major revenues sources are expected to be up in the coming year. Sales tax is projected to increase by 7.1 percent, while state sales tax and state income tax are expected to be up 3.3 percent and 9.2 percent, respectively.

• The city is proposing the net addition of 1.25 in new city staff positions, including the addition of a federally-mandated position in the water department, and the increase of a three-quarter-time marketing coordinator to a full-time group sales manager.

The new sales manager would focus on bringing in tourists during the "shoulder" months in the spring and fall, said Deputy City Manager Alison Zelms, and also would work on the attraction of a conference center.

• Sixty-nine percent of the city's general fund revenues goes toward the public safety departments of police and fire. City officials say that percentage has gradually increased through the years, as the city has devoted less to other services such as parks and recreation.

The city will continue its budget discussion with a workshop on June 4, and a tentative budget adoption on June 11. The final adoption is set for June 25, and the new fiscal year begins on July 1.

Cindy Barks
The Daily Courier

PRESCOTT - Frustration ran high Tuesday, as the Prescott City Council conducted a virtual repeat of last year's discussion on the Antelope Hills Golf Course.

Once again, the 36-hole municipal course failed to break even, and it continues to rack up debt with the city. Over the past decade or so, the city's general fund has loaned the golf course more than $4 million to cover its expenses. This year's debt is projected to total about $207,000.

And looking ahead to a scenario of "too many golf courses, not enough golfers," Deputy City Manager Alison Zelms said there is little hope that Antelope Hills will turn a profit next year either.

"At the end of next year, we don't expect to be completely out of the hole," she told the council.

Added City Manager Craig McConnell: "The bottom line from a staff perspective - I think it's pretty simple - the golf course isn't going to make money. We're in a holding pattern here. We anticipate that at some time in the future it's going to be contracted out. The only question is when, and whether it's a part of something much larger."

Council members obviously were not willing to accept the status quo.

"This fiscal year has to be the year we make a change," Councilman Charlie Arnold said. "What's it going to take to make Antelope Hills not lose money?"

Over the course of more than an hour during Tuesday's daylong budget workshop, the council hashed over several options, including putting the entire golf course in the hands of a private management company.

But what emerged at the end of the discussion was a plan for Mayor Marlin Kuykendall to head up a committee that would look into closing nine holes in the south 18-hole course, and marketing the available land for a conference/events center.

"I would volunteer to this council - give me 60 days and let me put together a very small group of successful professionals," Kuykendall said. "I will come back with a plan."

The mayor urged the council not to put the management of the golf course out for proposals with the private sector without first looking at other options.

"Before we throw everything away, let's look at the big picture," he said.

The "big picture" likely would involve closing the nine holes that are located east of the Perkins Drive clubhouse. Golf Course Manager Mack McCarley said that would leave the remaining nine holes in the south course as an "executive course," as well as maintaining the popular north course for 18-hole golfing.

He estimated that the move would save about 25 percent in expenses, and would free up about 50 acres for economic development purposes.

After the meeting, Kuykendall said he envisions putting together a group of aviation and hospitality professionals to work with him on the plan. "There may be an opportunity of a public/private partnership," he said, adding that the city could contribute the land to the deal.

"Nothing would be off the table," Kuykendall said.

He expects to begin the committee meetings by about the first of June.

That plan would be the latest in the city's ongoing efforts to shore up profits at Antelope Hills.

After last year's budget discussion, the council agreed that the city should not be in the restaurant business and directed staff to put out a request for proposals for management of the Manzanita Grille, the city-run golf course restaurant.

But this past February, the city announced that it had received no proposals for the management of the restaurant.

That left the city with an enterprise that is heavy on staff and food costs, and light on profits.

This year, Manzanita Grille is expected to lose about $6,200.

"As far as I'm concerned, if you're in the private sector, you're out of business," Blair said. "This is ridiculous."

Blair focused specifically on the Manzanita Grille's $282,821 in personnel costs (from the city's nine-month projections). "We have four full-time employees. What are those people making out there?"

Along with the four full-time employees, McCarley said the restaurant also employs a number of seasonal employees. Other costs - for janitorial and other city services - also are billed to the restaurant.

Councilman Len Scamardo pointed out that because the restaurant workers are city employees, they receive the same health insurance and retirement that other city employees receive - benefits that privately owned restaurants typically do not offer.

Although several of the council members initially expressed support for putting the management of the entire golf course out for proposals, they agreed by consensus to give Kuykendall the 60 days he asked for to come up with an alternative plan.

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Reader Comments

Posted: Sunday, May 26, 2013
Article comment by: We need Options

There are amenities such as trails, ball fields, parks and golf courses that taken as a whole make Prescott a better place to live and give visitors activity choices. How much profit do ball fields make? trails? parks? One of the reasons we have a great town is because we have recreational options. My tax dollars go to support all of these...and I'm for it and I'm for having a public municipal golf course also.

Posted: Saturday, May 25, 2013
Article comment by: Disc Golfers Need grass!

They just happen to bring their own!! Disc Golfers unite and let's take over this ball-golf course!

Posted: Friday, May 24, 2013
Article comment by: City Loan Application

Golf Course - $4 million loss
Restaurant - Losses every year, but our chef can grill a good hot dog
Elks Movie House - $1 million loss on hidden expenses
Rodeo Grounds - we can trade good assets for a dilapidated redevelopment area
Airport - We gave away the only business showing a profit when the fueling operation went to a friend of the mayor's on the cheap
Conference Center - to continue our legacy to the taxpayers of Prescott another $15 million boondoggle!

Posted: Friday, May 24, 2013
Article comment by: Elizabeth Simoneau

How much money is being generated by the "hot landers" coming to play Antelope Hills for relief from the heat?? Do they stay and go out to dinner?? Maybe their rates do need to be raised, as well, since this is town supported and we don't need to subsidize the out of town visitors there.
Perhaps some of the "income" to Prescott from golf can be found in other places than the till of the course!

Posted: Friday, May 24, 2013
Article comment by: Bozo Course

To: @ Other Amenitites...sounds like this ridiculous rhetoric/analogy was written by Lamerson. Oh yea, let's hide the losses and take it out of the general fund so the taxpayer has no idea what it is costing. You compare the library with the golf course? Lunacy!

What is the deal that the golf course can't be sold because of the way the land was acquired?

This is another money pit that the taxpayers were duped into by council's whim...cut the losses. NOW!

Close the restaurant! Get the near $300,000 in salaries and benefits off the books.

Stop with the private enterprise/city partnership (buzz word) deals! The taxpayer gets screwed every time the City makes a feeble attempt to do a business deal.

Hassayampa closed its golf course, even tried opening it to the public. Get it???...golf is a dying sport...a proven loss leader.

The effluent water bill on Antelope Hills course is $280,000 per year. I say let it all go to weeds. Let the disc golfers take over...they don't need grass!

The Council needs to get off the pot and take some action on getting rid of this dog. This money pit has gone on far too long.

And the voters better take action and get rid of this council at election time!

Posted: Friday, May 24, 2013
Article comment by: Hidden Agenda Whysouth

Why the south course.? It has more play , less repairs, newer and also has the clubhouse on it. The north course has the airport,big trees and three entrances all very appealing for a conv.center . Oh let's remember the mayor lives on the north maybe he doesn't want to look at trash bins? Maybe it has to do with some other failed property variances that did not pass on the south course?somebody needs to be watching him and his committee

Posted: Friday, May 24, 2013
Article comment by: Art Lyon

Two beautiful courses that are an asset and fun to play. Sadly my friends and I have cut our rounds at Antelope by probably 50% the last few years because of the price. Each year they lose money they raise prices trying to recoup that money and it's not working. Why can't anyone figure that out? IF you lower your prices, get friendlier people at the front desk, and stop charging so much for beers you will see play escalate. Old sales line "volume cures all evils." The Country Club has good rates and I play in Phoenix for $20 at most courses in the summer. The $30 weekend specials are awesome. I'll bet the rounds are up on those days. Hope something can be worked out.

Posted: Friday, May 24, 2013
Article comment by: Marlin To The Rescue!

Oh Joy Not To Worry! Big Daddy Deal-Maker is On The Job! Do keep in mind voters that whenever Marlin hatches a deal it invariably costs the taxpayers a bundle and promises long-term gains that just never seem to materialize. Not for the taxpayers anyway.....

Posted: Thursday, May 23, 2013
Article comment by: Low Down

Lower green fees= more golfers!!
Fast nickle or slow dime, you decide!!!

Posted: Thursday, May 23, 2013
Article comment by: Golfers Woe Is Me

@Will Hepburn & others Now the real reason folks are clamoring to keep this loser...people bought houses on a golf course and are panicking.

Welcome to world of investment folks...you win some and lose some. The taxpayers are subsidizing your investment and we are sick of it sucking the coffers dry...stop with the lawsuit talk.

No one is guaranteed of anything in this world. Suck it up...times are changing. You will still make a profit on your home at the price you bought it...withh or without the golf course.

Does the Mayor live near Antelope Hills golf course?

Stop with the comparison of the parks, lakes, library, skateboard park to a stupid, special interest group of golf...someone in the "investment" business should know better than to try that hype! I YIII YIII IYiiiiiii!

Posted: Thursday, May 23, 2013
Article comment by: AH Golf Course

So lets see, the City of Prescott runs the restaurant and the golf course at a loss. Sorry mayor your new idea stinks, city government should not run the restaurant and golf course you're not business people. You should contact the City of Long Beach in California and ask them about American Golf Corp. who have been running their golf courses, pro shops and restuarants since the 1980's. AGC runs a lot of golf courses and they turn loses into profits. The comments by your Deputy City Manager is nonsense, he's a city worker and doesn't have a clue how to run a golf course or restaurant. I'm sure if AGC took over you would see advertised deals with hotels and golf packages, the city has no clue how to draw golfers in.

Posted: Thursday, May 23, 2013
Article comment by: The Princess

Can you imagine the carcass left for the taxpayers/City after the Mayor and his henchman get through working a "deal" for that 50 acres? The very thought of it swipes at what this city has endured at the hands of these people for years...public office - private gain...

Posted: Thursday, May 23, 2013
Article comment by: Let PV Have It

What (people) would put a convention center on the outskirts of town. People want to be where the action is not 10 miles away.

This is a bad idea. Let PV have the convention center. Moving from a failed golf operation to a failed convention center at taxpayer expense is just wrong.

We desperately need new leadership.

Posted: Thursday, May 23, 2013
Article comment by: smell the coffee --Golf's dying nationwide

The fact is that golf courses all around the country are going under. The sport hit its peak decades ago and has been in slow decline since. I'll bet most readers know friends/ relatives that have been affected by a golf course going under. Eliminating 9 holes will not cure the problem anymore than rearranging the deck chairs could save the Titanic. The Council wants to continue wasting taxpayer money rather than face cold hard facts. And building a convention/events center there is about as likely as building a prison--let the law suits begin.

Posted: Thursday, May 23, 2013
Article comment by: borg swenson

Golf is a game for the social and political elite, that is supported by taxes on everybody.

The fix is in.

Posted: Thursday, May 23, 2013
Article comment by: Dale Wilson

Wonder how many teachers we could have afforded with that $4 million.

Posted: Thursday, May 23, 2013
Article comment by: my thoughts

The conference center idea was tried before and failed for lack of interest. That is why the City decided they would buy the property and go into the development business, and as Hooty Hoo mentioned, the city (we) developed the lots and built a new gold course, but it had nothing to do with building the homes. What Hooty does not remember correctly is that the City did not make money, and it took a very long time to even sell the lots. The citizens picked up the tab on that fiasco and we continue to do so to this very day. Now the city is just going to abandon the course adding insult to injury, but if it helps to stop the bleeding by all means go for it. The mayor said it right, the city has no business sense when it comes to making money and only knows how to spend it. Get out of business and stay out. If it is a good idea then the market will bear it without needing the cities help.

Posted: Thursday, May 23, 2013
Article comment by: Golf is not as popular

Golf isn't as popular as it once was. The golf industry associations have reported these declines. Fewer and fewer kids are taking up the sport. Kind of like horse racing and most racquet sports. And Mah Jong. There aren't enough golfers to support this course. You can't improve the business model enough to change that. If a convention center wanted to come there then a convention center would already be there. Good lucky, Mr. Mayor, but in 60 days come back and tell the folks that it's time to sell the golf course to recoup the loans and let the new landowner run a golf course, or grow dandelions or whatever it is the new owner wants to do. Golf is done for.

Posted: Thursday, May 23, 2013
Article comment by: Local Resident

I have always preferred playing on the south course instead of the north course.
The city is losing 200K per year on the golf course, now they want to double down and market 9 holes of the golf course for a conference/events center. Look for loses in the range of 400k per year.
Other cities are able to run their public courses, why not see what they are doing right?
Build the conference/events center on the land owned by the city next to Heritage Park, with a view of the Park and Lake instead of the airport and a gravel pit.

Posted: Thursday, May 23, 2013
Article comment by: Remember When

Great blog utterly stupid . All the same reasons that prevented the mega church will come in to play here also. No access,safety and emergency vehicle response homeowner litigations just to name a few. Utterly stupid hit the ball straight when saying there is a lot of vacant surrounding property that would already have the infrastructure in place for a convention center .no cost to the taxpayer.they could help pay and promote the beautifull Antelope Hills. Let's find a way with Mayors committee to bring in a conv center on the vacant property

Posted: Thursday, May 23, 2013
Article comment by: The Fix Is In

The relatively few people that play (at reduced rates) think raising everyone's taxes to cover the losses is a great idea. Most of us do not.
If the Council does what is best for the majority of Prescott home owners, taxes will not be raised. Instead, the people that actually play will be required to pay for it. My guess, based on past experience, they will do exactly the wrong thing.

Posted: Thursday, May 23, 2013
Article comment by: Golfing Joe

It's very cheap to play here, and they never ask for proof of residency either. I played 2 resort courses south of Phx last weekend and they were both $60 with cart. Here it's like $35 in the summer for a resident. They should charge more than they do, about 5-10 more for 18 with cart. Don't copy PCC's rates because that's a dog track and AH is in excellent condition and better tracks in general.

Posted: Thursday, May 23, 2013
Article comment by: New Disc Golf Course!!!

Lets turn half the course into a disc golf course with baskets!! It's built to suit, low impact, and an easy conversion! What do you say!?!?

Posted: Thursday, May 23, 2013
Article comment by: mark knoke

As a former resident of the area, I'm a bit shocked that this course isn't doing better. The rates are low...and for those of you who think they are high, you should check other public courses around the state and other states. I currently live in Denver and it's pretty rare to find rates under $50.00 with a cart at a public course playing before noon on a weekend. The idea that $32 for afternoon play is a resort price is a joke...that person obviously has not been to a resort where you pay in excess of $100 for the golf, pay $5 for a gatorade, $10 for burger and another $5 for fries with it.

The notion that Prescott has too many courses is not that accurate in my opinion...you need to look at how many are PUBLIC and how many are private courses. There aren't that many courses open to the public in the area.

Lastly - this is a business and needs to be run like one. That means the rates need to be competitive, you need to market outside your area, you need to find more ways to cut expenses, and you need to have a product that people want. Right now - it sounds like the city is not hitting all of these objectives.

Posted: Thursday, May 23, 2013
Article comment by: Aristotle II

Raising taxes, police scandal (don't dare speak of it) and LOTS of dithering blather and indecision. Don't forget Granite Dells Parkway to the moon. Well, the Mayor and Council DID add some crucial and essential Sister Cities without which Prescott might not have survived. What a record to run on for re-re-re-election...Now you know why they want to run in off-year elections...People don't vote. One day all this, and more, will dawn on the good voters of Prescott...

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