Thursday, March 13, 2008

Ogden, Utah Mayor Matthew Godfrey Wants To Raise Taxes To Pay For A Mount Ogden Golf Course That's Lost Money For 24 Consecutive Years

Question: What would you do if you were a private sector enterpreneur and your business had lost money every year for 24 consecutive years?

Answer: Dumb question. If you were a private sector enterpreneur, you would have either sold or scrapped the business after five years or so, at the most. Unless, of course, you had the power to levy taxes.

And it's this power to levy taxes that Ogden's controversial Mayor Matthew Godfrey (pictured above left) wants to use to keep open the Mount Ogden Golf Course, which, according to the Weber County Forum blog, has lost money every year since its opening in 1984. Increased taxation is incorporated into three of the four possible strategies unveiled on Wednesday March 12th, 2008 in order to stem a growing debt now allegedly at $2 million. Godfrey will also present the options to the Ogden City Council during a work session on Tuesday March 18th and at a town meeting in the City Council chambers on the third floor of the Municipal Building from 5 P.M. to 7 P.M. on Wednesday March 19th. Additional stories from the Ogden Standard-Examiner and KSL Channel 5 (March 11th and March 13th)

And what are the proposed options?

(1). A voter-approved tax increase to subsidize Mount Ogden Golf Course and allow operations to remain unchanged.

(2). Issue $6 million in voter-approved bonds to redesign the golf course to make it more playable. This may also include renovating and relocating the course's clubhouse to the top of 36th Street.

(3). Close the golf course and allow it to "go to seed" so it could be used as a nature park with hiking and bike trails.

(4). Place the golf course in a special improvement district and raise taxes on nearby property owners to fund operations.

All options except number three call for increasing taxes on residents in one form or another. Conspicuous by its absence is an option #5, to either sell or lease the facility to a private sector enterpreneur who might be able to make a go of it with some innovative marketing strategies.

Godfrey claims he hasn't determined which option is best and is seeking input from the city council and public. "We are not advocating any of these options, but these are the ones we have identified to date and think are viable," he said. "We are doing everything to make it (the golf course) work. But there has to be some pretty drastic things done quickly."

City Council Chairwoman Amy Wicks, who has run afoul of Mayor Godfrey in the past, said she had not received information from Godfrey about his options for the golf course and was not in a position to comment.

In the meantime, greens fees at Mount Ogden Golf Course are scheduled to increase later this year to keep it competitive with other area courses.

Mayor Godfrey believes the lack of profitability is attributable to the difficult technical design, which may scare away too many golfers. He estimated the course's annual revenue losses to be about $250,000 over the last five years. Including original construction costs, the facility is about $2 million in debt. Yet Godfrey apparently does not want to consider selling the golf course despite its financial problems.

However, the "difficult" design is not the only reason. The Ogden City website reveals that there are SEVEN other golf courses within a short driving distance of the area. So unless Mount Ogden can be presented as a unique, one-of-a-kind duffing experience, it cannot expect to succeed in such a crowded field. Some commenters to the Weber County Forum blog also believe Godfrey himself hasn't done enough to "sell" the course to the public.

But it's Mayor Godfrey's use of the word "drastic" that tripped the red flag on the Weber County Forum. WC Forum believes that it is important to have full financial accounting and disclosure before taking any further action. Specifically, they recommend the following:

We believe that the council should take the initiative on this issue, demand a full accounting of golf course income and expenses from the time of the course's original opening in 1984, including scrutiny of the amortization of the "loan" which golf course management ought to have been paying down over the past 24 years. This is something that should be done prior to considering any of the "options" now being put on the table by Mr. Godfrey.

WC Forum, based on their local experience, questions Mayor Godfrey's word on issues. But in any event, any prospective enterpreneur would demand full financial disclosure as part and parcel of any prospective deal should the city ultimately decide to take that route.

Analysis: Asking taxpayers to pony up more for a public golf course that has lost money for 24 consecutive years is clearly an invitation to throw good money after bad. And creating a "special improvement district" merely penalizes some taxpayers just for living near a course which they may not necessarily use. With seven other golf courses withing driving distance, I see little chance of success for this facility. In the long run, I only see two practical solutions to this problem.

(1). Close the facility. This is the most logical solution.

(2). Sell or lease the facility to an enterpreneur. The prospective target should be financially prepared to endure as much as five years of initial losses. Because of the technical difficulty of the course, it can be best marketed as an "extreme" course, to capitalize on the niche market for "extreme" sports. However, it will need to offer something else to the public in order to succeed financially.

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