Social and Political Commentary

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Who pays if the golf course can't?

... a question that our city officials never answer.

by Joe Sullivan

During the public participation period of the July 8 Park Commission meeting,
Commissioner John Mercer interrupted the process when he anticipated what he
thought would be a question from the Melrose Mirror reporter. He heatedly pointed
out that the Mirror reporter had been told on repeated occasions that if the golf
course revenue was not adequate to cover the bond payments for the new athletic
field complex that the city would be responsible.

The reporter said that he had not intended to ask that question but the
Commissioner did not relent saying that it was always the reporter’s question no
matter how many times he has been told that the city would be responsible for any
unpaid bond obligations.

After being allowed to resume, the reporter continued with a related question to
course finances but not the one the
Commissioner was expecting.

In fairness to Commissioner Mercer the reporter has frequently pestered the
Commission with the “who pays” question and has pointed out that saying the city is
responsible for an obligation is not the answer to who pays for this obligation. It
does not
seem reasonable that the city will be laying off policemen, firemen or school
teachers to get the money to pay for a bond obligation if the golf course does not
produce enough to pay it.

The city's dodge.

“The city will be responsible” is the city’s party-line answer to the who-pays
question. Ask any city official who pays if the course cannot cover the bond
payments and that will be the answer.

It was probably because Commissioner Mercer was not able to attend the June meeting
that he did not hear the concern expressed by the other Commissioners in a
discussion that related to the course’s ability to pay for the athletic field bond

After the golf course has paid of all its operating costs the excess revenue is
supposed to be adequate to cover the annual bond costs. One of the problems the
Commissioners face is caused by the very large cut the city takes from the golf
course operations. An item listed as “indirect costs and taxes” takes $145,000 from
the money that would be otherwise used to pay off the bonds or add to whatever is
left of the Mount Hood Reserve Fund.

The Reserve Fund is important because the golf course will not produce enough
revenue to pay for both the athletic field bonds and the remainder of the bonds
needed to pay for the repairs caused by the Big Dig dumping calamity.

When this happens the Park Commission is depending on the money held in the Reserve
Fund to make up the difference. The Reserve Fund in January 2010 was $810,179
according to the minutes of the Aldermanic Public Service Committee. The Reserve
Fund in July 2013 is $477,179 according to the report issued at the Park Commission

It must be unnerving for the Commissioners to watch the city increase  the indirect
costs each year to take money out of golf course revenue for the “indirect costs”.

The city's hefty cut

These “indirect costs” are far from stable. They have increased year over year at a
rate faster than the golf course revenue increases. In the city’s published summary
of the Mount Hood Enterprise Fund Revenue and Expenses for 2010 the indirect costs
were listed as $128,421. At the Park Commission June meeting it was stated that for
2012 the cost will be $145,000.

In an off-the-cuff conversation with a person who has been directly involved with
the financial operation of the golf course the Mirror reporter was told that when
the “indirect cost “ first appeared on the Hood’s Revenues and Expenses statement
it “was about $70,000.” When the reporter asked how the city describes these costs
the response was a loud, wry laugh.

There’s an expectation that if Mount Hood revenues are inadequate to cover the
costs associated with building the new athletic field and running track the remedy
is simple. Increase the prices to play golf at Mount Hood.

The law says no

There is a problem with that expectation. Mount Hood Golf Course operates using an
Enterprise Fund. The Enterprise Fund is a Massachusetts General Law 44 administered
by the Massachusetts Department of Revenue.

In its explanation of the law a question-and-answer technique is used. One of the
questions is,

“Can a legislative body vote to use enterprise funds for purposes not related to
the enterprise?”

Answer: “No. The enterprise-enabling statute provides that the enterprise fund
revenues may only be used for enterprise related-expenses.”

Golf course revenues are enterprise revenues. Athletic field-running track bond
costs are not enterprise-related expenses.

Just because the Enterprise Fund statute forbids the city from raising prices to
Mount Hood golfers doesn’t mean the Aldermen won’t try. They could vote to
discontinue the Mount Hood operation as an Enterprise Fund.

How the city buries the intention

Unfortunately for golfers, there is a precedent as to how the city will do it. An
intention to eliminate the Enterprise Fund to increase prices will be kept secret
until the day the Aldermen vote.

The proposal to do so won’t say Enterprise Fund. It will say something like,
“Despite the provisions of General Law chapter 44 etc, etc” The Aldermen will leave
it up to you to find out that chapter 44 refers to Enterprise Funds.   

This may be a cynical opinion. But that’s just what our city government did when
the Aldermen voted to approve the plans for the athletic field and running track.
No public mention of those two programs had ever been mentioned before they were
announced by the Mayor and approved by the Aldermen on the same day.

When the Mayor announced the field plans he said they would be paid for using Mount
Hood golf course money. To get this money the Aldermen had to pass Special
Legislation and they passed it at the same meeting where they approved the plans
for the athletic field and running track.

The Special Legislation which was to be passed on to the state legislature and
Governor for approval. The Special Legislation’s first words are, “Notwithstanding
the provisions of Chapter 124 etc. etc.”

The Aldermen left it up to you to find out that Chapter 124 was the law that
established the Mount Hood Park and Golf Course and that this law forbade using
money generated at Mount Hood from being used anyplace but at Mount Hood.

Bottom line, they never told the people who elected them what they were voting to

Keeping the citizens in the dark

Our city government, when it had an obligtion to tell its citizens something, came
up with a way to conceal it instead.

A process that works like this relies on keeping people who will be most affected
from knowing what is being planned or what is being done. It eliminates their
opportunity of knowing what is being proposed.  

The Aldermen who participated in this devious exercise will be back to ask these
same people to vote for them in November. The Aldermen are relying on the hope that
these people won’t realize what they took from them. What was taken, of course, was
their right as citizens to speak out on any legislation that effects them.

That’s a lot for any citizen to lose.  



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