Taxes may pay for golf

CEDAR HILLS — In May of 2001, Priscilla Leek voted against the city golf course and the $7 million lease revenue bond proposed to fund it.

She even led a petition drive trying to defeat it.

Now she is indignant to learn the city may be forced to bill her $11 a month — along with the other 1,706 households in the north Utah County community — to repay the bonds because the course is not generating sufficient revenue to cover the payments.

"There is nothing we (residents and the city) can do about the bond. It has to be paid," Leek said. "But can we save money and cut corners in other areas? Can we put on a time certain date? I don't want to pay a fee forever."

"This is very concerning. This will be a hardship on people," said Linda Fotheringham, another resident who opposed the golf course idea. "We feel angry, but we're trying to overcome it."

Mayor Mike McGee is feeling the same frustrations. He and others on the City Council, most of whom ran for office because they didn't like the way the golf course came about, are now the ones having to determine how to pay the piper.

"It's not producing what was expected," McGee told The Deseret Morning News Tuesday. "It should have been no surprise to the previous administration. There's just flat too many golf courses in the area."

McGee said no one on the council is happy about having to take money from this year's budget to augment course revenues to meet the $223,780 bond payment that was due this month. Because the near-interest only bond payments escalate nearly $100,000 per year, the impact on next year's budget and following years is expected to be even more severe.

In November 2007, the city faces making a $6.06 million balloon payment to retire the bond, said Councilman Jim Perry.

Perry said there is no way a small city of 7,000 people with an average annual budget of $1.4 million can meet those demands.

If the city defaults, the golf course and the equity in the city building go to the lender, Zions Bank.

McGee says he doesn't believe the city will default but says it may be necessary to impose a "golf course service fee" on residents until either the course is sold or the debt is restructured.

"I'm not happy about it. I inherited this. The City Council is not happy about it," McGee said. "Nobody's happy about it, but sometimes you have to do what you have to do."

Perry said every option is being explored and the public will be invited to a series of town meetings to discuss solutions.

"We're committed to having a transparent and honest and open operation," Perry said