Bond vote OK'd for golf course

CEDAR HILLS — It appears Cedar Hills officials have decided which club they'll use to tee off on the rescue of the city-built, financially troubled Cedar Hills Golf Course.

The City Council voted 4-1 Tuesday to adopt a resolution to allow a special bond election in June.

The resolution gives the city the option to ask voters if the city can issue general-obligations bonds up to $7 million to refinance the cost of the golf course.

"This is just to allow us to have the special bond election so that in essence we can refinance under better terms," said Councilman Darin Lowder, who expressed surprise at the lone dissenting vote by Councilman Rob Fotheringham. "Strictly speaking, finances (drove us to this point); the same reason any homeowner would refinance under better conditions."

Lowder said the resolution is simply a mechanism to put the final decision in the hands of the voters in June.

Fotheringham and Councilman James Parker had leaned toward use of a revenue bond in past discussions.

Mayor Mike McGee said that because of the way the original loan was structured, refinancing was inevitable given the course's lower-than-expected revenue. The $6.4 million payback agreement requires a $6 million final payment in 2007.

"The way the financing was arranged to begin with . . . it only lasted until 2007. So by 2007, at the latest, it was required by the deal to have a refinancing or restructuring of the bond," he said. "We're just moving it up a few years to avoid paying all that extra interest until 2007."

The city estimates the course will operate at a loss of about $300,000 this year.

By comparison, total property-tax revenue for the 7,500-resident bedroom community in the fiscal year 2003-04 budget was $366,000. The revenue shortfall is due to several factors, including a faulty feasibility study estimating course revenue and a proliferation of competing courses.

Lowder said defaulting on the loan, which had been discussed, is no longer considered a viable option by most city leaders.

"Defaulting is pretty much out of the picture," he said.

Lowder said he thinks most Cedar Hills residents will be pleased with the action.