Cedar Hills raises green for course

CEDAR HILLS — Cedar Hills has bought some time to figure out what to do with its golf course, but it will cost Cedar Hills homeowners about $132 per year per household.

Cedar Hills sold a $6.25 million, 20-year bond to restructure the debt on the troubled course, which has been losing money since it opened in August 2003.

A property tax increase of about $11 per month will allow the city to make its bond payments, Mayor Michael C. McGee said.

That's something the city was struggling to do before the restructuring. A $380,000 bond payment was due in December, and making that payment would have required the city to dip into its "growth money," McGee said.

"We just don't want to do that," he said. "No city in its right mind wants to spend its growth money that way. In Cedar Hills, our growth money is going to come to a screeching halt in just a few years. Once that happens, we want to have everything we've had in the past at our fingertips for whatever our needs are."

The fact that the city doesn't have a commercial sector also played a role in the decision, McGee said.

"We're hot on the trail of that," he said, "but until that happens, we just need to mind our p's and q's. This was the best way to do that."

Residents voted in June by an 82-percent margin to allow the city to float the bond, which was callable in 2007. The city was also able to get a low interest rate of 4.35 percent in the restructuring, which will also save Cedar Hills money, the mayor said.

The property tax increase will go into effect on homeowners' November 2006 tax bills.

"I don't want higher property taxes, but the bottom line is we believe in paying our debts," McGee said. "This was a debt we took on, and we have the obligation to pay it. We decided this was the best way to do it, and we saved a boatload of money (in interest), too.

"We felt like we won all the way around. We saved our reputation, and we maintained the reputation of the state of Utah, which is known throughout the bond community around the nation as the state that has never defaulted on any debt."

It also gives the city time to figure out what to do with the golf course.

"If we were under the gun and had to get this thing resolved by 2007, we would have at some point been forced to do whatever was offered," McGee said. "We could have lost our shirts on something like that, and it just didn't make economic sense. It certainly wasn't the best thing to do for the people of the city."