Another shot fired in public-private golf battle

Last month, the Carson City Board of Supervisors heard complaints from the owners of two private golf courses about the city subsidizing the operator of the city-owned Eagle Valley Golf courses by forgiving its $200,000 lease payment.

One issue brought up at the time was that the city needs the Eagle Valley courses to help dispose of effluent water from its sewage treatment plant. If Eagle Valley was not operating, then the city would be forced to spend more money to build more storage for the water.

I noted at the time that this admission could affect the the two private golf courses, since they currently buy effluent from the city.

I talked with Empire Ranch owner Dwight Millard last week, and mentioned that maybe the city should just give him that effluent for free, since they made the case that it will cost them if they have to store it. He countered that he wanted the city to now pay him to dispose of it. I thought that was a pretty bold position.

Millard followed this up today with a letter to the board, outlining a plan for the city to pay all the golf courses to dispose of the effluent. In it, he shows how the payments would help bail out Eagle Valley so the operator could again start making lease payments, while evening out the playing field for the private courses.

Here is the letter:

March 23, 2011

Mayor, Bob Crowell and Members of the
Carson City Board of Supervisors

RE: Eagle Valley Golf Course

I appreciated the opportunity to address the Board of Supervisors at your recent meeting under the agenda item of Eagle Valley Golf Course Status Report. I appreciate and understand the reason and meaning of the report that was presented, but would still like to address issues as they apply to the Eagle Valley Golf Course.

It is extremely important that the Eagle Valley Municipal Golf Corporation meet its obligations to Carson City under the terms and conditions of the lease agreement.

The annual bond payment by the city for the course construction is approximately $200,000 per year and that amount should be tendered by the corporation each year. The forgiveness of the annual lease payment allows the corporation to take advantage of a $ 200,000 advantage over area private courses.

The lease payment is dedicated to the reduction in the Bond issued to build the golf course. Recall that Eagle Valley:
· Pays no property tax
· Pays no sales tax on major purchases (purchases through City)
· Trades free play for services
· Offers free golf to many individuals associated with the course.
· Has all maintenance for the entire property, including irrigation, covered by the landlord.
· Has the landlord sign guarantees or surety for major long term purchases or leases.

The validity of an IRS 503 (C)3, non-profit could be questioned if there are profits and advantages, and the benefits are not necessarily those of a non-profit but rather an atmosphere of commerce competiveness with City General Fund subsidies.

As a method to assist the corporation in raising the revenue to meet their annual lease payment obligation, I presented the concept that the wastewater treatment facility pay the three existing Carson City golf courses an annual fee to accept and to dispose of the effluent.

To advance this concept several things must be done.
· First, a presentation of the history and facts on the current effluent disposal method and requirements should be presented to the current Board to fully understand the obligation and responsibility of the City in disposing of the effluent.
· Second, an analysis of the property currently being used for disposal and the effects of one of those properties being removed from the matrix should be done. The analysis of how much property is required to properly dispose of all of the effluent in this basin.
· Third, a simple review of the wastewater budget and the effects of paying for proper disposal of the effluent. I don’t believe these payments would substantially affect the wastewater budget.
· Fourth, consideration should be given to the effect of what would happen if the reservoir was sealed and did not leak into the Carson River.

The Payment to Eagle Valley for disposal helps preserve the integrity of the Eagle Valley Golf Course by allowing them to meet their obligations. This concept is accepted above the idea of changing Eagle Valley into ball fields or requesting bids for the operation of the municipal course by management companies, which are other alternatives.

I trust the Board will consider my “pay for disposal” plan and at least move forward immediately with the review and analysis that I have suggested to verify the validity of my plan.

Making the business playing field fair and competitive between commercial businesses where one business has a huge municipal investment and involvement is a direct responsibility of the Board of Supervisors to insure continued private investment into businesses in this community.

Best Regards,

Dwight C. Millard
Empire Ranch Golf Course

Mark Turner, vice president of Silver Oak Development Company, also sent a letter (attached below) detailing his concerns about how the operations at Eagle Valley affect the private courses and give the city-owned facility an unfair advantage. He states that an audit of the golf course operator is needed to figure out where the money is going to.