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Wednesday, April 20,2011

Is Groesbeck really losing money?

by Tim Knowlton

Guest columnist Tim Knowlton is a Lansing resident and a semi-retired attorney.


I have been skeptical about Mayor Virg Bernero’s claims concerning the financial consequences to Lansing, arising from its operation of golf courses — and now a single golf course, Groesbeck.


Bernero used the continued operation of the golf courses as an issue in his mayoral reelection campaign against City Councilwoman Carol Wood. More recently, he and Parks Director Murdock Jemersen have claimed that the city’s general revenues support Groesbeck to the tune of $400,000 to $500,000 a year.


With the upcoming millage election, I wanted to ascertain if Groesbeck is indeed losing money and if so, to what extent. Thus, on March 4, I made a FOIA request for, among others, documents showing revenues and expenditures for Groesbeck and any indirect expenses the city allocates to Groesbeck’s operations.


On March 28, I received certain documents in response to my FOIA request that were wholly inadequate to assess the impact of Groesbeck’s operations on the city’s finances. No documents concerning the direct costs of operating Groesbeck were provided. I was given documents showing that from 2008 through 2010, Groesbeck enjoyed revenues of approximately $400,000 a year. I also was provided with a report allocating certain costs of other departments to the combined golf accounts — Groesbeck and Sycamore — totaling some $170,000 in fiscal year 2009. The single largest item in this allocation was some $106,000 for “parks administration,” which apparently represents a percentage of salaries/wages for parks management to oversee Groesbeck and Sycamore. While such allocation is permitted under accounting principles, I strongly disagree that these allocated expenses tell anything about whether Groesbeck is really losing money. For instance, if Groesbeck closes, almost certainly this $106,000 in “parks administration” expenses will continue to be incurred by the city. And this seems to be true of all other allocated expenses.


After complaining to City Attorney Brig Smith about the inadequate FOIA response, he met with me and provided me with a document entitled “Fiscal Year 2009/2010 Budget as Adopted by City Council,” which included a balance sheet obviously responsive to my original FOIA request entitled “Municipal Golf Courses Enterprise Fund.” Under “Expenditures,” this balance sheet listed some $403,000 as “Administration” and another $407,00 for “Groesbeck Golf Course,” specifically. Smith could not explain what was included in either line item. Another document shows that some $1.1 million of the budget appropriation for the Parks and Recreation Department went to the golf enterprise fund, including salary/wages of $482,000, an “Operating” appropriation of $515,000, and an appropriation of some $110,000 for “Debt Service.” Smith could not explain what was covered by the “Operating” and “Debt Service” line items.


Because he could not explain what he had given to me, Smith arranged for me to speak to Finance Director Jerry Ambrose. I spoke to Ambrose on April 12. He too could not tell me what expenses were being paid out of the $515,000 supposedly going from the appropriation to Parks and Recreation Department to the golf enterprise fund, except that it would include the indirect costs that were allocated to golf. Ambrose acknowledged that the full allocated costs to the golf fund would not be saved even if both Groesbeck and Sycamore were closed, although he opined that some of these costs would be saved. Nor was Ambrose sure what the appropriation for “Debt Service” represented, but said it could relate to the storm sewer separation project.


Per his suggestion, I e-mailed Ambrose the documents I had questions about seeking a follow-up response. As of this writing, no response has been received.


Based on the documents received, no more than $482,000 represents the actual costs of personnel assigned to Groesbeck and Sycamore. Since I have never received any documents showing who works at Groesbeck or salary and fringe information, I cannot determine if these figures are real or how much of this personnel expense relates to Groesbeck versus Sycamore. Nor can I tell if these figures include the entire cost of annual salaries and fringes for year-round city employees who only work part of the year at Groesbeck.


I don’t know if Groesbeck actually loses money, but if it does, I don’t believe it is close to the $400,000 to $500,000 claimed by the Bernero administration. Nor can I tell whether general fund revenues subsidize Groesbeck’s operations. If they do, however, this is unnecessary, because any shortage in revenues needed to meet Groesbeck’s expenditures could easily be met by a transfer from the parks millage fund. Ambrose confirmed that funds obtained through the parks millage were not characterized as “general fund revenue.”


I no longer play golf, but I voted for the special park millage in part to ensure that Groesbeck was not closed.  Apparently, however, unlike other parks, if a city golf course isn’t self-sufficient — and Groesbeck may or may not be — Bernero believes it should be closed down. But no other municipal park, except Sycamore, is held to this standard. My conclusion is that the on-going issue over Lansing’s golf operations has virtually nothing to do with the city budget and everything to do with what the mayor sees as an issue useful to his political career.

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