Golf Course Financials

You probably know that the golf course financials were a hot topic during the last campaign. Different people have interpreted the financials in different ways, leaving many wondering what the truth is. Shortly after the election the Mayor and former Council called a special meeting (November 22, 2011) to discuss with the City Manager some of the questions and claims that had come up during the campaign. This meeting was very informative and if you have time to listen to the audio then I highly recommend it. At the end of the meeting the Mayor announced his plan to form a Golf Finance Advisory Committee with the purpose of going through the financials and creating a document that would provide clear answers for residents. The audited financial statements are on the city's website and available to all, but I believe this committee will be very helpful in providing insight and information in a more clear and concise format.

One question that came up often during the campaign and continues to come up is how much money has been invested in the golf course via taxpayer funds. At the November 22nd meeting, Konrad went through the most recent Statement of Cash Flows and provided an answer to this question. These are my notes from that meeting. I will be going down the column for the Golf Course Fund in the 2011 audit, which you can find on page 23 of this link http://www.cedarhills.org/pdfs/auditors_report_2011.pdf

The first cell shows cash received from customers, meaning money the golf course made through greens fees and other sales related to golfing. For 2011 it was $653,011. The next two cells show cash paid for golf course employees ($426,637) and golf course suppliers ($309,244). Subtracting these two expenses from the cash received from customers shows the net cash from operating activities (-$82,870 for 2011). This cell is where the term "operationally profitable" came into the picture last year when it was reported the golf course was operationally profitable. I'm not an accountant so am not going to get into the argument over whether or not that is an accurate statement, however, it should be noted that our auditors sign off on our financial documents every year and that this number just takes into account customer cash coming in minus expenses for employees and suppliers, nothing else.

The next section shows cash flow from noncapital financing activities. The first cell shows cash paid from other funds. This is any money that has been transferred into the Golf Course Fund from other funds. In 2011 that amount was $371,726, which came from impact fees and are being used for the building of the Community Recreation Center. The only other time cash came in from other funds was in 2004 when the Golf Course Fund was created and its assets and liabilities were transferred in from the Capital Projects Fund. The next cell shows any cash paid to other funds ($2,332 for 2011) and the next shows property tax revenue ($398,591) that is used to pay off the bond. The next cell totals up these three amounts and is the net cash from noncapital financing activities ($767,985 for 2011). In most of the years past the only amount in this section is the property tax revenue collected to pay the bond. The increase for 2011 shows the impact fee money coming into this fund to be used for the recreation center.

The next section shows cash flows from capital and related financing activities. The first cell shows an amount of -$215,025, which includes money spent on maintenance equipment ($25,820) and on building the Community Recreation Center ($189,205). The next cell shows a total of $27,950 which is money the City made after selling the Sunset Room ($2,000) and after selling old golf carts ($25,950). The next cell, proceeds from the issuance of debt, would have an amount if we had gone into any new debt for the year, but is zero for 2011 as we did not. The next two cells show the amount of money we paid on past debts, $256,803 in principal payments and $267,758 in interest payments. The final cell in this section shows the net cash from capital financing activities, which for 2011 is -$711,636. This amount reflects the money we paid for our debts, the recreation center, and money we made after selling assets.

The next section shows cash flows from investing activities, which we did not have for this fund.

The final section shows the net increase or decrease in cash for the year (-$26,521 for 2011), the cash at the beginning of the year (-$1,674,450) and the cash at the end of the year (-$1,700,971).

Going back to the original question, the investment being made to the golf course each year from tax dollars is the amount collected in property tax revenue as well as the cash shortfall for each year. The City has considered the cash shortall a loan that will be repaid at a later date once the golf course is profitable overall. My personal belief is that this amount should be considered a subsidy until and if that loan is repaid, but the rest of the Council may disagree with me. In any case, whether we consider it a loan or a subsidy, the amount of tax dollars that have gone to the golf course each year (both for the bond and cash shortfalls) is as follows:

**The large shortfall in 2008 was due to money spent to reconfigure the golf course in order to create 29 new residential lots owned by the City. The City still owns these lots and when they are sold the proceeds will go back into the fund to help pay down the bond.

After going through all of this I still feel our best option is to continue to operate the golf course to the best of our ability until we can sell it at a fair price. We will have to pay the bond no matter what and making significant changes to the course to turn it into something else could be even costlier. Our hope is that the new recreation center will increase revenues from customers as we will now have a nice facility that can be used for golf tournaments as well as other events in addition to recreation classes and activities. I'm excited for this new facility and hope we all work together as a community to make it a success.

This is a very high level overview of one aspect of the Golf Course Fund. If you have more in depth questions you are always welcome to reach out to our City Manager, Konrad Hildebrandt; our Finance Director, Rebecca Tehero; the Mayor or any member of the Council. As I mentioned earlier, the Golf Finance Advisory Committee will go over all of the numbers in depth and provide a more detailed analysis. In the meantime I hope this information is helpful.

Questions? Feel free to email me at jrees@cedarhills.org or call me at 801-358-8730.

Work Session with Pleasant Grove on January 24, 2012

The City Council of the City of Cedar Hills will hold a Joint Work Session with the City Council of Pleasant Grove City on Tuesday, January 24, at 6:00 p.m., at the Pleasant Grove City Council Chambers, 86 East 100 South, Pleasant Grove, Utah. The following items will be discussed: 1) 4000 North Sewer Line; 2) Public Safety Issues; 3) Other Business. The public is invited to attend.

January 17, 2012 Coucil Meeting

Work Session
First Lt Mark Buffington from the U.S. Army came to discuss the Community Covenant Program, which was started by the Army in 2008 and is designed to work with communities to find ways to support service members and their families. A city can create a document that commits to supporting these service members and their families while the service member is deployed to a hostile fire area. The covenant is a non-legal and non-binding agreement, but allows citizens within a community to find ways to help our service men and women. I requested this assignment and the Mayor approved it, so I will be working with First Lt Buffington to create our covenant and set up a signing ceremony. We will provide more information as this is developed, but I think it is a wonderful way for the residents of Cedar Hills to show our support to those residents within our community who are serving our country.

Public Comment
Ken Cromar again discussed the November article written by the Daily Herald discussing the golf course financials and also discussed a November 8th editorial also published by the Daily Herald. He would like an explanation of the golf course financials to be provided to the residents. He feels the city needs to correct the record after stating in the September 2011 newsletter that the golf course is operationally profitable. He wants to know how much money the taxpayers have put into the golf course.
   **Mayor Richardson is going to provide Mr. Cromar with the portion of the audited financials that give this information. Additionally, on November 22, 2011 a special meeting was called to discuss the golf course financials. I found this very informative and recommend listening to the audio file, which can be found at http://www.cedarhills.org/government/city_council/minutes/index.shtml. I will also put together a summary of my notes from that meeting and post to this blog within the next few days.

Review/Action on Amendment Regarding Apiaries (Bee Keeping)
Ryan Wood and Roman Frasier, who are both beekeepers, have been working with the Zoning Administrator to develop regulations for hobby bee keeping within Cedar Hills. The ordinance did pass with the following changes to be made to the ordinance:

1. The term "hives" will be changed to "colony"
2. A colony will be defined as one stack which consists of one hive body with any number of honey collecting supers
3. Lots may have 2 colonies per 5000 square feet (Section 1A)
4. Neighbor permission can be revocable (Section 1D)

Any resident who has questions or concerns with this ordinance may contact Brad Kearl (Zoning Administrator) as he has all of the information on this.

Review/Action on Amendment Regarding Solid Waste and Recycling
This was brought forth just to change the ordinance so that the language used is consistent with the language used in our contract with Waste Management Services. The ordinance passed with one change: the term "solid waste" will be changed to Municipal Solid Waste (MSW) to match the wording in the contract.

Review/Action on Contract for Park Maintenance
The city currently has a contract with Wilkinson Outdoor Maintenance to provide services such as mowing, trimming, weeding flower beds, and fertilizing. The contract expired December 31, 2011 but can be extended for two three-year terms. The city did go through the bid process in 2008 and Wilkinson came in the lowest. The city has been very happy with this company as they are willing to fix a variety of things at no extra charge and the quality has always been very good. The contract is based on acreage and is approximately $105,000 per year. The council approved the extension of this contract.

Review/Action on Intent to Annex Property
Rhinehart Land Company, owners of the property located at approximately 10018 N. 4800 W., and Hart's have come to an agreement for Hart's to purchase that property to build a gas station and convenience store. As such, Rhinehart has agreed to have their property annexed into Cedar Hills. The process is as follows:

1. The Council adopts a resolution of intent to annex this property
2. The city must publish a notice stating the intent to annex
3. A public hearing is held no earlier than 30 days after the adoption of the resolution
4. At the conclusion of the hearing the Council may adopt an ordinance approving the annexation
5. A notice of impending boundary action is sent to the Lt. Governor's office who issues a certificate of annexation
6. All documents are recorded at the Utah County Recorder's office

The Council passed the resolution indicating the intent to annex this property. We are very excited to move forward building our commercial area.

Review/Action on Board and Committee Appointments
The Mayor recommended the appointment of Randy Gehring to a five-year term on the Board of Adjustment. The Council approved this recommendation.

Review/Action on City Council Assignments
The Mayor recommended Councilmembers Gygi and Augustus work with the Golf Finance Advisory Committee, and that Councilmember Rees work on the Community Covenant program. These recommendations were approved by the Council.

City Manager Report and Discussion
Marisa Wright was asked to provide other alternatives to the decoration of the Community Recreation Center. She provided four options.

• Option A: Using resident Natalie Scott to decorate with trees on the walls. Her work can be seen on her website at http://perfectspacedesigns.wordpress.com/. Price range would be $11,800 to $17,300.
• Option B: Using Critical Laser to do work similar to the work they've done down by Chase Bank. Working with metal circles with the city name and logo. Price would be $1500 per circle.
• Option C: Contracting with artists to do original oils. Marisa would choose pieces that emphasize our area and landscaping. Price ranges anywhere from $4,000 to $100,000, depending on the artist.
• Option D: Purchase stock art. Price varies depending on the piece.

The Mayor has told Marisa she can move forward as she chooses.

The meeting was adjourned and the Council moved to executive session to discuss litigation matters.

If you have any questions please feel free to contact me at jenneyrees@gmail.com or via phone at 801-358-8730. You can listen to the audio of this meeting by visiting www.cedarhills.org. These files are generally available one week after the meeting.

Council Meeting Scheduled for January 17, 2012

There will be a work session on January 17th at 6:00pm followed by council meeting at 7:00pm. During the work session we will be discussing a Community Covenant Program. This was created by the U.S. Army and encourages cities to formally commit to supporting service members and their families in a variety of ways.

The agenda for city council meeting is as follows:

• Public comment
• Review/Action on amendment to the city code regarding apiaries (bee keeping)
• Review/Action on amendments to the city code regarding the solid waste and recycling programs
• Review/Action on the existing contract for park maintenance
• Review/Action on Resolution of Intent to annex property located at approximately 10018 North and 4800 West
• This has been purchased by Hart's with the intent to build a gas station and convenience store on that parcel of land
• Review/Action on board and committee appointments still outstanding
• Review/Action on City Council assignments still outstanding
• City Manager report and discussion

Both meetings will be held in the conference room of the Public Safety Building and we encourage residents to attend.

News Articles

We've had some recent articles published about Cedar Hills in the Daily Herald.

For information on the approval of temporary businesses within Cedar Hills click here
For information on the YCC's sub for Santa program click here

January 3, 2012 Council Meeting

Public Comment
Ken Cromar spoke again on his concerns with the September issue of the city newsletter stating that the golf course was operationally profitable. He expressed concern over the golf course financials and referenced the Daily Herald article from November. He indicated he is waiting for updated information from the city.
   **Mayor Richardson has announced that he is forming a golf course finance committee which will be working on researching the financials and communicating with the council as well as residents.

Angela Johnson spoke on concerns she has with the City Manager's salary increase, severance, car allowance, lunch expenses, and extra vacation days. She does not want the city to build a City Hall or create a municipal court. She does not want a splash pad to be built as she has concerns over the health risks and the costs of maintenance. She does not want the city to use CARE tax funds for recreation center equipment as she feels those funds should be used for park improvements.
  **Mayor Richardson offered to meet with Angela in person to discuss her concerns.

Marisa Wright spoke about her concerns she has regarding the contention within our city and feels it comes from one source. She provided advice and insight to the new council and expressed her appreciation for the opportunity to serve on the council.

Jim Perry congratulated the new council and expressed appreciation for the opportunity to serve on the council for the past 8 years.

Consent Agenda
The minutes from the November 22, 2011 and December 6, 2011 were approved.

Review/Action - Temporary Vendors
The council approved the amendments to the city code that will allow for temporary vendors to do business within Cedar Hills (for things such as shaved ice stands, fireworks stands, Christmas tree lots, etc.) with the following changes to be made:

• Item #19 - Instead of dictating a specific number of off-street parking stalls the code will state that all off-street parking requirements will be based on the anticipated average daily traffic,
• Item #23 - Temporary businesses will need to remove all structures and materials within 7 days (instead of 14 days) but can be granted an extension to 14 days if needed,
• Item #24 - A fee schedule needs to be provided by the end of March and needs to include all fees that can be assessed for these temporary vendors.

Review/Action - Assisted Living Centers
The council approved the amendments to the city code that will allow for assisted living centers to operate within Cedar Hills, with the following changes to be made:

• Item #5 - Verbiage should state that "to exceed eight residents will require 150 square feet of personal room space per individual or 200 square feet per double occupancy",
• Item #13 - Facilities cannot be closer than 1/2 from any other assisted living facility.

One thing that was changed from the last meeting is that an impact fee may be assessed to any assisted living center. These impact fees will be based on monthly water usage. Any month that the center exceeds the standard water usage (which will be determined) will result in an impact fee. These fees will be added to the fee schedule, which will be presented before the end of March.

Board and Committee Appointments
The council approved the following appointments as requested by the Mayor:

• Donald Steele and Daniel Zappala will serve three-year terms on the Planning Commission.
• David Driggs will serve as the 1st Alternate on the Planning Commission and the 2nd Alternate will remain vacant for now.
• Darin Lowder will serve a four-year term on the Board of Adjustment. The second vacancy on the Board of Adjustment has not yet been filled.

Appointment of Mayor Pro Tempore
The council approved the appointment of Stephanie Martinez to serve as Mayor Pro Tempore for 2012.

City Council Assignments
After discussing the Mayor's recommendations the council approved the following assignments:

Stephanie Martinez:

• Recreation, Parks, and Trails Citizens Advisory Committee
• Recreational Programs
• Celebrations/Community Events
• Youth City Council

Jenney Rees:

• Library Issues
• Beautification Citizens Advisory Committee
• Board of Adjustment
• City Communications

Gary Gygi:

• North Utah County Solid Waste Special Services District
• Utah Valley Dispatch Special Service District
• Finance Committee
• ULCT Policy Council
• Golf Course Finance Committee (when created)

Trent Augustus:

• Traffic Safety and Livability Oversight Committee
• Planning Commission

Scott Jackman

• Lone Peak Public Safety District
• Finance Committee

City Manager Report and Discussion
The City Manager requested that Marisa Wright present to the council her plans for the interior decorating and finish work for the Community Recreation Center. Most of the items have been purchased (tables, chairs, etc.) and Marisa has been working with a local artist to design the interior. The council requested a time be set up to view some of the artist's existing work before committing to the project. A work session has been called for January 6, 2012 at 5pm. We will meet at the Public Safety building and then go on site to view a sample. The public is welcome to attend.

There was no executive session called.

Please join our online forum at www.aboutcedarhills.org to discuss any questions or concerns. Audio files of each council meeting can be found at www.cedarhills.org and are generally available one week after the meeting. Feel free to contact me via email at jenneyreeschcc or via phone at 801-358-8730.@gmail.com

Agenda for Jan 3, 2012 Council Meeting

There will be a work session at 6:00pm on Tuesday, January 3rd followed by council meeting at 7:00pm.  During the work session new Councilmembers Rees, Augustus, and Gygi will be sworn in and we would love to have residents attend. Items on the agenda for the council meeting are as follows:

1. Review/Action on the city code that will allow for temporary vendors, such as shaved ice shacks, fireworks stands, Christmas tree lots, etc. The Planning Commission has made changes requested by the council and is presenting the updated ordinance for review and/or approval. This would allow for temporary businesses to operate in Cedar Hills.
2. Review/Action on city code that will allow assisted living group homes within Cedar Hills. The Planning Commission has made changes requested by the council and is presenting the updated ordinance for review and/or approval.
3. Review/Action on board and committee appointments. The Planning Commission has four openings - two of them being for alternates to serve on the committee. Donald Steele and Gary Maxwell served terms that ended last month and alternates Daniel Zappala and Trent Augustus have served their terms.
4. Review/Action on appointment of Mayor Pro Tem. This appointment is made by the Mayor and allows a councilmember to perform the duties of the mayor during the Mayor's absence, disability, or refusal to act. Councilmember Stephanie Martinez is next in line to serve as Mayor Pro Tem.
5. Review/Action on City Council assignments. There are several assignments that need to be divided up amongst city council representatives. This will be discussed and the Mayor will make the appointments.

As always the meeting will start with a public comment period so if you have any questions or concerns to bring to the council this is a good opportunity to do so. Of course, you are always welcome to contact me via cell at 801-358-8730 or via email at jenneyreeschcc@gmail.com. Once I have my city email address setup I will provide that as well.