For the second year in a row, state auditors have criticized Sumner officials for failing to pay back more than $900,000 they shifted from other city funds to prop up the city’s struggling golf course.
A state audit released Monday used nearly identical language from the previous year’s audit as it dissected the web of internal loans the city made to the golf course fund starting in 1999. As of this fall, the golf course owed $506,473 to the storm drainage fund, $216,201 to the cemetery fund and $195,655 to the general fund, which pays for police, streets and most day-to-day services.
“The significant delay in repaying the interfund loan constitutes a permanent diversion of funds,” the audit concludes. “Permanent diversions from special funds violate state law.”
And those loans don’t scratch the surface of the $5.8 million in golf course bonds that Sumner is still on the hook to pay off by 2019 – money that also likely would have to come from the general fund. The 18-hole Sumner Meadows, which opened in the mid-1990s, historically has not generated enough in green fees or other revenue to cover its debt payments.
The city’s written response to the new audit is similar to that of a year ago, acknowledging that the golf course is a “constant drain” on the general fund and that paying back the internal loans is fraught with “ongoing obstacles.”
What’s different in the new audit is Sumner’s vow that it has a solution at hand: The City Council last month authorized the mayor to begin marketing the golf course property for sale.
The city owns about 280 acres on and around the course, about 172 acres of which could be developed. Selling most but not all of that raw land could yield $35 million, officials have said.
Sumner spokeswoman Carmen Palmer said Monday that a group including Mayor Dave Enslow and representatives from city departments started meeting two weeks ago. They aim to hire a broker and perform the “due diligence” necessary to prepare the site for market.
Palmer said the latest state audit brings no fresh sense of urgency to their task. The city has more practical reasons for not wanting to wait too long to liquidate its interest in Sumner Meadows.
“Next year’s budget was built figuring that we will sell it within the next year,” she said. “If that doesn’t happen, then we are looking at raising taxes or cutting services for 2014.”
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