Pat and Myrna Cowan, the entire golfing community including over 200 individuals who either delivered written support or personally attended two council meetings, several charity organizations and non-profits are very disappointed and shocked that the Soldotna City Council voted down (4-2) the opportunity for the city manager to negotiate with the Cowans to attempt to find a solution including funding sources to purchase Birch Ridge Golf Course land (92 acres) and then lease it to an operator who would own the buildings and equipment to run the golf course, thereby eliminating the responsibility and liability for the operation of the golf course.
The day before the meeting the City Manager sent a document to the members of the council entitled “A Risk Based Analysis of General Fund Reserve Requirements for the City of Soldotna” conducted by the Government Finance Officers Association. This document is 18 pages long and we are sure that some of the council members didn’t have time to read it prior to the meeting. (The two council members that voted in favor did read it.) He then used this document to insinuate that the council didn’t have sufficient funds in its reserves to make the purchase, when in fact the city has too much in its reserves, so much, that it could be argued that excessive reserves should be returned to its citizens (page 2 of the analysis).
He went on to say that sales tax is volatile; again, wrong. According to page 7 and 8 of the analysis, the sales tax in Soldotna is not very volatile and has been very stable from 2008 to 2013.
It’s also strange that the city manager, who suggested the land purchase and lease back agreement was in support when first introduced, is now not supportive. Why? Does he believe that a fund balance reserve of 80 percent is really necessary, when a 60-65 percent fund balance would actually be above that suggested by the GFOA analysis, or are there political reasons that we don’t understand?
A couple of the council members talked about whether the citizens who live in Soldotna would actually be in favor of the purchase. Let’s set the record straight, the City of Soldotna does not receive its sales tax revenue from just the citizens who live within the city limits of Soldotna, as a matter of fact, it would have a very hard time managing the city affairs if they only collected sales tax from 4,100 people. Sales tax revenues comprise over 90 percent of the city’s general revenues (page 7 of GFOA analysis). They know that, and that’s why prior councils have supported libraries, sports arenas, parks, trails, etc. that serve the greater Soldotna community, including Ridgeway, K-Beach, Sterling, Kasilof, Funny River, and all others who shop in Soldotna and call Soldotna home. It is a fact that those 4,100 folks elected the present council, but they did so because they thought the council would represent the greater Soldotna area. That sales tax allows Soldotna citizens to maintain quite low real estate tax rates.
Also it appears that the City Council chose to ignore the economic benefit that Birch Ridge Golf Course supplies the City. 10,000 rounds per year, and after a game of golf many folks stay in town to have dinner, a couple of beverages, shop, buy gas, etc. Also out of the 10,000 rounds, 3,500 of them are from out of town. Those folks play golf, stay in our hotel/motels, and shop in our community. Economic studies suggest those folks spend $150 a day in our community and the GFOA analysis indicates the “multiplier effect” (page 3) is 2.0. That means $300 spread around our community as a result of these travelers. 3,500 multiplied by $300 = $1,050,000. Six percent sales tax on that total is $63,000, divided by 2 (3 percent borough, 3 percent city) is $31,500 in lost sales tax to the city in addition to the loss to businesses, as that business will probably go to Kenai.
There appears to also be some misconceptions regarding the purchase and lease agreement. The Lessee Birch Ridge Golf Course Inc., would still own the buildings and equipment and would operate the golf course. Then Birch Ridge Golf Course Inc. could sell the buildings and the equipment to a person of our choice. Right now, our choice to run the business is Nolan Rose, et al; however, if Nolan was no longer interested we have been approached by other golf pros. Our interest in Nolan is after observing him since he was 7 years old and recently for the last five years where he has been our employee and general manager.
The mayor said that they’ve received unanimous emails in favor; because of that we would hope that the city manager was sincere when he said he was willing to work with us to try to find a solution out there that we haven’t looked at. We will explore that possibility next week with our broker and the city manager.
We urge every resident who lives in the City of Soldotna to request, read and study the GFOA analysis.
Finally, we would like to thank all of you that sent emails or attended one or both of the City Council Meetings. We would also like to thank the Mayor, Linda Murphy and Pete Sprague who did do their due diligence, read the analysis and supported the resolution.
We would also like to thank the other council members who voted no, Keith Baxter, Regina Daniels, Megan Bos and Paul Whitney. Perhaps, after reflection and reading the analysis you might reconsider your position.
Pat and Myrna Cowan are 100 percent stockholders of Birch Ridge Golf Course Inc.
