Aztec City Commission will discuss golf course

Options include an operations contract, continuing operations, ending the lease, increasing taxes or buying the course

Hannah Grover
hgrover@daily-times.com

FARMINGTON — The Aztec City Commission will discuss the future of the municipal golf course during a special meeting at 5:30 p.m. Monday.

Members of the Aztec City Commission will discuss what to do with the town's financially troubled municipal golf course during a meeting on Monday.

Commissioners first discussed the financially troubled golf course during a Nov. 14 meeting, but they said they did not have enough information to make a decision about the facility's future. Commissioners instructed City Manager Joshua Ray to present them with various options and information about how each option would impact the city financially.

In response, Ray prepared five options and emailed them to commissioners. Commissioner Katee McClure forwarded the email to The Daily Times. She said she will have a lot of questions for staff members about each of the five options.

The first option, which was presented to the commission on Nov. 14, involves contracting with Ruby’s in the Valley — a locally owned restaurant located at the golf course — for operation of the entire golf course. Currently, Ruby’s in the Valley operates the snack bar and clubhouse at the course.

If Aztec contracted with Ruby’s in the Valley, the city would continue paying the leases for the property and the Yamaha carts. It will also pay for the annual liquor license, but Ruby’s in the Valley will reimburse the city for the cost of the license. In 2016, the license cost $1,300, according to the email.

The city will pay ballooning annual lease payments for the property, starting at $10,000 and increasing to $30,000 by the fifth year. The city currently is leasing the property for $24,000 a year. The new lease agreement the city is considering would decrease the annual rent for the first few years but would increase it for the last two years of the five-year lease. The city estimates the expenses for the first year of the new lease agreement in 2017 would be about $21,500 and would increase to $41,500 over the course of the agreement because of the lease payments.

Ruby’s in the Valley has proposed to credit the city with 25 percent of the daily cart fees, or an estimated $12,500 in revenue a year, according to the email Ray sent commissioners. The city is also looking at annexing the course, which would result in a $4,900 increase in revenue from property tax and an estimated $6,470 increase in revenue from gross receipts taxes, according to the email.

Rod Wimsatt tees off Nov. 3, 2015, at the municipal golf course in Aztec.

The second option presented to commissioners would be for the city not to renew its lease when the current agreement expires on Feb. 16, 2017. The city would spend about $42,000 leading up to the end of the lease agreement, according to the email. That $42,000 in expenses would include $5,760 for carts, $6,000 for the facility lease, $6,666 to Ruby’s in the Valley, $17,500 to pay employees, $6,000 for utilities and $2,700 for water rights.

After the lease expires, the city also would have to decide how to handle club memberships that are paid beyond February and could have to pay unemployment claims for golf course employees who would be laid off. Under the terms of its contract with Yamaha, the city also would be required to pay nearly $128,000 for early termination of its lease of the golf carts. According to the email, ending operations of the course would cost the city nearly $148,000.

The third option is for the city to continue operating the course as it currently is. According to the email, that option would cost the city approximately $80,000 per year. However, the email states that estimate is conservative, and the city may need to buy new equipment within the next two years to maintain the course. That equipment could cost approximately $75,000.

The fourth option for the course could come into play if commissioners choose either the first plan or the third plan and allow residents to vote on a potential tax increase that would be used for recreation. A 1 percent gross receipts tax increase could generate about $88,880 a year, according to the email. That tax would be earmarked for recreational uses within the city, such as the golf course.

The final option calls for the city to purchase the course, its facilities and its equipment. The cost of purchasing the course would depend on the appraised value, which could be about $1.25 million, according to the email.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.