Indian Spring Country Club has proved a difficult thorn to remove from the sides of Evesham officials and residents.
In the latest move to ease the crushing $900,000 in debt service on the municipally owned course, the Township Council this week gave preliminary approval to spreading the debt over 20 years instead of the current 17. It also approved a resolution to seek bids from private management companies to operate the debt-ridden course.
The restructuring plan is scheduled for a public hearing July 20. It first requires approval by the township's finance board.
The plan would reduce the annual debt service to a little more than $350,000 in 2005 - the first year it could be in effect - and require reduced payments for an additional five years. But the payments would jump back up to more than $800,000 in 2011 and exceed $1 million for five years midway in the life of the loan. The restructuring would cost about $2.5 million more than the original loan.
In the mid-1990s, Indian Spring pumped $2.6 million in surplus money into township coffers - allowing officials to hold the line on tax increases. But it fell into the financial rough when capital projects in the late 1990s, including a $4.4 million clubhouse, increased debt service from $79,896 in 1995 to $936,957 in 2003.
Construction to improve the course disrupted golfers, and the number of rounds played plummeted from 54,993 in 2000 to 36,634 last year.
With the projects finished, Indian Spring has bounced back well this year, with the number of rounds up by 3,800 over a year ago.
Restructuring the debt "hopefully will give us time to get the number of rounds back up," Township Manager Edward Sasdelli said. "If we can get the number of rounds to 50,000, and if the driving range is doing well, and the food and beverage is doing well, it's my hope the surplus being generated by the golf course will be enough to cover the debt service. By doing this, the taxpayer won't bear the burden; the golf utility will bear the burden" of paying its debt.
Any surplus revenue from a rejuvenated golf course will have to be put aside for future debt service and will not be available to prevent tax increases.
Some of those taxpayers Sasdelli is trying to protect are not so sure they won't be burdened with bailing out the golf course at some point.
"Eventually, it's going to hit the taxpayers," said Donna Giamoni, a longtime resident of the Marlton Lakes section. "Everyone thinks that."
She said taxes were a great concern to residents.
"With all the defeated school budgets, a lot of people are taking a closer look at taxes these days," she said. "I know of three families in my neighborhood who have put their homes up for sale and are moving to Florida. And the reason is taxes."
The tax alarm already has sounded once. Sasdelli in November proposed a 3.5-cent increase in the tax rate just to cover the golf course's debt service. The council balked, and other revenue sources were found: $450,000 from canceled bond ordinances, $150,000 from job cuts, and a prepayment between $225,000 and $250,000 on a lease extension from the independent Municipal Utilities Authority.
Joseph Marra, who has lived in Evesham for 18 years, said the plan "passes the debt to a future council and taxpayers... . Even if they generate more money from the MUA, it's still taking from Peter to pay Paul. Either way, the taxpayers are stuck with the bill."
The resolution council approved gives private golf-course management companies three options: to bid to run only the 18-hole course and its driving range; to bid to operate just the food and beverage service for the clubhouse banquet hall and restaurant, now handled by an independent caterer; or to bid for entire operation.
But turning the golf course over to private management won't change the amount of debt service.
"The bottom line is, we're stuck with it," Marra said.
Source: Philadelphia Inquirer
