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City gives OK to golf course budget

CARLSBAD — The Carlsbad City Council approved the 2010 budget for the city’s public golf course, The Crossings at Carlsbad. Prepared by the course’s operator, Kemper Sports Management, Inc., the budget reflects a reduction in golf revenue due to the ongoing recession while showing the restaurant and banquet parts of the operation continue to do well.
“If you don’t count the cost of the debt service and the habitat restoration efforts, the course is just about breaking even, which is pretty remarkable in today’s economy,” said Lisa Irvine, the city’s finance director. “We have always known the course would need city support in the early years, and the timing of the recession means it’s going to take a little longer than we planned for it to become self-sustaining.”
The Crossings at Carlsbad opened to the public in August 2007. Kemper Sports Management estimates that in 2010, The Crossings will generate operating revenues of approximately $6 million, which is a 5 percent increase over the 2009 revised projections. Revenues come primarily from golf play fees and food and beverage sales.
The operating expenses, which include food and beverage service, debt service, and funds set aside for future capital needs, are estimated at $7.1 million, approximately 0.8 percent more than the 2009 projections. The annual operating loss is expected to be approximately $1,181,000.
In addition to the operating expenses, habitat maintenance and monitoring costs are estimated at approximately $441,453. The golf course’s development permits require the restoration and maintenance of large areas of habitat for five years or as long as it takes the habitat to become established. Habitat costs are higher in the initial years and will decline as the coastal sage scrub and other native plants and animals are better established. Once established and accepted, the habitat created is anticipated to require no irrigation and a minimal level of monitoring and maintenance.
Capital projects, which include adding fencing, stairs and trenches for drainage, as well as supplies for the banquet and catering operations, are estimated to cost $138,000 in 2010.
Including all costs, the city will need to provide approximately $1,760,839 to the golf course in 2010. The city of Carlsbad planned for this expense in its financial forecast and annual budget, so it will not require any changes to city operations or services.
In addition to presenting its estimated 2010 budget, KSM may revise its 2009 budget. The original subsidy projected for The Crossings for 2009 was $1,792,178. Due to the economy and increase in water and sewer rates, the revised projected subsidy for 2009 could be up to $1,936,000 or an increase of approximately $150,000. The actual amount needed will be finalized once the books are closed at the end of the calendar year.
“The city’s investment in The Crossings will pay off in the coming years as the course becomes financially self-sustaining and the habitat and open space become established,” Irvine said. “These community resources support the active, outdoor lifestyle and open space that are so important to our quality of life.”