Yorba Linda's Black Gold Golf Course, Phillip Paxton Equestrian Center: the financial facts

Interesting financial facts for two of Yorba Linda's municipal facilities – the city-owned Black Gold Golf Club and the city-leased Phillip S. Paxton Equestrian Center – merit attention this week.

First, the 219-acre golf and restaurant facility reported a positive net income of $547,000 on revenues of $6.2 million. After spending $157,000 for improvements, the final net income for the fiscal year ending June 30 was $390,000, above the $294,000 that was anticipated.

However, the city's financial statements “are prepared on a full accrual basis of accounting,” which include non-cash adjustments, according to a recent report to City Council members from Parks and Recreation Director Mike Kudron.

So the books show “net income was negative $658,544,” after factoring in $753,536 for depreciation and other amounts for accrued interest on outstanding construction loans, new assets capitalization and the principal paid on the outstanding loan for purchasing golf carts.

“The primary reason for the negative net income is related to depreciation; however, this does not reflect the true value of the golf course property, including the clubhouse,” Kudron noted in his report.

Longtime residents who followed civic affairs in the late 1990s might remember pollyannaish predictions from some then-serving council members that Black Gold would return $1 million yearly to the city treasury, replacing fading income from development fees in the built-out city.

The club's revenue breakdown for the fiscal year: total income was 103% of the prior year, with green fees at 97% (due to a “very wet winter/spring”), golf shop at 109% and food and beverage sales at 114%. Rounds played declined by 1,118 from last year.

The average rate paid per player was $48.60, a drop of 69 cents. Kudron noted, “When weather presents challenges, lower rates are offered to attract additional business. This results in higher rounds played, but a lower green fee average.”

Second, it's back to the drawing boards for improvements to the 5.5-acre equestrian center on Buena Vista Avenue. The council rejected all eight bids received to expand a horse arena; add a vehicle ramp; modify hardscape, landscape and irrigation; and remove paving and landscape.

Low bid for the project was $398,000 from Micon Construction of Placentia, much higher than the estimated $246,000, leaving $152,000 unfunded. The city's Equestrian Committee recom- mended using $75,000 in equestrian funds and finding $77,000 elsewhere.

Another option presented by the committee was to complete the project in phases and change the scope of the project to fit the allotted budget, a recommendation adopted by the council, as the panel on a unanimous vote directed staff to modify the project.

The rent-free lease with the county, which must approve any changes to the center, runs to 2038. The primary purpose of the property is flood control, according to the lease.