Faced with its 11th straight year of a budget shortfall, the city of San Jose is considering selling off and/or converting land used by public golf courses to prevent further cuts to libraries and community centers come next summer. Mayor Chuck Reed and other city officials will be holding the first of several community meetings at 6pm Wednesday at the Mayfair Community Center.
While San Jose Municipal is self-sufficient and has no debt to pay off, Los Lagos and Rancho del Pueblo golf courses could be placed on the chopping block due to negative revenue returns to the city and an inability to pay off millions in bonded debt.
According to numbers provided by the mayor’s office, Los Lagos lost $15,480 last year and has $21.2 million in outstanding bonds it will likely never be able to reduce. Rancho del Pueblo reported a loss of $279,965 in 2010-11 and has $5.6 million in bond payments.
Debt service payments made by the city last year for the two courses, respectively, was $1,465,051 and $452,699. The mayor’s office says the $1.9 million in debt service payments could be reallocated to other areas of need. They include:
• At four days/week of operation, the costs for a small, medium, and large branch library are $546,000, $732,000, and $905,000 respectively. Branch libraries serve more than 700 unattended children per day (kids using libraries without a parent or other adult).
• Costs for a community center start at $600,000 per year.
• Costs for a fire station are about $2 million per year.
While some are in favor of selling the courses, Rancho del Pueblo’s Golf Operations Manager, Colleen Henry, says paying off the bond money for the two courses was never an expectation when they were built.
“Going into it, they never anticipated the revenue from the golf course would pay the bond on the land, and the same with Los Lagos,” she said.
“It’s a tough budget call. I don’t begrudge the mayor. They have some tough numbers to crunch.”
Councilmember Xavier Campos, whose district includes Ranch del Pueblo, has said he will fight to keep the course open. He says replacing it with housing development in the area would only increase pollution and traffic congestion.
The course also provides needed recreational activities to a community with few options, Henry said. A study done by the course found that 35 percent of golfers came from within the course’s zip code or adjacent zip codes. And roughly 85 percent of golfers were found to live in San Jose, Henry said.
Also, with cheaper green fees at $10, kids who are just beginning to play the game as well as senior citizens on fixed incomes take advantage of Rancho del Pueblo , which is a shorter, 9-hole course.
“From a customer point of view, the demographics come from all age groups,” Henry said. “They don’t have a lot of access ot golf or other recreational activites in their neighborhood.”
Similar to the city’s pension crisis, which became a problem after the dot-com bust and the recent recession, the city seems to have been overly optimistic in past decisions.
“Now that times are tight the landscape has changed,” Henry said.