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Hieftje email

The following is an email from Mayor John Hieftje with an attached copy of an email from Second Ward Council Member Rapudalo. It has been sent to a few residents who have written to the Mayor about the City's efforts to re-purpose the Huron Hills Golf Course. In the email, the Mayor notes that he has sent the message to others and encourages the recipient to share the email with others.



From: Hieftje, John [mailto:JHieftje@a2gov.org]
Sent: Wednesday, December 01, 2010 3:20 PM
To: _________________
Subject: RE: Huron Hills

Dear ______________:

Thank you for writing regarding Huron Hills.  

Since I have been receiving a fair amount of correspondence on this topic I hope you don’t mind if I reply with an email I sent to other residents who wrote on the same issue.

The city has no plans to privatize, sell, lease or develop Huron Hills or do anything that would take away from the pleasant view. Many residents who live around HH’s and others interested in golf have insisted that it remain a golf course so the city has been expending resources to make this happen. 

The RFP put out by city staff in August was issued in order to see if a private entity can make it work as a golf course better than the city can. Two proposals have been submitted. The city is under no obligation to accept either one.  

Huron Hills Golf Course loses money each year and this is not due to any accounting gimmicks. Back in the 1990’s the Golf Courses were put into their own “enterprise fund” by council. I suppose to protect the golf fund from being raided for other park’s activities. Putting the courses back into the mix would not result in any charges to the golf fund going away. The costs are indeed the costs. Golf would have to compete for shrinking dollars with parks activities that have a larger base of support and my guess would be that golf would come out on the short end. 

Many residents have commented that we are swimming upstream in trying to keep HH's as a golf course. Golf courses are abundant in our area  and several privately owned courses are struggling. Still, the city is committed to exploring every avenue in order to keep golf at HH’s and thus the RFP.

In any event, I will not support a plan that involves construction that would detract from the "vista" we all enjoy or put the city at financial risk.  This includes the sale of bonds.

HH’s is after all, a green and beautiful park.  Our residents need to be able use this park year around.

In the worst financial situation for local governments since the Great Depression Ann Arbor city government has made it thus far with a millage that is lower now than it was 10 years ago, without closing any facilities and while maintaining almost all services. This is not the case in many of Michigan's other leading cities (Grand Rapids, Troy, Royal Oak, Etc.) where taxes have been raised and/or facilities are closing in the face of reduced State Revenue Sharing and falling property tax revenues. On top of everything else Ann Arbor lost 4.86% of property tax revenue when UM took over the old Pfizer site.

As you can imagine, the City cannot spend hundreds of thousands of dollars a year to subsidize golf forever. Indeed, there are citizens who question a subsidy for golf. If it turns out that Huron Hills cannot survive as a golf course the next best plan may be to turn it into a natural area park. Pathways could be mowed for hiking, skiing and sledding and over time the Natural Areas Preservation unit can work with their volunteers to put in low-maintenance natural plantings and more trees. There are citizens who would be happy to help in trail construction and maintenance. The rolling hills would make for a beautiful natural area park.

Please read the message below from Council Member Rapundalo who has been working tirelessly on this issue for years. It was written before the RFP’s were submitted.

If you would ever like to discuss this further please call my office for an appointment during my weekly open office hours. 794 6161. Given the amount of energy some individuals are putting into this issue, it is surprising that only one resident has set up a time to talk to me about Huron Hills in the last six months.

Please do not hesitate to share this message with any friends or neighbors who may have similar concerns.

Thank you for writing,

John Hieftje

Message below from Council Member Rapundalo:

____________________________________________________

Thank you for writing regarding the Huron Hills RFP matter.  Let me try to provide you with background and context that has led to the issuance of an RFP.

It was at our Council retreat back in December 2009 that we challenged staff to come up with creative ideas on how to improve golf operations while finding added revenues and/or reducing costs to insure that the Golf Enterprise Fund ended future fiscal years in the black.  The fact of the matter is that Huron Hills in particular has been losing money (I’ll get back to that topic a little later) even though its bottom line has improved over the last year or so.  Despite better efficiencies, promotion and cost reductions the City finds itself having to allocate approximately $650,000 from the General Fund to support the Golf Enterprise Fund (primarily Huron Hills) and balance the fund’s books as it were.  Knowing this, Council asked staff to look into how we might better manage HH, improve its bottom line and enhance the golf operations there.  Staff came back to us at a work session in early February 2010 during the FY12 budget deliberations and suggested that it would be useful to issue an RFP that sought creative proposals on how do just that…enhance the golf experience and keep HH as a community recreational facility that caters largely to beginner and intermediate golfers, including juniors and seniors.

Over the course of the summer Parks staff worked with other departments like Finance, City Attorney, etc. (as is standard procedure) to develop the RFP.  The draft RFP (in large part pro forma) was presented to both the Golf Courses Advisory Task Force (which I Chair and includes a HH neighbor, PAC rep, high school golf coach, citizen with course design/maintenance experience, citizen with golf course management experience, golf enthusiast with league experience) and the Parks Advisory Commission (PAC).  The GCATF suggested language to insure that proposals would be in keeping with the values articulated in the PROS Plan.  PAC suggested clarifying the term “alternative design” to make clear to readers what might be included.  These suggestions were considered and the RFP was revised accordingly before its issuance on Sept 3.

Let me be very clear… the City is NOT seeking to transfer or cede Huron Hills to private commercial development.  Indeed, the RFP is explicit in that the course/park will be retained by the City, and if there are any improvements, including infrastructure, then those will also be owned by the City.  Contrary to assertions made by others the RFP is fully in keeping with the PROS Plan, and there is no intention to contravene the City Charter by selling any portion of the course, or even leasing it.  I, along with Councilmember Derezinski are strong proponents of the HH Golf Course and only wish to see golf operations maximized and continue there.

A number of individuals have embarked on a misrepresentation of the facts, and have not so quietly employed scare tactics for something that has not yet materialized.  We do not know what, if any, proposals will be submitted, nor their nature.  It’s possible that some proposals may focus entirely on the operations – for instance, they might propose to simply manage the current course as is for less money.  Alternatively, it’s also possible that a proposal might be submitted that seeks to enhance golf operations via added amenities and thereby draw a broader cross-section of the golfing community, especially juniors (a demographic that we’ve lost to other area course unfortunately).  We simply don’t know who will be interested, much less if they will submit a proposal for consideration, or what those proposals might entail.

Much of the vocal opposition stems in part from the fact that staff was approached with an unsolicited early conceptual drawing of HH with a driving range contemplated for the front seven holes.  Coincidentally, a second inquiry from an area golf enterprise came into staff along similar lines.  There was an outcry by interested folks upon learning this in early spring 2010 and they immediately began spreading falsehoods…such as 1) the City was selling or privatizing HH, 2) that bulldozers were arriving imminently to tear up the fairways, erect protective netting and bright lights for nighttime usage.  None of this was true then, nor is it now.  Will there be some proposals that might contemplate infrastructure changes?  Perhaps, but there’s nothing to say that the City would accept any such proposal.  However, we do owe it to taxpayers to insure that our services and facilities are being run in the most cost efficient manner while providing the highest level of service.  At the very least this behooves us to examine the cost of doing business at HH and what will it take to do it better and enhance golf operations.

I won’t bore you with metrics (though I’d be happy to sit down with you and show the specifics), but suffice it to say usage has demonstrated clearly that HH operates predominantly as a 9-hole course vs 18 holes (about 80-20 split).  So it’s natural to wonder if a reconfiguration of the course (and not necessarily physical changes) might bring more business, while retaining current levels. 

Some have suggested that the City is doing all this under the false pretext that HH is losing money when in fact it isn’t, that this is nothing more than accounting gimmickry.  I can assure that the financials are clear.  On a cash basis, HH breaks pretty much even, perhaps a little shy.  However, it’s important to note that all of the City’s Enterprise Funds (streets, solid waste, etc.) have a Municipal Service Charge (MSC) levied against them to account for costs associated with City services utilized by the Funds – payroll, IT, City Attorney, etc., not to mention that the Funds must also expense pension and healthcare for current and retired employees.  When all that is added to the equation, then HH goes clearly into the red, and hence the need to allocate General Fund dollars to the golf courses year after year (at the expense of supporting other General Fund park improvements).  Please note that the MSC is not arbitrarily set by the City in some willy-nilly manner as some would one believe.  Rather, independent auditors come in every two years (they just completed such an exercise recently), review the books and business unit costs, and set the appropriate unit rates and allocations.  It is those rates and allocations that then make up the MSC for the respective Enterprise Funds based on their relative usage.  The same costs are expensed in a similar manner within the General Fund supported budgets, but are not wrapped up together and referred to as the MSC – and this is where some people make the mistake that the golf courses are somehow unique and disadvantaged by having the MSC levy, when in fact they are treated uniformly and equitably like all other budget lines.

Some have even suggested that since the MSC is an inappropriate levy, that the golf course should be placed into the General Fund like all other parks facilities.  Fair enough, though I have endeavored to tell people that doing so would jeopardize funding for the golf courses more, as they would have to be prioritized relative to the other facilities, programs and parks.  Despite what some people think, golf courses would rank much poorer than other City park facilities as golf is generally viewed as an elitist sport (rightly or wrongly, I’m simply telling you what is a rather apparent sense).  PAC is not happy that Council continues to “subsidize” the golf courses every year when those funds could easily be used for things like the pools, ice rinks, senior center, etc.  And I can assure you that golf courses would suffer under that kind of scenario.  So again, it behooves us to explore what the possibilities might be that could improve golf operations at HH.  We are under no obligation to accept anything.  However, we will never know if we’ve missed some creative way to enhance the golf experience at HH, whether that approach is implemented by the City or via a public-private management partnership. 

I should also point out that private management, if we were to do a public-private partnership (like we do already with recycling) does not mean that the City will simply walk away from the courses.  The City will continue to provide oversight and insure that whatever is happening at HH will be in keeping with community values and in the best interests of the City, both financially and otherwise.  We will not be handing HH over to private concerns.  The City would continue to have a strong hand in golf operations and insure that our expectations and anticipated outcomes were being met.

Bottom line is this…I’m committed to seeing HH be better than it already is – there’s plenty of room for improvements.  I don’t pretend to have all the answers, nor does staff, and the RFP is simply a way to seek creative approaches and determine if any of them seem to have merit and potential for success.

My sincere desire is to have cooler heads prevail.  We have an educated community and I would hope that they would realize that the Council is exercising its fiduciary responsibility by insuring that all of the City’s functions and services are being managed responsibly, including those at the golf courses.  I think it would be a crime, and I certainly wouldn’t be doing the job entrusted to me by residents, if I didn’t at least insure that we’ve examined all possibilities for continuing golf operations.

Sorry for the long-winded response.  Hopefully I’ve provided some meaningful insight into the matter.  I’d be happy to meet with you at any time to discuss the subject further.   Thank you for your interest and support for HH.

Stephen


Stephen Rapundalo

City Council – 2nd Ward

City of Ann Arbor

Email:  srapundalo@a2gov.org

Tel: (734) 476-0648