Financial responsibility at heart of VRD election

At the center of the election is whether financing a $3.5 million renovation project to Dobson Arena was financially irresponsible and will negatively impact other recreational programs in town for years to come.The district’s current board, which included incumbent candidates Nancy Stevens and Ross Davis Jr., opted two years ago to go ahead and assume a $5.5 million debt load with interest, payable in $270,000 annual installments over the next 20 years – despite the fact that the building is owned by the town of Vail.The debt was taken out in form of revenue bonds, which aren’t subject to district voters’ approval, and are repaid with future revenues, the district generates.That, critics of the current board and the two incumbent candidates say, was “financially irresponsible” in the light of shrinking fund balances and a revenue stream they insist has dried up to a trickle and is largely dependent on how well the Vail Golf Course performs in years to come.”A financial crisis in my mind is when you don’t have a plan going forward where you have sufficient funds to meet your debt,” says Warren Graboyes, who supports newcomer candidates Julie Hansen, Anthony “Nino” Licciardi, and Peter Cook, who are running as a “coalition.” The trio promises change and new leadership, along with financial accountability.If elected as a group and installed as a new majority, Graboyes says, the three will “return recreation to be accountable to the public and take it out of the hands of the current board, which is now some closed little club.”Coalition supporters aren’t shy about being frank.”What they have been doing isn’t financially responsible. It’s like a bunch of 16-year-olds given a checkbook,” says T.J. Conners, a 20-year Vailite and treasurer of the coalition’s political action committee.Thumbing through the VRD’s 2001 budget, Graboyes points to a $300,000 shortfall from green fees at the Vail Golf Course, which translates into about 7,000 less rounds played last summer.Without major capital investments, the number of rounds played will further drop, he predicts.”This is an old golf course and it does need attention,” Graboyes says, kneeling down to pat a bald brown spot near the sixth-hole of the two-decade-old course. “Grass is either dormant or dead. This is dead.”Granted, it’s early in the season – the golf course isn’t even scheduled to open until Friday – but since golf accounts for a third of the district’s $4.6 million in annual income, the 18-hole championship course deserves care beyond simple maintenance, Graboyes says.”Forget that we like golf. That is not what this is about,” he says, rolling a golf ball on the putting green to prove his point that the golf course is in a sad state of disrepair. “This is the district’s most valuable asset. This is the district’s cash cow. We need this to be first-class. We need this to be Arrowhead.”Committing money to hockey and concerts at Dobson when an increasing number of public and private golf courses in the Vail Valley are pining for local and visiting golfers is beyond Conners’ comprehension.”There is just a lot of competition in this valley,” he says. “It would have been a lot smarter to use the ($270,000) on the golf course than throw it away into Dobson.”While the critics charge that the ice arena’s $3.8 million in debt is driving the district to the brink of bankruptcy, a look at the recreation district’s financial information doesn’t support the coalition’s doomsday claims.In 2001, for example, when revenue bonds were activated, the district did spend down a combined balance of its General and Enterprise funds from $2.9 million to $153,662, and according to the district’s approved budget for 2002, the fund balances are predicted to increase again starting in 2003.A closer look at the numbers, however, reveals little about how the district’s plans to fund anything beyond existing programs at the current maintenance levels.For 2002, the golf course is expected to bring in $1.7 million in green fees this summer, a conservative 6.3 percent increase over the $1.6 million the golf course earned last golf season – one of the course’s worst in its two-decade history – falling $300,000 short of what the board had expected in revenue from the golf course for 2001.By budget time for 2002, the district board cut five staff positions for an annual saving of $225,000, blaming the shortfall on the onset of a recession in spring and justifying the cuts as necessary to heed off the effects of the Sept. 11 terrorist attacks.Even if the golf course makes only $100,000 more this summer than last – roughly 1,000 rounds more than last year’s 24,000 rounds played – the district’s total budget projects ending the year with $278,000 in the bank after making the $270,000 Dobson debt payment.Aside from $1.7 million from golf, the budget projects to collect $1.5 million from taxes, up $100,000 from years past, and another $1.4 million from other recreation program fees for a total revenue budget of $4.6 million, or $400,000 less than last year’s total collections. Total expenses for 2002 will be $4.4 million, down from $7.7 million spent in 2001, which includes nearly $3 million allocated to the Dobson renovation for 2001.That, however, doesn’t mollify the critics. The $1.2 million per year the budget allocates for routine maintenance and operation of the golf course and the $2 million spent on improvements since 1996, such as a computerized irrigation system and a new storage shed, do not make up for the fact there is no significant reserve in funds for capital improvements, such as a new clubhouse. No improvements to current golf facilities or equipment are scheduled for 2002.”My feeling is that if the golf course is the economic engine that makes money, you want to invest in the money-maker, not spend money on the money loser,” says Conners, who admits to be partial to the golf course.”It’s the cash cow,” he explains. “If the engine runs out of oil and begins to sputter you add oil to it.”Graboyes says says other programs lose too.”I think we need to address the gymnastics facility,” he says of the popular program that could be homeless by 2003 unless the town or the district come up with $2 to 3 million for a new gymnastics center to replace the current facility in the Old Town Shop. The district currently funds the operation of the gymnastics program, but the budget does not show any allocations for a new center or a contribution to a new center.”There is no long-range plan, and we need to plan ahead,” Graboyes says. “That’s why we are saying we need business people on the board.”The district’s budget does include a three-year plan, updated each year with each district department’s “wish list” for capital projects.The three-year plan does contain a line item for design and planning for a clubhouse in 2003 – albeit without a cost estimated next to it.If more money than budgeted comes in, the district board looks at the wish list and allocates money throughout the year to capital projects, said the district’s chief financial officer, Bob Trautz, when asked about the district’s process for long-term projects.Funds for a clubhouse, he said, could not be saved through long-range plan. Instead, the district would have to go to the voters and ask for an increase in the district’s 2.76 mill levy to repay a $3 million to $5 million debt.Anticipating critics’ question of why Dobson wasn’t financed that way – which would have created a dedicated revenue stream for the debt obligation – Trautz said the district was considering a ballot question when the town opted to include a new ice rink and special events venue in the planning process for the Vail Center back in 1999 and 2000.”We were working with the town and were anticipating a consolidated funding question,” he said.By the time the town opted to put the $78 million Vail Center on the back burner, Dobson’s refrigeration system had become so frail the district had to act fast.Still, Trautz said, there is nothing hurried about the revenue bonds the district used to finance Dobson. The district passed an intense thee-month-long financial review by the lenders with flying colors, receiving a “AA” rating from the Standard & Poor Index.”We’ve been able to bond for Dobson because they looked at our revenue stream and said “based on this data we can loan you the money,'” Trautz said. “There is nothing fuzzy or crazy about these numbers.”Geraldine Haldner covers Vail, Minturn and Red Cliff. She can be reached at (970) 949-0555, ext. 602 or at ghaldner@vaildaily.com.