NORWALK, Conn. – Oak Hills Park Authority (OHPA) needs additional revenues to stay alive. If these revenues are not achieved, then as their independent auditor states, “(there is) substantial doubt about its ability to continue as a going concern.”
While interest in a driving range has existed for years, OHPA’s financial difficulties have brought the driving range idea to the forefront. OHPA has been working closely with the city on the Request for Proposal for the range.
There has been a lot of community discussion over the driving range. The most vocal opponents appear to be reacting from an intensely passionate environmental perspective. However since Oak Hills has been a Norwalk gem for decades and a source of community pride for many, there has been strong city support to help OHPA regain its footing.
Therefore this letter attempts to address questions raised by other Norwalk citizens.
How did OHPA get into this financial mess? Two things happened. The first was the recession, which has driven down golf rounds from 45,716 in 2008 to 33,167 in 2012. The second was the city decision in 2005 to require the OHPA to assume the $2.275 million restaurant debt. In retrospect the restaurant and its debt were too large – a much smaller and less costly venue would have served the golfers better.
Do Norwalk taxpayer dollars pay for OHPA operations? No. There is no line item in the city operating budget for Oak Hills. Created by the Common Council in 1997, OHPA has its’ own revenue stream – like the Parking Authority or the WPCA. OHPA revenues come from golf fees, ID cards, cart revenue and rental income – not from tax dollars.
But doesn’t the City support OHPA? Yes, in the form of loans. The first city loan to OHPA was in 1999; $990,000 to fund the installation of the irrigation system. This loan has been repaid down to $260,526. Additional $2,275,000 loans were made in 2005 and 2006 to finance the restaurant construction. The restaurant loans have been repaid down to $1,971,067. Smaller loans in 2009 and 2012 were made to finance cart path paving plus other capital improvement projects.
Has OPHA taken steps to improve itself? Yes. The new leaders have cut costs and raised fees. In exchange the city modified the OHPA loans to spread out the repayments. However all of these steps are still not enough.
What about the recent $150,000 loan to OHPA? Authorized 13-1 by the Common Council and approved by the BET, this loan prevented OHPA from running out of cash this winter. While OHPA has always had negative winter cash flow, its weakened state created this seasonal emergency for the first time – hence the urgency to move forward.
Where does the city get the money for the OHPA loans? The city issues bonds as part of its normal capital budget process. OHPA repays the loans to the city and the city repays the bonds to its investors. The whole process is designed to be a wash and at no cost to the Norwalk taxpayers.
Is golf still financially viable at OHPA? Yes. From July 2011 through December 2012, OHPA generated positive cash flow of $170,959 before the restaurant debt repayments and capital expenditures. So OHPA is making money from core operations. However it is not enough.
In conclusion, we are at a financial crossroads. OHPA needs additional revenues to repay the restaurant debt plus cover the winter months. The most coherent new revenue idea that has been presented is the driving range. We cannot risk losing this community gem. Doing nothing is no longer an option.
Chairman, Board of Estimate and Taxation