>La Grande Observer | Union and Wallowa Counties' News Leader

Union County officials clash over how to fix Buffalo Peak's financial woes (The Observer/PHIL BULLOCK).

Bill Rautenstrauch

The Observer

The Joseph Annex on K Avenue, home of the Union County Board of Commissioners, is a two-story building. These days, that's true in more ways than one.

On the top floor is the office of Commissioner John Lamoreau, nearing the end of his first term and challenged for his seat by County Clerk Nellie Bogue Hibbert.

Lamoreau's got his own story about Buffalo Peak, the financially troubled, 18-hole golf course the county owns in Union.

He says he wants to help solve the golf course problem, but has met with opposition — especially from fellow commissioner Colleen MacLeod.

"I'm trying to work with people and get support for the golf course. But Colleen has said she is the liaison and has told me to back away," Lamoreau said.

On the first floor of the Joseph Annex are the offices of Lamoreau's fellow commissioners, MacLeod and Steve McClure, plus those of General Services officer Dennis Spray and Administrative Officer Marlene Perkins.

Each of the three members of the board of commissioners has his or her own assignments, and in that respect, the golf course belongs to MacLeod.

Her story is that Lamoreau has stepped outside his area of responsibility to turn the golf course into a campaign issue.

"This has become a political battering ram," she said. "We have done things right. We have made a premium golf course, but it suffers locally because of people trying to get political traction."

Dennis Spray, Union County General Services officer and golf course manager, also thinks Lamoreau is out of line.

"You can criticize, but until you're behind the counter waiting on folks, you really don't know," he said.

Back in the late 1990s, the City of Union sold bonds to raise money to build Buffalo Peak.

But as things turned out, Union couldn't afford to pay its bond obligations. In 2002, Buffalo Peak was taken over by Union County, which had far better financing leverage.

"The major concern was Union would default on the bond and never recover from it," MacLeod said.

The vote to take over the course was 2-0, with MacLeod and then commissioner John Howard voting yes and McClure abstaining.

According to Spray, the county initially borrowed about $1.8 million from the Oregon Economic and Community Development Department to finance purchase of the golf course. Later it went back for more. Principal on the loan is about $2.1 million now.

The course is up and running, serving about 17,000 rounds a year currently.

But everybody involved agrees on at least one thing: that is not enough to sustain the course economically.

According to audit reports, Buffalo Peak lost $116,500 in 2003-2004 and $92,879 in 2004-2005, excluding accrued interest on the loan.

With interest factored in, the course was running $720,000 in the red as of Dec. 31, 2005.

Upstairs and downstairs, there are widely different accounts about what will happen if the financial hole continues to deepen.

By contract, the county is obligated to pay the loan even if the money has to come from the general fund.

Lamoreau said he thinks that is what will happen. And he added that he believes the level of county services will suffer.

"I am very, very concerned we will not have the funds to make the next payment," he said. "I believe you will see there will be cuts to other programs this year."

MacLeod, on the other hand, said programs — and jobs — in county government are safe.

"We have never considered taking general fund money. Not once," she said.

An initial loan payment of $174,000 was due in December, but the OECDD agreed to a one-year extension.

No other negotiations about the loan have taken place, MacLeod stressed.

But she also said she thinks the state will work with the county on the fiscal problems.

"We have been partners with the state in economic development for longer than I've been here," she said. "We're trusted at the state level. They know we're not going to stiff them."

Said Spray, "From a practical standpoint, the state isn't going to come in and cripple Union County."

The OECDD is mum on the issue of whether new agreements may be worked out, or what steps the agency might take if the county can't make the next payment.

Michelle Godfrey, public relations director for OECDD, has not returned calls placed to her office by The Observer.

Though he may stir resentment by involving himself with the golf course, Lamoreau shows no signs of butting out.

While tracking the budget, he continues to offer his ideas on ways for the course to make more money.

In particular, he cites recommendations in a performance evaluation done for the county in 2002 by NGF Consulting of Jupiter, Fla.

The county implemented physical changes to the course as the study recommended, but, according to Lamoreau, ignored key operations recommendations.

Those included a two-tiered pricing plan, with local residents receiving a discounted green fee, and others paying a non-discounted rate; creation of a non-resident annual pass for golfers living more than 50 miles from the course; and elimination of private carts and cart passes.

Other recommendations focused on maximizing course use — and profits — during weekends.

The consulting company recommended discounted rounds be offered only Monday through Thursday, and that a weekday or senior pass be created, good only for play Monday through Thursday.

The consultants also recommended tournament play be discouraged on weekends, and that a premium price be charged for those tournaments that do occur on weekends.

It's a proposal Lamoreau heartily endorses.

"The weekends are prime time. One of the most frequent complaints you hear from people is that they can't get on the course on the weekends because there's always a tournament going on," he said.

But Spray and MacLeod think the tournaments are good for business. They also maintain that the events do not tie up the course for unreasonable amounts of time.

Spray said that since Buffalo Peak is an 18-hole course, half the course often is shut down for a tournament while the other half is used by individuals.

He added that some tournaments take only four or five hours to play.

MacLeod said she thinks the tournaments are a way to get good word-of-mouth for the course.

"We have some things to overcome, not the least of which is isolation," she said. "We have to make it so people remark about the course, or else others won't come to play."

The 2002 evaluation also said the course would benefit from the services of an independent marketing and managing company.

In that regard, Lamoreau last summer opened negotiations with Gordon Tolbert, noted golf pro and owner of Total Golf Management Services.

Among Tolbert's contracts is one to manage Stone Creek, a successful, publicly owned course in Clackamas County.

At a cost of $1,250, Tolbert's company offered Union County 12 hours per month consultation, which would have included review, oversight and other related services.

Nothing came of the deal, however. After a visit to the course and talks with the county, Tolbert decided to step away from the project.

"Tolbert is one of the best golf minds in the state, and I could not get the votes I needed to bring him here," Lamoreau said.

As Spray recalls it, Tolbert's asking price was too high and there wasn't enough certainty the county's investment would be recouped.

Spray said he thinks there is no need to introduce sweeping changes at the course at this time.

He said that for this year, pricing remains essentially the same, and so do the policies on carts and cart passes.

Spray said to change those things now would risk alienating the customer base that has already been built.

"It takes awhile to build a base. That's just Economics 101," he said. "As we go along, we believe we have the right course plotted out."

He said a short-range goal of Buffalo Peak staff is to increase the annual number of rounds from 17,000 to 20,000.

"At $30 a round, that's $600,000 a year and enough to get us to the break-even point. The goal has been to get there by 2008."

Spray does concede that the county should develop more aggressive marketing practices for Buffalo Peak.

"That's the one place I think we're weak," he said. "We should have a part-time person for marketing, someone to follow up, get the word out to where we've got 60-70 people on the course, versus 20-30."

Spray said the county's appointed golf committee considered the recommendations in the 2002 study, but decided not recommend implementation.

"We looked at the proposals in the study and for one reason or another have not done them. It's got a lot to do with what we've learned as we've waited on customers," he said.

MacLeod has criticized Lamoreau — and also citizen Jack Johnson, an outspoken critic — for acting independently on golf course issues without taking concerns to the committee.

For his part, Lamoreau counters that the board of commissioners needs to take a more active role in management of the course.

"The problem is commissioner oversight," he said "It's our duty to make it work."

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Leasing course to private entity could be an option

Leasing the course to a private sector operator could be one solution to Buffalo Peak's financial woes.

Union County has received inquiries from a McMinnville businessman named Curt Johnston, asking for information on lease payments for equipment, costs for golf course operations paid by the county, number of employees and their wages, and more.

Johnston and his son, Kit, operate the Bayou golf course in McMinnville.

Curt Johnston told The Observer he took an interest in Buffalo Peak after hearing about it from a friend who lives in La Grande.

Johnston said he and his son are seriously interested in a lease/option, and hope something can be worked out in time for this season.

"We have to do it in a timely manner. We're about two months late," he said.

County Commissioner John Lamoreau said Monday many details would need to be worked out before a deal was closed. Chief among them would be price.

Also, if the county decided to lease the course, it would be required to send out a request for proposals so all interested parties could bid.