Support the LB businesses you see here:

Joe Sopo
Joe Sopo, Realtor has his pulse On LB. real estate. Click for info
Carter Wood Floor pic
Carter Wood Floors, a LB company, will restore your wood floor or install a new one. Enhance your home. Click pic.

Pollman's Insurance. Smarter Protection For Today's Risks. Click for info.

Lovelace pic
Bill Lovelace. LB DJ now has 21,000+ songs on computer for instant requests at your event! Click pic for more info.

Mike & Kathi Kowal
Mike & Kathi Kowal know Los Cerritos, Bixby Knolls, Cal Hts. and beyond. Click to learn more

NetKontent Digital Video Cutting Edge Services For The Internet, Broadcast and Multimedia. Click For Info

Ninos's Ristorante: A delicious treasure in Bixby Knolls. Click here if you're hungry or for catering!
3853 Atlantic Ave.

Your E-Mail
Click here

  • Neighborhood Groups/Meetings
  • How To Recall a LB Elected Official
  • Crime Data
  • City Council Agendas
  • Port of LB Agendas
  • E-Mail Your Council member
  • Council District Map
  • LB Parks, Recd & Marine
  • LB Schools
  • LB Airport Watchdog
  • Sacramento
  • Washington
  • References & Archives
  • Lost, Found & Adoptable Pets

    News in Depth / Perspective

    Fiscal Sand Trap? Council's Dec. 2002 Deal To Float Debt For Skylinks Golf Course Revamp Laid Groundwork For Higher Fees, Arguably Uncertain Taxpayer Future

    (July 25, 2004) -- LB City Hall management -- with voted City Council approval -- entered into a financial arrangement roughly a year and a half ago to float debt to pay for a major revamp of Skylinks Golf Course that effectively laid the groundwork for higher fees at Skylinks and an uncertain long-term future for taxpayers.

    City Hall's Golf Commission's rates and fees committee will meet July 26, 6:30 p.m. at the Rec. Park Clubhouse, 5001 Deukmejian Dr. to hear public response and offer recommendations on fee increases. However, the Commission has no independent substantive power in deciding fee increases...a power that ultimately rests with the City Council. When the budget comes to a Council vote in September 2004, Councilmembers can -- if they wish -- override what the City Manager proposes and have the last word on the fee increases.

    However city management has separately indicated that it already expects revenue from golf fee increases citywide to make up roughly $400,000 of its FY 05 steps to reduce a Council-created deficit (ongoing spending exceeding ongoing revenue).

    And the Skylinks portion of the equation was effectively structured roughly 18 months with Council approval.

    On December 10, 2002, the Council gave approval to a management-proposed arrangement that effectively made LB City Hall and its golf course operator/lessee American Golf Corporation (AGC) basically financial partners in a full scale renovation of Skylinks Golf Course. The city-owned golf course abuts Long Beach Airport between Lakewood Blvd. and Clark Ave. stretching from Spring St. past Wardlow Rd. to nearly Conant St.

    Under the Council approved arrangement, AGC is paid for its work by proceeds from the sale of city bonds. The bonds ensure AGC gets paid...while leaving LB City Hall (i.e. taxpayers) committed for roughly 27 years to pay back bondholders based on what City Hall assumes will be additional activity and increased rent from the Skylinks improvements.

    "[A]dditional activity at Skylinks Golf Course attributable to improved facilities should increase AGC’s annual rental payments to the City after completion of the project," said a memo to Councilmembers from LB Parks, Recreation and Marine Director Phil Hester and LB's (now former) Dir. of Financial Management Robert Torrez, signed as approved by City Manager Jerry Miller.

    Exactly how activity could be assumed to increase despite higher fees -- and quantified and forecast over roughly 27 years without knowing the amount of coming fee increases or future market rates competing golf courses, is unclear.

    It's possible Golfers at Skylinks may pay higher fees and produce sufficient rental revenue to cover the bond payments as City Hall assumes and produce higher demand due to the improvements. Skylinks abuts LB Airport...with hotels already nearby and others on paper that might attract visitor and convention traffic, including non-residents on vacation or corporate expense accounts.

    Or the fee increase might reduce demand at Skylinks to a level where rent received is less than expected, potentially leaving other LB golfers or taxpayers with the bill.

    Other Council actions applied optimistic assumptions in other contexts that have invited unwelcome fiscal consequences for taxpayers. For the "Pike at Rainbow Harbor," the Council OK'd using public money to back repayment of bonds on a parking structure...and if visitors and parking revenue fails to reach the levels predicted by City Hall, LB public money could be tapped to pay the difference.

    Likewise, the LB Aquarium of the Pacific, initially portrayed basically as a self-supporting entity, has drained sums from LB's Tidelands Fund to help pay bondholders because Aquarium attendance failed to meet rosy official expectations.

    If the Skylinks improvements don't produce the additional rent and increased activity assumed by City Hall, the Skylinks bond payments could likewise potentially invite fee increases for LB golfers beyond Skylinks and/or otherwise hand the bill to LB taxpayers.

    Under the proposed 2004 Proposed Golf Course Fee Schedule, Skylinks would be the priciest LB public course. Some examples: Weekdays, 18 holes for residents: $35 and for non-residents $45. Weekends, 18 holes for residents $45, and non-residents $55. Seniors, 18 holes before 7 a.m., discount disappears. Seniors, 18 holes before 8 a.m., $16. has posted the full proposed fee schedule for all LB golf courses in table further below.

    On December 10, 2002, a LB city staff memo accompanied its request for Council approval to issue bonds that would pay for what city staff then described as reconstruction of the entire Skylinks Golf Course. The reconstruction project (estimated at roughly $7 million at the time) would come from roughly $9 million in bonds (includes debt and associated costs) that would be repaid from golf fees.

    As for who would approve fee increases, the Council effectively took that decision out of its own hands, approving an escalator clause in the City's contract with AGC that automatically applies the Consumer Price Index and sends any increases beyond the CPI first to City Hall's appointed Golf Commission for recommendations...while leaving the actual decision to the City Manager.

    It appears that under the Council approved arrangement, if fees paid by golfers are not sufficient to produce revenue repaying the bonds, City Hall's General Fund (i.e. LB city taxpayers) could theoretically have to cover the bond payments.

    A copy of the City Hall-AGC contract (amended in July 2003 based on the Council's Dec. 2002 action), obtained by, states in pertinent part:


    ...To fund the Skylinks Construction Project, Landlord [City of LB] shall issue certain revenue bonds ("the 'Bonds'), the repayment of which...shall provide for debt service payments every six (6) months in an amount not to exceed $260,000.00

    ...On the 20th day of each month, beginning on the 20th day of the calendar monthly immediately following the date that the Bonds are issued, Tenant [AGC] shall deposit with the Trustee [selected by LB City Hall] ten percent (10%) of gross monthly greens fees (including but not limited to monthly tickets and 12-play tickets), tournament surcharge fees, SCGA membership sales, and miscellaneous fees (relating to such things as returned checks and credit card charges) collected from all golf courses ('Greens Fees Revenues') during the immediately preceding month...Trustee shall deposit the Greens Fees Revenues first into the Debt Service Account, until amounts on deposit...are equal to 1.5 times the maximum annual debt service on the Bonds, not to exceed $780,000.00 ('Debt Service Amount'), and after the Debt Service Amount has been funded, then into the [Capital] Improvement Fund...

    ...Fee Schedule and Changes

    Tenant [AGC] may, but is not required to, annually increase fees and charges by the increase in the Consumer Price Index (All Consumers) for the Los Angeles-Riverside-Orange County Metropolitan Area ('CPI'), rounding the result down. If Tenant desires an increase that is greater than the CPI, Tenant shall request that increase in writing to the Director [of Parks, Recreation and Marine, subordinate to the City Mgr. who works for the Council]. The request shall name the fee and identify the new amount of that fee. The Director will present the request to the City's Golf Commission for review and recommendations. The Director will review the recommendations of the Golf Commission, if any, and then forward his/her recommendations to the City Manager, who may accept or reject any recommendations..."

    In a Dec. 10, 2002 public memorandum to Councilmembers explaining the arrangement, city staff stated in pertinent part:

    Of [LB's] five golf courses, Skylinks is most in need of significant rehabilitation. Staff recommends the lease with AGC be amended to allow AGC to completely renovate the Skylinks Golf Course, thereby improving the golf experience for the City’s golfing community and increasing the revenue potential for this City asset.

    The improvements to Skylinks Golf Course are estimated to cost approximately $7 million and will entail the reconstruction of the entire course. Funding is proposed to be made available through bonds to be issued by the City; however, the debt will be paid from monies generated and deposited by AGC. Debt payments will be made from revenue AGC is currently required, through their lease, to reserve for the explicit purpose of making improvements to the City’s golf courses. Staff proposes to amend the lease with AGC to enable substantial course renovation improvements, to enhance maintenance standards for all five courses, and to make certain operational changes that will respond to concerns raised by the golfing community, the Municipal Golf Commission, the City Auditor‘s Office, and AGC.

    Financing Plan

    In order to finance the improvements contemplated for the Skylinks Golf Course, the City is proposing to issue approximately $8 million of fixed-rate taxable lease revenue bonds with a term of 27 years. A total bond size, not to exceed $9 million, is being requested to allow for possible changes in market conditions at the time the bonds are sold. The bond issue will generate approximately $7 million of construction proceeds and approximately $1 million for bond reserves, underwriter fees, bond insurance fees, and costs of issuance. Although the City’s General Fund will be the legal security for the bonds and primary source of payment for the bonds, the underlying source of repayment for the debt will be revenues pledged by AGC to the City. In the event that AGC defaults on their lease and fails to meet its obligations to fully fund the annual bond payments, the operation of the golf courses would revert to the City and debt would be retired through golf course revenue.

    AGC has agreed to pledge, and deposit with the bond trustee, capital improvement funds generated through its amended lease with the City. This pledge will remain in place through the term of the bonds and the amended lease with AGC. Currently these funds are used by AGC, with City approval, to make certain capital improvements across all City golf courses under AGC management. These funds are not used for normal maintenance costs. Normal maintenance costs will continue to be the responsibility of AGC through the amended lease. Amounts deposited with the bond trustee, and not required for the payment of debt service on the bonds, will be made available to AGC to fund, with the consent of the City, capital improvements for all City golf courses.

    The capital improvement funds pledged for debt service are derived from 10 percent of green fee revenues. The capital improvement funds will be deposited monthly by AGC with the City’s bond trustee bank to ensure funds are available to pay debt service. Based on current green fee revenues, it is anticipated that AGC will collect approximately $800,000 per year in capital improvement revenues. Based on current market conditions, the estimated annual debt service for the lease revenue bonds will be $600,000.

    The lease revenue structure of the bonds requires that the City pledge non-golf course assets. The City will structure the financing to allow for the flexibility to substitute or reduce the pledged City assets over the term of the bonds.

    It is contemplated that fixed-rate bonds will be issued. However, all or a portion of the fixed rate bonds could be converted to a lower variable rate through the use of a short- term swap transaction at or after bond issuance. A swap transaction is a commonly used tool to manage cash flow related to bond payments. A fixed to variable rate swap agreement can be used at a time when conditions in the swap market are advantageous to the City...


    The nine-month closure of Skylinks Golf Course for complete renovation must occur before January 15, 2003. This timing is imperative in order to provide sufficient warm season weather to fully establish a durable, playable course prior to re-opening.


    Because rent from AGC is based on revenue generated by the golf courses, the nine- month closure of Skylinks Golf Course should result in a reduction of approximately $640,000 in rent in Fiscal Year 2003. Reduced revenue to the General Fund from AGC was anticipated in the Fiscal Year 2003 budget. The lost revenue will be replenished by CPI increases in fees for all golf courses, which are anticipated to be approximately $200,000 per year. Also, additional activity at Skylinks Golf Course attributable to improved facilities should increase AGC’s annual rental payments to the City after completion of the project.

    Annual debt service will total approximately $600,000, and will be paid by AGC from monies generated and deposited by AGC. In the event that AGC defaults on their lease and fails to meet its obligations to fully fund the annual bond payments, the operation of the golf courses would revert to the City and debt would be retired through golf course revenue.

    Below is the proposed Golf Course Fee Schedule for 2004:

    TypeSkylinksEl Dorado PkRecreation Park 18Recreation Park 9Heartwell
    Weekday 18 resident$35$23.5019.50n/a9.50
    Weekday 18 non-resident$45$31$25.50n/a$12.75
    Weekday 9 resident$20$14$12$9$6.75
    Weekday 9 non-resident$24$16$14$11.75$9
    Weekday 9 Replay residentn/an/an/a$4.25n/a
    Weekday 9 Replay non-residentn/an/an/a$4.25n/a
    Weekday Twilight Resident$25$16$14n/an/a
    Weekday Twilight Non-Resident$30$18$16n/an/a
    Weekday Junior$10$6$5$3.75$3.75
    Weekday Super Twilight$17$12$9.50n/an/a
    Resident Senior 18 before 8 a.m.$16$12$10n/an/a
    Resident Senior 18 before 7 a.m.Eliminate$7$6n/an/a
    Resident Senior 9 before 7 a.m.$10$5$4FreeFree
    Resident Senior 9 before 8 a.m.n/an/an/a$5.75n/a
    Weekend 18 Resident$45$28$23.50n/a$10.50
    Weekend 18 Non-Resident$55$36$31n/a$13.75
    Weekend 9 Resident$24$16$14$10$8
    Weekend 9 Non-Resident$28$18$16$13.75$9.50
    Weekend 9 Replay Residentn/an/an/a$6n/a
    Weekend 9 Replay Non-Residentn/an/an/a$7n/a
    Weekend Twilight Resident$30$18$16n/an/a
    Weekend Twilight Non-Resident$35$20$18n/an/a
    Weekend Junior$16$11$9.50$3.75$3.75
    Weekend Super Twilight$20$14$11n/an/a

    The Golf Commission consists of 13 non-elected members appointed by the Mayor with Council approval...and is comprised of 10 representatives selected by LB men and women golf clubs and three at large members selected by the Mayor. The Commission offers recommendations to the Mayor, Council and City Manager on the operation, maintenance and fee structure of the municipal golf courses...but has no independent substantive power to make changes.

    A written FY 05 summary, distributed by city staff at a public July 2004 "budget summit," indicates that as part of city management's Three Year Financial Strategy to deal with the City Council created deficit (ongoing spending exceeding ongoing revenue), management already anticipates that fee increases -- including "Golf Revenue Adjustments" -- will contribute $400,000 in deficit reduction.

    The FY 05 city budget will be voted on by the City Council in September 2004...when the Council could (if it wishes) change management's proposals.

    City Hall's Golf Commission members are listed on a Parks, Recreation & Marine web page that can be accessed by clicking Golf Commission.

    The ambitious Skylinks/Legend revamp is described on a web page of the LB Dept. of Parks, Recreation and Marine.

    Return To Front Page

    Contact us:


    Copyright © 2004, LLC. All rights reserved. Third parties may cite portions as fair use if attributed to "" (print media) or "Long Beach Report dot com" (electronic media). Terms of Use/Legal policy, click here. Privacy Policy, click here