Elephant Butte’s financial well-being depends on turning around the Sierra del Rio Golf Course from a major expense to a break-even enterprise that does not pose a drag on the city’s General Fund.
The trendlines are headed in the wrong direction, the Elephant City Council learned at its April 21 meeting. Councilors approved a budget adjustment that added about $111,000 to the $200,000 already allocated in the General Fund to support the golf course this fiscal year.
In 2018, Elephant Butte accepted ownership of the floundering 18-hole course, clubhouse, restaurant and pro shop, spending about $600,000 to prevent the facility from closing. This subsidy was offset by the sale of the club’s liquor license for $300,000.
In 2019, the course’s subsidy was about $400,000.
Last year, the city signed a five-year management contract with Spirit Golf, agreeing to pay the company a fee of $200,000 to operate Sierra del Rio for the 2020–2021 fiscal year, which ends June 30. The contract places responsibility for all operating costs on Spirit Golf.
The city did not, however, budget for repairs. City Councilor Mike Williams, who managed Sierra del Rio before it was donated to the city, said this year’s additional $111,000 subsidy will pay for two air conditioning units for the clubhouse, repairs to the patio and an air vent in the kitchen. The city replaced nearly a dozen bridges spanning ditches too deep for golf carts to cross when it took over the golf course, Williams said, but it used untreated wood. Those bridges need to be replaced again, accounting for the rest of the $111,000 expense.
But not all the golf course news is bad. “We’re incredibly pleased with the public response,” Richard Holcomb, a Spirit Golf partner, said. “People are coming from all over the state and Colorado and Arizona. It would be a lot better, of course, without COVID, but we’re very happy to have helped the city increase its GRT.”
Partially due to increased play at the golf course, as well as meals and drinks served there, the city’s gross receipts taxes are up.
City Clerk Rani Bush submitted a GRT revenue comparison of the last four years to city council. Elephant Butte has taken in more GRT revenue this fiscal year—with three months to go—than it did in all of fiscal year 2018-2019.
The city’s GRT revenue for 2017-2018 was $433,169. In 2018-2019, the GRT revenue was $362,099. The 2019-2020 GRT revenue was $403,240. So far this fiscal year the GRT revenue is $362,547.