Dennison finds an easy $12 million – Mayor says its a cash grab. Is the golf course a city asset in play?

By Pepper Parr

February 19, 2014


You can`t fault Councillor Jack Dennison for trying – and try he does.  During a Standing Committee last week when discussions on the capital projects the city will take on in 2014 as they spend the $67 million plus that council is expected to approve Tuesday evening, Dennison felt there were opportunities that were being missed and wanted the city to consider selling the Tyandaga Golf course property.

Ward 4 Councillor Jack Dennison always has an eye open for an economic opportunity – sees a great one for the city: sell the golf course.

“This isn’t a business we should be in” Dennison commented, echoing remarks city manager Jeff Fielding had made more than a year ago.  While Tyandaga is currently running at a bit of a profit that was not the case a couple of years ago.  At that time the golf course juggled its business model and tightened up its management practices and the profit and loss statement began to look better.

Dennison just doesn`t think the city should be in the golf course business and pointed to the “40 golf courses” in the surrounding communities – that number might be a stretch, but Burlington certainly has its share of golf clubs that are a 15 minute drive from the downtown core.  Should the city be in a losing business when there are plenty of very good private golf clubs in the community?

Ward 4 Councillor Jack Dennison sees 200 homes on the Tyandaga golf course property and thinks the Catholic Diocese property that front on Brant Street could be made a part of the project as well.

Dennison saw the 110 acre Tyandaga property as prime residential development land and talked of being able to get something between $12 and $18 million for the land alone.  He added to that the immense development charges that would accrue to the city and then the tax assessment which he pegged at $200 million.

Dennison told his colleagues that the property had 33 acres of land that could be developed and because of the location he saw at least six houses on each acre getting pretty close to 200 homes on a prime site that would have 76 acres of parkland.

Before we knew it Dennison had $1.6 million in additional tax revenue in the city’s coffers.

Councillor Dennison saw an easy $1.6 million in taxes from golf course- will he be on Council to see it happen?The golf course wants to spend $150,000 this year on upgrading parts of the golf course – Dennison wanted to defer that spending while the city took a closer look at the property and the opportunity he felt it offered.

The rest of Council wasn’t as gung-ho as Dennison.  They Mayor said it looked like a “cash grab” to him but didn’t explain what was wrong with wringing cash out of an underperforming asset.

The rest of Council didn’t get very excited either.  Ward 1 Councillor Rick Craven was delayed in getting to the Standing Committee meeting and missed a discussion that would have taken a major public recreational service off his plate.

Councillor Sharman took the high road and said the selling of the golf course had to be looked at in a “broader context” but didn’t elaborate on what that meant other than to say that the city was “not ready for the discussion”.

Councillor Meed Ward piped in with her view that adding residential assessment isn’t always a good deal for the city.  “For every dollar of tax revenue we pull from residential properties we end up, over time, spending a $1.40  Dennison came back with “that argument doesn’t really hold all that well”.

Council needed some input on just what the planned spending on the golf course was for and called Director of Parks and Recreation Chris Glenn to the podium.  Odd as it may sound Glenn wasn’t able to say just how many golf courses there were in Burlington, nor could a member of his staff come up with a solid number.

Parks and Recreation department not sure just how many golf courses the city has.Were anyone to ask a privately operated golf course what their competition was you would expect them to tell you exactly how many competitors they had and be able to tell you which were their closest competitors in terms of course usage and revenue.  The mindset of the private sector is a lot different from the mindset of the public sector where the renewal of an asset is based on a chart or a schedule that dictates when an asset has to be renewed.  The private sector operator would wring every possible nickel out of a piece of equipment.  Any expenditure comes out of the bottom line which tends to be the owners pockets.

Glenn explained what the $150,000 was going to be used for – and added that it wasn’t really a capital expenditure from the city’s point of view – the expenditures were going to come out of reserves the golf course had in place.

For Dennison it was an opportunity that was being missed; he wanted to see the asset being used in a much different way.  He didn’t manage to convince his colleagues to go along with him – the motion to defer the item was lost on a 4-2 vote.  But Dennison did manage to plant a seed – the city manager is way ahead of him on this one. When city council decides what businesses it wants to be in – the golf course business is not likely to be one of them.

Another question is: will Jack Dennison be on Council to see this kind of development take place.

At the Tuesday evening Council meeting the Capital budget was approved for 2014.  There are loads of items in the longer term capital budget that will be getting a much different look during the year.  City hall will begin the process of totally recasting capital expenditures as it reorients itself to its new financial reality.  Among the projects in that capital budget that will be getting a closer look are the railway underpasses on Mainway and Burloak – neither is going anywhere in 2014 – both will be getting a closer look as the longer term capital budget gets its remake.

On the books for the 2015 to 2023 capital spending is a massive $494,012,195 in capital spending.  City manager Jeff Fielding looked at the cookie jar and knew pretty quickly that the number wasn’t possible – thus the decision to totally recast what we want to do, what we have to do and what we can do in the way of capital spending for the next 15 years.  

Lori Jivan, on the right, Acting coordinator budget and policy with the city explains the 2014 budget at a public meeting.

With the capital budget of $67,973,902 nailed down – let’s look at where the money is going to come from:  Lori Jivan, Acting coordinator budget and policy  explains:

External other: These are monies the city gets from other place, could be the provincial government, the Region or some other municipality we are doing a joint project with.  If  Tremaine Road was having work done on it – because it is our border with Oakville they might be paying part of the cost.  We pick up $10,089,000 from this source.

Debt:  We sometimes decide to borrow money to pay for a capital project.  This year the city projects they will borrow $6,903,000

Cash from the current budget:  This is tax revenue – money the city collects as taxes.  A portion of the tax money gets pushed into the Capital account.  For 2014 they are moving $16,684,000 into capital expenditures

IRRF – this is the Infrastructure Recover Fund which amount to $2.000.000 the city gets from Burlington Hydro.  It comes to the city from Hydro as a dividend which the city places in the Infrastructure Recovery account.  $2,000,000

SCD: Special Circumstances Debt.  This is an estimate of the amount of debt the city will have to take on for special project – one time situations that might get taken on.  The Performing Arts Centre is an example of a one time Special debt.

FGT:  Federal Gas Tax. The portion of the federal gas tax that the city receives.  For 2014 that is set at $4.774,000

Provincial Gas Tax  PGT: The portion of the provincial gas tax the city receives.  For 2014 that is set as $850,000.

Reserve funds will be used with $20,648,000 coming from the development charge reserve and $5,027,00 coming from what the city calls “other”.

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3 comments to Dennison finds an easy $12 million – Mayor says its a cash grab. Is the golf course a city asset in play?

  • Seems like a very reasonable question to me ~ WHY is City in the golf business?
    Good question.

  • Mr. Wonderful

    Hey what’s going on here. Every time I return from vacation, something crazy is going on.

    I will keep it simple today, because I injured my foot playing golf last week.

    Goldring’s comments seem somewhat unusual and not Mayor like; a bit weird actually; maybe the pressure is getting to him.

    I have a problem with Dennison speaking to potential site density, development type and potential, and land value. THIS IS NOT HOW COUNCIL OR THE CITY SHOULD BE COMING OUT IN PUBLIC TO TALK ABOUT THE VALUE OF A UNIQUE REAL ESTATE ASSET SUCH AS THIS PROPERTY. Dennison does not know the value of this property, nor does the city’s appraiser.

    It is getting frustrating to witness the way in which the city has been dealing with real estate issues; this type of loose and public management of financial and city owned asset issues can be potentially damaging to the best financial interests of the city.

    Neither Goldring or Dennison know what they are talking about. They definitely do not know HOW to communicate effectively on such matters.

    Sorry, I’m a bit off due to my bunion issues, but, I feel this obligation to help where I can. See ya for now!

  • Cathy P

    I agree with getting out of the private sector business, but who is going to buy a “premium home” with a major power line in the backyard? Dont forget, we cant remove these power lines and Ontario Hydro has jurisdiction here. You cant even put a soccer pitch on vacant hydro lands without Ontario Hydro’s permission.