Letters to the Editor

THE BALTIMORE SUN

Have enriched classes available to all pupils

An article in the January 23rd edition of The Sun (Anne Arundel section) entitled "IB is in Demand" points out the near-insanity of Dr. Eric Smith's ill-conceived movement to standardize curricula throughout this very diverse county. By forcing hundreds of students to waste time during the school day in an extra hour of reading (which they can do at home), Smith has brought every child's school day experience down to the lowest common denominator.

The insanity to me is now apparent in this article which illustrates the hunger on the part of students and parents to experience better school day programs. But only a select few will be allowed to do this: those who are admitted into the Middle Years program, who are willing to commute to one of the two locations and who have decided that having a better school experience is worth leaving their friends behind.

Somehow, by being democratic and forcing all students into one county-wide program regardless of their individual needs and interests, we have now created an extremely undemocratic program where only a select few will be able to experience this enriched Middle Years program. As one concerned parent, I cry "Foul." Something is just too wrong with this picture. Does the school board recognize this craziness? The officials in charge need to be contacted and made aware that we won't tolerate this situation.

Leo J. Vidal

Millersville

Don't bail out Compass Pointe

The Compass Pointe fiasco really has me steaming. From what I read, the county has no legal obligation whatsoever to bail out the Maryland Economic Development Corporation (MEDCO) with a $26 million bond issue. Taxpayers already have put up $1.1 million last June in an agreement that was to cost us nothing.

MEDCO apparently has been pulling the wool over everyone's eyes. Now they want another $3 million from taxpayers, and probably more as time goes by. It's stupid to think Compass Pointe needs the other 18 holes finished. They need to live with what they have until revenues can pay for the final product. I don't believe for a minute MEDCO's problems are due to bad weather. More likely, it's due to poor planning and management.

What really rips me is that MEDCO continues to make totally unrealistic revenue projections. While some may argue that these projections are merely optimistic, I would say they are conscious misrepresentations on the part of MEDCO. This is either misfeasance at best or malfeasance at worst.

My stance is to let MEDCO sink or swim on its own (what has been their take from this so far?). Taxpayers should not be in the business of developing golf courses. If the county will suffer $2 million in higher interest rates over the next ten years (some say this is not likely), this is a much smaller price to pay than another $3 million coughed up now. Besides, what would be the interest payments on the $26 million bond issue? Seems like a no-brainer to me.

I feel sorry for the investors. They got taken, but then they should have done better research before getting hooked into this mess. Bailing out unwise investors is not a proper use of taxpayers' monies.

Laurent Deschamps

Annapolis

Samorajczyk explains golf course dilemma

Compass Pointe is a 36-hole golf course located in northern Anne Arundel County off of Fort Smallwood Road. In 2001, the Maryland Economic Development Corporation (MEDCO) issued $17.6 million in bonds for its construction. Now Anne Arundel County taxpayers are being asked to bail out MEDCO at a cost of $26 million and assume ownership and all financial risks for Compass Pointe. What happened?

Before MEDCO issued its bonds, County Executive Janet Owens entered into a contract with MEDCO agreeing to ask the County Council to fund operating expenses for Compass Pointe if there were insufficient revenues. The Office of Law said this agreement did not create an obligation by the county. However, the financial market that oversees bond ratings for counties may disagree. Financial advisers subsequently told the council that the agreement by the county executive indicated a willingness to pay, and since the county has the ability to pay, the failure of the council to appropriate any money that is needed for Compass Pointe may affect the county's bond rating. Sounds unbelievable, doesn't it?

The crux of the problem is that the golf course revenues are not sufficient to pay its operating expenses and the 8 1/4 percent interest to the bondholders. Plus, there are construction overruns in excess of $3 million. Yet MEDCO has failed to do an audit to find out why the construction costs are so much higher than projected. In addition, there is another $5 million of expense to pay the bondholders 8 1/4 percent interest until 2011 even if the county becomes the owner of Compass Pointe. These two items represent $8 million of the requested $26 million in county bonds to replace the $17 million in MEDCO bonds.

So why doesn't the council just say no and let MEDCO resolve its own problems? Because the county's bond rating, which is viewed as the "sacred cow," is threatened if the Council fails to approve funding. This is a first. Recently, the council's financial advisers calculated potential costs if a downgrade to the county's bonds were to occur. The cost ranges from $18,000 to $76,000 each year when the county sells its bonds. These costs will compound each year that the bonds are in existence. Over a 10-year period this could cost the taxpayers approximately $1 million to $2.2 million, depending on the severity of any downgrade. But the financial advisers also said it is unlikely that any downgrade to the county's bond rating would continue beyond a few years, given the county's long term conservative fiscal record. In addition, when a more favorable interest rate is available, costs could be reduced by refinancing the bonds.

But there is more to the story. In the alternative, if the county decides to issue $26 million in bonds at 4.4 percent interest for 30 years and take over ownership of Compass Pointe, it may acquire a golf course that cannot ever generate sufficient income to pay the proposed debt service. The administration hired Economic Research Associates (ERA) to conduct a market feasibility study. Unfortunately, the study is remarkable for projections for Compass Pointe that dramatically exceed documented trends for public golf courses in the market area.

For example, between 2001-2003, the National Golf Foundation reported a 14.7 percent decline in the number of rounds of golf played in the United States. Locally, the Baltimore Revenue Authority reported a 15 percent decline in rounds of golf played on its courses between 2002-2003 alone, with only a 2 to 3 percent increase in 2004. Other local public golf courses have reported similar declines.

Market research firms attribute the decline to player loss, reduced play per golfer and an oversupply of golf courses. Larry Hirsh of Golf Property Analysts in Harrisburg, a nationally recognized golf course appraiser, estimates golf courses have lost 60 million rounds due to declining demand and 31 million rounds due to new competitors since 2000. The Baltimore Revenue Authority documents a 90 percent increase in the number golf courses in the Baltimore region between 1990-2004. The study concludes that "when coupled with flat and declining demand for golf after 2000, the results are very negative for golf course operators." Other independent research included in the ERA study demonstrates that golf, like so many recreational pursuits, may be on the downward half of the participation cycle.

In the face of this, the ERA feasibility study projects that by 2008, Compass Pointe will achieve gross annual revenues of $5.4 million. In 2004, the most competitive 36-hole golf course in the market area earned $3.2 million, which is consistent with an average of $1.6 million gross revenue per 18 holes achieved by other courses in the area. Unless Compass Pointe exceeds this average by over 65 percent, taxpayers will be contributing to pay debt service on the $26 million in bonds. If the actual revenue for Compass Pointe is consistent with other courses in the market area, revenues will range only between 50 percent to 75 percent of the projected $5.4 million. Financial advisers estimate this would cost taxpayers an additional $6 million to $17 million for debt service on the bonds over a 10-year period.

There are potential risks with either alternative. What would you do?

Barbara D. Samorajczyk

Anne Arundel County Council, District 6

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