If you are a supporter of Sligo Golf Course, you are probably asking yourself two questions:

Why, after more than two years of proposals, is there still no solution for keeping Sligo open to serve the residents of Montgomery County?

Why did County Council President Nancy Floreen wait half a year to bring the Sligo Task Force Report before the Council, saving it for the final hour of the Council’s final session before the 2010 primary election?

The answer to both questions requires an understanding of how the operation of Sligo came to be transferred from the Park & Planning Commission to the Montgomery County Revenue Authority in the first place.

Sligo was transferred to the Revenue Authority in April 2006, first under a six-month “interim operating agreement” and then under a 30-year lease.  Sligo is one of four Commission courses that the Revenue Authority agreed to operate; the others are Needwood, Northwest, and Little Bennett.

When the Revenue Authority took control of the four Commission golf courses in 2006, it already operated five public golf courses of its own.  The Revenue Authority needed to take over the Commission golf courses because it needed the revenue from those courses to help meet its own financial obligations.

What were those financial obligations?  First, the Revenue Authority needed more revenue to make payments to M&T Bank on $24 million in bonds, debt that the Revenue Authority had incurred to upgrade its own golf courses.  Second, the Revenue Authority needed more revenue to meet its obligations under a $5 million letter of credit agreement with M&T Bank.  Third, the Revenue Authority needed more revenue to subsidize losses at the Montgomery County Airpark, which the Revenue Authority also operates.  Fourth, the Revenue Authority needed revenue to pay its share of planned capital improvements at the Airpark to ensure its receipt of tens of millions of dollars in federal grants from the Federal Aviation Administration.

These financial needs remain unchanged.  So how does keeping Sligo open affect these needs?  If Sligo closes, many golfers will then play at other public courses operated by the Revenue Authority, thereby improving the Revenue Authority’s revenues.  If Sligo remains open and is operated by a third party, the Revenue Authority will lose Sligo’s revenues entirely.  If a third party makes Sligo really successful, additional golf revenues could even be drawn away from the Revenue Authority’s remaining golf courses.  Simply put, both the Revenue Authority and M&T Bank benefit if Sligo closes – just like they benefited when operation of the Commission golf courses was transferred to the Revenue Authority in 2006.  The County Council knows all of this.  County Executive Ike Leggett knows all of this.  They’re just not telling you.

Ms. Floreen has been playing hide-the-ball with Sligo in order to avoid questions about her participation in the process that transferred the Commission golf courses to the Revenue Authority in 2006.

The transfer was part of a political deal between then-County Executive Douglas M. Duncan (who was running for Governor), then-County Councilmember Steven A. Silverman (who was running for County Executive) and Ms. Floreen (who was seeking reelection to the Council).

At the time, Mr. Silverman was chair of the Council committee that oversees the Commission, and Ms. Floreen was a member of that committee.  Also at the time, Ms. Floreen was chair of the Council committee that oversees transportation issues.

The deal involved a straight-up trade of golf course revenues for transportation funding.  Ms. Floreen and Mr. Silverman agreed to deliver Sligo and the other Commission golf courses to the Revenue Authority.  In exchange, Mr. Duncan agreed to “give” Mr. Silverman and Ms. Floreen $80 million toward a transportation program that they wanted to campaign on in the 2006 elections.  To ensure an “even” trade, the two sides came up with a benchmark number.  Ms. Floreen and Mr. Silverman’s transportation funding would cost approximately $5.6 million in annual debt service.  Every year, Mr. Duncan’s Revenue Authority would be guaranteed approximately $5.6 million in revenue from the Commission golf courses before it would have to pay any rent for the privilege of using them.

Although the deal was hailed as an “arm’s length transaction,” it was not.  Under the “interim operating agreement,” the Revenue Authority obtained all of the peak season revenues of the Commission golf courses in 2006 in exchange for nothing.  This left the Revenue Authority with a windfall of approximately $3 million at the expense of the Commission and County taxpayers.  This $3 million covered the Revenue Authority’s cost for the entire deal: $2.88 million to gain control of the Commission golf courses and to purchase all of their equipment.  In effect, County taxpayers bestowed a multi-million-dollar subsidy on the Revenue Authority which, as a matter of County law, is not entitled to receive any direct or indirect taxpayer subsidies.  Every year, County taxpayers bestow a second type of subsidy on the Revenue Authority: $5.6 million in golf revenues that the Revenue Authority is permitted to keep before it pays a dime in rent to the Commission.

It is time for the Revenue Authority and M&T Bank to give back.  I call upon them to agree to keep Sligo open by providing it with the equipment and funding that it would have access to but for the taxpayer subsidies that continue to benefit them.

I pledge that as County Executive, in the absence of such a voluntary agreement, I will use the offices of the County Attorney to compel an equitable resolution of the Sligo situation in a court of law.