Six years ago, five city-owned golf courses were draining the city treasury, so then-Mayor William Donald Schaefer decided to lease them to a private corporation for free.
The courses, under the management of the Baltimore Municipal Golf Corporation, have become so successful that they made more than $800,000 in profit last year.
Mayor Kurt L. Schmoke has asked the golf corporation to share some of the money with the city so it can be used for the city's understaffed, decaying recreation centers.
But the golf corporation's board of directors declined the request. Now, the city is considering court action to force the corporation to share the profits, the mayor says.
"It seems to me that they operate as our agent and on behalf of the city. So, they should adjust to the needs of the city," says Schmoke, adding: "They don't need all the money. We asked them for some of it to help inner-city children."
A recent study of the city's recreation centers found that the city has enough money to operate only half of its 86 recreation centers and suggested closing some of them. During the past 10 years, money shortages have forced the the city to cut 175 recreation jobs and virtually eliminate maintenance money for the centers.
"The concept of a municipal golf corporation is good," says Schmoke, "but they should not feel themselves to be completely autonomous."
George G. Balog, director of the city's Department of Public Works, put the city's position more bluntly:
"They're using our property," he says.
The golf courses -- Carroll Park, Clifton Park, Forest Park, Mount Pleasant and Pine Ridge -- were leased to the Baltimore Municipal Golf Corporation, a non-profit corporation, in 1985 under a 15-year lease.
That year, the city's Board of Estimates agreed to lease the golf courses at no charge, in exchange for the corporation's promise to make the courses self supporting, using only the revenues they bring in.
But the lease agreement does not require the corporation to give any of its revenues back to the city.
William L. Cook 2nd, executive director of the golf corporation, noted that the city was "losing half a million dollars a year" before his corporation took over the golf courses.
"They said 'don't come back' and now they're saying, 'come back'," said Cook, who declined further comment.
Cook also said board chairman Henry H. Miller had been hospitalized and was unavailable for comment.
The corporation uses its relationship with the city to maintain tax-exempt status with the federal government. The corporation's 1990 Internal Revenue tax statement says its activities "contribute to accomplishment of [tax] exempt purposes by lessening the burden of government.
"Activities which provide recreational facilities which ordinarily are provided and maintained at the taxpayers' expense are considered performing governmental functions and are thus charitable."
According to the 1985 agreement with the city, the golf corporation has full control to operate and maintain the city's golf courses, to buy equipment and to construct new buildings.
According to the corporation's own accounts, it has become a successful, multimillion-dollar operation in its half dozen years of existence.
It's glossy 1990 annual report shows the corporation made more than $800,000 in excess of its expenses last year, due partly to a long playing season unhindered by rain or excessively hot or cold weather.
The extra money is being used for $600,000 in capital improvements, including a new golf cart storage building at Clifton Park in Northeast Baltimore, a new finishing hole at Forest Park in Northwest Baltimore and 260 new gas-powered golf carts.
The improvements also include $100,000 in new golf cart paths and $100,000 to replace aging equipment, said the annual report.
The corporation's payroll for its staff was $1.8 million last year. It's executive director and director of maintainance made salaries of $64,680 and $61,416 respectively, according to its IRS tax statement.
In addition to the mayor's attempts, City Council President Mary Pat Clarke has also tried to get some of the golf corporation's profits for the city.
She says she met with board chairman Miller several months ago, and he declined to share the corporation's profits.
"The good news is the corporation has done a splendid job of upgrading the golf courses, but we're not sharing the success," says Clarke, adding: "At the time when the recreation centers could use the infusion [of money], it would be good to share the profits with the recreation department since they own the golf courses."
Schmoke says he believes the golf corporation is holding on to its profits because it is still interested in expanding the city's Pine Ridge Golf Course, located in Baltimore County on city-owned land adjacent to the Loch Raven Reservoir.
In 1988, the golf corporation's plans for expansion were shelved after Schmoke opposed a new golf course because of potential pollution problems it could create for the reservoir, which provides the metropolitan area's drinking water.