County seeks spending audit on golf courses

Financial problems afflict Compass Pointe project

MEDCO requests more funds

Officials want assurances of project's stability

Anne Arundel

September 30, 2004|By Andrea F. Siegel | Andrea F. Siegel,SUN STAFF

Anne Arundel County officials are seeking a legislative audit of how a quasi-state agency spent $17.6 million in bond money to develop a still-unfinished golf course for the county and improve a second course.

The Maryland Economic Development Corp. has run into financial problems in building the 36-hole Compass Pointe course in Pasadena, which was to have been finished in May last year and now has 27 holes open. MEDCO also took over operation of the Eisenhower Golf Course in Crownsville in 1998.

MEDCO's chief told the county this week that his agency needs another $3 million to finish building the last nine holes at Compass Pointe, on top of $1.1 million the county provided in June because of an operating shortfall. Although an agreement with MEDCO calls for the county to assume control of the course when the bonds are paid off in 25 to 30 years, alarmed county lawmakers said they are considering taking back the project soon. An audit would help them decide, Council Chairman C. Edward Middlebrooks said.

"We want to see if the money was spent properly and in a wise fashion. And we want to make sure we are not taking a pig in a poke if we take [Compass Pointe] back," said Middlebrooks, who joined County Executive Janet S. Owens in seeking the audit.

Owens' spokeswoman, Jody Couser, said the executive wants the audit because MEDCO has not provided audited financial reports as required by the sale of the bonds for the project.

The county's request was forwarded by leaders of the county's legislative delegation to the General Assembly's Joint Audit Committee. The state, not the county, has the authority to audit MEDCO.

An aide to Sen. Nathaniel J. McFadden, co-chairman of the Joint Audit Committee, said yesterday that the senator had just received the audit request and needed more information before making a decision.

MEDCO Executive Director Bob Brennan said MEDCO did not prepare a separate financial statement for the Compass Pointe facility for the fiscal year that ended June 30, 2003, because the course did not open until last October. The information was incorporated into MEDCO's overall financial statement, which has been audited by KPMG.

"Because the golf course was not operational, we didn't do a standalone statement. Maybe we should have, but the decision was made at that time," he said. He arrived at MEDCO in June.

Brennan said the agency has "nothing to hide," and that he has told county officials they can review the books. Previous state audits of MEDCO showed its records were in order, he said, adding that he would expect the same results if another were to be done.

Of concern, he said, is whether the controversy over project financing would lead to a delay in finishing the last nine holes, considered crucial for the operation to be profitable. Brennan said he wants the course to be fully open for the spring season.

But the county has to sign off on any additional bonds that would have to be sold to complete the course, and Middlebrooks said he doubted the council is prepared to do that without financial documentation.

Brennan attributed the higher-than-expected costs for the project to several factors, including delays caused by heavy rain from Tropical Storm Isabel last year that required unanticipated stormwater management work.

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