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This Colorado golf course is finally profitable, but owes over $1M in water bills. What happens next?

PUEBLO, Colo. — Desert Hawk Golf Course’s old water debt — totaling $1.279 million — may start to be whittled away now that the Pueblo West course is turning a profit.

Pueblo West Metro District lawyer Karl Kumli asked the district board Monday to consider whether it wants to start collecting on the outstanding debt.

The golf course has paid all of its water bills since 2011, said Anthony Sandstrom, metro district communications and public engagement strategist. Because water bill tabulations are saved for only the past five years, it is unclear how long the golf course was unable to pay its water bill, he said.

“The golf course owes the district for water, so the question is how do you want to recoup it? You can ask for a portion of the relatively meager profits or allow them to be retained by the golf course,” Kumli explained.

The profits for 2020 and 2021 are “in the low six figures, about $100,000 for each year,” and 2022 figures should be available soon, Kumli said.

Desert Hawk is owned by Pueblo County and the metro district. They joined forces through a 2000 intergovernmental agreement designed to save the failing golf course, which had previously been operated by a string of private owners. The agreement calls for “repayment of the lease as a first priority and a second priority of funds realized going to operations and maintenance of the golf course, of which water is certainly a necessity,” Kumli explained.

He said the district could seek a token amount of anywhere from zero up to $100,000. If the current profit rate continues and the board did opt to take a $100,000 payment annually, the debt could conceivably be retired in 12 years.

“I believe this is the first time we have been faced with this because the golf course has not been profitable,” said Doug Proal, board vice president. “I certainly believe it is an asset to this community, and it has been for years.”

“We should get a portion of that back but divide it appropriately to make sure the asset moves forward,” Proal said.

Board President Kim Swearingen said she would “like them to pay their bill, but in the spirit of trying to be a good neighbor and knowing it is an asset to the community, I would like to see what they plan to do with their profits before we decide.”

Both Proal and board member Jami Baker Orr also expressed an interest in having more information and time to review the situation. A golf course committee meeting is set for March 22, and the board likely will discuss the issue further at its March 27 meeting.

Water rate increased for the golf course late last year

In November, the board approved a price increase for Desert Hawk Golf Course water rates from $1.15 per 1,000 gallons to $1.56 per 1,000 gallons. The board voted 4-1 on the rate increase, with Secretary/Treasurer Joe Mahaney casting the lone no vote.

“It doesn’t make sense to me that we are leasing water from the (Pueblo) Board of Water Works for $2.48 (per) thousand gallons and selling it to the golf course for $1.56,” Mahaney said at the time.

However, Jeffrey DeHerrera, deputy director of utilities, said the golf course is using well water, backwash and raw water, which costs less to deliver.

According to the most recent district documents the Chieftain could obtain, the golf course is overseen by an independent contractor that operates, manages, maintains and promotes the course. An agreement with Zaremba Enterprises Inc., of which golf course professional Michael Zaremba is president, has been that independent contractor in recent years.

Tracy Harmon covers business news for the Chieftain, part of the USA Today Network. She can be reached by email at tharmon@chieftain.com or via Twitter at twitter.com/tracywumps.

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