The Town of St. Paul is seeking the golf course club's executive to pay from its personal resources, $36,900 to the town, based on what it describes as “blatantly false&” representations of the club's finances.
The Town of St. Paul is seeking the golf course club's executive to pay from its personal resources, $36,900 to the town, based on what it describes as “blatantly false&” representations of the club's finances.
In a letter sent to the club's executive, including golf course board president Danny Gadowski, vice-president George Parrott and treasurer Maurice Brousseau, the Town of St. Paul explained that in a September council meeting, Brousseau said the current liabilities of the club were $61,232 and asked for an increase in the guarantee of its loan through Servus Credit Union. At the time, he explained this would help the golf course operate until it got to its December pre-membership sale.
“The Town based its decision to increase its liability by this $82,000 to Servus Credit Union because of this representation,&” states the letter, with the golf club's line of credit extended to $120,000 after that meeting.
“We now understand that at the time of Council request, that the actual current liabilities of the club were of a magnitude of at approximately four times that amount,&” it states.
Town council “is very upset&” that the club was not forthright in presenting its financial information, states the letter, which notes that the overall indebtedness of the club is in excess of $1 million when taking into account the line of credit.
While the Town increased its liability by $82,000, the letter noted that 45 per cent membership of the club is comprised of individuals who do not live in town. It accepted the increased guarantee in the amount of $45,000 if the club would pay to the town the $36,900 represented by non-residents' portion of that debt.
The Town of St. Paul is asking for confirmation of payment on or before Nov. 30, 2015, saying, “If not, then we will have no choice but to commence legal action against the club and against Danny Gadowski, George Parrott and Maurice Brousseau for a return of the entire $82,000 that the Town has been made responsible for.&”
A senior town official says that the town is considering all the legal options available to the town to get as much money as possible to cover the $923,000 plus fees it will have to pay as the guarantor for the golf club, to do its due diligence for residents.
Gadowski said the letter was hand-delivered to him last Friday, and described it as a “shock,&” but declined to comment further as the golf club is seeking legal advice.
Mayor Glenn Andersen confirmed that council was not aware of the letter before it was sent to the golf club executive; however, he did note that the letter was sent on behalf of the town and was written on town letterhead.
"Administration has to do what's best for the town," he said, adding that administration has a "tremendous responsibility" to protect and serve the financial interests of the municipality. "It's all covered under the MGA (Municipal Government Act) and he's acting accordingly . . . it's perfectly within the role of his position."
On Nov. 11, golf club members asked for more information about the state of the club, its direction and the proposals it was putting forward to the town to work towards a solution. For more information from that meeting, see this week's St. Paul Journal.
