SG Golf Management remains obligated to provide monthly and annual financial statements to the City of Devine after the City Council voted 3-2 against adopting amendments stripping those requirements from the contract between the entities.
The decision was made at the Regular meeting held last Tuesday, December 14, following Scott Grego’s refusal at the June meeting to turn over SG Golf’s financial statements, and his request that the City remove stipulations in the contract requiring him to do so.
The contract, which was approved 3-2 by Council in November 2019 and went into effect in January 2020, requires the City to pay SG Golf Management $32,536 a month to handle the day-to-day operations of the course until the City’s turnkey renovation of the clubhouse is completed.
In turn, SG Golf keeps all revenue made from the golf course and is required to furnish the City with financial documents including its employers quarterly report, Texas Workforce Commission quarterly report, Federal unemployment tax report, and income tax returns (18.01); monthly statements, within 20 calendar days after the close of each calendar month, showing the course’s financial activities for the preceding calendar month and the calendar year to date (18.02); and annual statements, within 60 calendar days after the close of each calendar year, a financial statement showing the course’s financial activities for the calendar year then ended (18.03).
Under the proposed amendments, 18.02 and 18.03 were revised to require SG Golf to only turn in modified financial statements regarding just its $32,536 provided by the City, while 18.01 was revised to specify that a copy of SG Golf’s income tax return was due 30 calendar days after it was filed, but no later than November 15 of each year.
A new clause, 18.04, was also proposed, which stated that SG Golf would not be required to provide the City with balance sheets, income statements, or profit and loss statements, notwithstanding anything else in the contract to the contrary.
City Attorney Tom Cate said that discussion had been held under former City Administrator John Vidaurri about whether or not wages should be considered an expense.
“Every accounting principle that I know of, wages are an expense,” Cate said. “So at 18.02, this is where I think that should come in. 18.02, that second paragraph, just add the sentence ‘wages shall be specifically included as an expense.’ And that way, if Council wants to pass it, that way there’s no more misunderstanding on that issue.”
District 2 Councilwoman Angela Pichardo read aloud section 23.11 of the contract, which states in part that the contract itself “supersedes any and all other agreements, either oral or in writing, between the City and SG Golf Management.”
Cate explained that section 23.03 of the contract allows for its modification “effective only if it is in writing and signed by both parties.”
“So that’s why we’re here tonight,” Cate said, “for Council to decide whether or not you want to modify the contract, and we will put that in writing.”
“And we already voted to modify it,” District 5 Councilwoman Debbie Randall said, referring to Council’s decision at the June meeting to move forward with Grego’s request.
District 3 Councilman David Espinosa noted that Grego “strongly refused” to give the City required paperwork, and asked Grego if that was still the case.
Councilman Espinosa asked, “Scott, back when we had this meeting initially (in June), you strongly refused to give us some paperwork, and that’s what brought us to here right now.Are you still in that state of mind you are not turning in paperwork?”
“I’m not going to,” Grego replied. “That’s why I’m asking for [the contract] to be amended.”
”At one point or another, all of us have entered a contract, either a home or car or what have you, and both parties need to abide by that,” Councilman Espinosa said. “I want everything to work out for both parties. That’s what we are trying to get at…But the taxpayers..As a taxpayer, I am concerned…. .I have nothing against you personally, not at all.”
Grego also said that the City is receiving a copy of paperwork that shows how the $32,536 is being spent, and Mayor Cory Thompson added that the City is paying SG Golf to manage the golf course, and that it doesn’t ask for third party vendor expenses from anyone else.
“All we want to know is that the money that we’re paying them is being used correctly for the job that they are doing for us, and in that amount of job that they’re doing for us, not in the entirety of their business,” Thompson said.
Espinosa said he understood Thompson’s point, but pointed out that SG Golf operates on City property and using city assets.
Pichardo said that Council has a duty to taxpayers and citizens regarding how tax dollars are spent.
“I would be doing an injustice to people if I did not state that we do not support any other private business,” Pichardo said. “Who is everyone up here representing? The taxpayers.”
After discussion on the state of the clubhouse (see separate article), Randall made a motion to approved the proposed amendments “as we had all said we wanted to do back in June” with the addition of a sentence regarding wages added to 18.02.
District 1 Councilman Rufino “Flipper” Vega seconded the motion, which failed when Espinosa, Pichardo, and District 4 Councilwoman Kathy Lawler voted against it.
“Wow,” Randall said. “Y’all said that you were..”
Scott Grego, who was at the podium throughout Council’s discussion and vote, said “Breach my contract,” while his wife Shirl Grego, who was in the audience, screamed out “Un-nnnnnn…..believable” before exiting the building.
An archive of the meeting’s live stream video can be viewed at cityofdevine.org/live-council-meetings/. Click on the December 14, 2021 meeting link.
The contract between the City and SG Golf can be viewed on the Devine News website at devinenews.com/devine-golf-course-contract.
A meeting to discuss proposed redistricting of the City’s voting districts based on 2020 Census data will be held Wednesday, Dec. 29 at 6:00 pm in the Community Center.
By Marly Davis