The City of Devine has issued over a half-million dollars in checks ($553,112) to a private company, Scott and Shirl Grego dba SG Golf Management, and according to City records it was discovered that only $241,724.15 has been accounted for in SG’s expenditure receipts to show how the taxpayer money was spent, leaving $311,387 unaccounted for. After a lengthy meeting packed with golf course homeowners’ and golfers’ emotional praise, demands and thoughts before the city council voted to consider amending the contract to suit Scott Grego’s multiple refusals of “I will not turn in my financials” “no one needs to know how much money I’m making” and demands of “you need to amend the contract” he signed as well as Mayor Cory Thompson on December 12, 2019. For 17 months the Mayor and City Council members have allowed this management company to not turn in required income and expense reports despite multiple pleas from concerned community members at public meetings.
Devine City Council met last week in regular session on Tuesday, June 15, 2021 in the community center on the agenda were discuss and consider the following items: Item 15-Consider selling the golf course City Property – requested by Scott Grego. Item 16. Consider request by Councilwoman Pichardo to declare a breach of agreement of SG Golf Management. Item 17. Consider for the City to request an independent audit to audit the financial activities of the Golf Course under Section 20 of the Golf Course Management Agreement- requested by Pastor Kevin Stevens.
As these matters, the contract requirements or possible breach, and the possibility of auditing how the taxpayer money has been spent tempers flared as golfers and District 5 homeowners pointed out how great the golf course is looking now and how much they are enjoying the entertainment under the direction of Scott Grego.
In the heated meeting, Scott Grego of the SG management stood up and told City Council that he “will not” turn in the balance sheet, profit/losses, or income statement, unless it is kept “behind closed doors”— regardless of the contract he signed or the fact that his company receives $32,500 in Devine public taxpayer funds each month to help pay for the expenses of taxpayers owned golf course and assets he is managing on public land. The crowd roared each time he made his demands and refusals in support of Grego not living up to his word and promise to let the city know how their golf course was doing monthly financially. A few citizens did speak up saying that Grego should abide by the contract he signed, and the city take care of the signage they promised as well, and ask for an audit to provide the truth of what is going on at taxpayers’ expense.
A signed contract between SG and the City of Devine states that SG is responsible for turning in financial reports, and that the City can inspect their books and order an audit at any time–to ensure that taxpayer money is being spent on the City golf course. The full contract can be seen at the city as well as on www.devinenews.com. It is all in writing and signed by both parties.
At the meeting new City Administrator John Vidaurri, who just took office a little over a month ago, presented Grego with a report showing the total money given to SG, the total receipts turned in by SG, and a difference of $311,387 unaccounted for. Grego threw that report on the ground.
The report shows that $32,500 is given to SG each month, but only $7,800 in receipts were turned in for March, $7,700 for April, and around $8,880 for May. Grego argued that his payroll alone was over $30,000 in May, and that paychecks (to himself and others) should be an eligible receipt.
FACT CHECK: The contract states that SG is a “SUB-CONTRACTOR” and classifies “the furnishing of food, beverages, utilities, concession, entertainment, operating supplies, equipment, repairs, and other materials” as expenses. But in regards to payroll, it states “SG GOLF MANAGMENT will secure at its own expense, all personnel required…..Such personnel shall be compensated solely by SG GOLF MANAGEMENT.”
Councilman David Espinosa questioned the missing reports required due to the use of taxpayer funds, Grego responded.
“We do have all of our financial reports, I have them,” Grego said. “What I am going to ask is that they stay behind closed doors, and that it doesn’t go to the public. I don’t feel like the public needs to know what I make….”
Councilwoman Debbie Randall asked if the City can ask the Attorney General for permission to keep the public documents confidential. Tom Cate responded that he did not think so.
As the council was discussing this, Grego shouted out “I will not turn them in…..If it’s going to be public knowledge, I will not submit it, even if I’m in breach of my contract,” Grego said. “I will not turn them in.”
Councilwoman Kathy Lawler addressed Grego, asking “Scott, do you know what reports are being requested?”
“Yes ma’am, I do,” Grego said.
“And you don’t want to turn them in?” Lawler asked.
“No. The main thing is the profit and loss that everyone wants to see…Now that I am making money, everyone wants to know how much I am making,” Grego said.
“We are spending $70-80,000 per month,” Grego said.
Lawler said, “I understand what you are saying Scott, but there are people who have asked me about the contract. Tom, do we have anything that is in breach, or?”
“He is not complying with the terms of the contract,” Cate said.”He is not submitting the reports required by the contract. I think that he has not breached it yet, because he hasn’t been given the right to cure. But once he is given the chance to cure, then council can make the determination that he has breached it, because he is not turning in the reports.”
Grego stated, “They are looking for balance sheet, income statement, and profit and losses. Those are the three things they are looking for.”
“So where do we go from here?” Lawler said.
“I don’t care, that’s up to council. I’m not going to turn them in,” Grego said. “In the beginning, I was told that only three people were gonna see my financials–the mayor, the attorney, and the financial advisor. Those were the only three people who were going to see me my financials. Then I walked into a council meeting, and everyone on the council had a copy of it.”
Councilwoman Angela Pichardo who raised the concern over the missing reports, stated:
“What I’d like to say is that it’s not that I am against the golf course.”
Grego interjected, “You’re just against me?”
“No I am not against you either. There is a contract, a binding contract that I am looking at here,” Pichardo said.
“There are no financial statements that have been turned in 18 months…..This is the stack of receipts that has been submitted. There’s not one monthly statement….My concern is that SG Management has been negligent in their accounting practices. I understand that the golf course looks wonderful.”
“I would, as a city like to request an audit, so we can have the management company turn in all of the required documentation, and have an independent auditor come in to do the audit,” Pichardo added.
The Mayor stated that is another agenda item which should not be discussed yet.
Pichardo responded, “These are all breach of contract.”
After some discussion, they put it to a vote and council voted SG Management is not at this time in breach of contract 4-1 (Pichardo dissenting). The City Attorney did advise council that the company has “not complied” with the contract, but should be given a chance to “cure it”, before a breach of contract could be determined.
Addressing the council, Grego asked:
“If I’m going to be accused of fraud I want to know what I am being accused of?”
“Any default especially in record keeping which has not been submitted properly. Again, we do not have those records. I would like to address council to have you submit those records and give you some time to do that so you can rectify the negligence in record keeping,” Pichardo said.
“I make a motion not to find SG Management in breach of contract, and that maybe we can find a way to amend the contract with them if they so desire,” Randall said. (It was a Randall-Schott motion to vote for the original contract back in 2019, Mayor Thompson voted yes to break the tie, Espinosa and Lopez voting no, and Valdez absent).
Cheering from the audience ensued. As many of the crowd started to leave, Mayor Thompson and others encouraged them to come back.
“Audience if you are still hanging around, we still have one more item concerning the golf course. There’s still one more item,” Thompson said striking the gavel. “I would recommend ya’ll sit down.”
Grego stated, “For record keeping, I have the minutes from November 21, from Dora and Tom Cate, that they only need to see how the $32,500 is all they needed to see. So if I can have my contract re-done….All I was asked to do is turn in the $32,500, and that is exactly what we are doing, so we are not in breach of contract, thank you.”
FACT CHECK: Receipts totaling $32,500 monthly have never been turned in by SG, for any month January 2020-May 2021. Nor have additional financial statements that are required in the contract which would show the overall intake and output of the city golf course.
“We must follow what’s on the contract,” Pichardo said.
“That’s why I am asking that the contract be amended,” Grego said.
Devine Golf Course residents packed the city council meeting to express their support for Scott Grego, SG Golf Management and the job they have done turning the golf course around to be a viable business. But when the city asked for financials Grego adamantly refused to turn in financial statements as required by the contract with the city declaring multiple times, it was nobody’s business what he makes, and “I will not turn them in, I will not”.
Grego gave his word when he signed the deal and gladly accepted $32,500 in taxpayers’ dollars per month to help him reform the course, and now is demanding the city “amend the contract to keep his personal business private” rather than requiring him to fulfill his lawful duty as promised.
The majority of those who spoke didn’t care if he was held accountable to his promise to all the taxpayers, they were just happy to have a nice golf course again to play on, look at, and a place to meet and socialize with entertainment.
The council agreed to meet Grego’s demand to consider some sort of amendment to the contract so he didn’t have to cough up all his personal financials which he said he does have, he just doesn’t want others to see.
The contract asks for the financials of the activities of the golf course, not all of his personal activities.
On a motion by Debbie Randall, Council voted 4-1(Pichardo descending) to amend the contract regarding what financials Grego is required to turn in.
Devine Council votes NO so far to audit of how half-million dollars was spent at golf course
Devine City Council also discussed and considered ordering an audit of the half million dollars that the city gave to a local management company to improve city facilities. After some questioning, it was determined that there has been no audit of the way the $553,112 was spent, nor have all receipts or the required financial statements been turned in. Of the half-million dollars that was given to SG Management, the new City Administrator stated that only $241,724 has been accounted for in SG’s expenditure receipts turned into the City.
To begin discussions on auditing, a citizen asked the Mayor if the golf course had been audited. Mayor Thompson explained that the overall city is audited every year.
“The auditors did review the information that we have for the golf course, and they were indeed apparently happy with it. They noted nothing in their notes that there were any issues that they had,” Mayor Thompson said.
Pichardo asked in response, “I would like to ask our lawyer Tom Cate to just verify if there has ever been an audit of the golf course?”
Cate stated that the auditors looked over the City’s expenditures, not the golf course or SG management’s expenditures.
“Mmmm–no the golf course had to submit paperwork. I know they did,” Thompson replied.
“The golf course was never audited,” Pichardo said, asking former Interim City Manager Dora Rodriguez to verify.
Rodriguez stated that NO, the city’s auditor does not audit third parties like SG Management as part of the regular city audit.
Councilman Espinosa stated, “We basically give the golf course $32,000 a month, and Scott, if you can account for that. I’m okay with that. I will say if we get an auditor in here, we are looking at $20,000 of taxpayer money.”
The crowd cheered.
However, less than half of the $517,000 has been accounted for in eligible expenditures, which does not include payroll according to the signed contract.
“Initially, we were turning in all of our receipts prior to April last year, and that is when Tom and Dora said all we needed to do is show proof of the $32,000 being spent,” Grego said. “But if Dora and whoever wants to go through all $80,000 worth of receipts every month I’d be happy to turn them in.”
City Administrator John Vidaurri asked for permission to speak.
“Mayor, may I say something? Because I am looking at an expense report from January 2020 to May 2021. And when you look at your expenses in that pile (of receipts), it does not add up to $32,500. It’s much less. Could you respond to that?” Administrator John Vidaurri asked.
“I have not seen that report,” Grego said, taking the page to read it.
“I don’t know who takes copies, but it shows that for May of 2021 that we’ve turned in receipts for $8,845. My payroll is $32,000 a month, and I submit that. So I don’t know where the record keeping went wrong, but this is not accurate at all by what we’ve turned in,” Grego said.
“The contract says you pay for payroll,” Vidaurri responded. “These are supposed to be expenditure reports.”
“Payroll is an expense!” Grego interjected.
“We’ve been requested by the public to provide those expenditure reports and we don’t have them,” Vidaurri said.
“So payroll is not an expense [eligible in the $32,000]?” Grego asked. “Why am I just now being told this after 18 months?”
“Read your contract,” Vidaurri said. “The $32,000 is to be spent on other expenses [for the golf course] whatever it is.”
“You’re crazy!” Grego said, throwing the paper on the floor.
“No, I’m not,” Vidaurri said. “In most instances you are not spending $32,000 a month based to the expenses you are submitting to the city, and we have documentation to reflect that.”
Grego and the audience laughed.
“Well I am laughing because payroll is an expense we turn into the City!” Grego said.
Councilwoman Randall stated “Calling for a breach of contract for this reason is a total waste of our council’s time. Actually the City of Devine is in breach of contract due to required signage that has not been completed on the golf course.”
Randall made a motion NOT to audit the money given golf course.
“I don’t want to send $10,000 we don’t have in our budget,” stated Councilwoman Randall, referring to the idea for an audit on the half million dollars given to SG Management over the past year and a half.
Golf course is looking great
Many residents who live on the golf course came to speak, and were allowed to speak at select times throughout the meeting. Over 150 people attended.
Mr. Tim Bourcier is one of the residents who spoke, stating:
“I have lived on Jack Nicklaus for 14 years. It was my choice to live there, and I knew what my taxes were going to be. All that I ask is that the taxes that are paid are used wisely. You look around this town…Let me tell you something I got pulled over on Windy Knoll. The reason he pulled me over….you think this is funny but I’m serious…He said ‘Sir have you been drinking?’ I said ‘No, sir, I don’t drink. I am dodging potholes.'”
“I ain’t got nothing against the golf course. Scott, it’s never looked better,” Bourcier added. He also stated that he enjoys seeing all of the golfers out there having fun on the course again, and that it is no longer just a place to drink, but a place for families to enjoy.”
NOTE from the Publisher:
I agree the golf course is looking great, and it’s a great thing for the community, those are facts. The matters being discussed are not about the golf course anymore; its about taxpayers having a right to know how their tax dollars are spent plain and simple. The truth is in the money trail.
An audit and appropriate record-keeping would ensure that the city does not have to pick up any expenses or taxes like they had to in prior years from prior management companies in order to not lose the golf course land and clubhouse.
Some of these issues can easily be rectified if the subcontractor who received $553,112 in taxpayer funds will turn in at least $553,112 dollars of eligible receipts spent on revamping the golf course to what it is today, plain and simple. The rest of the money and income and expense reports would show how sustainable the business is and if any debts have been incurred during the process related to the golf course.
If the city wants to know that the golf course business is truly a viable, stable and thriving business it must see all the income and expense related reports as required by the contract to protect the citizens of Devine, their duty. And if they want to put it up for sale to the public, as suggested by the homeowners of District 5, they need to know it’s true worth. The city has fought hard and spent millions of dollars to help the golf course survive. Just a few short years ago the homeowners and golfers begged for the city not to sell it so it would be here for the public forever without worry of someone coming in and developing the land instead for using it for private use. Ironically many of the same people are now demanding it be sold, not kept, because they like the current progress and management company. They want the city to sell it, put it before the citizens to vote upon during an election. With it being pubic property it would have to be sold through a bid or auction, and no telling who might buy it now that it is a thriving operation and fixing to have a full service kitchen and restaurant inside courtesy of the city taxpayers dollars again.
It has not been easy to stand by and see this situation unfold over the past 18 months, and to report the facts while many respected community members continue to ignore the facts and let emotions take over. People who believe what they hear on the street or on social media without verifying the facts are contributing to the confusion of the truth.
An audit and or records of the city’s golf course operations including profit/losses and balance sheets, and how the taxpayer money was spent would be prudent because it does, indeed, belong to the taxpayers. We thank the city officials who remember that and are fighting for accountability. We thank the Gregos for reviving the golf course. They were hired to do a job and have the greens looking awesome, and have drawn many of the golfers back as well as provide social entertainment opportunities in addition to the golfing. Business is business. Emotions are emotions. Let’s get on with the truth of the money trail.
Citizens threatening public officials in a meeting and after them is unacceptable.
Attorney Cate’s opinion to City of Devine on possibility of sale of golf course
City Attorney Tom Cate sent City Administrator John Vidaurri the following opinion on the possibility of selling the golf course via email on Tuesday, June 15.
“1) The City needs to complete the renovations to the club house.
2) The City needs to call for an election by the eligible City voters to decide FOR or AGAINST the selling of the golf course and related property.
3) If the voters vote FOR the sale of the golf course, obtain an appraisal of the fair market value of the golf course to establish the minimum bid that the City would accept.
4) If the voters vote FOR the sale of the golf course, conduct the sale of the golf course by either a sealed bid process or a public auction. If the council decides to go with a public auction, that process might result in a higher bid than the sealed bid process.
5) The City should reserve the right to reject any and all bids.
An election is required if the golf course is considered a “park”. I have not been able to find a case that gives a clear definition of what is a “park”. One definition of a park is “a pleasure ground set aside for the recreation of the public and to promote health and enjoyment.” The Texas Municipal League (TML) has advised that if the City has any question that the golf course land could be considered a park, an election should be held.”
By KK Calame
Publisher