Reading Country Club
We Are and How We Got There
December 20, 2005, Exeter Township filed a Declaration of Taking on the Reading
Country Club property. On February 9, 2006, the Township amended its taking to
include all tangible and intangible property owned by the club (Personality).
The parties stipulated that possession of the Realty in all instances and all
Personality was tendered from the club to the Township effective January 15,
2006. The parties were not able to agree
on a set price. This necessitated a
hearing before the Board of View.
anticipation of the Board of View decision, on November 9th, 2005,
the Township issued $15,250,000.00 of General Obligation Variable Rate Demand Bonds
(“Series 2005”). This was required by law as evidence of the Township’s ability
to pay and served as temporary financing until a decision by the Board of View
was rendered. (Open link for details: http://www.exetertownship.com/Administration/RCC%20Jury%20of%20View%20Decision.pdf )
June 5, 2007, the Board of View determined the following values:
Course Equipment $200,000.00
Course Chemicals $3,000.00
November 15, 2007, the Township issued $17,810,000.00 of General Obligation
Notes (“Series 2007”). This was permanent financing for the property.
September 30, 2015, the Township issued $1,808,000.00 in General Obligation
Bonds (“Series 2015”). This was to carve out the Club structure and refinance
tax free bonds to taxable bonds as necessitated by the leasing of the building
to a for-profit business.
December 30th, 2015, the Township issued $9,755,000.00 in General
Obligation Bonds (“Series A 2015”). This was Part One of a refinancing to take
advantage of lower interest rates.
April 20th, 2016, the Township issued $7,005,000.00 in General
Obligation Bonds (“Series 2016”) this was the second, and final, part of the
refinancing to take advantage of lower interest rates. (The two above bond issues resulted in a net
savings to the Township of $3.1 million in interest.) (Open link for details: http://www.exetertownship.com/Administration/RCC%20Bond%20Documents.pdf )
Associated with Financing $1,053,778.48
under review by Solicitor $2,267,041.58
and principal paid $7,080,378.51
cost of RCC $36,811,714.53
attempting to unwind the complicated history of the financial transactions
related to the RCC we discovered that bond proceeds were used to make interest,
principal, and arbitrage payments. These
transactions are being reviewed to ensure they complied with IRS regulations.
the Reading Country Club was acquired, the Township has relied on real estate
taxes to pay the overwhelming majority of the debt service. While the revenue from golf operations has
paid for part of the course maintenance, no more than $30,000.00 per year or
less than 5% of the golf course revenue has been contributed to the retirement
of the debt.
The most relevant fact
after reviewing the annual data for revenues of both the golf course operations
and the lease of the Country Club is that there has been little or no growth in
net revenues from either. In fact, with
the decrease in the number of rounds played on the golf course over the past
several years, the only explanation for the increase in revenue is an increase
in golf rates. Prior to 2017 there were no
initiatives taken to increase the play of the golf course nor to substantially
reduce operating costs. Without
increased play or new nongolf activities on the golf course, the status quo will
be maintained. With the anticipated
increase in debt service requirements in 2025, additional burdens will be
placed on Township residents potentially necessitating a tax increase