Palmer’s extension of golf course contract approved but still under legal review by city

Palmer’s city council voted a one-year extension of a contract for its golf course operator a its Tuesday, Dec. 16 meeting, but the extension is still under legal review, according to sources.

Assuming the review is completed and the extension becomes effective Dec. 31, when the current contract with expires, preparations for another year at the city’s popular recreation amenity will continue and approximately 50 people employed at the golf course will not be laid off. Eagle Golf Course Management, Inc. is the current contractor.

Golf course supporters crowded into The Depot in Palmer on Dec. 16 to give members an earful. At the end of a long meeting, the contract was extended. Otherwise, it would have expired on New Year’s Eve, putting the future of the golf course at risk.

However, the extended contract will also cost more through higher fees and increases cost allowances, such as for fuel. City manager Kolby Zerbel told the council she needed more time to obtain justification for the increases from the contractor, but the council, with the large crowd looking on, didn’t wait. About $80,000 has been requested including $30,000 for expenses like fuel, Zerbel told the council.

The contract extension allowed for the fuel costs but it is unclear whether other increases will be allowed. The current contract was for a fixed price of $425,000 annually and was increased in 2023 by $8,000 from the original amount of $417,000 to $425,000 to reflect the rise in fuel and other operating expenses. There was not an increase in 2024.

Zerbel said she also needed time for a legal review of the changed contract terms, which is now underway. Palmer does not now have a city attorney after the former contract attorney, Sarah Health, opted not to extend her contract, but an attorney is under a short-term contract just for the golf course review. Zerkel said she will be interviewing candidates soon for the position but that will be too late for advice on the new golf contract.

The council’s decision could temporarily put to rest the tempest that has developed over the issue. Golfing enthusiasts are worried that the Federal Aviation Agency, which years ago financed the purchase of land for the city-owned airport including land now used for golfing, may require the property to be used for aviation purposes if air taxi and service companies need to expand their operations.

The city is obligated to follow FAA requirements that came with the federal grants to purchase the land. Airport manager John Diumenti told the council that the city is required to do an updated airport master plan and as part of that show how an expansion in aviation activities can be accommodated. In the future that may require some golf course acreage to be used for operations.

That possibility stirred up the local golfing community who pressed the council to extend the current operator’s contract in the belief it would help keep the FAA at bay. Earlier in the meeting Zerkel told the council, and the audience, that the FAA has reassured her that no near-term action is intended for a change, but that did not allay fears.

The issue is also linked, however, to a new “fair market” valuation for city land around the airport. The FAA does require that non-aviation uses of land be rented at fair market value which must be periodically updated. That has not been done for years for the airport and land used for the golf course. When it is done, and a Request for Proposals is now out for a contractor, the present rental rates may be adjusted.

Currently the fair market value is set for agricultural uses, which results in an affordable rate for the golf course use. The local golfing community fears that if the fair market rate is revised upward it will make golf course operations uneconomic. While a possible expansion of the airport into land now used for golfing is a long-term challenge, a sharp adjustment of rental rates for golf course is a nearer-term problem that that the city will have to wrestle with.

The operation of the golf course as an enterprise fund requires that revenues generated be used for the operation and maintenance of the facility and that it be self-sustaining. The city derives revenue from green fees, cart rentals, trail fees and a driving range.

Meanwhile, in other actions, the city council gave final approval Dec. 6 to an ordinance prohibiting sleeping in public places. The matter has been before the council for several weeks now but action was delayed due to the need for a legal review of language in the proposed ordinance. That has now been done, and the council has now okayed the prohibition against public sleeping.

The council also approved the rezoning of two land parcels near the airport which prompted discussion Dec. 16. The proposal was to rezone two tracts from a Single-Family Residential (R-1) classification to a Business Park (BP) classification, which would allow Cruz Construction to proceed with a purchase the property for a needed expansion of its business operations.

There was criticism of the rezoning in public comments during the meeting, however, with one local resident saying that Palmer is in dire need for more residential housing and the rezoning to a commercial classification would take away land for potential new homes.

Palmer’s planning and zoning commission had recommended approval, however, on the grounds that the parcels in question had adjacent land on three sides zoned for commercial use and the reclassification would not unduly upset the local residential housing market.