When Flagler Golf Management officials face the Flagler Beach City Commission this evening, their backs will be against the wall, the fate of their 15-year lease with the city, to run Ocean Palms Golf Club, in grave jeopardy. It will be up to the officials, including Belle McManus, now the owner of the management company, to convince the commission to give the company yet one more chance to resolve issues that have been recurring in one way or another for several years.
Tonight’s public agenda includes documentation by the city of the company’s lease-default status. That documentation, including a long and blistering letter from City Manager William Whitson, have been reported before. (See: “Calling it ‘An Embarrassment to the City,’ Flagler Beach Manager Issues 30-Day Ultimatum to Golf Operation.”) Whitson sent the ultimatum to Flagler Golf Management on Feb. 3, giving the company 30 days to bring the lease into compliance.
What’s not included in the public document and is reported here fir the first time is a seven-page, March 4 memo from Kathleen Doyle, the city’s finance director, summarizing their findings after McManus provided documents on March 1. The memo is nothing short of devastating to Flagler Golf Management’s fate: “Our assessment indicates Flagler Golf Management is not in compliance with the reporting requirements set forth in the lease agreement,” Doyle wrote before presenting her department’s review.
McManus has the memo, but declined to comment before this evening’s meeting, saying she was deep in preparation for the meeting.
The city had been seeking to audit the company’s books since last summer. As documented in emails, the finance department and the city attorney struggled to obtain the complete records they were seeking.
It did not help wither the city or McManus that just as the requests for records were issued, the criminal cases against Terry McManus, the former owner of the company and Belle’s husband, were culminating in a series of court actions: In June, a jury found McManus guilty of his third DUI in 10 years. His bond was revoked on June 22, he was remanded to jail pending sentencing, and his ability to manage the company was effectively over. In early October he was sentenced to four years in prison, an unusually harsh sentence, especially in light of the circumstances of his third arrest (passed out at the wheel of a golf cart in a construction zone, not a car on the road). He had been seeking a shorter sentence or probation. In early January, the sate dropped its other felony case against him, a fraud charge, ending the uncertainty over his legal troubles but not the company’s.
It was through those months that Belle McManus, who had only played a peripheral role at the golf course since 2015, took over ownership and management. She described in an article on March 2 how she had to crash-course her way to understanding the company’s books and why there’d been problems and confusions in providing documents to the city, problems she said at the time were all but over. The club, she said, was back on course, running smoothly. (See: “Ultimatum from Flagler Beach, Husband in Prison: Ocean Palm Golf’s Unintended Owner Tells Her Story.”) But several city officials privately complained that Belle McManus was covering up serious issues with an attempt to “pull at residents’ heartstrings,” as one put it–something they would not allow at this evening’s meeting.
The audit was finally conducted on March 2 based on bank statements, profit and loss statements, sales and other reports from 2020 and 2021. Doyle reported numerous irregularities, inconsistencies, improper bookkeeping, plus dozens of transactions in West Palm Beach, Delray Beach, Boynton Beach and locations out of state. “For Example: (35) Transactions during this period occurred at Home Depots located in Palm Beach totaling $8,617,” the memo states. “Of that amount $7,244 was spent in July 2020. The records provided do not show enough information to verify purchases that are related to the golf course.”
Going line by line through the type of records submitted, Doyle, writing in red as if to emphasize the red flags, bulletized the problems: “Inconsistent and unverifiable Payroll records,” “Questionable Purchases,” “Unable to verify any of the Profit & Loss data,” “Expenses and / or expenses categorized the do not match the bank statements.” Deposit and sales figures don’t match, the whereabouts of the balance of funds left unexplained.
Doyle, referring to the federal Covid aid to businesses known by their acronyms and administered through the Small Business Administration, found: “The data show an SBA loan, PPP and EIDL Grant = $49,554.05 in total, which may or not be forgiven and may need to be repaid. Based on our preliminary review this is especially concerning without proper documentation to support the payroll records. This could potentially be a miss appropriation of federal funds. The City needs further information on this matter now that we are aware.”
Whitson in his letter to the company had raised concerns about the use of volunteers at the facility, a potential breach of federal law. In her interview with FlaglerLive, McManus acknowledged the use of volunteers, describing them as retired individuals who d love to come hang out, meet new neighbors meet up with old neighbors.” In exchange, the volunteers get to play golf. McManus’s explanation is quoted in Doyle’s report, and followed by a citation from the Fair Labor Standards Act: “Under the FLSA, employees may not volunteer services to for-profit private sector employers. On the other hand, in the vast majority of circumstances, individuals and volunteer services to Public Sector Employers.” The memo then lists three additional issues with the use of volunteers, such as whether the bartered golf games were recognized as revenue one the company’s books, whether the company complied with IRS regulations, and whether the company is in compliance with workers’ compensation regulations.
Equally desolating–for the company, at least–are the last two pages of the memo that sum up considerable dollar amounts th city has paid directly and indirectly to Flagler Golf Management over the years, as opposed to revenue the city has earned from the company. The city has paid the company $38,272 directly, whether to compensate for the removal of brazilian peppers or to compensate for construction on the golf course in 2017.
According to the memo, the city has also spent $123,000 as the landlord, for such things as roof repairs, irrigation, electricity and pump repairs, pest control, and several thousands of dollars due to the “addition of golf course buildings.” The figure does not include yard waste pick-up. That brings the total expenses paid by the city of Flagler Beach–by taxpayers–to $161,405 over the years.
Revenue from Flagler Golf Management: $22,300.
It is notable that in comparison with, say, the enormous deficits Palm Coast government built up over the years while trying to keep up its Palm Harbor Golf Club, the Flagler Beach imbalance pales. It is only in the last couple of years that Palm Coast managed to reduce its liabilities at Palm Harbor Golf Club. But between 2009 and 2016, the city lost $5.5 million between spending on operating and capital expenses, and $9.3 million in losses when the city’s tennis club was included over the same time span. (See: “Palm Coast’s $9 Million Scam at Taxpayers’ Expense.”) The city all along argued that it was worth it, because the clubs were “amenities” to residents, like public parks (though public parks are free to use, as the clubs are not, either in Palm Coast or in Flagler Beach).
Flagler Beach and Flagler Golf Management entered into a 15-year lease agreement in 2015.
When McManus and the commission meet this evening, in open session during the commission meeting, which starts at 5:30 p.m. at City Hall, McManus will have lost her biggest supporter on the commission: Rick Belhumeur lost in last Tuesday’s election and will be replaced this evening by James Sherman, who was encouraged to run by Commissioner Ken Bryan. Bryan, who previously gave the golf course the benefit of the doubt, has over the past year become the commission’s strongest critic of the club.
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Concerned Citizen says
Who’s fault is this ?
Well Flagler Beach really. How many times do we see “special deals” and favoritism come and go in this county? And how many times do they end up biting the municipality in question?
The first signs of improper business appeared years ago. And excuses were made. But for whatever reason our illustrious Commission rung their hands and made excuses. When really it should have been nipped in the bud to begin with. Now years later here we are tying up time that could be dedicated to handling other issues.
Hopefull this time our Commission and Mayor says enough is enough. Cancel the lease. Hold parties accountable. And get someone in there that will run it impartially and honestly. Enough of the back room deals.
Jimbo99 says
Sounds like the golf lessons & driving range in the movie, “Tin Cup” ? McManus living his Flagler Beach Kevin Costner-like Roy McAvoy lead role without the flash of 15 minutes of fame for a PGA qualification card & career. Something else is going on here, perhaps shutting down the 9 hole golf course entirely and building more residential homes there instead ?
E, ROBOT says
Why not put the Visitor’s Center there, hire a competent, knowledgeable manager and run it as a municipal golf course? Be a money maker and take some of the traffic away from the center of town which has become a nightmare with a weed infested, traffic impeding center divider requiring u-turns to get into the residential areas — you know where the tax payers live — west of A1A.