PENDLETON — A State Board of Accounts report on Pendleton revealed the town-owned golf course is more than $290,000 in the red.
The report, part of a regular audit inquiry done every two years, found the Fall Creek Golf Course's cash balance was overdrawn by $297,686 in 2012.
Town Council President Don Henderson said the reason for the debt is the way the town purchased the golf course.
Henderson said Pendleton took ownership of the golf course about five years ago with the intention of incorporating it into the park system. But, because the town wanted to add more land from Indiana's Department of Corrections, they decided to wait on handing the course over to the parks department to facilitate the transfer of land.
He said the golf course was close to $300,000 in debt when the town decided to purchase it with a revenue bond.
The town put the bond on the course, which meant all revenue generated by the golf course went toward paying the bond instead of addressing the debt. Henderson said the town has also improved the course with better greens and new fairways and added a driving range, which cost additional dollars.
"The debt looks worse than it is," Henderson said. "Because of all the revenue going toward the bond."
The town's deputy treasurer Linda Kreigh said the debt is not owed to any person or entity. It is simply the town spending more money out of the golf course account then it had. Henderson said other funds have been used to absorb some of the difference.
Pendleton will sign the course over to the parks department by the end of the year, and a new way of addressing the debt will be implemented.
Henderson said the park will use a general obligation bond, which will be paid with money raised from taxes, not from revenue. That means the money the course brings in will go toward paying off the debt instead of paying off the bond.