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Alan Pearson of Clayton putts on the 3rd green at Boundary Oak Golf Course in Walnut Creek, Calif., on Tuesday, September 9, 2008. Pearson and the other three men in his foursome like the prices at the public course.A sign at the pro shop states that golf fees are planned to go up October 1. The city did this two years ago because the course needed the extra revenue after budget shortfalls for two years. (Susan Tripp Pollard/Contra Costa Times)

WALNUT CREEK -- There will be no new outdoor patio or remodeled golfers' grill at the city-owned Boundary Oak Golf Course clubhouse anytime soon.

Instead, with a downsized budget for improvements, the city will move forward with fixes to the 40-year-old clubhouse that are necessary, if not flashy. While stucco will be patched and the upstairs bathroom redone, things like electrical upgrades and repairing the leaking kitchen floor may not be noticed by golfers.

Those are all part of the $3.7 million in improvements city officials signed off on earlier this week.

"Staff has done a very good job with redesigning the project to be affordable and take out some of the things that, while they were nice to have, the cost just got out of hand," said Mayor Pro Tem Bob Simmons at a Tuesday city council meeting.

This comes after some council members in October bagged the idea of issuing $5 million in bonds to pay for larger-scale improvements at the clubhouse, citing concerns about the high cost of paying the debt back.

Even for these less ambitious improvements, the city will have to take out a loan to afford them. The complex financing plan calls for $1.2 million to come from a mix of golf course reserves and future revenues. And the bulk of the money, $2.5 million, would come from an external loan, which would take the form of a lease. With a 10-year term and a 4.25 percent interest rate, city staff estimates the course would pay about $600,000 in interest and debt service. An "essential purpose asset" such as City Hall or the Lesher Center would need to be put up as a sort of collateral, which would be necessary for this financing.

The City Council will have to approve that outside loan. And Mayor Kristina Lawson said it must be clear how much that will cost taxpayers and what exactly will be put up to secure that loan.

"Whatever the structure of this transaction is, I want to make sure there is full disclosure," she said.

This will allow the city to get 17 of 26 projects done in an effort to fix up the clubhouse, which has seen years of deferred maintenance. Renovations at the clubhouse could begin by January 2015, and all should be complete within three years.

"In my opinion, Boundary Oak is probably in the top of public golf courses in the East Bay, if not number one," said Dick Richmond, a longtime golfer. "There are things ... that do need repair. In order to keep Boundary in the forefront of being the best we really need to do" these improvements.

After the work is complete, the food and beverage portion of the Boundary Oak business is expected to bring in $1.5 million in 2019, the same as this fiscal year. Further, after reserves, loan and debt payments are paid, annual revenue for both the course and the clubhouse would be around $200,000 -- the current level -- or lower in some years, according to projections.

To help alleviate some of the golf course fund's annual debt, the council also plans to move forward with a loan of $450,000 from the city's general fund to the golf course fund to pay off 1997 lease irrigation bonds set to be paid off in 2017. This general fund loan is supposed to be paid back by 2024, at 2 percent interest.

This is not the first time the general fund has loaned the course money. Two years ago, the council wrote off a $2 million golf course loan made decades ago, reasoning that if the loan was not being regularly repaid, it should be forgiven. Much of that money was used to pay off legal settlements with former food and beverage operators at the clubhouse.

Councilwoman Loella Haskew said the fixes to the clubhouse will result in more people using it, though she'd rather more could be done.

"I wish in a perfect world we could really do some pretty spectacular things, but this is a very practical and smart approach," she said.

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.