Little Falls council debates short-term lease to local operator for clubhouse as finance concerns persist

The Little Falls City Council met in a special work session April 7 to discuss a proposed lease that would place the Lee's Little Falls Golf Course clubhouse and event center with a local operator, Carrie, for a short-term contract while the city addresses long-running deficits.

City Administrator (staff) told the council they had updated a lease and that "you do have in front of you the most recent lease as of this afternoon. It is not 100% completed" and that the proposal would set "dollars 2,500 for year 1 with a 4% increase annually" and have the lease end on Nov. 1 so the city would have time to find an alternative before the next golf season if needed.

The proposal drew public comment and council debate. Resident Doug Dahlberg said he was skeptical that the city should run the clubhouse itself when private professionals exist. Rob Orr, also a resident, said he preferred a private operator and called Carrie "a perfect solution" and urged the council to "get her started as soon as possible." Resident Karen Miller strongly opposed the city taking on further financial risk, saying the city was already "$1,500,000 in debt" and calling the proposal "pure insanity."

Carrie, the prospective operator, asked the council to act quickly because obtaining a liquor license takes time: "I need to get my liquor license. I need to get this up and going. I can't take any more delays" and said she would "pay my lease payment every month" but could not guarantee profitability, adding "it's a tough business." She also said she would not accept profit-sharing arrangements that would leave her responsible for staffing and costs while the city kept event rental fees.

Several council members voiced competing priorities. One council member (identified in the record as Anna, staff member) briefed the council on budget treatment, saying: "in the 2025 budgeted, we budgeted a hundred thousand dollars that will be a transfer to pay back that deficit balance that we have in the golf course fund. In addition, we also budgeted a hundred and $65,000 to pay back year 1 of 15 of the clubhouse project." Anna said those budgeted amounts were included so taxpayers would not take an additional hit in 2026 for that specific payback.

Other council members emphasized urgency and practicality. Miguel (council member) said he would be willing to support Carrie except for a lease clause that would let the lessee keep event-center rental revenue from city property, noting that "that money should come to the city." Several council members expressed support for a 2½- to 3½-year initial lease as a runway for the operator; at least two urged 3 to 3½ years to allow the operator time to recover an initial investment.

City staff and council repeatedly noted that the golf course enterprise fund has run at a deficit for years and that the city has been using interfund transfers to cover losses. A staff summary presented different loss projections at different times: earlier estimates cited a roughly $745,000 projected deficit for combined golf course and clubhouse operations, while a more recent staff calculation presented at the meeting showed a projected operating loss of about $340,000 under a full-staff city-run scenario. Council members called attention to those changing figures and said the size of the ongoing deficit and the interfund borrowing have drawn auditor concern and could affect the city's bond rating.

No formal vote was taken during the work session. The discussion concluded with differing views about the right balance of speed and due diligence: some council members and residents urged immediate action so the facility would open for the season, while others urged pausing to evaluate internal manager applicants and to ensure rental revenues for the event center were returned to the city.

The council adjourned the work session and planned to continue the discussion at upcoming meetings; no final lease approval or formal directive was recorded in the transcript of the April 7 session.