County Goes After Former Golf Manager Over Alleged Theft, Hears Recommendations for Courses
Kenton County has filed a lawsuit and an injunction against its former golf course manager Dan Moening, who was fired last week and is the subject of a criminal investigation over allegations that he stole in excess of $100,000 while on the job.
The decision by the Kenton County Fiscal Court to pursue further legal action against Moening followed a presentation by a national golf course consultant that included the recommendations that the county should consider closing one of its three golf courses and should make substantial investments in the Independence golf facilities.
"We had to decide, what do you do once you have this information while the proper authorities are still investigating?," Judge/Executive Kris Knochelmann told The River City News on Thursday. "The reality is, we have a responsibility to protect the assets of the county."
To that end, now that Moening is no longer a county employee because he was formally fired on January 19, county leaders wanted to make sure that the former golf course manager did not make an attempt to liquidate assets or access his state retirement benefits until the investigation has concluded.
In the suit, Kenton County names Dan & Joan Moening, the Kentucky Retirement Systems, Kentucky County Employee Retirement Systems, and Huntington Bank, which Moening used for bank services, are named as defendants.
According to the injunction, Moening worked for the county from 1993 to 2010, and from 2011 to 2015. He ran for judge/executive in 2010 and lost in the Republican primary.
Beginning in 2011, Moening was paid $50,000 a year, plus commissions from sales at the pro shop.
On September 18, 2015, Kenton County Treasurer Roy Cox discovered what he believed to be an unpaid invoice for waste removal services provided to the golf course by BestWay Disposal. According to the injunction, the county contacted BestWay to pay to the bill but was told that the invoice was paid, and the company presented a canceled cashier's check as proof. Assistant County Administrator Scott Gunning contacted Moening to question him about this, and, according to the injunction, Moening stated that he had a practice of paying bills using unrecorded cash from golf outings in order to avoid the incurring of late fees or termination of services.
Gunning told Moening that Kentucky law requires all invoices be paid through the country treasury.
From there, the county began an inquiry into how many other invoices may have been paid by Moening in the same manner. They include $2,168 paid to Cunningham Golf Cart Company by cashier's check, and seven invoices that totaled $4,003 paid to Brooks Meats in cash.
On October 28, Gunning and senior accountant Elmer Powers met with Moening at the golf course. The former director told the pair that he had used his own personal funds to pay Cunningham and Brooks Meats. So, why didn't Moening ask for reimbursement? "It was too much of a hassle," Moening stated, according to the injunction. He used between $2,500 and $3,500 of his personal funds each year for golf course expenses, the injunction states.
Moening stated that he was told by former Judge/Executive Steve Arlinghaus to take care of any expenses for which he could not get proper funding through the county, such as on the weekends, and that's how the personal spending started. He was placed on administrative leave pending an audit of the golf course. Gunning, Cox, and Powers began their audit when Moening left the premises. In 2012, $765 had been improperly paid; in 2013, $5,835; in 2014, $6,512; in 2015, $10,508.
The injunction further states that Cox also found discrepancies in the daily and monthly cash drawer reports. It was determined that the cash drawers were not balanced against the sales receipts. The negative balance of the cash drawers in 2009 was $1,251; in calendar year 2010, the number increased to $8,529, but Moening was fired the first time for unrelated matters in October of that year. In November 2010, the negative cash balance was only $53, and in December, was $26.
Moening was re-hired in March 2011, and the negative balance for calendar year 2011 was $17,238. In 2012, it was more than $19,000 and more than $20,000 in 2013.
In 2014, the number climbed to more than $32,000.
By 2015, it had ballooned to more than $42,000.
According to Cox, Moening would manipulate transactions by misstating cash receipts and monthly financial reports during presentations to the county administration.
Beyond that, the injunction further alleges that Moening would engage in a scheme to redeem illegitimate rain checks and gift cards, beginning in 2012. Moenign would redeem rain checks that were never actually issued in sham sales of inventory in order to inflate his sales commission in an amount of more than $52,000 over a 4-year period, according to the injunction.
Per county policy, rain checks are only to be redeemed for fees related to greens and carts, not merchandise. In the county's investigation, it is alleged that Moening redeemed more than $284,000 worth of rain checks for merchandise that was bought at wholesale for more than $195,000, creating a lost profit of more than $88,000. Further, the county accuses Moening of using the rain checks to acquire merchandise that he would then sell to third parties.
"We put the injunction on any of his assets so he can't go after them and get them because he is no longer an employee," Knochelmann said. Moening is accused of beefing up his retirement through the alleged scheme and false reporting of his commissions. Now that he is no longer employed, Moening could go after his retirement. "We just want to preclude that stuff from happening."
The entire fiscal court voted to proceed with legal action outside of the criminal investigation in order to protect the recovery of any potentially lost funds.
Consultant recommends closure of golf course
The legal action taken against Moening by the county followed a presentation at the regular Kenton County Fiscal Court meeting on Tuesday night in Covington. That meeting featured a presentation by Richard Singer of the National Golf Foundation, which evaluated the county's golf course operation in Independence last summer.
The county tapped Singer to look into the operations since golf had become a consistent financial loser year after year. "It's a tough business to be in," Singer said. "It's a high fixed-cost business and you are at the mercy of a lot of things that you can't control."
As part of his work, Singer evaluated the long-term potential of each of the three courses and the system as a whole. He documented the market environment and presented recommendations to right the ship.
Ultimately, $3 million should be invested over the next five years, along with $120,000 in additional funds to improve facilities in order to sustain competitiveness. A retaining wall needs to be repaired, as does a bridge along one of the cart paths. New on-course services like a new restroom facility and drinking fountains are needed. The practice/driving range should be enhanced and expanded, Singer said. The clubhouse needs an upgrade, too.
"The restroom on Fox Run (course) is not working and it is one of the nicer restrooms on your course," Singer said. "It forces golfers to use port-o-potties, which is less than ideal."
One of the keys to the future is expanding the driving range, he said.
The courses do have some positives to point to, though. "Your golfers are very passionate about your golf course. You have a lot of regular-play golfers out there who want to see it succeed and would pay more if they can be assured that the money they paid in additional fees was going to improve the property and not any additional use," Singer said.
A survey of hundreds of golfers who use Kenton County found that The Willows was a favorite, followed by The Pioneer. Fox Run was the least favorite, though several golfers that prefer Fox Run came to the meeting to speak against its possible closure.
But revenue was much lower than most operations that feature three courses, and there is nowhere else to cut, Singer said. "You really can't cut any more out of this golf operation. You've cut all you can possibly cut out of this operation," the consultant said. "The only solution going forward is growing revenue." The current $2 million in annual revenue needs to be increased to $2.5 million, "Which is very reasonable for this propery," Singer said.
The expenses for this 54-hole operation are more in line for what Singer sees at 36-hole operations, he said. "You're trying to run a 3-course operation with a budget for a 2-course operation." Reducing the operation to two courses may be a wise choice for the county, Singer said, adding that there may be too many courses in the county overall as it is.
Another option is the hiring of a third-party management team to take over the operations, much like the City of Covington has at Devou Park.
The fiscal court voted to issue a request for proposals from management companies.
Written by Michael Monks, editor & publisher
Photo: Dan Moening (provided)