Calvert County has given the Maryland Economic Development Corp. about $150,000 to help the state agency cope with financial problems at Chesapeake Hills Golf Course in Lusby.

MEDCO, as the agency is known, purchased the golf course in 2002 with financial backing from the county. In that deal, the county pledged to assist MEDCO if revenue from the golf operation were not sufficient to satisfy debts from the purchase.

On Tuesday, the Board of Commissioners approved a budget adjustment that will allow the use of $149,742.26 from a reserve fund designed to help MEDCO with debt service. Terry Shannon, the county's director of administration and finance, said the county was notified May 10 that MEDCO was not able to make the full payment due May 1.

"We have to cover that shortfall within 30 days of the notice," Shannon said.

MEDCO helps local agencies attract new businesses and expand and modernize existing operations. It is overseen by a board appointed by the governor.

The state agency issued $3.94 million in bonds to complete the purchase of Chesapeake Hills, Shannon told the county commissioners in a memo last week. The budget action marks the second time this fiscal year that the county has had to help MEDCO meet debt service payments. In November, the commissioners approved a payment to MEDCO to cover a $66,669.78 shortfall on the debt payment for that month.

Under the agreement with MEDCO, Shannon said, the county is obligated to cover shortfall on principal and interest through fiscal 2006.

The golf course's revenue shortfall stems in part from frequent rain in 2003, which cut down on play, she said.

"They had a very rainy season through 2003, and I think that hurt them," Shannon said.

In the memo to the commissioners, Shannon wrote that the golf course is showing an increase in revenue so far this year, but that the facility is "still falling short of meeting . . . budget estimates." Golf course officials "feel that business is continuing to improve," Shannon said, and that there will be no more requests for county funding "provided the weather holds."

If the golf course makes more money than needed for operating expenses and debt service, the surplus will go toward repaying the county for covering the shortfalls in debt payments, according to Shannon.

"We could potentially get this money back with 5 percent interest," she said.

MEDCO owns and operates the golf course through a joint-use agreement with the county. Chesapeake Hills has remained a public facility under MEDCO, which has hired a private company to manage operations there.

MEDCO officials viewed the golf course as an amenity for potential tenants of a research and technology office park it is developing across the street. The county has pledged more than $800,000 toward developing that site, the Patuxent Business Park, which encompasses 92 acres near Route 4 and Cove Point Road.

Calvert County also contributed roughly $800,000 from Project Open Space funds to help MEDCO. In endorsing the purchase, the commissioners said at the time that they wanted MEDCO to acquire the property to revitalize it and to make the nearby office park more marketable, as well as to protect the land from development.

Use of open space funds was appropriate, county officials said, because the purchase essentially protected 143 acres from the possible construction of 157 homes if the golf course were sold to developers.