Monday, February 27, 2017

The Watchdog Report: The Mystery of Golf Corporate Memberships

The Watchdog Report
by Mike Zinkin

The Mystery of the Corporate Membership
The Community Center golf memberships for December reveal 228 members, which is two memberships less than in November. What was also interesting is that a new category appeared…Corporate Memberships. There were three Corporate Memberships added in December.

Town conceals information
Since there is no information about this mysterious membership category on the Town's website, nor has there been any media advertising, I contacted the Town to request information about this new category. My request included the cost and benefits of a membership, as well as the names of the three corporate members. I received the following response:
"Corporate golf memberships are being offered by Troon. The membership costs and benefits vary depending on the needs of the potential corporate golf member. Regarding your request as to who currently holds corporate golf memberships, you may contact Troon."

This is typical of the Town’s usual response to my questions… obfuscate, camouflage, befuddle. I imagine that the goal is, “Ignore him and he will go away.” Except that I won’t. Their answer was a non-answer, so I appealed to the Town Manager. I received the following response from his office:
"Troon informed me that they do not release names or personal information in order to protect the privacy of their members or dependents. The Town typically redacts personal information (names, addresses, etc.) of our public records as well."
Obfuscation 101
First, I would understand the “privacy” issue if this was a private golf club, but this is a municipal golf club, supplemented by the Town’s residents, and as such, membership rolls (including corporate members) should be public knowledge.

Second, you will notice that the Town also did not answer my questions regarding the costs and benefits of a membership and gave no reason for not releasing this information. Clearly, costs and benefits information does not fall under “privacy” issues.

A high school math “word problem”
In November 2016, the member dues were $58,455. In December 2016 the member dues were $59,444. This means that in December, the Town collected an additional $989 in member dues. With two less usual members and three more corporate members, it appears that the corporate membership yields the Town about $330.00/member. These are the same dues that a non-resident "Explorer" member pays.

Stonewalling the taxpayers
I do not understand the "stonewalling" by Troon and the Town in informing me of the costs and benefits of a corporate membership. I will stress again that this golf club is subsidized by Oro Valley taxpayers and all information pertaining to the Community Center and Golf Courses should be public knowledge. So much for open government.
Mike Zinkin is a long-time Oro Valley resident. Mike is also a golfer. Mike was in an Valley Council member from 2012 through 2016. He has been following the community center/golf situation closely from its inception. He has consistently argued  for ways to rationalize Oro Valley's operations of these golf courses. His pleas for action were ignored by the Council majority until after Mike left office in November. Then, suddenly, the Council decided that they needed to study what is, now they admit, a very serious problem.

Monday, February 20, 2017

Lambert Lane West of LaCanada Closed Until Early June

"Oro Valley, Arizona (February 17, 2017) – On March 13, 2017, Lambert Lane will be closed to thru-traffic from La Cañada Drive to La Cholla Boulevard for construction activities as part of the Lambert Lane Phase 2 project. (Local-only traffic will have access to W. Lambert Lane.) The closure is in the interest of public safety, minimizing the risk to pedestrian and vehicle traffic while performing roadway reconstruction and removal of excess material.

Motorists, cyclists and pedestrians should use Naranja Drive as an alternate route during the closure. The road is scheduled to re-open June 5, 2017 (weather permitting).

This project will improve safety and visibility along Lambert Lane, while widening the roadway to accommodate additional travel lanes, multi-modal enhancements, curbs and landscaping. The work is being performed by Granite Construction, Inc., and the project is funded by the Pima Association of Governments.

Click here for the project page, including a construction closure map, project renderings and contact information."
Source: Oro Valley Press Release

Friday, February 17, 2017

Feather Tailed Stories

Oro Valley resident Allan Block is an amateur photographer.  He takes some great pictures of birds. We thought we'd refer you to his website.

His latest posting includes some beautiful pictures of Harris Hawks. They of course are  among Oro Valley's earliest residents.


Oro Valley asking for community input on the FY 2017-18 budget

"Oro Valley, Arizona (January 30, 2017) – The Town of Oro Valley is beginning the annual process of developing its operating and capital budgets for the 2017-18 fiscal year, and encourages citizen input in its annual budget process. The feedback received will be taken into consideration by the Mayor, Council, Town management and staff when formulating the Town’s financial plan.

One way the Town is soliciting feedback is through an online budget questionnaire, 5 Questions in 5 Minutes. This brief questionnaire will be available January 30 through February 10, 2017. No registration is required, and responses are anonymous.

To answer the five questions, click here or copy/paste the following link into your browser:

There is also a budget information page on the Town’s website for residents to peruse at their convenience. It will be available through final budget adoption.

Although the online questionnaire closes February 10, the budget information page will remain online, and residents will have the opportunity to attend two public hearings on the FY 2017-18 budget, scheduled for May 17 and June 7 at 6 p.m. in Town Hall Council Chambers, 11000 N. La Cañada Drive"
Source: Town Of Oro Valley Press Release

Thursday, February 16, 2017

Guest View-Mike Zinkin: Proper Golf Course Utilization

One does not need to be an expert in golf course management to understand that a tee time that goes unfulfilled is lost revenue. So let's look at the golf course utilization at the Oro Valley Town-owned golf courses. For the purpose of illustration, we will not count the 9-hole course at Pusch Ridge.

Golf courses schedule a foursome to begin every eight minutes. This equates to 7 foursomes, or 28 golfers an hour. During the winter, it is not unreasonable to start your first tee time at 7:30 AM and continue for 7 hours until 2:30 PM. During those 7 hours, a golf course can provide play for 196 golfers (28 golfers an hour x 7 hours). With Oro Valley having two 18-hole courses, the Town can accommodate 56 golfers an hour or 392 golfers a day (392 rounds of golf).

The winter of our discontent
Taking the month of November with 30 days, if the courses were 100% utilized, the Town would have provided golf for 11,760 rounds. In actuality, in November 2016 Oro Valley golf courses had 4,013 rounds of golf played, of which 467 rounds were complimentary. This means that two Oro Valley 18-hole golf courses were utilized only 34% of the available time (this includes member, non-member, and complimentary play). This is during the high season.

There ain’t no cure for the summertime blues
During the summer months, golf is available from 5:30 AM - 4:30 PM. During these eleven hours of play, there are 616 rounds of available play (56 golfers an hour x 11 available hours). With 31 days in July, there are 19,096 rounds of golf available in July. However, in July 2016, Oro Valley’s two courses provided for only 2,093 rounds, including 102 complimentary rounds. This means that the Town's golf courses were utilized just 10.97% of the time.

It’s Elementary
One does not need to hire a consultant to understand that if your courses are not utilized anywhere from 66% - 89% of the time, they are not going to make money. No sales tax revenue, membership revenue, or any other existing revenue is going to make up for this deficiency. Golf is not working in Oro Valley and it’s time to cut our losses and move on. The council recently requested a Feasibility Study. It appears that they have finally given up on their 5-year plan and are now looking for a way to save face.

Here’s an idea
Besides the four options that the town enumerated in their Request for Proposal, the options below should also be considered:
  1. The Town can close or lease the Overlook Restaurant.
  2. The Town can GIVE UP GOLF entirely and close the 9-hole Pusch Ridge course and the 18-hole Conquistador course.
  3. The Town can also taking advantage of a clause in the purchase agreement which allows the Town to lease the Canada course (18 holes on east side of LaCanada) back to the El Conquistador Resort for $10,000 per year for 50 years.
The Resort can choose not to lease it, in which case they would lose their Resort status. In that instance, the Town would return the five holes south of Lambert Lane to The Villages of Canada Hills HOA and ask the People what they desire to do with the remaining 18 holes on the Conquistador course, the 9 holes on the Pusch Ridge course, and the remaining 13 holes on the Canada course.
Mike Zinkin is a long-time Oro Valley resident. Mike is also a golfer. Mike was in an Valley Council member from 2012 through 2016. He has been following the community center/golf situation closely from its inception. He has consistently argued  for ways to rationalize Oro Valley's operations of these golf courses. His pleas  for action were ignored by the Council majority until after Mike left office in November. Then, suddenly, the Council decided that they needed to study what is, now they admit, a very serious problem.

Wednesday, February 15, 2017

Guest View-Mike Zinkin: Beware of the Approaching Iceberg

The Numbers and the Rhetoric do not add up.

The Community and Recreation Fund (CRF) ended the month $597,566 in the red. This is in spite of the $1,013,173 in revenue from the increased sales tax. Despite these numbers, the Finance Director tells us that by the end of the fiscal year (FY), the Town will be able to pay back the annual $120,000 to the General Fund and still end the year with a positive balance of $11,574.

How is this possible? The CRF lost over $590,000 during the first 6 months of the FY, so in order to fulfill the forecast of the Finance Department, the CRF Fund must make over $700,000 during the remaining 6 months. I suppose that one way to make this possible is by delaying the $400,000 promise to make the facility ADA compliant.

Golf continues to lose money
Golf lost $171,848 in December, which was $116,774 more than forecasted, and $36,134 more than the December 2015 losses! During the first 6 months of the FY, golf was forecasted to lose $1,041,912, but actually lost $1,423,431...a $381,519 miscalculation.

Food and Beverage operations continue to lose money
The Overlook Restaurant was forecasted to make $14,079, but actually lost $5,391. This brings the total food and beverage losses to $82,649 for the first half of the FY.

Town releases a new survey
Finally realizing that it cannot continue along this trend, the Town published an online survey on its website asking citizens to answer “5 questions in 5 minutes” to solicit feedback for the 2017-2018 budget. (The questionnaire was only available on the Town website from January 30th through February 10th.)

The survey asked if you would be willing to pay more in taxes to continue services. They asked what services are important to you. The problem is, this survey is hardly valid since one person can answer the survey multiple times and there is no guarantee that the survey responses will only be submitted by Oro Valley residents. Just as an example, what is to stop a Parks and Recreation employee from answering the survey multiple times stating that they would like to see more money spent toward Parks and Recreation?

The validity of the survey is not important to the Council. The mayor and three of the current council members previously disregarded a statistically valid survey that asked Oro Valley residents what amenities they would like to see in a Community Center. Despite tennis ranking #11 on the survey, golf ranking #33, and a pool not being mentioned at all, what did we get at “our” taxpayer-funded Community Center? We got 31 tennis courts, three golf courses, and two pools.

I mention this only as a reminder that the majority on this council have already shown a history of not listening to citizen input. Why should we expect them to treat the results of this survey any differently?

Iceberg dead ahead
So what’s the real reason for the survey? It’s likely that this Council is just looking for an excuse to raise your taxes instead of reducing the size of government.

Why do they need additional funding? Consider that over the past couple of years, the Town staff has grown by over 40 employees (none of them in Public Safety) despite the fact that our population growth during that time has not grown at a pace warranting an additional 40 employees. Additionally, Town employees have enjoyed a minimum of a 3.5% wage increase each year over the past four years.

Rapid growth of Town staff and a policy of across the board wage increases that are not merit-based is an unsustainable business model. They simply need more funding to cover these additional and unnecessary costs.

Tuesday, February 14, 2017

Editorial: Reviewing the Town’s “Request for Proposal” for the Community Center and Golf and Restaurant Operations

During the January 18th Town Council Meeting, the council directed the staff to prepare a “Request for Proposal” to solicit bids for a Feasibility Study regarding the future operations of the town-owned golf courses and restaurant.

The chosen contractor is expected to produce a “comprehensive report on alternative recreational land uses as well as alternative food and beverage venues, and the economic viability thereof.”

Below are some pertinent excerpts from the 25-page proposal:
“When the Town purchased the Country Club, it was recognized that an additional revenue source was needed to subsidize the operations and provide funding for capital improvements to the facility. As a result, the Town Council approved a 0.5% sales tax increase effective in March 2015 with the dedication of those revenues (approx. $2.1 million annually) to the Community Center Fund.”

“…the year-end net operating loss…is estimated at over $2.1 million compared to a budgeted net loss of $1.5 million. With these projections, the amount of net loss from the golf and food and beverage operations exceeds the available amount of dedicated half cent sales tax revenue earmarked for the operational subsidy, leaving minimal resources available for capital improvements and thereby creating an unsustainable financial situation in the Community Center Fund.”

“The Feasibility Study is intended to provide policymakers with sufficient information to allow them to consider continuation of current food and beverage operations and the merits of continuing the current golf operations as compared to re-purposing the land (or portions of the land) for alternative recreations uses.”

At a minimum, the alternative land use options to be considered are:

  1. Maintain existing 45-hole golf course 
  2. Reduce the number of holes from 45 to 36 
  3. Reduce the number of holes from 45 to 27 
  4. Reduce the number of holes from 45 to 18

Ideas whose time has come
Where are the options for giving up golf altogether or for leasing the Canada course back to HSL? This is allowed per the original purchase agreement. It seems reasonable to expect that these options should have been included as well and one wonders why they were left out of the request.
Bidder's Conference: Yesterday, the town conducted a bidders conference for this project. Listen to it in its entirety here.

Monday, February 13, 2017

Guest View-Diane Peters: The “Heck of a Job” Council

An interesting event took place during the January 18, 2017 Town Council Meeting when the following agenda item came up for discussion: “Discussion and Possible Direction to Staff regarding future Community Center elements.”

Why is this interesting? Because whenever former Councilmembers Zinkin, Garner, and Burns requested to discuss possible options for dealing with the abysmal Community Center financials, they were repeatedly shot down with cries of, “It’s too early to discuss changes” and “This is a 5-year plan.” Suddenly, at just the 4th meeting of the new council and just over 1.5 years into the “5-year plan,” the new council wants to discuss options!

Councilmember Hornat gave the following presentation:
“Councilmember Rodman and I have talked through this a couple of times and it was our intention to put this as a direction to staff…and it’s finally time, we’ve got some history now. We know what the golf business is. We think we’ve got a handle on the restaurant. But none of us are experts in either one of these and to the best of my knowledge, no one on the staff is either.

So one of the things I’m going to ask Council tonight is for a consensus to direct staff to hire a consultant to review the options on our restaurant facility and also the configuration of our golf courses. Ask them to prepare an RFP (Request for Proposal), solicit bids, and then report back to Council as to what the cost of that would be and also eventually what the plan would be and if it’s anything different than what we’re doing today.

What we’re doing today is the best job we can and I think were doing a heck of a job. As we’ve heard earlier from the Director of Finance, we are improving, just not fast enough to close this the way we want to, so we’re going to take a little more aggressive action.”

Councilmember Snider responded:
“I can support this, Joe, because when we decided to make this acquisition and go down this road, we said that we would watch it carefully and that when we discovered adjustments that may need to be made, we would be wiling to look at those and make the decisions.”

Hornat continued:

“It’s time. We have the history and I think we’ve seen what a year and a half to two years of both operations – certainly our recreational facilities are doing very well. There is no argument there. We’d like to improve that, too, but that’s not going to be part of what this is.

I think we’ve done all that we can with the knowledge that we have and now its time to get some outside view on this. Someone who can take a look at it – a professional – and give us some ideas on what we can do and can’t do.”

No vote or consensus was taken, but the Town Attorney stated that the staff understood the direction they were given.

Council, your dinner is served. Would you like some wine with your crow? What happened to the 5-year plan? Didn’t Vice-Mayor Waters chastise the naysayers to “Get on board!” Now, just two months into the reign of the new council and they contract for a feasibility study?  Where was the study PRIOR to the purchase?

They made a horrible miscalculation when they bought this property. They ignored the pleas and valid arguments of Councilmembers Zinkin, Garner, and Burns for over a year. Now they’re swimming in debt and they’re looking for a way out.

Rest assured that whatever the outcome, they will take credit for all of it and never mention that all of their “new ideas” are actually recycled ideas stolen from Zinkin-Garner-Burns.

We know what you said last summer
During the candidate forums and in newspaper interviews, Pina-Rodman-Solomon were asked what they felt was an appropriate length of time to evaluate the property’s financial performance and how they would handle the growing losses.

Their responses:

PINA: “Golf, technically, is a seasonal business, so you have to look at trends, and trends don’t just come from looking at one quarter or two quarters. It’s trending for at least, I would say, a couple of years. So to answer the question, for time, I think the year that we’ve had was a little volatile. Let’s give it another year and maybe another year after that…you have to look at trends year over year over year.”

RODMAN: "Initially it was a 5-year plan and it wasn't intended to make money during that period of time, so all of this uproar about trying to make a decision now is probably premature."

SOLOMON: “For a project of this size, I would give it 5 years and I would really start giving it a close look in years 3, 4, and 5. But obviously, we have to keep a close watch on the expenses while we take into account, the revenues. So once again, 3-5 years.”

A Timeline of their Misguided Beliefs 
When they bought this property in December 2014, they told us that it didn’t matter that the council and the town staff weren’t experts in the golf or food and beverage industries because it would all be managed by Troon, a professional golf management firm, and they were the best in the business. Not to worry.

In 2016, when the golf and restaurant financials were still not meeting Troon’s projections after more than a year in business, they told us that it was too soon to consider other options because they needed to watch “trends” over a “5-year period” and how “it wasn't intended to make money during that period of time.”

Now in January 2017, we’re being told that we need to hire “a professional” to “give us some ideas” because “none of us are experts.” Wasn't Troon supposed to be the professionals and the experts?

How quickly they have backtracked on their convictions. All of this points to the fact that the Town Council should never have approved the purchase of a business in which they and the town staff admittedly have no expertise.