Tuesday, August 23, 2016

Zinkin: "Magic Fund To Cover Golf Losses Is Gone!"

The following is from an email received from Council/candidate Mike Zinkin. Zinkin along with council member and candidates Burns and Garner want to stem the losses. According to Zinkin these losses, as they continue, will become a drain on our residents as funds will have to be diverted from needed uses to pay for this luxury.

The Majority-4 and their 3 council candidates want to wait until it is far too late. They are hoping for a resurgence of the sport of golf. This is not going to happen.

The "writing" has been on the wall for 18 months now. When will the incumbents and their 3 candidates learn? When will they act?
You might have heard the challengers for the Oro Valley Town Council defend the purchase of the golf and community center from HSL by telling you that "we have a fund to cover this purchase," and that the "sales tax increase supports all the funding." Much to the Town staff's credit, and much to the mayor's chagrin, I have received the unaudited financials for the Community and Recreation Center Fund (attached).

These numbers include not only the expenses, golf and restaurant losses, and capital improvements, but also the revenue. Upon inspection you can see that the contracted revenues were $1,828,807 LESS than budgeted. The Town's operating revenue, which is the fitness center, some of the tennis, swimming, and recreation programs came in over the budget by $122,069. The increased sales tax to cover expenses is shown as $2,030,000 in revenue. What isn't shown is that due to Troon's forecast not being achieved, Troon rebated the Town $36,000 in management fees. Also not shown is that the first year's promised repayment of $120,000 back to the General Fund was postponed until next year. In summary, the fund started the fiscal year (July 1, 2015-June 30, 2016) with $1,025,222. This money was borrowed from the General Fund Contingency with the promise to pay it back at $120,000 a year for 10 years. After all the expenses and revenues were calculated, the fund lost $863,070, leaving an ending fund balance of $162,152. Keep in mind that if Troon had not rebated the $36,000 mentioned earlier, and if the Town had paid the promised $120,000, the fund balance would have been only $6,152.

The questions that the People must ask are:

  1. Where is the money coming from in fiscal year 2016/2017 to cover the predicted losses? The "magic fund" created to cover all expenses is dry.
  2. Will the Town be able to pay back next year's $120,000 installment that they promised the People when they took the $1,200,000 loan from the General Fund? 
  3. Or will they miss that re-payment two years in a row?
  4. How is the Town going to cover any capital improvements?

The challengers insist that this is a five year plan and that it is too soon to do anything.

Look at the attachment and you decide if we need to do something NOW. 

The magic fund is dry. There is only enough money to cover $162,152 in losses. Any additional money must come from the Citizens, and I believe the Citizens have seen enough of this disastrous purchase and want the Council to do some corrective action Now.

Mike Zinkin
Oro Valley Town Council

(Via email)