The financial report for September 2016 has been published and nobody should be surprised that the Oro Valley Community and Recreation Fund (CRF) is deeper in debt. To remind everyone, the CRF was the fund set up to pay for all the expenses for the foolish purchase of the El Conquistador Golf, Tennis, and Community Center.
This fund takes into account all the revenues derived from golf, tennis, fitness, swimming (except the Aquatic Center), food and beverage, and the 25% increase in the sales tax. This fund also pays for all the expenditures, including the capital improvements and an annual obligation of a $120,000 pay-back to the General Fund Contingency, from which $1.2 million was borrowed to start the CRF.
CRF Balance is in the hole
At the start of the current fiscal year [July 1, 2016] the balance of the CRF had been reduced from the original $1.2 million to $161,744. (This carry-over would have been only $41,744 had the majority of the Council not reneged on their obligation to re-pay the first year’s $120,000 payment back to the General Fund.)
After the August financial report was published, it was noted, and acknowledged by the Town's Finance Director, that the CRF had lost $215,912, leaving a CRF balance of negative $54,168 ($161,744 minus $215,912). The September financial report indicates that the CRF continues to lose money and now lost $363,038, which leaves the CRF balance at a negative $201,294 ($161,744 minus $363,000).
Sales Tax Revenues not Covering Losses
Since July 1st, golf has lost $760,069 and the Overlook has lost $48,902. This amounts to $801,971 in losses yet the sales tax revenue through September was $485,428, leaving a deficit of $316,543, and we are only 25% through the fiscal year. This indicates that the increase in the sales tax is NOT covering the losses in the CRF.
With 75% of the fiscal year still in front of us, the report shows that the town intends to spend $479,291 in additional capital outlay, and transfer the obligated $120,000 back to the General Fund. This amounts to a $599,291 obligation. With the CRF already $201,294 in the hole, where will this money come from?
Golf Memberships are down
Staff tells us not to worry because golf is cyclical and that the revenue producing months are ahead. However, the much needed increase in golf members is not happening. As of October 31, 2016, the golf membership was down to 226 from 250 when the fiscal year started in July. To make matters worse, this 226 number includes 6 members who are over the age of 90 and 4 members who are on medical leave, all of whom pay no dues. So, today there are only 216 dues paying golf members. Troon tells us they hope for a membership total of 318 by December 31, 2016. That doesn’t seem likely at this point.
Does staff know that Golfsmith went bankrupt ? Does staff know that Nike no longer manufactures golf equipment? Does staff know that Adidas is no longer involved with Taylormade and Adams golf? Why would staff think that we in Oro Valley are special, and that golf can thrive here?
The Scapegoats have left the building
The Mayor now has a Council that is completely in sync with him. They are now a “cohesive” unit, the word liberally used by Rhonda Pina during both candidate forums. With Burns-Garner-Zinkin no longer on council, the "headwinds" that Councilmember Snider claimed were keeping the Community Center and Golf from thriving are now gone. There will be no more excuses for them to fall back on as we continue to witness this slow motion train wreck.
Thanks to former council member Mike Zinkin for his continuing coverage of this important issue.