Tuesday, March 21, 2017

Guest View: Dick Leonard ~ Our Community Golf Course. Should it be public or private? Should it be taxpayer subsidized? Part 2

Below is Part 2 of a letter sent to the Town Council by Oro Valley resident, Dick Leonard. Part 1 appeared yeserday. The letter has been re-formatted with sub-headings added to fit the LOVE's format.
Municipal Golf Course Subsidies
Again, if the City wishes to operate the course as a Municipal course, the issue of subsidies must also be addressed. According to the RFP, Exhibit B, the 6 month total cost for sales, operations and management fees requires approximately $2 million. The current 0.05% sales tax which accounts for $2.1 million would be only a half year solution not counting capital expense. The other half year subsidy could be financed by either raising the sales tax, or placing a special assessment on another service, such as on the water bill. Not having any data on the cost of other Community Center services or capital expenses, the total amount appears to be unpopular. Without substantial subsidies, this consideration would likely not be acceptable to the public.

Breaking down each course and using the 7979 total rounds played on the "daily fee" side (July 2016 to Dec. 2016 ) with revenue of $201,450, the yearly subsidy for this course is estimated at $600,000. This again would require that 40,000 Oro Valley residents subsidize a country club for only 162 memberships.

Operating without subsidies
If, however, the Town operates the golf course as a Municipal Golf course, there are ways to operate at little or no subsidy from Town residents:

  • Reduce course configuration to 18 holes, with 9 holes on each side
  • Place all remaining fairways in Parks Dept. control and financing
  • Install fee-based ball dispensers to provide continuous daily income
  • Develop a local golf identity with convenient on-line booking and customer service
  • Provide individual 6 and 12 month annual resident cards which retain and reward repeat golf customers
  • Provide a variety of daily fee rates to match age groups and time-of-day, plus seasonal play 
  • Install vending machine areas to provide continuous revenue without reducing pace of play
  • Use a portion of the sales tax subsidy for the 18 hole course and cart path improvements
  • Eliminate food service discounts and reduce prices to all customers, or lease food service to independent operators

National trends
In addition, recognize the national trends in shrinking golf play and the increase of fitness participation, along with the many promotions of shorter courses and less time consuming play (i.e. 9 hole courses), which indicates the need to expand and improve all fitness related activity and the increased revenue source.

In summary
I believe the needed financial changes are only possible if the Town administration concludes that Oro Valley is in the business of MUNICIPAL GOLF, and that the facility must be operated as such. There are many examples of such golf courses in Arizona and all operate with the same basic goal of providing an affordable golf experience to all residents, without requiring burdensome subsidies. A contact with any one of the many municipal golf facilities across the United States will provide the results sought in the RFP and once implemented, will benefit our City residents for years to come.