Thanks to Mike Zinkin’s Watchdog Articles on the LOVE Blog, the mismanagement of the town-owned golf courses continues to be exposed. After the resounding defeat of the Town Council’s latest scheme to pass a $17 million dollar Naranja Park Bond, it’s easy to see why such information is suppressed by the Town. For example, how many citizens know that their sales tax dollars are being used to pay for two completely different types of golf courses?The first type is a Traditional Municipal Golf Course
In this type, each golfer pays the same daily rate for each round played. This does not include any other amenities that may be available at that golf course. This management style is common to every Municipal facility throughout the country, and when operated efficiently, generally requires little or no public tax subsidies.
The second type is a Municipal Country Club operation
In this type, the golfer becomes a Member by paying an annual fee. This type entitles the golfer and/or family to unlimited and exclusive play on a dedicated course. This includes access to whatever amenities are offered (pools, tennis, fitness, food discounts, driving range, etc.); whereas the daily fee golfer pays extra for each amenity used.
Nationwide, this style is privately owned and the Members are responsible for the entire cost of operation. However, in Oro Valley, taxpayers are responsible for all costs over and above the income generated from membership dues. For the last two years, these losses have cost Oro Valley taxpayers over 5 million dollars.
Is this fair?
There are no objections to having additional country clubs in Oro Valley nor to having a true municipal golf facility. However, if the town chooses to operate a country club facility, it should not be funded by the public. Note that the Oro Valley Country Club and Stone Canyon Country Club do not receive any public support.
Does anyone (except the Town Council and Staff) think it’s fair to make working families and thousands of members of the non-golfing public pay to support the lifestyle of 242 country club golfers? Not only does this require the expense of having a separate dedicated 18-hole course, but it also grants free access to all amenities of the Community Center.
The Numbers from Fiscal Year 2016/17
Total Troon income (member golf fees, non-member golf fees, cart fees, food and beverage, merchandise, tennis, etc.) was $2.9 million in FY 2016/17.
The dedicated half-cent sales tax increase brought in another $2.2 million in revenue.
Despite a total of $5.1 million in revenue ($2.9 MM/Troon and $2.2 MM/sales tax), the Town suffered a $2.5 million dollar operating loss, which after the $2.2 million in sales tax revenue, caused the Community Center Fund to drop by $300,000.
The Community Center Golf Courses cost the Town (via the taxpayer), roughly $2.5 million per year for the 45 holes of golf. The combined income from the Public (daily fees) and the Private (country club) member dues is roughly $1.4 million. Hence the sales tax subsidy, which you pay, to make up the difference.
In fiscal year 2016/17, there were 42,679 total public and private rounds played for a total of $1,456,722 in revenue. (Member rounds were 19,777 and non-member rounds were 22,992). If all rounds played were played with a daily fee rate of $40.00, the revenue would have been $1,707,160.
If the course was only 18 holes, we eliminated memberships, and charged an average of $40.00 per round (and assuming the same amount of rounds were played) the total operating cost would be closer to $1.7 million and no taxpayer subsidy would be needed.
Another example: If the average golfer plays 3 times per week times 52 weeks, they would play roughly 150 rounds per year. A daily fee golfer would pay $40.00 per round or $6,000 per year.
Currently, a member pays only $4000 per year for unlimited rounds. This is a loss of $2000 per year which is why the tax subsidy is necessary. This is exactly why there are no Municipal Country Clubs anywhere in the country but here.
Part 2 will be published tomorrow and will discuss questions to consider and some options for solving the golf course problems.
