Tuesday, January 9, 2018

Guest View: Mike Zinkin ~ The Only Realistic Alternative

It is a fact that Oro Valley has bought 45 holes of golf. It is a fact that this purchase has been a financial disaster. Given the fact that we own this property, what is the best way to minimize its losses? Of course, the best way to minimize the losses is to ELIMINATE golf all together.

However, if the Council insists on keeping golf, as I am certain they will (they need to save face, after all), what is the best alternative to minimize the losses? Keep in mind I said MINIMIZE because there is no chance that the El Conquistador golf facility will ever profit, nor even break even.

Keep only an 18-hole municipal facility
I suggest that we return the golf complex to the original 18 holes and become purely a municipal facility. By that I mean “no members.” Everybody pays for each round played, everybody pays to use the practice facilities, and there are no “member discounts” for merchandise or food and beverage.

In FY 16/17, the combined income derived by member dues and cart/trail fees amounted to over $928,000. While that’s a lot of income to give up by going strictly municipal, the reduction in expenses from closing 27 holes of golf and allowing prime tee times to be sold to the public (these times are currently saved for the members) will allow the Town to offset the losses.

Contract out Food and Beverage
The first thing that has to happen is to contract the food and beverage. This is also echoed in the $50,000 Golf Study Report. Contracting out the food and beverage will do three things: (1) save the Town over $100,000 per year that is it currently losing; (2) the Town will make money from the contract/lease; and (3) take the Town out of competition with private enterprises.

Financial Savings
By reducing available golf to the original 18 holes, the Town has a facility that can allow for golfers to play a 9 or 18-hole course since the 9th green and the 18th green both end at the Community Center. Cart leases can be reduced because we will only need to lease 70 carts instead of the current 100 carts. Equipment leases can be reduced as there is no longer a need to maintain 45 holes of golf. Payroll, employee benefits, repair and maintenance, and Management fees can all be substantially reduced.

Utilities can be reduced. There will no longer be a need to water the holes south of Lambert as they were never part of the purchase and belong to the Villages of LaCanada HOA. The Town must still water and maintain the acreage that is not utilized for golf in order to protect property values of the surrounding homes with golf course views, but there will still be a substantial reduction in utility expenses. Other than the 18 holes, there will also be no need to over seed in the winter and no need to maintain greens and sand traps.

By returning to the original 18-hole concept and contracting out food and beverage, the savings will be substantial. The $2.1+ million in sales tax revenues will cover any remaining golf losses and allow the Town to maintain the rest of the acreage in a responsible manner.