Monday, January 29, 2018

The Watchdog Report: Golf and Community Center Financials from July through November reveal continuing losses

The November financials were on the Consent Agenda during the January 17, 2018 Town Council meeting, and as always, they were not removed for discussion. Why remove them when the story remains the same? This investment is a loser!

Community Center Fund remains in the hole
The Community Center Fund (CCF) was $364,689 IN THE HOLE, as of November 30th. Keep in mind that in 2017, the Council (with advice from the Financial Director) withdrew an additional $350,000 from the General Fund Contingency to supplement the CCF. Without this additional supplement, the CCF would be over $600,000 in the hole.

The Town is planning to transfer $165,956 out of the CCF by the end of the fiscal year. It’s not clear where they’re planning to transfer it (perhaps $120,000 back to the General Fund and $45,000 for capital improvements?) but to-date they have not transferred out one penny.

The Town Council borrowed $1.2 million from the General Fund Contingency in March 2015 to start the Community Center Fund with a promise to pay back $120,000 per year for 10 years. They reneged altogether on the initial payment in 2016. The 2017 “payment” was a shell game since they had taken out another $350,000 from the General Fund (as discussed above) and then used that money to make the $120,000 payment back into the General Fund. Does anyone want to wager if the Town Council is going to be able to make this year’s $120,000 annual payment?

Town Losses (Recreation Center): July 1st through November 30th
The Town, which is responsible for the recreation center and swim team/swim lessons, lost $48,009 in the first five months of the fiscal year. (The Town lost $86,876 during the same time frame in 2016 so this is an improvement).

However, this improvement is marred by Troon’s increased losses shown below.

Troon Losses (Golf, Food and Beverage): July 1st through November 30th
Troon lost $1,142,288 in the first five months of the fiscal year. That’s over $228,000 a month!

The food and beverage losses for November, primarily the Overlook Restaurant, were $10,481. Food and beverage is forecasted to lose $68,245 in FY 2017/18, but has already lost $58,182 just five months into the fiscal year. Oh well, just another incorrect forecast.

In November 2017 alone, Troon lost $117,028, while in November 2016 the loss was a mere $62,485.  That's $54,543 MORE in losses than in the same month last year.

Incorrect Forecasting Continues
Do you like the way golf is trending? This is the prime time of the year. Troon made a forecast to lose $1,822,941 during the entire fiscal year 2017/18, but has already lost $1,147,288 in just the first five months.

When will the Town Council get tired of all this and make a responsible decision? These continued losses are despite the $855,071 that they collected in sales tax revenue from July 1st through November 30th.

I am as tired of reporting these continuing losses as you are of reading about them. We need a Town Council who will act rather than just sitting back and allowing these repetitive losses to continue.

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Mike Zinkin has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge. He was a commissioned ensign in the United States Navy Reserve in 1969. He worked as an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley after retiring in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. During his time on council, he was named as one of 23 Leadership Fellows for the National League of Cities University, he was a member of the National League of Cities Steering Committee for Community and Economic Development, and a member of the Arizona League of Cities Budget and Economic Development Committee.