The good news is that the Community Center Fund (CCF) ended January 2019 with a positive balance of $32,682. But before you start celebrating…remember that:
• January is a prime month for golf
• The Town still needs to transfer the $120,000 annual repayment to the General Fund (promised by the Hiremath council in 2015 when they borrowed $1.2 million from the General Fund to start the Community Center Fund with a promise to pay back $120,000 per year.)
• The Community Center is still not ADA compliant
• The town has spent only $2,653 of the promised $50,950 in capital improvements.
As of January 31, 2019, the contracted revenues (Troon) were $1,673,938, while the contracted expenditures were $2,874,342. This means that Troon has lost $1,200,404 since July 1, 2018 (the beginning of the fiscal year).
The Town’s revenues were $511,800 while their expenditures were $475,423 resulting in a profit of $36,377 since July 2018.
In January 2019, there were 3,762 non-member rounds of golf played on 45 holes, while at a public course within 5 miles there were 3,764 rounds played on 18 holes. The golf membership was 233, however, there were 6 members who did not pay dues in January due to medical leave and those over 90 not being required to pay dues.
The Overlook lost $11,224 in January, bringing the total loss for the fiscal year to $77,348.
Since the establishment of the CCF in May 2015, Troon has paid $4,905,941 in utility expenses and the Town has paid ZERO. This is odd when you consider that:
• The Town’s portion of the Community Center includes a heated swimming pool, lighted tennis courts, and HVAC requirements for the fitness and recreation center.
• Troon’s portion includes the golf courses, the pro shop, and the Overlook Restaurant. However, all utility costs have been allocated to Troon.
I asked the Town why Troon was responsible for the Town’s portion of the utility expenses. They responded:
“The decision was made upon acquisition to account for all utilities in the Troon budget because the bulk of the utilities costs (water for the golf courses) was a Troon expense, and the building was not equipped with separate meters to clearly measure the Town’s portion of utilities versus Troon’s portion.”This was a decision made by former Town Manager, Greg Caton and Finance Director, Stacy Lemos upon the purchase of the property.
Granted, water is a large expense for golf, but there is also water utilized in the two swimming pools and the shower facilities.
The Town goes on to further justify this unfair allocation:
“Conversely, the Troon budget also does not allocate a portion of golf member dues (collected by Troon) to the Town to recognize the fact that golf members have access to the Town’s fitness facilities as Premium members.”However, the Town fails to mention that the Premium Fitness and Tennis members also have all the benefits regarding food and beverage and merchandise discounts, but Troon receives no portion of these dollars.
Why did the Town rig the financials this way?
We all know that whatever they do, golf is going to lose money. Was this “clever” bookkeeping done because this might be a way to show that the purchase was not a total loss if they can show that the Community Center/Fitness/Tennis portion is making money?
Although the Town’s expenses vs. revenues are showing a positive trend (with recent financials indicating that the Town has made a $36,377 profit through January 2019) is this a valid number when it does not include utility costs accrued by the Town?
Utilities for this fiscal year show:
Electric and Gas $301,720
Waste Removal and Cable Service $38,673
Given these numbers, the Town’s true expenditures for the fiscal year would be considerably more than the $475,423 listed above and their “profit” of $36,377 would be non-existent. There would, in fact, be a negative balance.
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. He was an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009 and the Board of Adjustment from 2011-2012. He served on the Town Council from 2012-2016 during which time he was named a Fellow 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.