Wednesday, March 25, 2020

Mike Zinkin's Watchdog Report: "Something's Fishy. More Rounds Played But Less Revenue Earned"

The numbers and categories look very fishy
In January 2020, the golf revenues were $642,052 with a reported 4,205 rounds of non-member play.  By comparison, in January 2019, the golf revenues were $718,791 with 3,762 non-member rounds.  According to the January 2019 and 2020 Financial Reports to the Council, there were 443 more non-member rounds played in 2020, but the revenues were $76,739 less.  How can there be more rounds played but less revenue produced?

Until the January 2020 report, the Town showed member dues as its own separate category.  Now the Town shows the category as Golf Member Dues, Trail and Cart Fees.  As a result of adding the trail and cart fees to this category, the Town now shows that in January 2020 there was $152,095 more revenue in this category than in January 2019 ($617,642 vs, $465,547).

In January 2019, there were 219 golf members, while in January 2020, the number increased to 262.  The 43 additional members have increased the revenue stream by $152,095, or $3,537 per member ($617,642 - 465,547 divided by 43).  Even with all this maneuvering, the contracted losses (Troon) were $1,107,932 through January 2020.

There is no mandate in any contract to operate the Overlook Restaurant
After researching both the original Purchase and Sales Agreement (PSA) between the Town and HSL, the original Troon contract, and the amended Troon contract, I can tell you that the town has no contractual obligation to operate the Overlook Restaurant.

The Troon Contract, as amended, states in Section 4.01 (xi) that Troon shall “supervise and coordinate food and beverage activities at the Facility, including, if applicable, banquet operations.”

This does not mean a full service restaurant.

A food and beverage cart or the (now closed) Garden CafĂ© provides for this service.  Seven months into FY 2019/20 (July 1 through January 31, 2020) the Overlook has lost $64,195, or the approximate cost of two swing sets for our parks.

The mayor states that the new contract with a course manager  will go into effect on October 1. This contract will state that the Town will no longer subsidize the food and beverage operation.  However, the Mayor believes that the new management firm can not close the Overlook without council authorization.

The mayor and council need to recognize that the Overlook has never made a profit nor broken even.  It is a government entity that is in direct competition with the private sector and should be closed now.  Not many private businesses would go on for this long with this record of continued losses.