Monday, August 24, 2020

The Watchdog Report: Currently available golf statistics for Fiscal Year 2019/20

Golf rounds and revenues released but dedicated sales tax revenues not yet available
Due to sales tax revenues being an important part of the Community Center Fund (CCF) financials, we will not know how the CCF performed in FY 2019/20 until late September.

We do know how well the golf courses performed during FY 2019/20 because we now have the amount of total rounds. Keep in mind that Oro Valley golf includes 45 holes of golf (36 holes when the 9-hole Pusch Ridge course is closed) while the other courses we are comparing it to contain only 18 holes of golf. Even when the Pusch Ridge course is closed, we still have a minimum responsibility to maintain it. My assumption is that it is much cheaper to maintain 18 holes than 45 holes.

During FY 2019/20, Oro Valley’s courses had 64,665 total rounds. This includes 24,318 member rounds, 35,479 non-member rounds, and 4,868 complimentary rounds.

Tucson golf courses continue to outperform Oro Valley courses
Within 5 miles of the Oro Valley courses, one municipal course, despite being closed for 6 weeks, had 33,000 rounds on 18 holes, which is nearly equivalent to what Oro Valley had on 36 holes. The other course had 62,573 total rounds which is 56.7% MORE than what we did when comparing non-member rounds.

If we compare 36 holes vs. 36 holes, there is a 36-hole complex in Tucson (Randolph and Del Urich) which could be a similar comparison. The Randolph complex made a $740,848 PROFIT. Although Tucson lost money on two of their other golf courses, that loss was covered by the profit they made on their three other courses.  Tucson ended the fiscal year with a $884,277 PROFIT. To quote a Tucson Councilman “…total rounds are up citywide by over 8% and net income is $250K over budget. One - maybe the only - thing positive about COVID.”

While we don’t have the final monetary numbers for the Oro Valley courses, what can we expect when 18-hole courses around us are outperforming our 45 holes? (Remember our total number of 64,000+ rounds includes 4,800+ free rounds, and 24,300+ member rounds.)

Why be a member?
As of May 30, 2020, the members paid $1,005,420 in dues and trail fees and played 22,315 rounds. This equates to $45.05/round (1,005,420 divided by 22,315).

Non-members accounted for $1,326,148 in golf revenues and played 31,926 rounds. This equates to $41.53/round.

It gets even worse during July. The new management company, Billy Casper Golf, is complicating the numbers. They report that in July 2020, there were 4,070 non-member rounds. This is up from 1,740 rounds in July 2019 for an increase of 135%.  If this is correct, then apparently Troon wasn't the Rolex of golf management companies after all. 

However, 1,362 of those rounds were played on the members course (big deal) and those rounds produced $28,287 in income. This means that if a non-member was lucky enough to play on the members course, it cost them only $20.77/round.

That leaves 2,708 non-member rounds that were played on the other course. The Town does not tell us what the income was on the non-member course.

Why all the smoke and mirrors?
Why can’t the Town just report the number of non-member rounds and the income that those rounds produced? The bottom line is that $20.77/round will not subsidize a 36-hole operation even with additional member income. Are we about to enter another fiscal year with million dollar losses?

• The 18-hole courses within 5 miles of us outperformed us on number of rounds.
• As of July 31, 2020 it is cheaper to play as a non-member than as a member in Oro Valley.
• The City of Tucson made a profit of $884,277 on their municipal golf courses.

A word of caution
The FY 2020/21 budget includes $1.1 million for irrigation improvements on the Conquistador course. The Council has mandated a “pay as you go” model. The Town should not contract for the work until there is a $1.1 million positive balance in the CCF after all obligations are paid (e.g. $120,000 annual payment back to the General Fund and $148,000 to pay for the Energy Efficiency Bond).

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Mike Zinkin and his wife have lived in Oro Valley since 1998. He 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. He was named a Fellow for the National League of Cities. He was a member of the NLC Steering Committee for Community and Economic Development and a member of the Arizona League of Cities Budget and Economic Development Committee. He was an Air Traffic Controller for 30 years. Mike 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.