Tuesday, June 21, 2022

The Watchdog Report: Do You Really Believe that Town Golf is doing OK?

Let’s start with the number of non-member rounds played in May
This is the first time we can compare apples to apples as there were only 18 holes open. (The Conquistador Course is closed for a $7 million irrigation project and the Pusch Ridge Course is closed for the season).

The Oro Valley owned La Canada course had 2,627 rounds. For comparison, a public course within 5 miles of us had 3700 rounds, and a semi-private course within 5 miles had 3,802 rounds. Oro Valley’s wonderful investment didn’t fare as well. In addition, the number of golf members was reduced to 326 in May, a reduction of 19 members from the previous month.

Now let’s look at the financials presented on the Council agenda for June 15, 2022
The Community Center Fund (“CCF”) [panel: document on left] shows a positive balance of $3,446,645, but it also shows that there is $1,868,519 in upcoming transfers and $132,500 still to be paid in capital.
Click To Enlarge

There still is no transfer scheduled to pay back the General Fund for the initial “kick start” for the CCF. This General Fund payback was put on the June 15 agenda for “Discussion and Possible Action.” On a 6-1 vote (with Councilmember Bohen dissenting) the Winfield council rescinded the 2015 decision of the Hiremath Council to pay back to the General Fund the money that they transferred out of it to start the Community Center Fund. This is precedent setting. 

In essence, the current Council has reneged on a commitment set by a prior Council. Of the $1.2 million dollars that was supposed to have been paid back to the General Fund, only $480,000 was paid back. The remaining $720,000 is not and will not be paid back as was promised in 2015.

The five-year forecast [panel: document on upper right] shows that Town Manager Mary Jacobs forecasts that the CCF will end FY 2021/22 with a positive balance of $2,983,676.  This is impressive considering that the CCF has never ended the fiscal year with a positive balance.  However, Jacobs goes on to forecast that the CCF will end FY 2022/23 with a $4,660,469 deficit. Yet, we are told by the Mayor that “golf losses have been substantially reduced.”  In fact, Jacobs doesn't forecast the CCF to end a fiscal year with a positive balance until FY 2024/25 and then it is only by $9,304.

The year end projection of the fund’s balance assumes [panel: document on bottom right] that the HOA’s will continue to contribute to the CCF. Why would they want to continue to do this? There is absolutely no guarantee that their contribution will be spent for golf, since the CCF has now been expanded to include Parks and Recreation needs and a $300,000+ expenditure to maintain the Vistoso Nature Preserve. 

Another assumption is that there will be modest economic growth and no economic downturns, which is contrary to every economic report out today.

Still circling the drain
Bottom Line: Golf and the Community Center continues to drain Oro Valley of its much needed revenues. Remember, in the 500+ page purchase agreement, there is never any mention of a community center…it is always referred to as a COUNTRY CLUB.  
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.