The Watchdog Report: The $750,000 Dollar Question

 

Who remembers the letter to the Council from the Town Manager dated September 4, 2019?
Yes, this is a loaded question because I seriously doubt if any of the council members would remember it since it was communicated almost six months ago. Additionally, neither Council members Greene nor Bohen were on Council when the above communication was written.

However, this is an important document because it offers the Town Manager’s forecast with the important caveat that the Mayor stipulated -- that the 36-hole option would require no more than a $750,000 tax subsidy.

Ms. Jacobs’ report was full of prerequisites that had to be fulfilled before the maximum subsidy of $750,000 could be accomplished. One of the requirements was that “The irrigation replacement and general refurbishment of both 18-hole courses was completed.” This had not even been started and the costs for just the irrigation improvements for the Conquistador course alone are over $1 million. This money is to come from the existing Community Center Fund, when, and if, it becomes available.

The forecasted target dates
In her report Ms. Jacobs states:

“By adding in the sales taxes collected by Troon for golf ($46,500), the utility sales tax for the water ($40,400), and the projected additional revenue from opening up the member course to day-play ($175,000), the subsidy is projected to meet the $750,000 target by FY 22/23. If the HOA contribution discussed below is factored into the pro forma, the subsidy is projected to meet the $750,000 target by FY 21/22.”

Jacobs goes on to say:

“According to the pro formas attached, the $750,000 tax subsidy target is achievable by FY 21/22 and possibly sooner if revenue collections remain strong. The potential action plan and accompanying pro formas included in this memorandum more fully demonstrate the financial viability.”

You can read the entire report HERE.  

Since this communication was written almost six months ago, nothing has been accomplished toward improving the courses because the money is not there. Currently available financials from the first 5 months of FY 2020/21 (July-Nov) reveal that the tax subsidy is already over $1 million.

The current formula is not working

How many communications are going to be written, and forgotten, before the Council understands that the 36-hole formula is not working and will not work?

The Mayor and 3 Council members ran on a platform to do something about the golf financial drain. The meetings and abuse they took from the “Green Shirts” are over.

Although golf is up 30% nationwide due to the pandemic, losses continue for Oro Valley due to the fact that our golfing population cannot support one entity owning 36 holes. The Town could possibly support the losses with just 18 holes.

Mr. Lopez and HSL want nothing to do with golf as witnessed by their refusal to take on the 9-hole Pusch Ridge course. This is further evidence that golf does not make good business sense.

Oro Valley is made up of more neighborhoods than Canada Hills and the Villages. In fact, the vast majority of Oro Valley residents live outside those communities. What it is going to take for the council to represent the entire Town, and not just one faction?

---
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.

The Watchdog Report: February 2020, The Best Yet. However…

The financials are in for February 2020 and they are the best yet. The Community Center Fund (CCF), with both the contracted (Troon) and Town-sponsored facilities actually made a profit of $2,035. The balance of the CCF through Feb. 2020 is $332,266 which is $34,858 above the forecast.

The total membership of the golf “club” was 262 which was unchanged from January but was 22 more than in February 2019. The total number of non-member rounds was 4,673 which totaled 1,256 more than the same time last year.

The Overlook was budgeted to lose $1,416 in February but actual losses were $5,034. However, this is still much better than last February when they lost $10,871. However, the total Overlook losses so far this fiscal year (July 2019 through February 2020) were $89,185 which is $17,400 more than the forecasted amount of $71,785. The Overlook is currently closed, and, hopefully, will not re-open. The Town is forecasting a CCF surplus over $400,000. Why don’t we use that money to make the Community Center ADA compliant? In fact, of the budgeted $106,500 set aside for capital outlay, only $26,697 has been spent. With the building closed and nobody walking around, this would be a great time to make the facility ADA compliant.

Why do I say, however?
With all this great news, why do I use the word “however” in the title? It’s not because I see the glass as half empty. I say “however” because of the current pandemic.

As of February 2020 ,your sales tax subsidy to the CCF is 3.3% above forecast ($1,728,698). However, according to the recent Financial Report to the Council:

“Due to the impacts from Covid-19, current year end estimates have been revised down $2.3 million from January’s estimate.”

The report goes on to say:

“It is important to note that due to the timing of sales taxes received, forecasted declines may not be seen until as late as May 2020.”

As previously stated in my April 20th Guest View, “Who’s running the Town?” a communication I received from the Town on 7/1/19, stated that there were 13.18 full-time equivalent employees (FTE) at the Overlook (which is now closed). The entire Community Center (which is now closed) employed 73.73 FTE’s. Despite these closures, the town has not furloughed or laid off any employees.

The Town Manager advises us about a future with reduced revenues. Due to the pandemic, Sales Tax, Bed Tax, State Shared Revenues are all going to be less than forecasted in FY 2019/20. It’s time to look at our expenditures and start reducing them. One of the reasons that we elected the “new Council” is because we were looking for fiscal responsibility.
…
Mike 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.

The Watchdog Report: Half way through the Fiscal Year

The December 2018 financials have been posted. This marks the halfway point of the fiscal year (July 1 through December 31). This also gives us an indication of the success of the holiday shopping season.

In December 2017, the sales tax revenues posted in the Community Center Fund (CCF) showed a gain of $206,132. The gain in December 2018 was $224,773. This is a gain of $18,641 in 2018 holiday shopping sales tax revenues. That’s the good news.

The bad news? Remember that former Town Manager Greg Caton and former Mayor Hiremath told us that the sales tax increase would bring in revenues of $2 million per year and that this would sustain the CCF. The sales tax revenues are projected to be $2,384,558 for FY 2018/19 but the CCF ended December 2018 at $221,389 in the RED. So much for Councilmember Solomon’s claim that we are “breaking even.”

December is one of the prime months for golf. The courses posted 2,748 non-member rounds on 45 holes of golf. To put this in perspective, a public golf course within 5 miles of the El Con posted 3,320 rounds on 18 holes of golf. That is 612 more rounds on 27 less available holes.

Mary had a little…plan
As of December 31, 2018, Troon has lost $1,175,440 of your money. We have shown that, from the start, Troon has done nothing but lose money since the golf courses opened in May 2015, yet Town Manager, Mary Jacobs, extended their contract an additional 6 months.

One of Ms. Jacobs’ essential functions is to: “Provide oversight and assist Departmental Directors in analysis and resolution of problems…” Another function is to “Respond to citizen complaints.” If you agree that extending the Troon contract was in conflict with one of her essential functions, you may write her at mjacobs@orovalleyaz.gov. If you do, please inform LOVE of her response.

In other good news/bad news

With all the rain, the frosts, and even the recent snow we’ve had this winter, the utility (water) costs for the golf courses should be reduced. However, this wet weather will also adversely affect the golf revenues which will be revealed in upcoming Town reports.

Another interesting number on the December report was a capital outlay of $2,633. When I asked the Town what this was for, the reply was, “minor reconfiguration of the parks administrative office.” Apparently this is more important than making the Community Center facility ADA compliant.

There was also a transfer out of the CCF of $133,999 to the Debt Service Fund to pay for principal and interest on the Energy Efficiency Bond. You see, we already have one bond dedicated to the CCF.

The Overlook lost $4,059 in December 2018, bringing the total losses to date $66,384.

Ending on a positive note, the Community Center (fitness, tennis, etc.) has made $8,548 through December 2018.

---
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.

Highlights of the February 20th Town Council "Listening Session" regarding the golf courses

El Con Golf Members and residents living along the town-owned golf courses spoke during the Listening Session at the February 20th council meeting. Below are some highlights of the arguments they presented for why they believe that the Town should not sell any of the golf courses or repurpose them into green space and walking trails, etc.

Comments were strong on emotion and weak on facts.

• “A lot of people who moved here are retired and they need a golf course…The point is, we bought it and the majority of people wanted the golf course. If we’re going to kill it or change it materially, I think you should put it back to a vote of the public at the next election and let it be decided by the voters because we voted for it.”

Fact: No one “needs” a golf course. A golf course is a want, not a necessity. Additionally, the majority of Oro Valley residents did not want these golf courses. When the Town surveyed the residents in 2014 about what recreational amenities they would like the town to provide, golf came in #33 out of #34 possible choices.

Fact: The citizens did not vote to purchase the Community Center and Golf Courses. The “vote” was made by just four members of the previous Town Council; Mayor Hiremath and Councilmembers Hornat, Snider, and Waters.

Fact: Many citizens voiced their opposition to the purchase of the El Con Community Center and Golf Courses in letters to the editor, in emails to the former council, and in speeches they gave at the podium during Town Council meetings prior to the vote being taken (see below). The Hiremath Majority-4 did not listen.

Fact: On December 17, 2014 (the night the vote was taken to purchase the El Con property), 39 residents spoke at the podium and 65% of them were against the purchase. Additionally, 75-80% of the emails received by council in the week prior to the vote were also against the purchase.

•”Do the due diligence. Look at what may happen to property values should you sell both courses.”

Fact: Hiremath and his Majority-4 council did not do their due diligence prior to voting to approve this purchase. They voted to approve the purchase without ever even seeing the contract between HSL and Troon, a contract which the Town would inherit upon purchase. The Town Council did not receive the 90+ page appraisal until about 4 hours prior to the meeting. They also never saw the rounds that the Hilton had experienced and they never saw the purchase agreement until after it was signed.

• “Whatever you choose to do, you have to include input and participation from the homeowners, not just some group that represents them, but you need to talk to every single one or you really haven’t done what’s right…You already have a source of revenue. It isn’t that you’re going to run out of money.”

Fact: The Town has already held two private meetings for residents living along the golf courses and one private meeting for the Golf Members.

Two Special Meetings for Residents living along the golf courses

May 4, 2017: Q&A Session/Workshop at the Gaslight Theater
December 12, 2017: Town Council Chambers

One Special Meeting for Golf Members

December 13, 2017: Sunset Room of the Community Center

Fact: The revenues are not meeting the expenses.

• “I believe that the golf course and community center adds value to our properties, it adds value to the community, and it is a justifiable expense…If we get rid of the golf courses, the property values will fall for the [home] owners. And of course, if that goes down, then the property taxes will go down. The revenue will go down on these houses for the town.”

Fact: Oro Valley does not have a property tax. Our property tax is paid to Pima County. If a person’s property tax goes down due to their home value going down, it will not affect Oro Valley’s revenue. Our revenues are derived from sales tax, State shared revenues, utility tax, franchise tax, bed tax on hotel rooms.

Fact: There is a misconception that property values will decline if golf does not continue. Green spaces and linear parks will not reduce values. A home's value is actually based on many things. In fact, university researchers have found a number of variables that affect home prices.

Proximity to Parks & Open Spaces ranked as number two. A desirable public park or other recreational open space boosts the property value of nearby homes by 8%-20%. One study looked at 16,400 home sales within 1,500 feet of 193 public parks in Portland, Oregon and found the following boosts to home values:

Natural areas:      $10,648
Golf courses:       $8,849
Specialty parks:   $5,657
Urban parks:        $1,214

(Source: Realtors Houselogic and Take Back OV)

• "I believe the benefits of the golf course to the community outweigh these relatively small monetary costs."

Fact: $10 million in losses is not a relatively small cost and these losses do not include the much needed capital improvements, including making the Community Center ADA compliant. There have been at least $6 million in “promised” capital improvements that have yet to be implemented. Due to the continued losses, the Town is now considering bonding to make these improvements.

• "I am in favor of keeping all 36 holes. We require all 36 holes in order to make the money that we need, especially Amphi [schools] to put on their Project Grad."

Fact: Project Graduation is a valuable program, but taxpayers shouldn’t continue to suffer millions in losses for the sake of one tournament. The Project Graduation golf tournament can be held utilizing one course (144 golfers). If more money is needed, they can have another type of fundraiser and more local businesses can be asked to contribute.

Guest View: Kim Krostue ~ Preserving 18 holes on the La Canada course is the best option

After the adjournment of last Wednesday’s standing room only Town Council meeting, the Council held a “listening session” with residents regarding the Community Center Golf Courses. Oro Valley resident, Kim Krostue, gave the following speech.

My name is Kim Krostue. I have owned a home on the tenth fairway of the Views golf course for 8 years.

I have reviewed the financials of the Town’s 45 holes of golf. Clearly the status quo is not financially sustainable. A change needs to be made.

First, the 9 holes need to be sent back to HSL.

Second, I have studied the National Golf Foundation’s 2018 report. There were 3 options discussed. The 18-hole option (Option C) is the correct one. However, the 18-hole configuration as outlined in the report seems artificial with a new 18-hole course carved out of the La Canada and El Conquistador courses, preserving holes on each course.

I would suggest changing this and just keeping the La Canada course as is. I would repurpose the El Conquistador course preserving the views of all current El Conquistador homeowners. By selecting the La Canada course, I believe the 4.2M conceptual reconfiguration cost outlined in the NGF report (Option C) could be reduced perhaps dramatically thereby leaving money for community center improvements. Plus the move to 18 holes could be done almost immediately with all required irrigation work being completed this summer.

I believe moving from 45 holes of golf to 18 is the best option to preserve the property values of all homeowners living on every golf course in Oro Valley and will also allow the La Canada course to operate in the black.

Mr. Krostue also submitted the following comments on Take Back OV (Facebook Page):
If you weren't there, take the time to watch. The attitude in the room demonstrated why Hiremath and crew were crushed in the election. The golf club members led the charge for a continued free lunch. No other way to say it. I do not remember anyone in the “keep 36 holes group” arguing that golf should operate financially in the black. The NGF study captured this group’s attitude in the 2017 study and nothing has changed.

I learned something significant at the meeting. The deed restrictions in the HSL contract apply to the La Canada course and the 9 holes, not to the El Conquistador course. It appears that the town manager (staff) did not understand what the deed restrictions actually were until after last month’s study session. Think about that for a second.
---
Editor’s Note: Mr. Krostue’s comment, “The NGF study captured this group’s attitude in the 2017 study and nothing has changed” was in reference to a comment by the National Golf Foundation after a 2017 meeting with El Con golf members and residents living along the golf courses.

“The feedback from these groups showed very little tolerance for change and lack of concern for the troubled facility economics." ~ Summary statement, Page 4, National Golf Foundation Study

The Watchdog Report: October 2018

The October 2018 financials are posted and reveals further proof of the fiscal irresponsibility of the Hiremath-Hornat-Snider-Waters council…and Pina, Rodman, and Solomon did nothing to stop it.

For those of you who are new to the LOVE blog, the Community Center Fund (CCF) is the fund that was set up to collect the revenues (including the dedicated half cent sales tax increase), and pay for all the Community Center expenses, including capital improvements.

As of October 31, 2018, the CCF is $460,575 in the red. This is what former mayor Hiremath and his sycophants call “breaking even.”

First four months of the fiscal year (July 1 – October 31)
Since July 1st, The Overlook Restaurant has lost $46,901. For comparison, the entire Community Center has lost only $15,903 since July 1st. The Overlook lost $13,355 in October alone.

• As of October 2017, Troon’s revenues were $924,875.
• As of October 2018, Troon’s revenues were $831,954. ($92,921 less than prior year)
• The good news is that Troon’s expenditures were $134,247 less in October 2018 compared to October 2017 and our sales tax revenues were $34,559 more.

When comparing FY 2017/18 to FY 2018/19, as of October 31st, Troon’s payroll increased $54,400, employee benefits increased $6,308, cart leases increased $3,759, and utilities decreased $120,074. Membership dues decreased $26,345. This closes the books on the Hiremath/HSL affair.

Since the purchase of the Community Center and Golf Courses in May 2015:
• FY 2014/15, Troon lost - $612,094
• FY 2015/16, Troon lost - $2,567,385
• FY 2016/17, Troon lost - $2,512,938
• FY 2017/18, Troon lost - $1,993,040
• So far in FY 2018/19, Troon has lost - $936,196

TOTAL LOSS OF $8,621,653.

The total of your sales tax revenues dedicated to this ill-conceived plan are $7,783,147, plus $1,550,500 that the Hiremath council transferred from the General Fund to assist in paying for this disaster. Just think of the parks and other citizen benefits we could have had with the combined monies of the General fund donation and the sales tax revenues ($9,333,647). Instead this all went to make Humberto Lopez (HSL Properties) happy at your expense.

Where do we go from here?
The Town Manager has already stated that she desires to continue with 36 holes of golf, completely disregarding the recommendations of the $50,000 golf study. Apparently, the Town Manager will not be the person to lead us out of this quagmire.

Oro Valley voters recently elected a new Mayor and three Councilmembers. Although I will continue to document this debacle, the new council majority completely understands the Town’s need to correct this problem and we should allow them some time to formulate a game plan to at least minimize the losses until a permanent solution can be found. I do not expect to see any massive changes in the immediate future, but I do expect to see some positive changes.

---
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.

The Watchdog Report: Community Center Fund Ends July 2018 Over $200,000 In The Red

The July 2018 Community Center/Golf numbers are posted and Hiremath and his three departing minions are not leaving a favorable legacy.

The Community Center Fund (CCF), the fund set up to pay for everything including capital improvements, lost $165,632 in July 2018. Add this loss to the fact that the fund started the fiscal year on July 1st already $74,010 in the hole, and this leaves the CCF at $239,642 in the red.

These deficient numbers include $179,538 in sales tax revenues for July and $55,466 in membership contributions.

Golf Memberships, Revenues, and Expenses
July membership was 223 which is three less than in June. The high was 249 in January, but still not even close to the 319 memberships that Troon desired by December 2015.

While July 2018 revenues were $5,552 higher than July 2017, the expenses were $116,507 higher. The higher expenses can be contributed to higher equipment leases and O & M (e.g. we have increased the number of golf carts we now lease).

The Overlook lost more in July 2018 than in July 2017
Did you notice the quarter page ad for the Overlook Restaurant in a recent edition of the Explorer? Why is the Overlook still open? The Overlook lost $11,345 in July 2018. This is $779 more than it lost in July 2017.

Will the Hiremath council bite the bullet and close this drain, or is he going leave it as part of his horrible legacy? We still need to see the numbers for August – October 2018 before we can close out the Hiremath-Hornat-Snider-Waters disaster.

---

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.

The Watchdog Report: Fiscal Year 2017/18 Final Report

The fiscal year (July 1, 2017 through June 30, 2018) has ended and we now have the final numbers regarding the financial status of the Community Center and Golf Courses.

Community Center
The Community Center Fund (CCF) ended the year $74,010 in the red. This number includes the fact that your sales tax contribution for the year was $2,330,941. It also includes the annual $120,000 pay back to the General Fund (the Town Council borrowed $1.2 million from the General Fund in 2015 to start the Community Center Fund).

The Town fell well short of their desired capital outlay. They promised to spend $94,250 in capital improvements, but spent only $45,464. The Town has fallen short of expected capital outlay since the Community Center inception in May 2015, hence the $6 million dollar bond for improvements in the FY 2018/19 budget.

The Town’s losses (fitness/recreation) were $123,800 in FY 2017/18 and a total loss of $291,009 since inception in 2015. In other words, the Town’s losses in FY 2017/18 were almost half of their total losses since 2015. Is this the trend we desire?

• The CCF ended FY 2014/15 with $1,025,222. 

• It ended FY 2015/16 with $162,152.

• It ended FY 2016/17 with $97,156  (however, this was due to the Council transferring $350,000 from the General Fund to the CCF).

• And it has now ended FY 2017/18 at $74,010 in the red.  The trend is not going in the right direction.

The Overlook Restaurant lost $96,100 in FY 2017/18. This is $23,606 more than forecasted.

Golf Courses
Troon Golf lost $1,993,040 in FY 2017/18. This is $170,099 more than forecasted. Since the beginning of this debacle, your sales tax revenues diverted to this fund have been $7,067,867 and Troon has lost $7,536,042.

Adding the Town’s losses since 2015 ($291,009) with Troon losses since 2015 ($7,536,042) equals total losses of $7,827,051. This number is $759,184 more than the sales tax revenues ($7,067,867) that were supposed to support this misadventure.  Are the members really paying their share for a private course?

Member Dues

FY 2015/16 ended with $876,133

FY 2016/17 ended with $726,811

FY 2017/18 ended with $784,071

Although member dues were $57,260 higher in 2018 than 2017, the fiscal year began in July 2017 with $58,678 in member dues and ended the year in June 2018 with $52,388 in member dues.

Fresh eyes
This investment continues to be an eyesore on our books. Beginning in November, we will have a new Council majority. Let’s hope that fresh eyes and innovative ideas can stem these losses. You can be assured that I will continue to keep a close eye on this situation.

Guest View: Tim Bohen ~ What the heck happened?

When the Town stated at the May 16 Council Meeting that outside golf revenues were way up through March 2018, this really caught my attention. Maybe the long promised outside play (non-member) golfers have finally arrived to save El Con golf. Per Staff, the Community Center fund is projected show a small surplus in 2017-18 mainly due to rising non-member golf revenues.

The March 2018 Troon cash flow statement (available for review on the Town website) reveals that March 2018 was the best ever month for outside play since the Town purchased the courses.

Several questions are raised
1. Did you see backed up foursomes on every hole all afternoon every afternoon in March?

2. After this great result at El Con, how did nearby Vistoso Golf Club see the need to close their doors just two months later? Did the Community Center steal its golfers? What the heck happened?

3A. Per Troon projections for FY 2017/18 (available on the Town website) El Con would have 318 members and would generate $1,793,000 in member revenue and $5,940,719 in total golf revenue.

3B. Per Town projections for FY 2017/18, the Town projected about 225 members, forecasted $811,811 in member revenue and forecasted $3,455,214 in total golf revenue. But somehow Troon is two years ahead of their 5-year plan. What the heck happened?

4. The NGF Study said the courses were in trouble and significant changes need to be made. A year later with no changes made we find ourselves two years ahead of schedule with respect to breaking even in the Community Center Fund. What the heck happened?

It’s all in the details
Absent any other source, you simply have to trust the Staff report made at Council. Needless to say, we should not trust it without seeing all of the supporting data, most importantly the outside golf receipts for March. We’re all paying for it with our sales tax. Show us the receipts!

It's a Community Center bought for the Community and paid for by the Community. Where is the detail that supports the newfound success? If I were the Town Council, I would gleefully share the details.

Fudging the numbers?
To those of us paying close attention, Community Center golf as managed by Troon is evolving into a financial scandal. Despite the fact that the sales tax subsidy has now risen to $2.3M (a $300K increase from FY 15/16) Troon and Staff still seem to feel the need to fudge the numbers to make it appear that the Community Center fund is turning a small surplus in FY 17/18.

The rising sales tax subsidy is the only good news regarding golf. And this has nothing to do with golf operations. A review of the Troon month-to-month numbers reveals no significant operational improvement in three years other than some hard-to-fathom outside play numbers for early 2018. But why?

Election year shenanigans?
Perhaps it is because we are in an election year and the Council is now seeking to justify major golf course upgrades to voters unfamiliar with the details. The bad news is out there. Golf courses are closing all over Arizona and nationwide. What is Troon doing right at El Con that others seem to be getting so wrong?

It’s the Management Contract, Stupid
Perhaps it is because the Troon management contract (which pays them $144K/year no matter what their results) is eligible for renewal in 2019 for 15 years unless the Town cancels the contract before March 30, 2019. Maybe some future revenues are being moved forward to the present to show a near term positive trend? Perhaps it’s, let’s keep the Troon gravy train going however we can?

Another way in which the Troon Management Contract may be terminated is per section 6.03 Financial Performance. In this case, if the facility does not earn 90% of the projected Gross Operating Profit (GOP), then the contract may be subject to cancellation. However the Purchase Agreement allows Troon to make up any shortfall within 30 days of being notified.

Imagine, if you will
Imagine a situation in which this shortfall is much less than $144K. In such situation, Troon may be motivated to simply pay the shortfall. The point is the amount to be paid to make up a shortfall, if any, is based upon Troon’s reported results. We as a Town should be monitoring Troon closely to ensure the fees we are paying are truly earned.

Thank you Oro Valley for making your residents need to learn about local golf course economics. That used to be a Troon issue. They are, after all, the experts. Now its a Town-wide issue and might remain so for at least 20 more years. Now that the Troon Management Contract renewal is coming up, we all need to be vigilant to ensure that Troon is reporting honestly and truly pulling their own weight.

-----

Tim Bohen grew up in Southern California and moved to Oro Valley in 2015. He has a Bachelors degree in Physics from UCI and an MBA from Loyola Marymount. He is employed as a Systems Engineer. He graduated from the Community Academy in 2016 and the Citizens Academy in 2017. He was recently appointed to the Oro Valley Historic Preservation Commission and is a volunteer mediator with the Arizona Attorney General’s office. His interests include aviation and history, with his greatest interest currently being frontier life and how the West was settled.

Guest View: Mike Zinkin ~ The Town Council appears to have some philosophical problems

Let’s begin with some historical facts.

December 17, 2014 Council Meeting. During the December 17, 2014 council meeting, during the discussions about purchasing the Community Center and Golf Courses, the Mayor bragged that he would not saddle the residents of Oro Valley with a 20-year bond debt for the Community Center and Golf. (Scroll down to the article “Then and Now” published on Monday to read his exact quotes.)

During that same meeting, the Power Point presentation presented by then Town Manager Greg Caton showed how the Community Center/Golf expenses would be covered with the 25% increase in our sales tax.

January 6, 2016 Council Meeting. Councilmembers Burns, Garner, and myself pointed out that just six months into operations, the golf investment had over $1.9M in losses and the Overlook Restaurant had over $148,000 in losses. Vice-Mayor Waters responded by chastising us and telling us to “get on board.” And with that, Hiremath-Hornat-Snider-Waters dug in their heels, accepting the fact that the Town would lose money on this endeavor for at least 5 years.

April 6, 2016 Council Meeting. Councilmember Snider blamed the lack of golf memberships on information that I had presented to the public which she said was “creating a headwind in town.”

Councilmember Hornat, when asked by a Channel 4 reporter, “What is your Plan B?” replied, “I’m not sure there is a Plan B.”

Burying their heads in the sand
When the monthly “actuals” repeatedly failed to match the “projections,” I asked then Town Manager, Greg Caton to revise the estimates. He refused to do so, replying that he worked for the majority of Council, not just one council member. The majority did not desire to see revised estimates (it’s easier to bury your head in the sand) and thus they were never prepared.

That Council majority is still in office and will not press Troon for accurate estimates.

Now let’s look at the current state of affairs.

The Town Budget for FY 2018/19 is $143.2 million. That’s $20 million more than the budget for FY 2017/18 which was $123.2 million.

After Mayor HIremath said in 2014 that he would not saddle residents with a 20-year bond for Community Center and Golf expenses, the FY 2018/19 budget includes…wait for it…a $6 million dollar, 20-year bond for Community Center and Golf Course improvements.

Town Policy forbids bonding for continuing expenses
The current Oro Valley Financial and Budgetary Policies forbid bonding for continuing expenses. One could argue that the Community Center/Golf operation is a continuing expense, but the Town is framing it as a ONE-TIME expense since the bond money will be used for improvements and not for monthly expenses such as payroll or utilities.

Town’s Philosophy: Use one-time revenues for one-time expenses
And now the plot thickens because if we look at it from the Town’s perspective as a ONE-TIME expense, there is still a problem. The Town’s philosophy has always been to use one-time revenues for one-time expenses. Yet they plan to support payment of the bond with the annual $800,000 in sales tax revenues from OV Marketplace that the Town will receive when the sales tax sharing agreement with Vestar expires in November 2019. Sales tax revenue is not one-time revenue, it is an ongoing revenue. Therefore, using sales tax revenues to pay for a bond is against the Town’s philosophy.

To clarify, using one-time revenues for one-time expenses is within the Town’s policy. Using ongoing revenues to pay for one-time expenses is against the Town’s policy. But we all know by now that this Town Council does not follow Town policies or philosophies.

-----

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.

Guest View: Devon Sloan ~ Open letter to the Mayor and Town Council

Let’s just take a look at recent happenings:

The $17 million dollar Naranja Park Bond failure. Despite this bond being "all about the kids" you were not planning to add playground equipment in next year's budget, but rather not until FY 2022/23. Then you suddenly moved it up to the FY 2019/20 budget. Could this be because this is one of the issues that mayoral challenger, Joe Winfield, has been campaigning on (citizens asked for playgrounds and you bought three golf courses instead) and you're worried that his campaign will resonate with voters? $350,000 suddenly becoming available for playground equipment in an election year sure seems coincidental to me.

The $14 million dollar bond. You’ve approved a $14M bond, which you can approve with no vote from the citizens, with $6M of that bond going towards improvements at the Community Center and 45 holes of golf, a dying sport supported by less than 1% of the town population. And now, with the Vistoso Golf Course closing, are you not paying attention that golf is NOT a sustainable sport anymore?

Closure of the Overlook Restaurant at the Community Center. This is due to loss of revenues, which makes me wonder…why close the restaurant and NOT the golf courses? The Overlook Restaurant has the best views of ANY restaurant in Oro Valley and would probably be successful with an actual viable restaurant manager/owner who would keep it open for dinner more than three days a month. Get out of the restaurant business, and give it over to someone who has the expertise.

The inane idea of Main Streets. If this was such a great idea, why didn’t the Town discuss with Vestar (when OV Marketplace was being built) that they should expect a town center concept in a few years? If the Town wanted a “Main Streets” they should have planned it long ago. Key word…planned. It would have made more sense in the OV Marketplace location (lots of space for people to congregate, easy access, plenty of parking, walking trails) than in the planned LaCanada Drive location between the Community Center and Lambert Lane (fighting lots of traffic to get to-and-from).

Complete disregard for Steam Pump Ranch and the Oro Valley Historical Society. What are the plans for the Ranch? Are there any? It’s a valuable historical asset to this town, and the Council doesn’t treat it with the respect it deserves.

Amazing disregard for our town’s desert landscape. Look at the two Silverhawke projects on First Avenue and the Capella project on LaCholla. You call this “judicious use of our remaining land” as was mentioned in the State of the Town speech last fall? What is judicious about it? Judicious means sound judgment, and I personally don’t see that, unless you are talking about sound judgment when it comes to funding your campaigns with developers’ money.

Nakoma Sky departure from Lambert and First Avenue. Wow! And now what will the town do about all that bladed land?

I, for one, will not be voting for any of you in the August Town Council election. I want this town to be the one I moved into almost 20 years ago, and I don’t believe that is possible with your “leadership.”

Guest View: Mike Zinkin ~ Then and Now

It's always very revealing to look back on what our overly-confident mayor and council were asserting back in December 2014 when they decided to purchase the El Con Community Center and three Golf Courses and compare it to what they are telling us now. While they will never admit that they were wrong about any of their promises or predictions, a look back in time tells the story.

Flashback to December 17, 2014

Below are two quotes from Mayor Hiremath from the 12/17/14 council meeting. This is the meeting when the council voted to purchase the HSL El Conquistador property:

"...We’re telling you that in the first two years, we’re going to lose major money on it…I know we’re going to lose money, but I think we have a good plan to help turn that around and that includes capital investment.”

“A lot of things have been floated around and one is a bond…Councilmember Burns mentioned it. Councilmember Garner mentioned it. How are they going to pay for the bond?...What’s the revenue source going to be? It doesn’t matter what it is…It’s not free money. There’s interest on it. Why do I want to saddle my residents…to pay extra money when we have the cash?"

Fast-Forward to June 2018
Well here we are, 3½ years later, and the new FY 2018/19 budget includes a $6MM bond to finance capital improvements required for the Community Center and Golf Courses. What happened?

I’ll tell you what happened. The Mayor and Council, along with the staff, completely ignored what was clear to everyone else. The money promised by the Mayor and Town Staff in 2014 NEVER MATERIALIZED.

The Town’s 2014 Power Point presentation

According to the Town’s Power Point presentation on 12/17/14, the promised capital improvements were:

                               FY 14/15                FY 15/16                   FY 16/17                   FY 17/18

Golf                        $50,000                  $1,310,500                $1,282,500                 $130,000
Comm. Ctr.             $760,000                $550,000                   $490,000                    $466,000
Total                       $810,000                $1,860,500                $1,772,500                 $596,000

The Town’s chart below shows the specific work that was to be done and in what year it was scheduled.

Fast-Forward to March 2018

Below is what they actually spent on capital improvement.

                   FY 14/15                 FY 15/16                FY 16/17               FY 17/18 (Thru 3/31)

                    $37,873                   $499,774                $72,414                  $29,464

Deficient     $772,127                 $1,360,726             $1,700,086             $566,536

Summary
• They promised to spend a total of $5,039,000 in capital improvements by FY 17/18.
• They actually spent just $639,525.
• This is $4,399,475 less than what they promised.

They have been wrong repeatedly, forcing them to renege on their promises year after year. It is now 3½ years later and this council still refuses to accept reality. We cannot allow them to continue in office for another four years.

Guest View: Mike Zinkin ~ Is Democracy dead in Oro Valley?

Webster defines democracy as:

“Government by the People; especially: rule of the majority.”

The International City-County Management Association (ICMA) has a Code of Ethics, consisting of 12 Tenets. Tenet 4 is:

“Recognize that the chief function of local government at all times is to serve the best interests of all the people.”

Do the actions of the current mayor and council meet the definition of democracy? Are they serving the best interests of all the people?

Exhibit A. The Golf courses
In June 2014, the Town paid for a statistically valid survey asking residents what amenities they desired in their parks. The results showed that the top 3 items requested were (1) playgrounds and play structures, (2) ramadas and picnic areas, and (3) paved walking paths.. Out of 34 possible options, golf came in at number 33 (with 63% of respondents stating that golf was “not important.”)

Despite this, just six months later, in December 2014, the Council decided to purchase 45 holes of golf. The overwhelming amount of input from the People was NO, yet the Council majority (Hiremath-Hornat-Snider-Waters) voted to purchase the golf courses anyway.

If there was any democracy in Oro Valley, would the Town Council chose to purchase a golf course just six months after the citizens asked for play structures, ramadas, and picnic areas? This purchase was supported by Greg Caton, the Town Manager at the time. So much for ICMA Tenet 4, and Government by the People.

Exhibit B. The voter-approved General Plan
In 2016, the Town Council forwarded to its residents a new General Plan. Developed with approximately three years of resident input. This plan, Your Voice, Our Future [YVOF] was placed on the ballot for voter approval. And although YVOF was approved by the voters on November 8, 2016, the Town Council voted to amend the Plan just 8 days later on November 16th. And they have continued to amend the voter-approved plan at every opportunity. Government by the People?

Exhibit C. Ball fields
In 2017, members of the community came to the council asking for ball fields for the children. They said that they were “desperately needed” and the Town Council agreed. But instead of looking for available resources to fund these fields, the Council instead asked the residents to impose a secondary Property Tax on themselves to fund these ball fields. This was a $17 MM bond that would have cost taxpayers $28 MM including the interest. The Residents overwhelmingly rejected the tax. Interestingly, the Council continues to brag that they have saved $2 million in the budget. Well then, why not put that $2M towards building those “desperately needed” ball fields?

Exhibit D. Undesirable development
The residents have told the Council repeatedly that they do not want postage-stamp sized residential lots and the continued blading of the desert. They have told the Council that they desire to save their mountain views and preserve the desert environment. What does the Council do? They repeatedly ignore the wishes of the citizens in favor of the developers/builders who financed their campaigns. Is this democracy?

Exhibit E. The Town Budget
The FY 2018/19 Town Budget is over $20 million higher than the previous fiscal year. There are NO ball fields included in it. There is, however, a $6 million bond of which $3 million will be used to improve the GOLF COURSES. Does this sound like adherence to the ICMA Tenet 4? Does this sound like Democracy?

Sadly, there is ample evidence that democracy does not exist in Oro Valley. On August 28th, the voters of Oro Valley will have an opportunity to replace four members of this council and return democracy to our Town.

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.

Guest View: Tim Bohen ~ The Real 5-Year Plan for the Community Center (Hint: It’s now a 25-Year Plan)

Note: The $6MM Community Center Bond approval is included in the Adoption of the Tentative Budget that the Town Council will be voting on at tonight’s Council meeting.

We have often heard from Town Council that we need to give the Oro Valley Community Center golf investment time to show that its financial viability is trending positively. This was a fair request since the golf purchase was truly a major undertaking. However, three years have now elapsed and time has revealed what the 5-year plan may have been all along.

Another victory for Humberto Lopez (HSL Properties) and golfers
At the end of next the fiscal year, the Town’s obligation to rebate Vestar 45% of the sales taxes collected at Oro Valley Marketplace will end. This information was provided by Town Manager, Mary Jacobs during the Town Council Budget Study Session on May 9th. When Vestar’s tax incentive ends, approximately $800K per year in sales tax revenue from OV Marketplace will now become available to support Town services. This should be great news. I’m sure we can all think of many community-wide uses for this new revenue stream. Perhaps we could use it to actually provide more ball fields or playground equipment for young families since that’s what residents have been requesting.

But wait. Later at the same May 9th budget review, a significant portion of these same revenues ($450-480K per year) was proposed to be effectively passed to HSL and our “Country Club” and fitness members as security for a 20-year bond to improve the Community Center and Golf Courses. And once again, ball fields and playgrounds take a back seat to golf.

The percentage of Oro Valley residents who have $20-$40 monthly fitness memberships is only approximately 3% of our population. And the number of users who visit this facility per day (about 320) is far less than 1% of our town population, as was cheerfully volunteered by Parks and Rec themselves at the same meeting. Do these 9,500 total visits per month in a town of 45,000 include out-of-town visitors from the resort who are coming to enjoy our sales tax subsidized golf?

Lipstick on a Sign
In essence, all the Town did was to cross out the “Country Club” sign in lipstick and write “Community Center” on the sign in the same lipstick and…well, it’s still a Country Club. It’s great that we have a day camp and fitness center members that enjoy the Community Center and make this portion viable. But this benefit clearly goes to relatively few as reported by Parks and Rec themselves. And frankly, this benefit has been, and will long continue to be, dwarfed by the golf losses borne by all.

All that has really changed at El Conquistador since 2014 is the sign out front, a new traffic light, and more importantly, who is now responsible for the long-term upkeep of the combined Community Center and El Conquistador Resort (HSL) golf asset. It’s we taxpayers who will now shoulder an ever increasing load of $3-4 million dollars per year for the next twenty years minimum (0.5% town-wide dedicated Community Center sales tax + 60% of the previously committed OV Marketplace sales tax to Vestar).

Fast Pitch
Our Community Center purchase agreement provides HSL with a 50-year (at $10K per year) Canada golf course improvements option to keep this one course open. Mayor Hiremath has stated that the signer of the purchase agreement, former Town Manager, Greg Caton, always seemed to “hit it out of the park.” It looks like this ball might come down some time around 2040 as far as loan payments, or 2065 as far as our lease with HSL. It’s a tape measure home run for HSL and the golfers either way. As for the vast majority of Oro Valley sales tax payers who don’t use the facility, let’s just say we’ll keep getting hit by the pitch.

Privatized Gains and Socialized Losses
So, upon learning this, how do we as a Town, in good conscience, choose to sink $6M minimum more into a 35-year old building and golf courses over the next three years? Our local economy includes flat golf revenues, rising local construction costs over the short term of this project, and potentially catastrophic decreases in CAP water for southern Arizona over the long term. Losing CAP water may shut all but the most financially healthy Tucson courses.

El Conquistador Country Club memberships are already well below where they need to be. This is maybe the only point everyone in Oro Valley can agree on. So, how exactly will three years of phased construction improve the membership rates? They won’t. Watch your Council brag about the great fiscal position of the Town resulting from their “skillful planning” and fiscal restraint and try to reconcile that with this long term decision. You can’t.

Town Council to vote on Community Center bond issue at Wednesday’s Council Meeting

At this Wednesday’s Town Council meeting (6 PM in Town Council chambers), Agenda Item #4 pertains to the Adoption of the Tentative Budget for FY 2018/19 (which begins on July 1st).

Part of this budget includes a $6 million dollar bond for Community Center and Golf Course improvements to be utilized as follows:


• $3.8 MM will be used to replace the aging and leaking golf course water lines
• $2.2 MM will be used to remodel the outdated Community Center

More information can be found in the attached article from Sunday’s Arizona Daily Star, including how the Town Manager and Town Finance Director propose that we repay this 20-year bond.

Read the AZ Star article HERE

Guest View: Mike Zinkin ~ The $6 Million Dollar Bond

The “turn-key” Community Center needs another $6 MM in taxpayer funds
In December 2014, Town Manager, Greg Caton, plus Mayor Hiremath, and Councilmembers Hornat, Snider, and Waters insisted that the Community Center and Golf course purchase was a great deal because it was a “turn-key” operation costing only $1 million dollars and that no debt service would be required. Turns out that this has become just another one of their lies/broken promises.

Through a series of email exchanges with the Town, I recently learned that Town Manager, Mary Jacobs is recommending a $6 MM bond for Community Center expenses, with half to be spent in FY 2018/19 and half in FY 2019/20.

According to Finance Director, Stacey Lemos, the actual cost for this bond, assuming an interest rate of 5% over 20 years will total an estimated $8.7 million dollars.

A Budget Study session will be held on Wednesday, May 2nd at 3 PM in Town Council Chambers. Will the mayor and council consider approving a $6 million bond in order to save golf? We expect that they will since none of their previous efforts to finance the Community Center and Golf Courses have been successful.

The Repeated Lies and Broken Promises of the Town Council

• They promised that the half-cent sales tax increase would cover ALL Community Center costs. It hasn’t.

• They asserted that there would be no debt service. Yet, here we are, three years later, discussing a $6 MM bond for Community Center/Golf expenses.

• They lied when they said that only $1.2 MM would be taken from the General Fund Contingency to jump-start the Community Center Fund. As you will recall, they had to transfer another $350,000 from the General Fund last year to meet Community Center expenses.

• They lied when they promised they would pay back the $1.2 MM to the General Fund with $120,000 a year for the next 10 years.

• They spent $50,000 of taxpayer money on a Golf Study and then completely ignored the recommendations.

Mary Jacobs email stated the following:

“I point you to page iv of the Town Manager’s budget message that outlines how the recommended capital expenditure is being budgeted in FY 18/19.

In addition, the Recommended Budget includes half of the projected $6 million in total planned funding for capital improvements at the Community Center building as well as irrigation system replacement, turf reduction and other improvements on the Canada and Conquistador 18-hole golf courses. The expenditure will be financed via the issuance of a 20 year bond, and debt service will be repaid through the Capital Fund…..it’s a $6 million bond with HALF of it expected to be expended in 18/19, and HALF expended in 19/20.” (emphasis added)

Page 228 of the TMRB
Town Manager Jacobs has requested $3.6 MM for golf course repairs and $2.4 MM in Community Center improvements (TOTAL $6 MM) spread over two years and financed with a 20-year bond

The following information was obtained from Page 228 of the Town Manager’s Recommended Budget (TMRB).

COMMUNITY CENTER (CC) BOND FUNDED IMPROVEMENTS

                                                                     FY18/19                FY19/20                  TOTAL
Community Center Improvements              $1,200,000            $1,200,000              $2,400,000
Golf Course Irrigation Replacement           $1,800,000            $1,800,000              $3,600,000
TOTAL CC BOND IMPROVEMENTS         $3,000,000            $3,000,000              $6,000,000

The Town Council’s Community Center financing plan did not work
The additional half cent sales tax was supposed to offset ALL expenses for the Community Center, including golf, tennis, and the Community Center building. Instead, all of the sales tax revenue is going down the drain for golf. As such, there have been limited funds for capital improvements which is why the Town now wants to bond $3M in the 2018/19 budget and another $3M in the 2019/2020 budget.

How many more millions of taxpayer dollars are they going to spend on this endeavor before they admit that they made a mistake in purchasing the El Con Community Center and Golf Courses?
---
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.

Guest View: Mike Zinkin ~ My Response to John Gorman’s article in the April 25th edition of the Explorer

Mr. Gorman is the President of the El Conquistador Men’s Golf Association. LOVE is responding to his Op-Ed entitled, “Critics are distorting the Town’s Community Center purchase.” (The Explorer Newspaper Facebook page has attached a hyperlink to his article directing readers to the LOVE blog to read our response.)

A good portion of Mr. Gorman's article tells us what a wonderful purchase this was with all the tennis courts, swimming pools, exercise equipment, etc. However, our objection has never been about the Community Center/Fitness portion of the purchase (although we do believe that the money would have been better spent on a new state-of-the-art, ADA compliant center.)

Our main objection has been, and will continue to be, the waste of taxpayer money (your money) that the Town has spent and continues to spend on GOLF. Our secondary objection is the belief by the golf members that they are contributing their fair share of these expenses via their golf memberships.

The true numbers can be found on the Town website within the agenda of any meetings where the Community Center financials were discussed.

Fiscal Year 2015/16
In FY 15/16 (the first full year we owned this property) the contracted revenues (golf revenues, member dues, tennis revenues, food and beverage, merchandise sales, and donated inventory) were $3,063,208. The contracted expenses were $5,481,179. This is a shortfall of $2,417,971. The member dues amounted to $876,133 or 36% of the deficit.

Mr. Gorman states that the members support the restaurant. In FY 15/16, the restaurant lost $255,570. This indicates that the Golf Members are not buying enough food to support the restaurant.

Fiscal Year 2016/17
In FY 16/17, contracted losses were $2,512,938. Member dues accounted for $755,611 or 30% of the deficit. This is also a DECREASE in member dues of $120,522. The restaurant lost $114,792 that year.

Fiscal Year 2017/18
Through January 2018 (58.3% through the fiscal year) contracted losses are $1,335,535 and member dues are $465,574 or 34% of the deficit. The restaurant has lost $86,430 so far this fiscal year. Clearly, the golf members are not paying their fair share of the costs for maintaining their private golf course.

Climate change?
Mr. Gorman accused us of “cherry-picking” data when we stated that “October 2017 golf losses were worse than October 2016 losses.” He stated that this was an anomaly caused by the need for more water during October 2017 due to the “unusually warm weather” and due to transitioning “from Bermuda to rye grass” in preparation “for outside tournament commitments.”

Yes, the utilities were high that month due to the weather. Golf is an outdoor game. It has to contend with hot weather, frost delays, and many other variables. It is the cost of doing business. So is transitioning from Bermuda grass to rye grass. It doesn’t matter HOW the increased expenses happened. It just matters THAT they happened.

The folly of subsidizing a private club
Mr. Gorman stated that when the Sheraton and then the Hilton owned the facility, that they also had a combination of memberships and open play, the same model that is being used by the Town of Oro Valley. This is true. However, what Mr. Gorman neglects to mention is that the Sheraton and the Hilton could write off their losses. The Town of Oro Valley cannot write off the losses. The residents have to live with the fact that a poor decision was made.

To allow for a private membership on community property is not democratic. If you desire to play on a private course, there is Stone Canyon and The Gallery, both within a short commute. The Citizens should not be supplementing your hobby by providing you, and the others, with their own private golf course.

Guest View: Diane Peters ~ Town Council deems man-made golf course views as more important than natural desert views. Part 1.

During the April 4th Town Council meeting, I spoke during the Public Hearing portion of the Saguaro Viejos rezoning (a rezoning that will destroy the pristine desert views that many residents paid for when we purchased our homes.) Below are past quotes from Town Council members that I used during my speech. These are followed by the mayor’s feeble attempt at a response.

Mayor Hiremath quote from the 12/17/14 Town Council meeting explaining why they needed to purchase the golf courses:

“Lastly, and not least, the overriding factor to me personally, it’s controlling the destiny of 330 acres in the middle of MY TOWN where I have residents who are going to be adversely affected by it.”

He was referring to the fact that if someone else purchased the El Con golf property, they could convert the golf courses into single-family residential homes, thereby destroying the golf course views of residents who paid for those views. The mayor was clear that he wanted to protect the homes along the golf courses from development that would be incompatible in their backyards.

Councilmember Solomon quote from the 7/12/17 Golf Courses Study Session when they were discussing the possibility of closing one or all of the golf courses:

“We have to be very sensitive to what happens to the areas that we no longer use as golf courses, because you’ve got homes backing up to these areas. They bought to be on a golf course. We can’t just go off and put in new residential development or commercial development. I mean that’s just not acceptable…We have an obligation to maintain, at minimum, an open natural desert setting for those homes.”

An obligation?
I then challenged them to explain their rationale. “If you vote to approve this rezoning, you’re going to have to explain how you have an obligation to protect the man-made views of one group of residents, yet you have no obligation to protect the unspoiled natural desert views of another group of residents.”

Mayor Hiremath’s response
“So to respectfully answer one of the speakers who asked me to explain the difference between this property and the acquisition of the 320 acres. We had the opportunity to purchase it and on those acreages there were single family entitlements, so if the Town had not purchased it, a development would occur and the Town of Oro Valley would have no recourse in stopping them because single family entitlements were already entitled.

With THIS particular property, [Saguaros Viejos] the Town does not have the opportunity to buy it. Private development owns it and therein lies the difference. So in one instance we did have the capacity to jump in and were offered the opportunity to buy it to preserve those views and that’s the distinction.”

Part 2, my rebuttal to the mayor, will be published on Friday.

Guest View: Mike Zinkin ~ Troon enters the Circle of Deceit

In yesterday’s article, “Oro Valley Government Lies to the Citizens” we offered numerous instances in which the Town Staff lied to the citizens in order to paint a rosy picture of what would happen if the Town purchased the El Conquistador Country Club with the intent to turn it into a Community Center for Oro Valley residents. Today’s article discusses how Troon also lied in order to seal the deal.

During the December 17, 2014 Town Council discussion on the El Conquistador purchase, it was a given that Troon would hold the management contract for golf, tennis, food and beverage. The purchase agreement with HSL Properties mandated that Troon must be the management company. Troon became part of the "pitch" that perpetuated the lies that Town Staff was giving the Council.

Here’s what Troon told the Council
Troon told the Council that their projections showed that in FY 2015/16, the Town would incur a $1,169,842 loss. In reality we lost $2,567,385. (Troon’s projection was off by $1,397,543).

Troon also stated that in FY 2016/17, we would lose $637,517. In reality, we lost $2,512,938. (Troon’s projection was off by $1,875,421).

Troon further stated that in In FY 2017/18, we were only going to lose $151,120. As of December 2017, we have already lost $1,257,785. (Troon’s projection is already off by $1,106,665).

Additionally, Troon stated that in FY 2018/19, the Town was going to MAKE $217,049. Keep in mind these numbers do not include the needed capital improvements we discussed yesterday because those improvements are the Town’s responsibility, not Troon's.

So far, Troon's projections have been off by over $4.3 million.

[Below is the slide showing Troon’s projections from 2015 through 2019. Click to enlarge.]

During the first year of Troon's contract with the Town, they admitted their error in the projections and offered to reimburse the Town for their last 3 months of management fees ($36,000) which the Town gladly accepted. This has not happened again. Troon continues to misrepresent the truth, and, more important, they continue to get praised by the Council. With this trail of untruths, how does Troon keep their job?

To sum up the last two postings:
• In order to please the Council majority, Staff lied to present a rosy picture of the HSL purchase.
• Staff did not even budget their own projections for capital outlay.
• Troon, in concert with Staff, made outrageous projections about golf revenues.

More lies on the horizon?
The current Town Manager, Mary Jacobs, has now inherited this mess. Her idea is to continue 36 holes of golf despite millions in losses and to incur a debt service to make up for all the previous lies. She has never considered discontinuing golf or at least reducing it to an 18-hole course in order to stop the bleeding. Remember, the Town Manager works for the Council majority and it’s in her best interest to tell them what they want to hear. So…will she also lie in order to keep her job?

. . . . . . . . . . . . . . .

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.

Editorial ~ Remember when?

Today we will take a trip down Memory Lane to see if the assertions made by the mayor and council regarding the Community Center/Golf Courses have proven to be true or false.

2014 Assertion: The Community Center is a Turnkey Operation (False)
Remember how the Mayor told us about the "turnkey" operation we were getting with the purchase of the Community Center? That "turnkey" operation has already drained $2.45 million from our General Fund Contingency.

2015 Assertion: The sales tax increase will cover all Community Center expenses (False)
Remember being told repeatedly by the Town Council that the Community Center Fund (financed with the dedicated sales tax revenue) would cover ALL the needs of the Community Center including golf and tennis and that NO MONEY would be taken from any other fund? [See “2017 FACT” below to see how that turned out.]

2017 Assertion: The Community Center is not using any other Town funds (False)
Remember Councilmember Steve Solomon stating at the April 19th council meeting:

“The Golf and Community Center revenues and the dedicated half cent sales tax for this year will cover all of its costs. It’s not using any other Town funds. It’s not taking money from any other Town project or Town source.”

Once again, Solomon is full of bluster. Read on to learn why.

2017 FACT: Town dips into Bed Tax Revenues to cover Community Center renovations
The Quarterly CIP Report (Capital Improvement Program) for the quarter ending 12/31/17 revealed that the Tennis Court Improvements were budgeted for $75,000. However, the improvements actually cost $96,323. (This is a 28.4% miscalculation).

Where did the additional funds come from to cover the overage? They came from the Bed Tax Fund! (The tax on hotel rooms).

So now we have another fund supporting this “turnkey” operation. This does not include the monies that Councilmember Rodman stated that we will need to borrow ($4.7 - $5 million) to fulfill the recommendations identified in the Town Manager’s presentation to the Council during the February 7th Golf Study Session. Rodman stated, “We’re going to have to finance this no matter what we do.”

Conclusion
Council assertions about the financial sustainability of the Community Center/Golf Course purchase have been, at best, wishful thinking…and at worst, deliberate lies to cover for their reckless decision to purchase this money pit. 

As a side note, the Department of Defense and the U.S. Air Force are no longer going to supplement golf at Davis-Monthan.  The Blanchard Golf Course is closing at the end of April.  The U.S. Government has decided to stop paying $400,000 a year to water the golf courses and to discontinue supplementing the $700,000 a year in golf losses.  For how long will Oro Valley continue to supplement the losses at the El Con Golf Courses?

. . . . . . . . . . . . . . .

Editor’s Note: Mayor Hiremath and Councilmembers Hornat, Snider, and Waters are up for re-election this year. These are the four “public servants” who made the disastrous decision to purchase the Community Center (including 31 tennis courts and 3 golf courses) and to increase your sales tax in order to meet the expenses. You will have an opportunity to vote them out of office during the primary election in August.