The Watchdog Report: And The Bleeding Continues

Should we believe Mayor Winfield when he tells us that golf is making money? We have heard this time and time again, yet the facts prove otherwise as seen in two October reports. One is the  profit and loss statement for the golf courses. The other is the report for the general fund report.

Highlights from July 1 through October 2022 (33% of the way through the fiscal year)
• Golf expenditures exceeded revenues by $605,000. (This is $61,000 more than last year’s loss for the same time period which was $544,000.)

• El Conquistador Golf had 310 less public rounds and $1,394 less in green fee revenues in October 2022 than in October of 2021. Golf had 450 fewer total rounds played this year than last year.

• Even more significant, for the fiscal year to date (July 1 – October 31) the public rounds are 2,536 less than this same time in 2021, and $50,740 less in collected green fees.

Losses have continued since the golf courses opened in May 2015
You might remember that our previous mayor (Hiremath) asserted that we would only lose major money in the first two years but that things would even out by year 3. He also said, “In year 4 or 5 or 6, are we going to project a profit? You’re darn right, we are.” [Source: December 17, 2014 Town Council Meeting]

Well, it’s now 7.5 years later and these losses have continued. We, the citizens, just invested $7 million in irrigation upgrades. The golf members are doing all they can, but it’s not enough.

Still waiting for ADA Compliance
Money still needs to be spent on making the Community Center ADA compliant, as well as the tennis courts at Pusch Ridge. The proposed capital outlay for the CCF still proposes to spend $2,666,700 of which only $312,105 has been spent. This means that the Town is expecting to dish out an additional $2,354,595. Where is this money coming from?

Draw your own conclusions

The Council has already spent over $28,000,000 for the Naranja Park amenities. They have done nothing to diminish the amount of potable/drinking water that we use to irrigate Town properties [panel left] and the mayor tells us golf is making money. Read the attachments we linked above. These are the town's numbers.  Draw your own conclusions.

On top of all this, the General Fund is forecasted to end the fiscal year with a decrease of $12 million. (Although the FY 2022/23 budget forecast showed an expected decrease of $13.8 million, so this is better than expected). This is the fund which pays for the operation of the Town. The ghost of former Town Manager Mary Jacobs is still haunting us. However, the Town Manager cannot do anything without the concurrence of Council.

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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.

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.  

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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.

The Watchdog Report: Golf Stats from March 2022

The truth behind the numbers
At the Council meeting on April 6, 2022, Town Manager, Mary Jacobs, broadcast that in March 2022, golf had surpassed 10,000 rounds for the first time.

The actual numbers are 10,109 rounds on the two 36-hole courses (of which 112 were comped rounds) and 3,363 on the Pusch Ridge 9-hole course (of which 155 were comped rounds.) That’s a total of 267 comped (free) rounds.

Here is what was not mentioned. Remember, the income comes from the non-member rounds. (Members pay a flat fee whether they play 1 round or 100 rounds.)

In March 2022, the non-member rounds on 36 holes were 3,976. A year earlier, in March 2021, the non-member rounds were 5,234. That means that in March 2022 there were 1,258 less non-member (income producing) rounds.

It is amazing what you find when you look under the covers and stop listening to the Jacobs spin machine.

Golf Memberships Update
As of March 19th, there were 334 Full Memberships, 31 seasonal memberships (30-60-90 day), and 16 Pusch Ridge Memberships.

Golf Course Irrigation –
3.5 Million Gallons of Drinking Water
The amount of drinking water used to irrigate the 9-hole Pusch Ridge course in March was 3,529,000 gallons, up from 1,428,000 gallons in March 2021. That is 2,101,000 more gallons over the same month last year!

If your home utilizes 7,000 gallons per month (which is typical) then the Town wasted enough potable/drinking water on Pusch Ridge to supply water to 504 homes.

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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.

The Watchdog Report: March 2021

 

This will be a short report since you are probably tired of reading the same old stuff every month.

Golf and Community Center
The expenditures continue to exceed the revenues. Through March 2021, the Contracted expenditures (golf, pro shop, food and beverage) exceeded the revenues by $371,139 and the Town’s expenditures (fitness center, swimming, tennis) exceeded their revenues by $193,171.

The total rounds of golf played on our 36 holes were 9,959, including 576 complimentary “free” rounds. The total number of rounds played at the public and semi-public courses within 5 miles of the Town’s courses were 12,131, including just 70 free rounds. Once again, in comparison to other nearby courses, our golf courses are not doing well.

The total golf membership was a record 317 through March 2021. However, before you get too excited, the membership dropped to 304 in April. You might remember that it was the Town’s goal to have 314 members by the end of 2015. Another golf goal not met.

Water Usage

The amount of water wasted on the Pusch Ridge course (potable water) was 383,000 gallons, costing $1,836.32. The amount of water poured on the Conquistador Course was 6,945,000 gallons, costing $20,553.77. The Canada course utilized 6,778,000 gallons of water costing $20,078.91. The total March water bill was $42,469.

It bears repeating
The term “Community Center” is a misnomer. What we are subsidizing with our tax dollars ($2,118,529 through March 2021) is NOT a Community Center. Can a resident use any of the facilities free of charge? NO. You must be a member to use your tax-payer subsidized community center. What we have in Oro Valley is a publicly subsidized member center, not a Community Center.

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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.

Guest View: Mike Zinkin ~ Why cut taxes when you can reallocate the additional funds instead?

 

The above question should not surprise anybody

After all, don’t all governments find a way to spend tax dollars, even when there is no longer a need for the original subsidy?

The history of the increased sales tax to fund the Community Center and Golf Courses
On March 1, 2015 Oro Valley initiated an increase of our sales tax from 2% to 2.5% with the additional .5% to be dedicated to the Community Center Fund. The Town had purchased the HSL properties to include golf, tennis, swimming, and a community center. The Town knew that it needed additional revenues to cover this investment.

According to the ordinance (O) 14-17, “an additional revenue source is necessary to subsidize the operating costs and fund the capital needs of the facility over time.” The tax was forecasted to “generate approximately $1.6 - $2 million annually in additional revenues.”

Some more background for the new residents in town
Immediately after the Town Council motion to purchase the HSL property, a PAC called TOOTH (Tee’d Off Over Tax Hike) was formed to gather signatures to invalidate the Council decision. TOOTH was a play on words as the mayor at that time was a dentist. They needed 1,148 signatures to get the referendum on the ballot.

Despite having to collect the signatures over the Christmas holidays (from 12/18/14 to 1/16/15), TOOTH collected 3,158 signatures (more than twice the required amount) only to have the Town Clerk void the petitions due to a minor clerical error. With one day left to gather the required signatures, another PAC was quickly formed and gathered over 1,100 signatures in just 5 hours. This was just shy of the 1,148 they needed to force a ballot issue. As such, the residents never had an opportunity to vote on whether they agreed with the tax increase to fund the Community Center, thus the purchase and accompanying tax became a reality.

Two Choices
In the current budget (FY 2020/21) which ends on June 30th, the dedicated sales tax is now forecasted to provide $2,492,960. So what does our government (Town Council) propose to do? Instead of reducing the tax, they find another reason to spend the additional revenue. Looking ahead to next year, the Town Manager’s Recommended Budget for FY 2021/22 forecasts the sales tax revenue to be $2,857,779.

The increased tax imposed on the People was to subsidize the Community Center Fund. Now that the revenues are well above the initial $1.6 - $2 million specified in the ordinance, the Council has two choices: (1) reduce the tax or, (2) find reasons to spend the additional revenue. They have chosen the latter and I believe that doing so is fiscally irresponsible.

This tax has forced the entire community of 44,000 residents to subsidize fewer than 300 “golf members.” The tax was wrong to begin with and will continue to be wrong if it is no longer going to be spent as originally proposed.

More tax history: The Utility Tax that never went away
Oro Valley already pulled a similar stunt when they passed a temporary 2% Utility Tax in 2006 to fund 18.5 new staff positions, mostly in the police department. The tax was supposed to sunset in 2009, but in 2009 the Loomis council voted to extend it at the 2% level with no sunset clause. Then, in 2010, the Hiremath council increased it to 4% and we have never gotten rid of this “temporary” tax.

Oro Valley should only tax for what it needs and nothing else.

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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.

The Watchdog Report: January 2021 Municipal Golf Financials

 

According to Troon, the month of January 2021 showed a profit of $31,707. However, for the fiscal year, (July through January) golf lost $616,587. The Town’s portion of the Community Center Fund (CCF), which is primarily fitness, has lost $158,088.

When will the tax subsidy finally be lowered to $750,000?
YOUR tax subsidy is saving the CCF. For the first seven months of the fiscal year, your subsidy was $1,657,461, which allows for the CCF to show a surplus of $753,871. Not long ago, the Mayor stated that he desired no more than $750,000 in tax subsidy. It doesn’t appear that this is going to happen. Town Manager, Mary Jacobs still intends to spend $1,124,500 in Capital outlay. Where is this money coming from? The General Fund? It certainly isn’t coming from the CCF.

Golf Members and Golf Rounds

As of 1/31/21 there were 304 golf members, an all-time record. The non-member rounds played on the 36 holes were 3,266, which includes 717 rounds played on the “member course.”

The model for Oro Valley is that our 36 holes are a combination of a public course and a public/private course. In January 2021, there were 6,956 combined rounds played on those 36 holes.

How does this compare to other establishments?
An 18-hole public/private course within 5 miles of Oro Valley had 6,528 rounds in January and an 18-hole public course within 5 miles of Oro Valley had 3,588 rounds played. When you add the two together, there were 10,116 rounds played on those 36 holes. When comparing apples to apples, there were 45% more rounds played on the other 36-hole combination.

A waste of water and taxpayer money
Besides wasting money, how much water was wasted? The closed Pusch Ridge course used 69,000 gallons of potable water providing for a bill due 1/27/21 of $742.71. The remaining 36 holes used a total of 13,396,000 gallons of reclaimed water providing for a bill of $39,702.80, also due on 1/27/21.

The Council will tell you, “don’t worry about the Pusch Ridge Course because the plan is to keep it for only 3 more years.” This is the same Council majority that ran on a platform of doing something about the golf losses. It appears that all they have done is kick the can down the road until their current terms expire.

We should all continue to worry about the monetary losses and the unconscionable use of water on these golf courses.

Partial February statistics are available
Golf Course Water Usage: There were 900,000 gallons of potable water used on the closed Pusch ridge course, costing $3,838.95. There were 9,673,000 gallons of reclaimed water used on the remaining 36 holes, costing $29,115.88.

Golf Rounds: There were 8,396 rounds of golf on our private/public and public courses, but there were 11,121 rounds of golf played on the courses within 5 miles. The outside courses experienced 32% more rounds than our Town-owned courses.

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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.

The Watchdog Report: Five months - 166 Million Gallons of Water for 36 holes of golf

While I am working on the most recent Community Center financials covering the golf debacle through January 2021, I thought I would quickly report on a recent response to a records request that I submitted.

Since the Town (under the leadership of Mayor Winfield and Town Manager, Mary Jacobs) will not voluntarily report all the financial information, I have had to utilize the “Public Records Request” format to uncover the water usage being used by the two 18-hole courses.

The cost to water 36 holes of golf
La Canada Course: Each 18-hole course irrigation is fed from a lake on each course. As you travel north on La Canada, the lake just to the east of the road as you approach the Community Center is the source of water for the La Canada course. Water bill payments from July 2020 – November 2020 reveal that this course consumed 77,358,000 gallons of reclaimed water at a cost of $225,951. (The water usage was the 5 months from May 28 – October 28).

Conquistador Course: The water source for the Conquistador course is found on the fifth hole. During the same 5-month timeframe, the Conquistador course consumed 88,604,000 gallons of reclaimed water at a cost of $258,488.

This total of $484,439 includes not only the cost of water, but State and local taxes, groundwater preservation fees, superfund tax, and a 4% utility tax. This is, however, the amount of money the Town is spending to water the 36-hole complex.

The reclaimed water argument

Yes, the two 18-hole golf courses use reclaimed water (wastewater that has been converted into water that can be used for other purposes such as golf courses and agricultural fields), but we pay the City of Tucson for this reclaimed water, so if we limit our usage, we reduce what we pay Tucson. Oro Valley Water Utility will not be affected at all by limiting our use of reclaimed water.

You might also want to read what is happening to the Colorado River water, its usage, and the ramifications we will experience from the ongoing drought. CAP water is a source of (1) recharging the aquifer, and (2) reclaimed water. But our CAP water is dwindling as the drought continues. Therefore, when CAP water from the Colorado River runs low, so will our reclaimed water. When that happens, should we pour our reclaimed water on our golf courses or on our food supply (our agricultural fields)? 

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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.

The Watchdog Report: November 2020 Financials - Cloudy with a lack of transparency

 

The November financials for the Community Center and Golf are posted and they continue to be cloudy. Due to a lack of transparency, it is difficult to completely analyze the report. I asked the Town Manager why the reporting format has changed from prior years. She responded that this is the way the contractor wishes to report.

The Town Manager and the Council apparently don’t understand that the golf management company works for the Town and will report whatever the Town requires them to report. Is the Town Council happy being left in the dark?

As a result of the lack of transparency I have submitted a records request as follows:

“Stop the lack of transparency in the Town’s financials. Please forward the cost of the utilities for the Community Center Fund, the total member revenues (Dues and Cart Fees), total revenues from non-member play (including any cart fees), the cost of water for golf (taken from each pond), the number of free (comp) rounds, for July 2020, Aug 2020, Sept 2020, Oct 2020, and Nov 2020.

In the future you can expect a request like this monthly until it becomes part of the Council’s financial attachments.”

Here is what we know
• Golf lost $22,094 in November 2020 (which is great) bringing the total losses to date as $658,349.

• Golf was originally forecasted to lose $922,245 in FY 2020/21, but that has been updated to $991,280.

• The Town reported an all-time high of 279 members. (Golf is up 30% nationwide, one of the positive results of the pandemic.) They also reported 3,891 non-member rounds on 36 holes.

For comparison, one public course nearby reported 3,570 rounds of play on 18 holes. Another course nearby reported member and non-member rounds as 6,971 on 18 holes, while the Town reported 7,545 combined rounds on 36 holes. Although our rounds are up, they still do not come close to what other courses are doing.

• The Community Center Fund shows a positive balance of $102,909 for the five months ending November 2020 and is forecasted to lose $45,749 by the end of the fiscal year (June 30, 2021). Your sales tax revenues have contributed $1,090,173 from July 1 through November 30, 2020.

Pusch Ridge Course
An agreement for the El Conquistador resort (HSL Properties) to lease the Pusch Ridge course was supposed to take place by the end of January. As of January 22nd, HSL had shown no indication that this will be accomplished.

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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.

The Watchdog Report: Community Center and Golf Financials, End of Fiscal Year 2019/20

 

The Town has published the financials for the past fiscal year (July 1, 2019 through June 30, 2020).

• Contracted services (food and golf) lost $1,616,922. This is an improvement of only $52,311 from the prior fiscal year.

• There were 264 golf members at the end of the fiscal year, which is an all-time high. However, membership was back down to 257 as of August 31st.

• The Overlook/Garden Café lost $147,201 which is $33,284 more than the prior fiscal year.

• YOUR dedicated sales tax revenues funding the Community Center and Golf were $2,584,916, which is $121,827 more than the prior fiscal year.  Primarily due to YOUR sales tax input, the Community Center Fund (CCF) ended the fiscal year with a positive balance of $408,438. If you live in an HOA adjacent to the golf courses, you not only contribute with your sales tax, but you contribute another $125,000 via HOA fees.

• The Town’s operations (fitness, swim, and recreation) lost $231,729.

HSL gets another pass
The plan for FY 2020/21 is to withdraw another $750,000 from the General Fund to pay for the improvements needed to make the community center ADA compliant.

The current Council has foolishly decided to continue with the 36-hole model. They also recently extended the effective date from 10/1/20 to 1/31/21 for HSL to begin leasing the Pusch Ridge course from the Town. This means that the Town continues paying for 45 holes of golf for another 4 months. It appears that the hospitality industry has been adversely affected by COVID. So the Town will assist HSL by continuing to provide for the “resort” course. In other words, the Town will take $125,000 from homeowners while they give HSL a pass.

I imagine that you are as tired of all of this as I am.

Let’s talk about the water situation
In FY 2019/20, the Conquistador Course needed 103,920,000 gallons of water (319 acre feet), while the Canada Course needed 106,908,000 gallons (328 acre feet). To give you an idea of how much water that is, 1 acre foot of water will service 4 homes a year. That equals 870 homes for the Canada course and 729 homes for the Conquistador course. According to the Town Manager’s Executive report, there were 122 Single Family building permits issued in all of FY 2019/20.

Yes, it was reclaimed water, but WATER IS WATER. We pay Tucson for the water. How much could we save in water alone if we had only 18 holes of golf?

Tucson’s share of the CAP water is diminishing due to the drought and the increased population in the Colorado basin and the St. George Utah area. Water is a serious issue in Arizona and Oro Valley has decided to use more than its share on 45 holes of golf.

So, with the water situation and the continued losses, why does a Town of 45,000 citizens provide 45 holes of golf? This golf course fiasco gets more absurd and ill-advised as time goes on.

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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.

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?

Summary
• 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.

Guest View: Mike Zinkin ~ More General Fund money for the “Turn-Key” operation

The budget for FY 2020/21 has passed and the stench of the Hiremath regime still permeates the air. The Chamber of Commerce still gets $40,000, Sun Corridor still gets $10,000, Visit Tucson still gets over $200,000, there is $10,000 for employee service awards (an average of $300/employee), the Children’s Museum still gets $75,000, and there is over $2.9 million for outside services. All this in a period when our revenue stream is uncertain due to the pandemic.

Pay-as-you-go?
There is $1.1 million budgeted for golf course irrigation improvements. Awhile back, the Council voted that all improvements to the golf courses would proceed on a “pay as you go” model. We have over 5 years of history on the performance of the Community Center Fund (CCF) and it has never had a positive balance of $1 million. In fact, according to page 6 of the Town Manager’s Recommended Budget, the CCF is forecasted to end the 2021 budget with a deficit of $214,212.

The approved budget also allows for $750,000 to be spent toward ADA compliance of the Community Center. (ADA upgrades were supposed to have been completed by FY 2018/19 according to the rosy projections and promises of the Hiremath council.  See below.) 

From the Town's December 2014 Power Point Presentation

I asked the Town where all this money was coming from. The Town confirmed to me that the $1.1 million for the irrigation project was coming from the CCF. But can we be confident that the Town Manager will respect the Council wishes of pay-as-you-go and not spend the $1.1 million unless and until the CCF has the money as a positive balance? Are you confident that this will happen?

A Capital Fund Smokescreen
When I inquired where the funding was coming from for the $750,000 to correct ADA issues, the Town replied that it was coming from the Capital Fund. I believed this response to be a smokescreen so I continued the conversation and inquired, “What is the difference between the Capital Fund and the General Fund?” The Town responded: “Generally speaking, in most instances projects budgeted in the Capital Fund can be assumed to be funded with General Fund resources. Exceptions would be projects that have associated grant or intergovernmental funding or outside contributions associated with them.”

$3.3 million in General Fund withdrawals for a “turn-key” operation
Remember, we have already withdrawn $1 million from the General Fund in 2014 to purchase the property, another $1.2 million in 2015 to initiate the CCF, another $350,000 in 2017 to supplement the CCF, and now an additional $750,000 in 2020 for ADA upgrades for the Hiremath “turn-key” Community Center.. This adds up to $3.3 million in General Fund withdrawals for this purchase (of which only $360,000 has been returned back to the General Fund -- despite a promise from the Hiremath council to have paid back $600,000 by May 2020).

And don’t forget that between 2015-2020, you have also donated over $10 million of your sales tax dollars towards this “turn-key” operation.

And the Hiremath stench continues.

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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.

The Watchdog Report: Community Center Financials, April 2020

The trends are still disappointing
The April financials are posted and, once again, the trend is not going the way the Hiremath/Solomon/Rodman crew had predicted. Through April 2020, the Community Center Fund (CCF) has a positive balance of $512,009. However, that’s $257,736 less than the same time last year when the CCF had a positive balance of $769,745.

Of the $512,009 balance, the Town still has not funded $79,407 of budgeted capital improvements. The Town is now forecasting that the CCF will end the fiscal year with a loss of $17,223. This is the same fund that is proposed to fund $800,000 in capital improvements in FY 2020/21. Where is that $800,000 going to come from?

Troon Golf lost more this April than last April
Troon lost $42,184 more in April 2020 than they did in April 2019. This is remarkable considering that the Crooked Tree Golf Course was closed in April 2020. The Arizona Daily Star ran an article on how the Covid pandemic was a boon for Tucson golf. Apparently, the players that had been golfing at Crooked Tree decided to utilize Tucson City courses rather than the Oro Valley courses.

In April 2020, there were 909 fewer non-member rounds of play than in April 2019. To further illustrate my point, another golf course within 5 miles of the Oro Valley courses had 6,834 rounds of non-member play on 18 holes, while the Oro Valley courses had 2,684 non-member rounds on 45 holes. Do you see a trend here?

Golf member dues and HOA contributions are not enough
The golf members (all 260 of them) have contributed $908,967 towards their private course. If you add the additional $125,000 contribution from the HOA’s along the golf courses, there still is not enough money to fully support an 18-hole golf course.

The 36-hole “pay as you go” option is not working. The revenue produced by the members and the HOA’s is not nearly enough. The revenue trends are going in the wrong direction.

Hiremath’s pie-in-the-sky predictions were wrong
YOUR sales tax support was $2,148,164 through April 2020 which is $114,788 more than the same time frame in 2019, yet the Town is still forecasting that the CCF will end the fiscal year (ends June 30th) with a $17,223 deficit.

That means that this investment will NOT earn a profit (or even break even) after 5 years as promised by former Mayor Hiremath during the December 17, 2014 council meeting when he said:

“We’re telling you that in the first two years, we’re going to lose major money on it, but…in year 4 or 5 or 6 are we going to project a profit? You’re darn right we are.”

Gee, if only someone had tried to warn him.  It must be those darn "headwinds."  Wink-wink.

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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.

The Watchdog Report: Troon Is Out. Billy Casper Is In.

According to Tucson Local Media, the Town of Oro Valley is finalizing an agreement with Billy Casper Golf  to operate the Oro Valley Golf courses…but will it make a difference?

Troon wasn’t entirely to blame
We know that Troon inflated their forecasts, especially in the first couple of years after we purchased the property. To be fair, however, Troon was working to please the then Town Manager, Greg Caton and the Hiremath regime. Troon also catered to the members and the “green shirts,” but was it Troon’s fault that their responsibilities as the “contracted operator” cost the Town millions?

I don’t think you can place all the blame on Troon as I doubt there is any company that can turn our 45 holes of golf into a profit, or even an acceptable loss. Unloading the 9-hole Pusch Ridge course is a start. Billy Casper will now only be responsible for a 36-hole operation. However, Billy Casper will not be subsidized with Town monies for food and beverage.

Mayor Winfield and the Council chose the 36-hole option
This is with the caveat that we pay-as-we-go and do not bond for any improvements. This is admirable but might be unattainable. Their decision prompted a failed recall attempt by the “Green Shirts.” The “Oro Valley Thrives” people believe that without borrowing money for golf course/community center improvements, the Town will go deeper in debt.

Closing the Overlook will save us about $100,000 and making people pay for the driving range will supplement the CCF about $90,000-$100,000.

Capital Improvements
The Town Manager only forecasted $106,500 for capital improvements for the Community Center Fund (CCF) during FY 2019/20. The last I heard (from former Town Manager Greg Caton and current Town Engineer, Paul Keesler) was that an elevator to make the facility ADA compliant would cost around $400,000 . (This includes the cost of the elevator, installation, and architectural modifications that need to be accomplished).

Canada Hills HOA and the Town are working on an agreement
The Canada Hills Community Association (CHCA), the HOA that surrounds the Conquistador course, is working on an agreement to give the Town $100,000/yr. However if the Town closes the 18-hole Canada Course due to financial strain, it remains to be seen if the CHCA contract will remain, or if they will contribute the money only if the Town continues to operate all 36 holes.

Golf memberships and non-member rounds
Golf membership has been as high as 262. As of April 30, 2020, it is at 260. However, that’s still an improvement over April 2019 when golf membership was 236.

Comparison Of Rounds

However, it is the number of non-member rounds that are the real money maker. Members pay the same whether they play 1 round or 100 rounds. That’s why it’s the outside play that counts.

In FY 2018/19, the number of non-member rounds through April 30th was 29,234. In FY 2019/20, the number of non-member rounds through April 30th is 28,182. That’s 1,052 LESS than the previous year. Keep in mind that the Town’s numbers are for 45 holes of available golf.

The chart at left shows a comparison of the Town’s non-member golf rounds over the past 7 months compared to a public course within 5 miles that has only 18 holes of golf available.

Is Billy Casper going to make a difference? 
Maybe, but it appears that it will only happen if we allow them to manage 18 holes of golf instead of 36. Mr. Mayor, Madam Town Manager, and Oro Valley Thrives: 36 holes is continuing to kill us. How can you continue to justify this?
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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: 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.
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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.

Guest View: Mike Zinkin ~ Who’s running the town?

In the midst of the coronavirus pandemic, we have all been witness to what happens when responsibility without direction is left up to subordinate levels of government. Is Oro Valley any different?

Below are some quotes from both local and national media
April 14, 2020 – the Washington Post: "Local governments generally cannot run deficits, unlike the nation’s capital, leaving them no choice but to slash spending or raise taxes.”

April 16, 2020 – the Arizona Star: “City workers could face furloughs and layoffs as Tucson deals with steep, unexpected revenue losses as a result of the coronavirus pandemic, City Manager Michael Ortega says.”

April 16, 2020 – KGUN TV:  “In a memo Wednesday, County Administrator Chuck Huckelberry said retail sales in the county are down almost a third this quarter. He says restaurants, bars and hotels are down 70%. Huckelberry says it's likely [that] all state-shared revenues will be down about $11 million, so he's asking all departments to prepare for a 5% cut if economic conditions continue to deteriorate."

The Town has not furloughed or laid off any employees
Does Oro Valley think things will be different here? In a recent communication from the Town Manager, I was informed that the Town has not furloughed or laid off any employees despite the closure of the Community Center and the Overlook Restaurant.

The Town’s Pandemic Leave Policy explains employee entitlements, however, unlike businesses small and large, there is NO money coming to the Town of Oro Valley from the Federal government. This is an unfunded mandate. Additionally, there is nothing in the Town’s Pandemic Leave Policy that precludes reducing the workforce.

Although this is a difficult thing to do (and I am certain I will be chastised by some for mentioning it) Oro Valley has no choice.

Per information obtained in a Public Records Request, as of 7/1/19, there were 13.18 full time equivalent employees (FTE’s) at the Overlook and 73.73 FTE’s employed at the Community Center.

We are just starting to get a look at the February financials in mid-April. However, this financial report will not reflect the economic conditions that we have experienced since February. We won’t see the April financials until June.

Due to the pandemic and resulting economic downturn, sales tax, bed tax, HURF revenues, and State shared revenues are all going to be well below forecast. Therefore, we have no alternative but to reduce our expenditures.

The Town Manager is in charge of the Town’s staffing. As such, she is in a difficult position. On one hand, she needs her staff to know that she is there for them and will do all she can for them. On the other hand, she is responsible to the Council and must show fiscal responsibility, especially during times like this. That is why the Council must take the decision out of her hands and do what is right for the Town of Oro Valley.

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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, 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: Community Center Financials through November 2019

There has been no new information regarding Town’s finances since August. When I brought this to the Town Manager’s attention (via an email) the Council agenda was then amended to show the finances through November 2019. Apparently, the Finance Department was “strapped” and did not have the time to prepare the financial information.

It’s my impression that, until it was brought to the Town Manager’s attention, Ms. Jacobs had no priority to relinquish the Town’s financials. One wonders if this was due to the Town Council not making it a priority or if it was simply not a priority of Ms. Jacobs.

There is no good news to report
In the past, the one area where we were doing well was with the Town’s portion of the Community Center. However, through November 2019, The Town’s operations (fitness, recreation programs, non-Aquatic Center swimming) lost $34,827. For comparison, at this same time in fiscal 2018/19, the Town had profited $7,650.

YOUR sales tax revenues amounted to $956,766 which is $47,303 more than last year. The money spent for capital improvements remains at $20,835, without a penny being spent on ADA compliance. The transfers out remain at $148,810 which is to pay for an Energy Efficiency Bond.

Another shell game
The $148,810 transfer is interesting. The Town Manager reported to the Council that there was no debt service concerning the Community Center Fund (CCF). When I asked her what the $148,810 was for, she replied that it was a transfer to the “debt service fund” to pay for the bond allocated to the CCF. It seems that she wants the Council to believe that there are no bonds associated with the CCF, when in fact, there is one.

Troon Golf and Overlook Restaurant
Troon Golf has lost $1,031,624. (Revenues of $1,084,403 minus expenses of $2,116,027). The golf revenues (non-member play) were $353,357. This is $71,621 less than FY 2018/19. Non-member play allowed for 2,755 rounds on 45 holes of golf. The public course within 5 miles had 3,211 rounds on just 18 holes. That’s 456 more rounds. Why aren’t we doing better? After all, according to the members, the courses are in the “finest condition ever.” So why hasn’t Troon improved on these numbers?

Nov. 2019 YTD Financials
(Click to Enlarge)

Through 42% of the fiscal year, the CCF is $279,469 in the red. It doesn’t help that the Overlook lost another $3,519 bringing its total year-to-date losses to $57,942.

The Town is searching for a new golf operations management firm
The only good news is that the Town has issued a Request for Proposal (RFP) in an effort to find a new contractor to manage the Town’s golf operations. According to the RFP:

“The successful contractor will provide comprehensive services to improve the operation, maintenance, and financial performance of the Town’s two 18-hole golf courses, including food and beverage operations.”

LOVE will report a bit more on this Friday.
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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: August 2019 financials

The evidence continues to mount that the 36-hole option is not sustainable without additional financing.
The financials for August 2019 are posted and Troon lost $422,049. The Community portion of our investment made $27,508. Of interest is that there was a capital outlay of $2,347 for benches on the tennis courts.

The total rounds of non-member golf for August 2018 were 1,774 on 36 holes of available golf. For comparison, a public course within 5 miles of the Town-owned courses had 2,626 rounds of play on 18 holes, which is 67% higher than what Troon could provide.

Keep in mind that the goal is for 40,000 rounds of play for each course (or 80,000 rounds total for both 18-hole courses.) To accomplish this, there needs to be an average of 3,333 rounds of golf played per course per month or 6,666 total rounds per month for both courses. In fiscal year 2018/19, there was a total of only 33,914 rounds of outside play. This is more proof that an 18-hole option can be sustainable, but a 36-hole option is not.

Golf membership expectations have declined
Another goal that has been established is for the golf membership to reach 275. This has been revised from the goal of 318 members that was set in 2015. As of the end of August 2019, there were still only 237 members.

Only $106,500 budgeted for capital improvements for the entire year What is troubling is that the Town Manager has budgeted only $106,500 for capital outlay for the entire fiscal year. There are NO plans to make the facility ADA compliant. The “scheduled” capital improvements are for:

• more benches for the tennis courts
• replace existing strength machines
• replacing some mats and weights
• purchasing outdoor chairs and benches
• and $90,000 for tennis court improvements

Ms. Jacobs would like to close the Overlook (which lost $13,378 in August 2019) and move it downstairs, and fix the irrigation problems on the courses, along with other needed improvements. How will all of this be accomplished with $106,500?

Town leans towards financing over pay-as-you-go
This is why Jacobs cannot allow for the “pay as you go” option that Mayor Winfield proposed at the October 2nd meeting. In a 4-3 vote (with Councilmember Jones-Ivey voting along with Solomon, Rodman, and Pina) the “pay as you go” plan was removed, and staff was instructed to come back with options for financing the capital improvements. The term “financing” implies that one has to borrow to pay for the needed improvements. We will wait and see what financial options Ms. Jacobs brings to the table (Bonding? Borrowing from the General Fund?) and whether the Council will allow for her options to become reality.

Right now, the golf investment is counting on $125,000 from the HOA’s that align the courses because the investment cannot stand on its own merit. Don’t be surprised if Ms. Jacobs tries to combine the Community Center Fund into the General Fund, like she tried to do earlier this year. Moving the CCF into the General Fund will remove all transparency and hide its financial status.

Community Center Fund - August 2019

Troon Cash Flow

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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 2018-19 comes to a close

The FY 2018-19 financials are posted (July 1, 2018 through June 30, 2019)

The Good News
The mandated annual $120,000 pay back from the Community Center Fund (CCF) to the General Fund has been made. This is the first time since the purchase that this promise was fulfilled. (Unless you count the time that the Hiremath council borrowed $350,000 from the General Fund so they could pay $120,000 of that money back into the General Fund…aka the shell game.)

Troon’s losses for the fiscal year came to $1,674,187. This is the best they have done since the golf courses were opened in May 2015, but we are a far cry from patting them on the back.

The Bad News
Total Troon losses for the 50 months that we have owned this white elephant have totaled $9,320,693. Your sales tax subsidy for FY 2018/19 (which the Town calls income) totaled $2,463,034. Your tax subsidy since the purchase has totaled $9,530,901.

The Overlook Restaurant lost $113,917 in FY 2018/19. That is more than they lost in FY 2017/18 ($96,100). Why is this restaurant still open?

Is a Members Only Golf Course reasonable?
Do the golf members deserve their own course? As of June 30th there were 238 members. Membership dues accounted for $761,764. The money the members contributed does not come close to allowing for their own dedicated course.

If we did not subsidize the “member’s course,” we could provide for capital improvements. We could have the Community Center ADA compliant. We would not have to bond. We would not have to depend on HOA’s to provide financial assistance.

We can have 18 holes of municipal golf and convert the remaining 18 holes to green space to avoid any potential loss in property values for those living along the golf course. Then we can start making capital improvements and have money for park improvements.

The Watchdog Report: March 2019 Financials, 75% of the way through FY 2018/19

When one first looks at the Community Center Fund balances for March 2019, one might be impressed and think that we are working ourselves out of this mess. After all, they show a surplus of $565,372. However, the balance sheet also shows that the annual $120,000 transfer to the General Fund has not been accomplished, and there is still $46,669 in capital outlay to be spent.

March usually marks the end of the prime months for golf, but with April and May temperatures being cooler than normal (it’s reportedly been 8 degrees cooler than normal), we might actually see better golf revenues this spring than in years past.

What is interesting is that when you compare March 2019 to March 2018, you see that the total revenues were $94,231 higher in 2018, but the expenditures were $434,143 lower in 2019. Your sales tax revenues totaled $1,792,890 in 2019, which is $78,901 more than 2018.

The Bad News
Even though Troon states that they made $30,410 in March 2019, their total losses to date are $209,773 higher than in 2018. Member dues were $15,003 lower in 2019 vs. 2018. Golf revenues were $108,338 less than budgeted and Troon is still forecasting to lose $1,775,622 in fiscal 2018/19.

The Town spent only $4,281 out of a promised $50,950 in Capital outlay.

The Good News
The number of rounds of non-member play for March was 5,457 (on 45 holes).  However, another course within 5 miles had 5,165 rounds on just 18 holes.

Thanks to the very rainy winter, Troon’s utility expenses have lowered.

The Overlook Restaurant actually made $771 in March. Their total losses for the fiscal year (to date) are currently $87,447.

The Town has made $73,467 through their programs (tennis, fitness, recreation). Maybe the Town can start sharing in the utility costs. (For more information on why the Town has paid ZERO in utilities since the Community Center opened in May 2015, please read our January Watchdog Report, under the subheading of “Clever Bookkeeping.”)

All things considered, March 2019 was not a bad month. We will see what the remainder of the year brings and if the Town Council will be able to transfer the Hiremath council’s promised $120,000 annual loan payment back to the General Fund.

March Financials - Click to enlarge

Overlook Restaurant March Financials

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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.