The Golf courses provide open space, beautiful vistas and great playing enjoyment. Despite the serenity, golf operational issues have not been without controversy.
Many of these issues cumulated in 2005. Losses from golf operations were increasing despite more golfers; desired tee times were less available; and operating costs were ever mounting to substantially more than costs at other local courses. Even non-golfers were not immune. Ponds that had been previously stocked for resident enjoyment were closed to fishing at all times and hikers and birdwatchers were banned from path use even during hours of closure.
Proposals were many and actions were taken, but they too met with controversy. Proposals to cut costs were ignored; alternative green fee proposals were advanced but were adamantly rejected; a new tee time scheduler was adopted but over continued objection. Substantial price increases for Pass and Card holders were proposed by the various Governance Committees in late 2005. But, this action met outrage from golf pass holders and was rescinded by the Developer. The Developer then covered the $200+k golf operating loss during 2006.
The Community Association outsourced Golf operations and pro shop to EAGL in September 2006. EAGL’s experienced management team has already reduced operating costs and increased the number of available tee times.
Past is history but helps provide perspective. http://scinform.blogspot.com/2005_12_01_archive.html
See --Golf and Cost…..In Search of a Solution
My overriding objective with Golf, as with the Restaurants, always has been that these businesses [at build out] need to operate on a breakeven basis in order to lessen the need for Resident Assessment increases.
With EAGL management coming on board to improve operations and with the Golf Committee focus on matching revenue with costs, they seem to have gotten the current balance about right. Revenue for the first quarter was a bit low but reduced expenses kept the golf operations on the plus side.
A note on Green fees
Annual passes and high volume cards have merit as they provide a stable base of revenue unaffected by inclement weather. Concurrently, pricing for low volume card and daily players along with tee scheduling must be competitive with local Courses. That delicate balance must be in place to avoid significant Sun City player leakage and revenue to other local courses. Otherwise, all green fees will spiral upward. Additionally, some of the former Golf task force members have suggested further examination of some equipment rental contacts as well as a reduction in number of rental carts for potential costs savings.
If it is working and a breakeven is doable in 2007, I say don’t break it. There are, however, future issues to address.
A new approach going forward
If I am elected I will recommend that the Finance Committee and the Board act to segregate financial accounting of Legacy Hills and White Wing Golf courses from that of the HOA and the new 3rd Golf course.
I will further propose that all losses associated with the 3rd course be funded by the Developer until sufficient new players are available to support a breakeven operation. The mechanics of this could be achieved by assigning all current player revenue to LH and WW operations and any new player revenue to the 3rd course.
It is important that any operating losses related with the 3rd golf during the early stages of operation not be used to (a) significantly increase green fees or (b) homeowner dues. The third golf course during early build-out is the developer’s marketing program, not ours.
I will further propose that any excess revenue from golfing operations at LH and WW be retained to be utilized in golf operations only. This would permit the building of a “rainy day” contingency fund to bridge unusual inclement weather periods. Currently, income from prepayment of annual passes and cards is being utilized at year end to fund past due HOA salary and benefit accounts payable. This is not a good business practice for Golf or the HOA.
The golf courses will continue to be treasured assets in the years ahead and I suspect controversies over how best to manage the courses to everyone’s satisfaction will continue as well. It is important that golf operations not pose a burden for non-golfers and that should be easily avoided given the excess demand for rounds played.
A more difficult challenge for golfers will be to manage the excess demand for golf rounds on sctx courses in a way that achieves financial success while balancing the desires of various golfing groups. If we work together on the issues without impugning each others motives, it would go a long way toward finding reasonable and rationale solutions.
I would appreciate your vote and support. You can support me by scheduling meetings with your friends and neighbors—Thanks!
Jack Stroobandt
