The other day i raised several questions relative to golf and whether it was subsidized beyond revenue collected. We saw some varied reactions from management,if you watched the video, and then a fierce rebuttal by the gm. She took the liberty of trying to over turn what the community has know for 40 plus years and argued what the board really intended. Sadly, she failed to take into consideration there are volumes written and documented in newspapers that exist today. There's no question what was "intended." However, i want to leave that discussion alone for the purposes of this exercise. I am going to forget, for now, whether golf is self-sustaining. I am going to not even look at the total revenue side of the discussion or the money they have been bleeding yearly or even the money she has been shoveling from capital improvements into golf yearly. We will come back to that at some point. Today's exercise is simple. We are going to look at all revenue from golf rounds played and then divide it by the total rounds played per year. All it really is is a basic math equation to see how much an average round of golf costs in Sun City. It's a starting point and it would be an easy exercise to do a quick 10 year look back to see what has happened over that same time period. The other day after the meeting i had some management people suggest i was making golf look as bad as i could by talking about golfers who played 300 rounds per year and paying a touch over $5 a round. Ignore the fact i included anyone buying the full play pass and calculating rounds played at 100, 200 or 300 per year. Because we never see any numbers, everything has been just guess work. For example, i went online and tried to find the total number of rounds played in any given year. I went through management reports and all i could find was information stating play was up or down at a given course or a composite of % increases on a yearly basis. Like most of the numbers they provide, they are meaningless. However, after the meeting as i was chatting with one of the board members he claimed golf rounds were consistently played at the 300,000 rounds per year. I have no idea whether that is right, wrong or nonsense. I know the board member well and he is more straight forward than most so i suspect he is close one way or the other. Enough for now, i will finish my suggestion along with numbers later.
Let's continue on with this exercise; lots of reads and not much to digest so far. I am a huge fan of keeping it simple stupid. Perhaps this is why i am proposing it. As i watched in abject horror from management and the board trying to get their head around the golf dilemma at the last meeting, it became clear they are clueless and their first choice is to ignore what has happened the past 46 years and pretend all is well with the world. It's not. And the gm's argument is even a bigger steaming pile of crap. I've argued with countless board members the numbers the gm has fed them is pure bullshit. Two of them, who shall go nameless, but have both served more than two full terms have tried to tell me i am just flat out wrong. I'll admit when i am wrong, happens from time to time, but you can't just say it, prove it. The numbers are the numbers and its all there, albeit buried by design. You simply cannot find any data to work through the actual costs; at least that i have been able to find on their website. My shock came when i was given the information from a departed board member. The Budget Worksheet contains 4 pages of information, all golf related. Oddly, nowhere does is tell me how many rounds of golf were played in a given year. I know they have that information and i am pretty sure board members get it. All of which is simply the setup for the premise i will be working from, it could be right or wrong so it would be awesome if i am wrong, someone from management corrects me (not holding my breath). The other day after the board meeting i was talking with a board member and a member of management. As i laid out in my first post on this thread, the cost per 100 rounds, 200 rounds or 300 rounds for people who purchase full play cards tells us little (other than it's really cheap). However, with the information in hand i now have, everything becomes pretty simple to determine the actual average cost for a round of golf on a yearly basis. Here's how: Take all of the revenue from actual income for playing a round of golf and divide it by the number of rounds played. We're not talking about pro shops or snack bars or driving range or sales from merchandise or cart rental. I will post below every category that was paid for a round of golf in 2018. I've taken that year because the numbers from 2019 were estimated for years end and while being close, the figures below are actual. 1). Prepaid greens fees: $1,798,179. 2). Prepaid greens fees- non resident: $97,542. 3). Daily green fess- card holders: $1,301,681. 4). Daily surcharge: $750,584. 5). Tournament income: $63,540. 6). Daily greens fees- guest: $897,734. 7). Daily greens fees- staff: $10,004. 8). Daily green fees- public; $275,073. If you add all of those categories up, here is your total revenue from purchasing a round of golf: $5,130,797. If we then take what i was told the other day and assume that it was correct, 300,000 rounds of golf played yearly it is a straight forward way to see how much a round of golf in Sun City cost, on average. $17. and very small change per round. So we are clear, that includes all of the outside play and all of the Sun City residents paying the full daily rate of $33, (might have only been $32 in $2018). All of which leads me back to the point i made at the meeting: How much does it cost per round to run our courses and just break even? In this case, what we are looking at is not the income versus cost side of the equation. That is another topic for another time. The new general manager told me following the meeting; "golf saved our bacon in 2020." I have no idea why that would be the case. The RCSC never lost any of their income stream, we all kept paying our fees even though the services were shut down...other than golf. Yes, they lost ticket sales to Weds night performances at Sun Dial but they saved money on cancelling Sun Bowl shows. Anyway, here's where this exercise gets kind of fun. I would encourage the RCSC to do this analyses going back on a yearly basis and see exactly what golf rounds have been costing and see whether those costs have increased, decreased or stayed the same from year to year. It would give you a bench mark to at the very least consider to insure we break even rather than us subsidizing golf with literally no checks and balance regarding how much you are shoveling into the game. And please if the number of rounds of golf, 300,000 isn't correct. let me know. Or better yet, if one of you can find the number of rounds played in 2018 i can drill it down a little better.
Bill, I believe golf has not been self sustaining, but the board and GM’s (plural) will use what is known as creative accounting to make everything look rosy with golf and self sustenance. I agree that A FORENSIC audit by independent auditors is required. I’ll ask again, how do they count total rounds, and number of rounds actually played. Pencil and paper? There needs to be electronic accounting of rounds played and when golfers enter the course and when they leave with facial recognition. Mr Hoffers admission that he played golf recently after announcing at a previous board meeting that he no longer plays golf justifies the need for facial recognition and electronic accounting. Did he play as a guest? in any case, he should not be voting on any golf related motions as by the boards own rules, that is a conflict of interest.
Lots to unpack there SCR, and perhaps most troubling is the current crop of board candidates comments and just how little they understand golf. After all, the exiting gm gave them the out by telling them that was never the "intent." Lots of work to do here and by the time the annual meeting rolls around (Dec 13) i hope to have all the data i need to make my point. Unless or until we know how much we have dumped into golf (over and above the 35 million from PIF), we won't know how much people will eat regarding foolish arguments. There's another reason not to post numbers, other than they don't want members to know. There are legal obligations regarding IRS limits for us to maintain our tax status. Any board member reading this and wondering what the hell i am talking about should have a heart to heart discussion with the gm (either one, doesn't matter), and immediately get their head around how important it is for the RCSC to stay under the threshold of outside play. You can do the math yourself, there's only 3 columns you need add. If you don't know what i am talking about, go look back and see what the RCSCW went through the last year. Nasty.
For most Sun City residents, they know nothing about golf. Why should they? We know that covers about 88% of the membership in the community. Consider this a basic tutorial to help those in the dark understand at least a little bit. There are three categories listed above where we can further break down costs. They are: 1) Full play passes and surcharge golfers. Full play is $1550 per year for residents and the surcharge is $625 Executive courses or $800 Regulation The surcharge ranges from $3 to $7 depending on the time of year and holes played. 2). Sun City residents who pay full rates. $33 winter and $20 in the summer with a variety of other gimmicks to stimulate play. That's for regulation courses, executive courses are less. 3). Non resident and guest rates are the third category. Guest/non-resident rates are $42 winter and $28 summer for regulation courses. The executive courses are less. There are also full play passes for those living outside Sun City, they cost $2000 no cart, $2500 with cart. As you can see, it gets very convoluted, very fast. Basically everything thing they do is intended to keep the number of rounds played as high as high as possible. Unfilled tee times are revenue lost. But are they? If those unfilled tee times are going to card holders who play 5 or 6 days per week, the RCSC is getting $5 to $10 a round. I won't go into how tee times are allocated, suffice to say, those playing all the time often get the best times. Nope not against that, only when you are buying the round for next to nothing. Let's get back to percentages of play by category. We know in 2018 total revenue for just a round of golf was $5,13o,797. The following is how much revenue was collected from each of the three sources: 1). Pre-paid green fees and surcharge cards residents: $2,548,763. (about 50%). 2). Daily green fees card holders: $1,301,681. (about 26%) 3). Guests/non-residents/no resident prepaid cards: $1,270,349. (about 24%) 4) For purposes of this exercise i have left off tournament and staff income because there is no breakdown by resident or non. It's roughly $73K. The picture you quickly come to understand is roughly half of the golf revenue comes from full play pass and surcharge card holders. In the exercise above we found an average round of golf was just over $17 which is amazing when you consider half the revenue comes from rounds costing an average of more than $30 between resident and non/guest. What it tells you is the RCSC is simply giving rates away to those buying the full play passes and surcharge cards. Again, that's not a bad thing if golf wasn't deeply in the red. There-in us the crux of the problem, no one, NO ONE knows except the gm. Most assuredly board members don't and in all likelihood they never have. Why should they, who has ever told them how bad it is? In fact, they've been told just the opposite, and led to believe it's all very close. All of which is the point of this exercise. Unless or until any current or future board members understand exactly how much golf has been subsidized, how do yo ever make a decision?
Just read the summary from the October Golf Committee. Interesting it took so long to be posted online. They had a "general" discussion about the concept of golf being self-sustaining and loosely stated their conclusion was that golf "The intent is to make money." Hmmm... This issue is also faced by 10-pin bowling but to a much lesser degree because the 2 centers are shared by other activities and the two George's Cafes. These additional activities and public restaurants are responsible for sharing costs related to utilities, staff and maintenance.
Interesting catch aggie, looks like a short discussion...but then that is better than ignoring the problem. 10 pin bowling has long been working hard to stay at a break even point. Passing PIF allowed for lane improvements which would not be billed back to the bowling budget (golf is the same, PIF expenditures do not factor into setting the price for a round of golf). Just found out Randy is retiring, such a fine gentleman to have led the Sun City bowling community for so many years. He will be missed.
So you all know, it has been pointed out i am a bit long-winded and sometimes talk over people. I agree. I also know people know virtually nothing regarding many of the topics i write about and my hope is when they read it and if they finish it, they will have a better understanding. In some cases i have missed the mark. With that clarification out of the way, let me simplify the above posts. Let's say a couple bought a home here in 2011 when prices were low. 1200 sq ft garden court apt, perfect for them. That unit would have sold well below 100K. They retired on a fixed income, small pension, social security check and some retirement income. They lived comfortably till 2015 when one of the spouses died (usually the man). Life changed for the remaining spouse. The social security check was reduced, the pension check may or may not have been there dependent on the options and their savings had dwindled. Money became tight but living in Sun City was a godsend. Taxes were lower, it was more safe than other places and there were numerous opportunities to do things, clubs, churches and organization looking for volunteers. Sadly the change made years back kept her recreation fess at the full amount (currently $496). Even though there was just her, she was paying the same as when they were a couple. It used to be a single person paid a single rate. It was way more fair. In fact, every single home owner in Sun City since 2003 is paying a full lot assessment. Another topic for another day. The stage is set and here is what i have been harping about. Golf courses were sold ($10 and a cup of coffee) with the intent to be run cost neutral, they were not meant to be subsidized by the $496 lot assessment (rec fees). After 15 years under the exiting gm, we now know they haven't been. What we don't know is how much money has been spent during that 15 year time period. It is a secret, you cannot find the information anywhere on the website. I doubt any director over those 15 years could tell you how much. That remaining widow who is financially struggling is helping pay for golfers to have cheap rates. Maybe it is the right thing to do, maybe it is wrong...it was never intended to be that way. So here's the question: If the directors don't feel it fair to make golf self-sustaining, how much of your rec fees/lot assessment/$496 would you be willing to divert so golfers can continue to play golf for $5, $10 or even $15 a round? Until we know whether it was a million dollars a year that has been propping up golf or a 100K is the number how can anyone make a decision? They are just questions that demand answers.
So you all know, it has been pointed out i am a bit long-winded and sometimes talk over people. I agree. I also know people know virtually nothing regarding many of the topics i write about and my hope is when they read it and if they finish it, they will have a better understanding. In some cases i have missed the mark. Tongue in cheek: Now, who would do that??!! BRAVO Bill! That one did it!! Now....... how do we get that message out to all the folks who are not in favor of having their $496. payment go for golf? We're working on it, right!
Potential Rounds of Play is simple math. Just check any public AZ course and you will see that the typical tee time interval is 8 minutes. I calculated 8 and 10 minute intervals. My assumptions: Hours for tee times (7 AM - 3PM - winter hours); 4 Players per tee time; 320 days of play per year. Tee Time Interval (minutes) 8 10 Tee time hours / day (7AM -3PM) 8 8 Tee Times / day 60 48 Players / tee time 4 4 Courses 6 6 All Course Tee Times/day 360 288 Days of golf / year 320 320 Tee times / year 115,200 92,160 Total Rounds / year 460,800 368,640 I'm sure that the management for any golf course in AZ knows the exact information. They need to know this to break even and sometimes make a profit. Someone (Duku?) knows this for RCSC. So Bill's comment about a Board Director saying 300,000 rounds played per year is pretty close. But as I said, someone knows exactly. Actual rounds are affected by weather, fewer than 4 players per group, etc. So 300,000 for 8 golf courses sounds reasonable. Now you apply info like players paying full rate, discounted member rate, Pass with fee, pass with no fee. You can learn a lot with this simple information. Now take into account all the operational expenses and it's easy to see if we get enough revenue from greens fees to pay for golf. You also see who is being subsidized through pass play. This is not rocket science and this is not done on paper. Its in the cash register and the tee time reservation software. Get the information and your question " is Golf self funded?" , will be answered.
As Mike points out, numbers are easy...unless of course you don't have them. We can always make assumptions, but if we are going to decide the fate or direction for the community we should have accurate figures. We don't and we haven't for the past 15 years. The RCSC homogenized the information flow to show you what they wanted you to see. When i questioned the exiting gm why, she said it was too difficult to try and show everything. What nonsense. Everything they do is on spread sheets and spread sheets are all just a click away if stored right and made accessible. At least at last nights candidate forum the consensus among the candidates was information should be readily and easily accessible to the community at large. What a breath of fresh air that would be.
