The Town of Oro Valley continues to struggle as a result of the purchase of the El Conquistador Country Club and golf courses earlier this year. The project has lost $1,426,804.37 in the first 5 months of the fiscal year, according to Councilman Mike Zinkin.
Zinkin, one of the Town’s fiscal watchdogs, advised constituents in an email about the poor performance, “The November golf numbers are in, and not to anyone’s surprise, they failed AGAIN to make their forecast.”
| Town Manager’s forecast – number of rounds – 6273 | Actual number of rounds – 5263 |
| Town Manager’s forecast revenue per round – $40.88 | Actual revenue per round – $37.49 |
| The Town Manager’s forecast was 6273 x $40.88 | = $256,440.24 |
| The Town’s actual revenue was 5263 x $37.49 | = $197,309.87 |
For the fiscal year (July 2015 – November 2015) the Town Manager’s forecasts are off by $351,619.37. The difference between forecast and actual is $59,130.37.
Zinkin points out that the Town Manager’s budget shows that expected (forecasts) losses from July – November are $1,075,185. “Add to that the actual loses,” writes Zinkin, “which are higher that forecasts, and golf has lost $1,426,804.37 in the first 5 months of the fiscal year.”
“This is outrageous. One of the reasons offered for not making the forecast was that there where 9 days were frost limited available play. I guess frost is a new phenomenon that was never figured in the forecasts,” writes Zinkin.” In prior budget years the Town Manager always forecasted toward the worst case, therefore, we were prepared for things like frost delays. This year is different. The forecast appears to be the best case scenario.”
Zinkin says the Town cannot “continue to do business like this. An alternative will be offered in the January 6 Council Meeting. We will be discussing the possibility of entering into an agreement with Integrity Golf, who might agree to a triple net lease of the golf. This will require terminating our contract with Troon. Whether Integrity Golf is the answer or not, we must find a way to stop the red ink this irresponsible real estate decision is causing.”
According to Zinkin the November report states that the Town now has a mere 252 total golf memberships, of which 245 are Town residents. He questions whether it is “right for the 41,000 people in Oro Valley to supplement golf for the sake of 245 residents?”
The golf members, which enjoy a reduced fare, accounted for 2789 (52 percent) of the 5263 rounds of golf.
“It seems all but assured that the Town of Oro Valley will experience Golf losses of between two and three million dollars in FY 16. This will require the current Council to (1) acknowledge that this venture is a financial mistake, and (2) take aggressive action to end these significant losses before raiding the Contingency Reserves or worse, proposing a tax increase. Merely hoping the problem turns around isn’t a proactive or effective strategy,” stated Oro Valley resident and community leader Steve Didio.