Regardless of what Satish Hiremath, Joe Hornat, Mary Snider and Lou Waters want you to think, the Town does still own three golf courses. Based on their rhetoric one would assume that the golf courses magically disappeared and we were blessed with a turn-key community center. The truth is that the El Conquistador Golf & Tennis Club purchased by the Town of Oro Valley is losing more money than projected and with that continued trend, those losses will far exceed the revenue from the 25% sales tax increase implemented by the Town in March 2015. A visit to the so-called community center will prove that it is far from turn-key.
Specific to the golf operations, in the first month (July), Troon Management reported a 40% revenue shortfall. The $98,781 total revenue collected was $65,825 less than the budgeted $165,607. Keep in mind that the $65,825 shortfall is on top of the $259,252 they planned to lose. Therefore, the net effect is that over $325,000 was lost in just the first month of operations.
At the September 2nd Council meeting, the news was not any prettier for August. Troon projected revenues of $165,833 and only collected $99,478 with a shortfall of $66,255. Like July, the total losses were approximately $325,000. I recognize that golf play is lower during the hot summer months, but Troon’s projections reflect that. There is no reason to believe that comparable shortfalls will not continue throughout 2015-16 and the Town cannot afford to sustain the losses.
The financial reports provided by the Town will not put it that simply. In fact the July and August financials for the golf operations would not have come to light if not provided by Council member Mike Zinkin. Town Manager Greg Caton and Financial Director Stacey Lemos did not dispute his numbers. Ms. Lemos proudly reported that the Community Center and Golf Fund closed fiscal year 2014-15 with a fund balance of approximately a million dollars on June 30, 2015. What she failed to mention and Council member Zinkin pointed out was that the Majority Four approved the transfer of $1.2 million out of the Contingency Fund in May 2015. Those contingency funds appear as revenue and not robbing Peter (Contingency Funds) to pay Paul (golf and restaurant operations).
The earmarked sales tax revenue is shown as revenue as if it were regular income from green fees and not on the backs of those who shop in Oro Valley and pay the higher sales. Bear in mind that the monthly losses would far exceed $325,000 if they had not put the brakes on needed capital improvements and maintenance. The original plan was to spend $1.75 million dollars in 2015-16. As a means of slowing the bleed of red ink, those expenses were cut back to $75,000 in the 2015-16 budget. The spending brakes will no doubt be lifted after the November election, if the recalled incumbents are re-elected. Regardless, if the Town stays in the golf business, $1.75 million and more will have to be spent on golf course improvements in 2015-16 or in the foreseeable future.
Possible Solutions
• Vote for the leadership of Pat Straney, Steve Didio, Ryan Hartung and Shirl Lamonna and vote recalled Hiremath, Hornat, Snider and Waters out of office.
• Establish an ad hoc group with business savvy composed of both those who were in favor of the purchase and those against to do a comprehensive study of the El Conquistador Golf & Tennis Club property and assets, gather input from residents, explore options to get us out of this mess and come back to the Town Council with a strategic plan.
Maybe they will find that it is in the best interest of Oro Valley to continue to operate all three golf courses, or maybe . . .
• Lease the La Canada course back to HSL for 50 years for $10,000/year as provided for in the purchase contract, before sinking any money into badly-needed capital improvements. Based on the same purchase contract, the El Conquistador course does not have to remain a golf course. It also allows for the Pusch Ridge course to be shut down as long as the space looks “park like” as viewed from the Hilton Resort.
They may find that instead of costly renovations to convert an 80’s-era club house into an ADA-compliant community center with valuable space wasted on a full-service restaurant that the Town is developing plans to renovate, that a better option might be to . . .
• Bulldoze the building and build a community center on that site or sell that land and build a community center that meets the wants and needs of residents at Naranja Park. It could be funded by the sale of the land and the existing 25% sales tax increase – only the sales tax increase would have a sunset date.
The Bottom Line
We badly need the leadership of Straney, Didio, Hartung and Lamonna who will allow options to be considered. Going forward they will listen and consider input from the residents before making any decision, with transparency and in the best interest of Oro Valley.
We must rid the Town Council of Hiremath, Hornat, Snider and Waters who have and will continue to make decisions in lockstep and in the best interest of the builders and developers who provided 80% of their 2014 campaign funds.
Debra Arrett, Oro Valley
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