04/30/2023
Found an accounting gimmick that helped understate the 2023 deficit and protected the Golf department from scrutiny and possible backlash and pressure to sell the assets (that's far too much work, no one in City Hall wants to have to go through that). LS;DR - as of this year, without a doubt, the golf department is now a money loser, and low-income property owners are subsidizing golf rounds.
In the 2023 budget, one department has interesting income and expense projections. That would be the golf department, whose loss is already understood as the budget breakout doesn't include part-time labor in the golf unit as part of its expenses - according to city data, the golf department has one director and no other employees - if that's the case, that man is Superman given all the mowing and maintenance that must be done at two separate courses (one way out of town), not to mention being in multiple places to sell tickets, equipment, and deal with customers!
The 2023 Budget final figure for the Golf Department's total revenue is $639,366. For context, the prior year saw revenue of $576,561. The 2023 budget is anticipating an 11% increase in golf income, which is a statistically significant increase, and I see no evidence to explain why they expect such a large jump. In fact, golf income has been declining for the last few years, reporting a record high of $593,289 in 2020 - a year where many were out of work, had free recreation time, and were looking to get out do something other than sit at home. This makes sense. Since then, revenue has been declining. The low of the period of years accounted for was 576k. So budgeting a surge of $62k causes some questions, I can't think of why suddenly there would be a 15.5% surge in golf fees (where the increase in estimates is coming from).
Now, where it gets... shady. The Golf Deparment's 2023 Budget final projection is suggesting the expenses for the year will be, wait for it, $639,366. Yes. Exactly the same, to the dollar, as the Income figure that, barring some information unknown, is inflated to that exact figure. Mind you, in calculating that, operating supplies expenses will decline from $61,563 to $45,000. In other words, in a year where the city expects more people out on the course playing, the costs associated with operating it will decrease 37%. All of this definitely makes sense.
So given the income and expense numbers were projected to be identical - meaning the department didn't lose money - and the assumptions on revenue seem to be overinflated - what's going on here? My answer is that the city was finishing its budget last fall and was close to a deficit. They wanted that to be as small as possible, if not flat/breakeven, so a small department that no one really pays attention to could be fudged a little bit on the 2023 documents so that on passing glance (and who gives these documents much more than a passing glance at the paper, or anywhere else for that matter), who would notice that the income and expense figures offset beachgoer perfectly, producing no loss that would drag the deficit lower. Some call it accounting; I call it shady.
The other possibility for doing this, or maybe in addition, is that when the city is asked, "Why do we have a golf course," and "Does the golf course lose money," they can say, backed up by the budget, that it does not lose money. Well, I think that is BS. First of all, as mentioned, if you factor in the seasonal workers, there is no question that it losses money. But even pretending they don't exist, given the assumptions about operations costs going down. In contrast, use goes up, and inflated estimates of golf income rising significantly - even higher than an unprecedented year where golf was one of the few ways to get out of the house and do something with friends - I think there is no doubt the two golf courses (one of which you basically need to take a plane to get to its so far from city limits) lose money. I even think they were losing money before this year when you factor in the seasonal labor, but at minimum, this year, there is no doubt.
Why would the city want to be able to say, "No, the golf course doesn’t lose money?" My take is they don't want to deal with the backlash of people finally fed up enough with the golf situation to have one more (big) fact to add to their argument that these ridiculous courses cost taxpayers money. It would put them in a corner, there would be increased pressure to sell, and they might even have to do it, saddling them with a lot of work dealing with setting up actions and sales that I don't think they want to do.
It might not be that, but that's what makes the most sense to me as to why they would fudge numbers, along with the desire to prevent the deficit on paper from growing too large. The reality is that when it does present a loss, that loss will pass onto next year's budget and make the 2024 deficit even worse.
The important takeaway is to me, this is solid proof that city hall plays games with numbers to avoid bad narratives and make make-believe with numbers, and more importantly, we are in a relatively low-income city with a very tight budget city, substantial pension, and debt oblations, have annual close calls with deficits, and we own two golf courses, one far out of town, that LOSE taxpayer money. Taxpayers are net subsidizing middle and upper-middle-income golfers to play golf.
Owning the golf courses has been ridiculous, remains ridiculous, and is now an affront and beyond indefensible. in an auction process, do not award strictly on the bid, require developers to submit plans that outline their projects, materials used, number of units, etc., and then factor in the economic bid. At that point, you choose the developer whose plan advances the beauty, quality, and other city government property objectives goals that also pay a reasonable economic premium for such high-demand property.
Joe, you dog you, with your budget gimmicks. I caught you, though; better luck with next year.
Budget fudging in '22 created an interesting scenario for golf income and expense. But with a quick look, it becomes obvious that games are afoot. As of this year, Golf is a net loser for the City.
