THE PROBLEM IS EPIDEMIC

From the Bowling Green (OH) Daily News:

Not leasing failing golf course is absurd

Posted: Thursday, October 20, 2011 12:00 am

Now let me get this straight. Parks and Recreation is losing around $200,000 a year of our taxpayer dollars operating the Paul Walker Golf Course.

Mr. Gary is offering to lease the course and bring it up to USGA standards. That means we would not be losing the $200,000 and the city would have the income from the lease that Mr. Gary would be paying.

However, Parks and Recreation says they don’t want to be in competition with Mr. Gary. Why are they afraid of the competition? Would it mean that they would have to start doing a better job with the other courses?

They say that if the course is leased to Mr. Gary, they want him to pay them a percentage of his profits.

How ridiculous does that sound, and by the way, what makes them so sure he will make a profit when they are losing their socks in running it?

Could it be that there is some hanky panky going on? Are they charging some unrelated expenses to the golf course to hide them?

The whole thing seems to have an air of mystery to me. Parks and Recreation says their mission is to provide a service to us. I think it would be a great service to us to quit losing $200,000 a year and still have a golf course serving us.

Perhaps someone in a position to do so should look very closely at the income and expenses of the course and see if there are some hidden reasons behind this whole thing.

Jay Eatherly
Bowling Green

LET THEM EAT CAKE

At the Finance Committee meeting held last Monday, March 19, 2012 the Clubhouse Committee found it necessary to trim the restaurant budget by $24,400 in order to break-even.

Keep in mind that each of the 1,084 units in FW already pays a "restaurant tax" of $30.00 a month to keep this enterprise going while the people doing the budgeting aim for a "slight loss to a break-even policy."

March 20, 2012

To: Members of The Clubhouse Committee

   From: Adam Briggs

C: Al Miller, Ed Jarrett, Brian Petrovits, Irene Loretto, John Dunham

Re: Reviewing Finance Committee's Request For A Balanced 2012-2013 Clubhouse/Restaurant Budget

Last night (3/19), Sophie and I attended the Finance Committee meeting to review Draft Three of the overall budgets for the FWMA and the FW District. The combined percentage increase for the two budgets, as of that draft, was 2.63%, which I'm guessing most residents would regard as modest and completely acceptable. To be sure, there are a few shrill, loud few out there who would like to see the Clubhouse and the Golf Course closed down altogether, and we did hear the written testimony of one who wants to reject the entire budget until a plan to end all losses in either Golf or Clubhouse is presented.

More importantly for our purposes, the Finance Chairman had asked Al Miller to ask Ed
Jarrett for a recommended plan to cut the Clubhouse budget back some $24,900. Ed's
ideas to achieve this are shown below (totaling $25,400). In fairness, Ed was given this
charge late Thursday, and even though I did not see it until 5 minutes before it was
discussed, he did try to give me some heads-up by phone. Do understand that Ed had no choice but to try to come up with something, and even while he was presenting it, he insisted it had to be run by the Clubhouse Committee. I was asked as a member of the audience, not to participate in the Finance discussion, but I was finally allowed to point out that (a) we had not seen any of these before, and ask the question (b) is there really a compelling reason why we should insist on a balanced budget at all. Although all members of the committee accepted the proposal to do a balanced budget, I did not hear anything that I personally considered compelling----all said, in essence, that it's always better to start a year at break-even, or slightly positive. In a perfect world, of course, that's always right, but we have always aimed for a slight loss to a break-even policy for the restaurant. Importantly, this would be a change to a budget Ed felt he could live with and actually achieve, as opposed to setting up for a probable failure.

These are creative ideas, but each of them may have some subtle, nuanced disadvantages that could cause various kinds of resident and/or golfer unrest. I am asking our committee: to review these carefully, one by one. It would be nice if we could conclude that all the ideas are good ones, and then both Finance and Clubhouse could sit back happily. However, if we conclude that some, or even all, of these ideas have major flaws that will hurt the clubhouse operation, we will need to speak up. But, I do feel strongly that we cannot just say we disagree; we need to be thorough and articulate as to why we feel that way.

But also, what would be really helpful would be to come up with some other alternative ideas that might bring the budget down by $25 K. 

 

But, by the way, the Golf budget is negative $132,000. and I haven't heard any
knowledgeable person suggest that should be a balanced budget---the reality is that
would be absurd. Our situation is more subtle, but still potentially fragile. We might
collectively agree to changes that would stir up more resentment than we now have, and even sink us totally in the long run.

Please put on your thinking caps for this one.

Ed's Suggestions for a Clubhouse Breakeven Budget

Close last two weeks of January and first two weeks of February ($5,000)
No lunch-time bartender from November 1 to April 1 ($4,000)

Reduce winter menu offerings ($7,500)

Close Restaurant and Pub 2 PM -5PM November 1-April 1($4,000)
Hire Seasonal Restaurant Manager without health benefits ($4,900)

Total Reduction ($25,400)

Some Other Options

I. Raise Minimum bv $5

2. Reduce menus year round with less perishable offerings

3.       Increase menu prices

4.       Reduce staff and seating capacity


Comments? You're welcome to email me at 2chewman@gmail.com.

CAN YOU FOLLOW THIS LOGIC?

From the Report of the Ad-Hoc Committee to Study Golf, March, 2009:

Charge to the Committee
"The committee was charged by the President of the District and the Master Association to review the financial condition of the Golf Operation at Farmington Woods and to make recommendations for change if necessary."

"The Problem-The declining membership makes it very difficult for golf to cover its expenses."

"The Golf Operation Is Losing Income"

And what change did the committee recommend?

 "Condo funds now support both the pools and courts. The restaurant is partly funded from Condo funds, albeit as purchase minimums. Since all residents benefit from the existence of the golf course, we recommend that the Golf Operation also be partly subsidized whenever golf membership falls too low to support 100% of the total operation." (The course has lost approximately $350K since this statement was made in 2009.)

I got a "C" in Logic 101 in college but even I can find the fault in this. If the tests were this easy I'd have gotten an "A" in that class. I wonder what a study done by a neutral observer would have found? We'll never know.

Can you find the flaw in the argument? Please comment.

WHAT OTHERS ARE SAYING

Richard Coffey

23 Cottonwood Drive

Farmington Woods

Avon, Connecticut 06001-4516

                                               

January 21, 2012

Ms. Irene Loretto

President, Farmington Woods District Board

P. O. Box 279

Unionville, CT 06085

Dear Ms. Loretto,

I thank you for your excellent work as the District President and for giving so much time and energy to the many dimensions and tasks that are required.

I write in response to your letter dated January 5, 2012, about the proposed $4 million borrowing by the District in order to upgrade the golf course and club house.  Because my work in the non-profit world of the performing arts never permits me to be present for community meetings (which I regret),  I hope that this letter may be entered into the record by whatever means is appropriate and acceptable.

I am strongly opposed to the proposal for several reasons:

·        If Farmington Woods was once considered to be a sports or recreation residential destination, I do not believe it can be so considered now, what with so many working families present.  I doubt that very many people purchase property here because of the golf course and may in fact do so in spite of it, though it has aesthetic appeal.

·        I can’t imagine any project for borrowing such a vast sum of money to be less worthy than one that has to do with leisure time and recreation.  There are other more pressing needs.

·        Already the golf course has become a debt to the non-club member homeowners, and that is egregious enough.  The golf course and the club must become self-supporting by those who make use of the facilities.  If that is not possible, I recommend the closing of the course, with the land become meadow or wild-flower beds, and the club house (thus relieving every one of the perpetually frustrating monthly charge no matter how little one makes use of the restaurant, if at all).

·        Eliminating the course and the golf club would reduce Farmington Woods expenses far and wide, including staff, maintenance, utility consumption, excessive traffic, and wear and tear on the property.

·        The present club house could be put to much better use by the 1100 home-owners by creating a fully equipped health/workout center and a well-stocked store for the purchase of food items, toiletries, supplies, and other of life’s daily needs.  This would be very popular, in my opinion.

I plan to vote against the proposal and will encourage my friends and neighbors to do the same.  Thank you in advance for your consideration of my position, and I hope that my remarks are either heard or read by the various bodies about to deliberate the proposal.

Sincerely,

Richard Coffey

JUST A REMINDER

Draft 3 of the Budget will be reviewed at the regular Finance Committee meeting March 19, 2012, 7 P.M. MA Board Room.

LET'S FOCUS ON THE FOCUS GROUPS

As part of its 10 Year Long Range Strategic Plan the district held a series of ten focus groups in February and March of 2011. In addition, Standing Committees were asked to submit items they thought needed to be addressed over the next ten years. The results of these meetings were compiled and presented to the MA Board Meeting in April of last year. (Available in member's section of www.farmingtonwoods.com)

According to media analyst and professor Douglas Rushkoff, focus groups are often useless, with data often "cherry picked" to support a foregone conclusion. Let's take a look at some of the focus group results and see what concerns were voiced and what conclusions were drawn from them by the committee. Some results:

• (From Focus Group Report April, 2011)" While this project was originally for the long range plan, the residents provided input on issues that were important to them. Many did not have long-term, strategic items, but sure had items to discuss."
  
•  Most wanted a definition of the "village of Farmington Woods". (Residential? Golf Community?)
• Residents wanted the board/committees to look at everything with "fresh eyes".
• Most consider "In the Woods" a golf/restaurant newsletter. Want minutes of meetings in magazine.
• Want to understand how (a bond) impacts condo fees. Will putting items in a bond reduce fees?
• Overwhelmingly want golf to be "self-funding".
• Want the restaurant/clubhouse to be the center of FW. Would like a fitness center/library.
• Want better insulation in buildings, facelifts, new colors, new lights.
• Want a subcommittee to investigate/evaluate 4-plexes.
• Some feel courtyards are neglected, want ponds dredged, sidewalks expanded, trees removed and a children's playground built with walking paths and areas.
• Others want to change rarely used paddle courts to basketball courts.
• Some would like to clean up Mallard pool and update poolside furniture at all pools.

As the first bullet points out, many residents did not have long-term, strategic items to suggest, but had plenty of other ideas to improve FW. They also made it perfectly clear that they wanted the golf course to be "self-funding". Unfortunately, after reviewing the focus group remarks the Long Range Strategic Planning Committee came up with a plan to float two bonds, one for golf course irrigation, one to improve the curb appeal and accessibility of the clubhouse, totaling $4M. Their plan, however, turns a deaf ear to the desire of most residents that golf be self-supporting and to the fact that residents want fees and taxes kept low.

It's hard to understand how this committee after taking the time to ask residents what they wanted and getting the answer-an updated community with enhanced infrastructure, more sidewalks for walkers and a fitness center surrounding a "self-funding" golf course, could come to the conclusion that floating bonds totaling $4M, thereby increasing district taxes 18% for each resident for the next 20 years, is what residents wanted long term. Is it possible that since residents could not provide many long term, strategic needs the committee just provided one for them?

Comments? You're welcome to email me at 2chewman@gmail.com.

WHAT SPECIAL PURPOSE DID THE 2009 AD HOC COMMITTEE SERVE?

In December of 2008 an ad hoc committee was formed to study golf at FW. Ad hoc is from the Latin, meaning roughly "for this special purpose". The committee, formally known as the Ad Hoc Select Committee to Study Golf released a report (available at the MA) of its findings in March of 2009. In the previous few years resident fees and taxes had been used to shore up what was once a self-sustaining golf operation and this study was done to determine what could be done about it in the short and long run. The pronouncements made and conclusions drawn came as no surprise to many residents.

The report stated that golf was losing money, that membership was down and that this was not just an issue for FW "but for the golf world in general."  It examined a number of ways to solve the problem including leasing it to a town, making it a public course, hiring a management company, building more units,even using it as a tree or wind farm.

No mention was made of selling it and the option of converting it to open space was deemed to be more expensive than operating the golf course.( No estimates for the cost of the open space option were secured from outside sources.) The report's final conclusion was that "since all residents benefit from the existence of the golf course, we recommend that the Golf Operation also be partly subsidized whenever golf membership falls too low to support 100% of the total operation."

From my reading of the report, few outside sources or viewpoints were presented to the committee, however the views of two realtors who specialize in sales of FW property were stated. They seemed reluctant to quantify how much, if any, the presence of the golf course adds to the value of residential units. One of them finally suggested 5-10%. Finally both said "they thought non-golfers bought units here because there was a course or at least groomed open space." This appraisal was done early in 2009, before the full force of the bursting bubble took its toll on the housing market. These days most brokers agree that high condo fees and taxes have an eroding effect on housing prices.

The report makes it clear that the long term goal should be for the course to be "fiscally independent" and advises that "given the uncertainty surrounding the future of golf, this topic needs to be reviewed each year to make the best decision for the Community." In the 2009-10 Budget proposed by FW the Golf Division reported that membership was down 65 from the previous year to 185 (resident & non-resident) golfers.They also projected a shortfall of $47,648. The projected shortfall for the present budget was $125K, however an additional $56K was added to that deficit at the January, 2012 Executive Board meeting.

In 2005 a resident committee was formed to vote down a budget that contained $68K for sand traps and repair of irrigation on the golf course by the Tax District. This year the district wants us to approve the sale of bonds totaling $6.8M (with interest) to replace that irrigation system and improve access to the clubhouse. How does increasing district taxes for residents by as much as 18% (9% for the golf bond alone) fit in with their goal of making the course "fiscally independent"? And what became of their concern for the  "fiscal interests"of non-golfing residents?


Comments? You're welcome to email me at 2chewman@gmail.com.

JUST WHAT IS A TAX DISTRICT ANYWAY?

House Bill No. 6475

Public Act No. 05-106

AN ACT CONCERNING THE POWERS OF SPECIAL DISTRICTS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 7-326 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

At such meeting, the voters may establish a district for any or all of the following purposes: To extinguish fires, to light streets, to plant and care for shade and ornamental trees, to construct and maintain roads, sidewalks, crosswalks, drains and sewers, to appoint and employ watchmen or police officers, to acquire, construct, maintain and regulate the use of recreational facilities, to plan, lay out, acquire, construct, reconstruct, repair, maintain, supervise and manage a flood or erosion control system, to plan, lay out, acquire, construct, maintain, operate and regulate the use of a community water system, to collect garbage, ashes and all other refuse matter in any portion of such district and provide for the disposal of such matter.......

There are approximately 300 tax districts in the state of Connecticut. Of those roughly 59 provide only fire protection, some are water districts and a large number are recreational districts that create and maintain beaches and provide recreational privileges for their residents. The remainder provide garbage collection, road maintenance and plowing, street lighting and other services that the town either can't or won't provide. 

From my research Farmington Woods appears to be the only tax district in the state that owns a private golf course. As a matter of fact, the district was created to purchase the golf course in the first place around 1985. Of course they provide garbage collection, road maintenance, plowing, street lighting and other services not provided by the town.The advantage for residents is that taxes paid to the district can be written off on tax returns.  The disadvantage is that unlike recreational districts that provide beaches and water amenities for their residents, FW residents must pay a rather large fee to become members of a private course.

This arrangement worked out pretty well when the golf operation was making a profit and the tax district did not have to contribute funds for the upkeep of golf infrastructure. Unfortunately for non-golfing residents the downturn in golf participation not only here at FW, but worldwide, (according to KPMG's Golf Benchmark Survey 2010) is having a negative fiscal effect on the residents who pay the condo fees and district taxes to keep the course operating.

And unfortunately for residents in these uncertain economic times,the district has decided to issue two bonds totaling $4M payable over twenty years ($6.6M with interest) to improve access to the clubhouse and replace the course irrigation system. This is the other thing tax districts can do: issue bonds. Of course that raises taxes, in this case as much as 18%, so that in the future we will be facing an even greater financial burden than we are now. When you consider the declining popularity of golf and the effects of the economic downturn on those who play the game it really begs the question. Why now?

Comments? You're welcome to email me at 2chewman@gmail.com.

IT'S DEJA VU ALL OVER AGAIN!

When trying to determine a course of action it's always good to see if the particular strategy you're contemplating has been tried before and if so, how it ultimately worked out. In the case of the FW Tax District bonding plans for upgrading access to the clubhouse and golf course infrastructure there is in fact a precedent.

During the mid-80's problems arose when the developer tried to sell the golf course without giving the residents the "right of first refusal". The resident group ultimately won a sum of money in a lawsuit but decided that rather than spend what they had received to purchase the course they would float a bond for a million dollars and finance it over 20 years. The Master Association offices were also built with this money.

At the time FW consisted of 600 units with roughly 30% resident participation in golf. Even with that relatively high percentage of residents involved with golf, the non-golfing residents had to be persuaded to go along with paying off the golf course with a portion of their taxes. After receiving promises that there would never be an assessment for the course and being told that taxes paid to the newly formed Tax District could be written off on their income taxes, the bond vote passed by a slim majority.

And how did that work out? Well, for most of the twenty years whether you played golf or not an average of $100 a year of your district taxes were going to pay off the debt. As for operational expenses the golf course itself was self-sustaining with enough paying members to keep it that way.

And then came the 2000's. By most estimates the number of golfers actively playing the sport dropped by almost 10% in the first ten years of the 21st century. This ultimately had an effect on golf participation at FW. By 2005 membership had dropped to 13.4% of residents and the golf course was losing its ability to pay for itself. In that year the proposed tax district budget had $68,500 earmarked for sand traps, tree removal and repair of irrigation on the course. (They had also approved $20,000 for a new outdoor bathroom the year before.)

And how did the non-golfing residents respond to this? It gets interesting. 2005 also happened to be the year the bond was finally paid off and most thought that the $100,000 a year going to the bond would now go to making improvements such as additional sidewalks and other upgrades to the overall community.When word got out that the tax district was going to spend $68,500 (plus $20,000 for the bathroom) a resident committee did their best to remind the community that golf was supposed to be self-sustaining and not supported by resident condominium fees or district taxes. They urged residents to vote no on the budget.

They did not prevail, however; the board convinced residents that the golf course was the thing keeping property values up at FW then, and folks continue to believe it to this day, three years after the real estate bubble burst in 2009. (The opinion of outside brokers  at present, however, is that a failing golf course and increasing fees actually lower property values.)  In the years that followed the Golf Club continued to lose members and other golf related expenses were charged to the non-golfing residents of FW through association fees.

Finally, in 2009 the Ad-Hoc Select Committee to Study Golf revealed that the Golf Operation had lost money in five of the six previous years yet still came to the conclusion that the only feasible use for the golf course was just that, a golf course. It wasn't feasible to lease it or use it as a tree or wind farm. The open space option was ruled out because it was deemed to be more expensive than operating the golf course. Selling it was not even mentioned. The committee's final recommendation was basically to have residents support the course until someone came up with a better idea.

And that brings us to today. Golf membership has declined steadily since 2005; resident golfers number around 100, roughly 9% of total residents. The board held focus groups in 2011 to see what residents thought were important to the long term health of FW as a community. Many things were suggested, but one thing came through loud and clear: residents overwhelmingly want the golf course to be self-sustaining. They don't want to continue supporting a golf course that is losing money, especially since they are not the ones using it.

Now, in 2012 the tax district's solution to the problem is to float two bonds totaling $4M, half of which will go to replace the irrigation system on a golf course that in ten years could have a dozen members for all anyone knows. There was no feasibility study or cost/benefit analysis done to determine if this is money worth investing. No one knows for sure what the future holds for Golf Club membership. One thing is for sure, if the bonds pass we will be locked in for twenty years just like the folks from the mid 1980's. And how did that work out for them? Depends on who you are.

Comments? You're welcome to email me at 2chewman@gmail.com.