12/07/2005

On Management...

The golf courses in Great Falls are bleeding money. This is, apparently, due to two facts.

First, there was a 2.6 million dollar remodel done a few years ago that saddled the courses with huge debt service. Second, our labor costs are higher than almost any other golf course in the region.

George Geise of the Tribune wrote a nice article pointing out these facts. He told us that golf courses in Billings, Butte, Missoula, and Helena all turned a profit, while we are losing $200,000.00 per year. Even a moron like me could read the article and see that wage costs play a role in the deficit. We use union labor; the other courses don't.

So, what does the City do? They commissioned a $24,000.00 consultants' study. And the study? Reduce labor costs! Treat the golf courses like a business!

"The debt service is a major contribution to this situation," said the consultant. Gee, I wonder who made the decision to borrow 2.6 million to upgrade the golf courses?

Did anyone else notice the juxtaposition of the golf course story this morning with the story on Manager Lawton's evaluation? Now, granted, he didn't get a raise this year, but he did get an extra $2,000.00 contributed to his retirement. (They just had to give him something) And he got the City Commission fawning all over him: "We as a commission feel he's done an excellent job," said outgoing Mayor Randy Gray. "Commissioner Diane Jovick-Kuntz said commissioners are pleased by the performance of Lawton..."

So, we're losing our asses on golfing when all the other communities in the state seem to be able to make money, we lost over half a million dollars on Explore the Big Sky (after crediting hundreds of thousands of dollars of 'revenue' from taxpayer funded grants), we're spending money like drunken sailors, lurching toward buying a utility that doesn't want to be bought, and this is an "excellent" job?

Where's the accountability? Someone was presiding when the City decided to spend $2.6 million on the golf course? Let's see their projections. They were obviously faulty, right? If someone convinces me to borrow and spend $2.6 million on faulty projections in my business, that person is out of a job. Why, because I'm mean? No, because my business is bankrupt! So, who was it? Are they still here? Who was watching the farm?

It's not that $24,000.00 is going to bankrupt us, and I recognize that specialized knowledge can be a good thing, but don't we pay City staff to manage our assets? There's no one down at the Civic Center who could have crunched these numbers and proposed a method to reduce payroll costs? What are we paying them for then?

5 comments:

dona stebbins said...

One of the issues the consultant brought up was that the "accounting system" was "loosey-goosey," the equivalent of running a business out of a "cigar box." Those were his exact words. He stressed the need for a Point of Sale system.
THOSE comments didn't make it into the Tribune article, did they?
For heaven's sake, didn't this City learn anything from the Tom Sullivan fiasco?
I don't think the labor costs are as huge a factor as the possibility of "shrinkage" in the cash flow.
Were you aware that ALL business at both courses is handled on a cash basis? They don't even take credit cards!
What's wrong with this picture?

Anonymous said...

They might have a bad accounting system, but there's an even worse accountability system!

a-fire-fly said...

Not to beat a dead horse, but the city had similar problems with Horse Racing. It confounds me that the City wants to get into all kinds of "business" ventures, but cannot control the ones that they already run. The first step in any business is a PLAN. Then you need MONEY. And a BUDGET. We have a sign down at the shop that says "You Must take in More than you pay out!"

Treasure State Jew said...

How is an increased $2 thousand dollars paid into a retirement plan not a pay raise?

He may not see the money now, but we are certainly paying it for his benefit. By any definition, that is a RAISE.

Treasure State Jew said...

A POS system might help, but should not be looked to as a panacea. POS systems can be gamed, as can manual systems.

However revenue is collected, the only real answer is that management must be proactive to keep the system accountable.

If a POS system is implemented, then I trust that the city will not go overboard. The golf courses do not need a multi-thousand dollar system. The courses could be run with something as bare-bones as Quickbooks wired into cash registers. Again, management is more important then technology here.