Contributor Opinion by Art Stigile: Golf Subsidies 10 Times Greater Than Swim Center Subsidy
Sep 13, 2010 10:56 - 5 Comments
Posted by: Cindy Cotte Griffiths
Department: Contributor Opinion,Opinion
Tags: by Art Stigile, Opinion, redgate
Department: Contributor Opinion,Opinion
Tags: by Art Stigile, Opinion, redgate
This Contributor Opinion is by Art Stigile.
For the past two years, I’ve been challenging golfers to answer a simple question — why should Rockville taxpayers provide a $24 subsidy for each round of golf played at RedGate, when golfers are supposed to be paying the full costs?
A common answer from golfers’ is that we subsidize swimming, but we can’t see the amount because the Swim Center subsidy is hidden away in the General Fund. In contrast, the Golf Course stands alone in a separate enterprise fund where the costs are transparent. If you pull the Swim Center out of the General Fund and compared apples to apples, the argument goes, you would see the Swim Center subsidy.
Well, I like apples, so let’s do the math.
For RedGate, the total subsidy for the current fiscal year is the sum of the projected deficit ($673,990) and the 50 percent reduction in the charge for central administrative expenses ($165,750), for a total cost to taxpayers of $893,740. Divide this amount by the projected number of rounds played (roughly 35,000) to get the estimated subsidy of $24 per round.
The calculation of the Swim Center subsidy is a bit more complicated because of how the City accounts for it, but the formula is the same. According to page 14-44 of the FY 2011 Adopted Budget, the Swim Center will have $1.694 million of operating revenue in FY 2011 and $1.730 million of operating expenditures, for a net operating deficit of $36,430.
To be comparable to RedGate’s bottom line, you have to add debt service ($169,762), depreciation ($70,745), and administrative overhead expenses ($398,386) to the Swim Center’s operating deficit. These amounts do not appear in the regular budget document, but they are provided in a March 26, 2010 memo from Gavin Cohen to Mayor and Council. The memo appears as attachment G to agenda item #10, “RedGate Business Plan (Plan) Financial Update”, June 21, 2010 meeting of Mayor and Council, page G-2. The amounts are for FY 2009, but they are not likely to be much different for FY 2011. Together, they sum to $638,893, increasing the Swim Center’s total cost to taxpayers to $675,323.
This is the total taxpayer subsidy for the Swim Center. To calculate the subsidy per visit, you have to know the number of visits. In response to my request, the City Manager provided me by email with an estimate of the number of visits in FY 2010. ( Mayor and Council and Joe Jordan, Chair of the RedGate Advisory Committee, were copied.) The number includes 113,378 visits by people using membership cards, 53,206 paid visits, 57,002 for classes, 58,792 for the RMSC Swim Team and the Rockville Rays Swim Team, and some other odds and ends. Together they add to 296,251 visits. I’ll assume the same number for FY 2011.
When you divide the Swim Center deficit by the number of visits, you get a subsidy of $2.28. (For reference, the subsidy per visit in FY 2010 was approximately $2.50.)
To summarize, that’s $24 per visit to the Golf Course, $2.28 per visit to the Swim Center. That’s one-tenth the taxpayer subsidy per round of Golf Course.
Any way you look at it, that’s a lot of apples!
The next time someone uses the Swim Center to justify taxpayer subsidies for the Golf Course, remember these two numbers — $24 taxpayer subsidy per round of golf, which is 10 times greater than the Swim Center subsidy.
Art Stigile
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You make a good argument Art, but I’m scared what may happen to that property if the course is closed and sold.
For the other side of the story, that presents NOT ONLY the accounting issues but the business/environmental/historical side of this matter, please attend the Mayor and Council meeting tonight (9/13/10) to hear the The RedGate Advisory Group present it’s comprehensive and thoughtful analysis of the Redgate golf course situation.
You can also read their testimony online at the following link:
http://rockmail.rockvillemd.gov/clerk/egenda.nsf/d5c6a20307650f4a852572f9004d38b8/e0136044af8540548525775a006643d7!OpenDocument
I was at the Mayor and Council meeting last night. I was asked if I wanted to wear a sticker that said “Save Red Gate.” I declined. I said I would wear a sticker that said “Fund Red Gate” (there were none). Because that’s the real issue-how to fund it sufficiently so that it stops being such a drain on the city coffers.
There aren’t two “sides” to this story-one financial and one environmental-and pitting people against each other likes this creates a false and damaging conflict. Many speakers repeatedly called the city financial staff outright liars about their figures. I also don’t see that as an effective way to reach a solution regarding Red Gate.
Please, let us at least TRY and tell the truth in regards to what the citizen’s of Rockville and the Redgate Advisory Committee testified about last night at the Mayor and Council meeting. Nobody…absolutely nobody, called anyone a liar.
The only name calling happened when the lone person who came out against the golf course (there was overwhelming support for the golf course by the many citizens of Rockville who spoke during citizens forum last night) called the Redgate Advisory Committee’s accounting “crazy.”
I tried to find the term “crazy” in the GAAP guidlines and was unsuccessful.
Other than that, the meeting was very respectful and magnanimous with most people discussing the environmental issues, the community the golf course fosters, or ways to improve the business model so that it can become more profitable. As for the Redgate Advisory Board’s presentation, Joe Jordan said up front that he would not question or argue the numbers and he wanted to look at ways to improve the golf courses performance. The only thing he took exception with was how the city measures the average revenue per round and the way they compare it to the Montgomery County Revenue Authority’s golf courses, which measures it using all revenue, not just fees and cart rentals.
I think it is telling however, that Ms. Defino doesn’t realize that there are two sides to EVERY story and she is actually willing to argue the point? In her world apparently you either agree with her side of the story or you are labeled divisive and a creator of false and damaging conflicts.
Well Ms. Defino, if we could relay on the accuracy of your story telling, then maybe your world of one sided stories would be at least plausible. But by trying to label me as a divisive element, “pitting people against each other” you are doing a good job in proving that your story in this matter is pure fiction and should be treated as such.
Concerned citizens of Rockville, for the TRUTH in what took place at the Mayor and Council meeting last night, you can watch the meetings video online or read the minutes at:
http://www.rockvillemd.gov/government/mc/
SAVE REDGATE GOLF COURSE!
David-I believe there are at least three sides to every story, and I was suggesting that you need allies who can work together to “save” Red Gate beyond those who see this as an environmental issue without addressing the fiscal implications in a realistic way.
I was not referring to just you. I previously commented on the contributor piece that showed photos of green space at Red Gate and then said “this will all be gone,” when there are no current proposals to do any such thing. I also question how a purportedly independent advisory commitee, while still impanelled, could launch a petition drive that simplistically describes the options as “save” or close the golf course.
Many speakers said they did not believe the city’s numbers. One woman in particular, who was given a round of applause after her talk, did just that. For some reason, the link to watch the meeting on line isn’t working, otherwise I would spent the time to go through the whole thing and pick out her testimony.