The business-minded superintendent

Carlos Arraya remembers walking up the stairs at Hawk’s Nest Golf Club in Vero Beach, Florida, a binder stuffed with spreadsheets tucked under an arm. After four months in charge as the interim general manager, he had received word that club officials had decided on a more permanent hire and he was bringing his work straight to the top, handing it over to whomever his successor might be.

After Arraya placed the binder on a desk, one of those officials told him they were about to introduce the new GM. Arraya waited, but nobody else entered the room.

“Where is he?” Arraya asked, confused.

“You’re the guy,” he was told. “We’d love for you to do it if you’re interested.”

Arraya was stunned. Just 30 years old at the time, he had filled the position out of necessity after his predecessor had departed near the start of the financial crisis that swelled into the Great Recession. Club members were leaving. The dues line was dropping. Expenses were still the same if not bumping up a bit. Hawk’s Nest would soon need to trim its budget by more than half a million dollars. The club ultimately survived — and later thrived — while so many others shuttered forever, but none of that was guaranteed when Arraya received the job offer. Was he ready?

What do you think?

“I don’t think you’re ever ready,” says Arraya, who wound up learning more than enough to remain the general manager at Hawk’s Nest for almost six years and today is the general manager and CEO at Bellerive Country Club just outside St. Louis. “I think you think you can do it — we all have ambitions — but I did not have the qualifications in 2008. I didn’t think I was ready, but I also wasn’t afraid of becoming uncomfortable and pushing the limits of what I could do.”

Arraya is — at least stereotypically — a rarity in the golf course maintenance world: A turf pro who embraced the business side of the industry, becoming as comfortable in a suit as he once was in work pants, boots and the occasional round of rain gear. But he is not alone. Arraya shifted over initially out of necessity. Others have moved into the business of the game, adding to their skillset and their résumé, because of curiosity, or ambition, or just to save some extra money on annual and quarterly taxes.

Business and finances beyond the annual maintenance budget might seem overwhelming. Arraya says the first time he looked over club finances, “I was so oblivious to it that I wasn’t afraid of it.” He didn’t know what he didn’t know. Even now, three years after his most recent promotion, he still doesn’t know everything. Do you know what you don’t know? And how can you make the move?

“It’s just like turf,” Arraya says. “You didn’t know how to grow grass. You didn’t know the difference between a systemic fungicide and a contact fungicide, but you studied it. Same thing with the financials. You take a label and you read. Financials are just numbers. If you don’t understand something, you ask questions. The best grass growers, the best operators, the best leaders, ask questions. There are people around here who are tired of me asking questions. I ask questions even of the best members. Some of the best CEOs in St. Louis and the Midwest are here. You ask those questions, you learn a lot.

“There are just a lot of moving parts. When you’re in operations as a golf course super and then you have to become a strategic thinker and leader, it’s much different.”

Take results, for example. “There’s an immediacy to operations,” Arraya says. “Whether it’s food and beverage, rackets, or golf, you see the difference right away. When you’re running a business, you don’t see those numbers right away like when you’re on the operations side. It’s not till you’re either forecasting the change or you experience the change on your next financial statement.

“You never feel like you get anything done when you’re a CEO.”

PJ Salter isn’t a CEO — yet — but he has made a similar move at Riviera Country Club in Coral Gables, Florida, just south of downtown Miami, where he was director of agronomy and is now director of facilities and grounds maintenance. He still oversees golf course maintenance and is now in charge of building maintenance and housekeeping, too.

A precedent of sorts was set by Eric von Hofen, a former director of agronomy and clubhouse operations at Riviera who mentored Salter earlier in their careers. After the director of inside maintenance and engineering left the club, von Hofen tossed his hat in the proverbial ring and landed more responsibility. Years later, Salter wound up in weekly meetings focused on rebuilding the clubhouse, and “learned a ton about construction.” After the director of building maintenance left in 2022, Salter, like von Hofen before him, talked with general manager Mark Snure and applied for the open position. He then received the promotion.

“The early months were chaotic,” Salter says — but not because of any inexperience. “Within the first month, a typical August thunderstorm came through, the clubhouse took a direct shot of lightning, and it fried a bunch of the electrical systems. Internet, phone systems, connectivity were all down.” In addition to the turf — where he relies on superintendent Drew Nottenkamper, first assistant Mike Smith and second assistant Mike Heinz — Salter was now responsible for repairing most of the club’s major tech systems. “We don’t have a full-time, in-house IT guy, so, effectively, I managed the IT and the company that we sub out some of that management to. It was a little bit stressful.”

Salter turned to a trio of indoor experts — chief engineer Jose Diaz and engineering managers Ariel Milan and Nelson Tanquero — and leaned on the skills he learned maintaining turf.

“I tried to retain competent people, give them the support they need to do their jobs, and stay out of the way,” he says. “A lot of superintendents — and I was this way up until this promotion — a lot of us sometimes think that our success is based on the fact that we are physically on the golf course 60 hours a week and we know where every inch of grass is. But when you have the chance to grow into a bigger role, in ways very humbling, you realize that’s only possible because you’re fortunate enough to have such great people in all departments, helping you execute the plan.”

Salter has always loved numbers — “I like problems that have exact answers,” he says — and he remembers faring quite well in Golf Course Budgeting for Superintendents while studying crop and soil sciences at Michigan State. Earlier in his career, he would work through math equations related to how much product to spray, study operating budgets, and eventually attend green committee meetings. Almost two decades into his career and two years into his new position, everything seems to have slowed down. He compares it a little to being a fifth-year quarterback. As a proud Spartan, Salter says, “I’m hoping I’m like Kirk Cousins” — who did, in fact, spend five seasons in East Lansing before his long run in the NFL.

And, of course, working with the right people is important.

“A lot of times in the golf course management and club management world, you have a group of directors in different departments — a controller, a director of finance, a director of accounting — and they play a huge role in building budgets and managing expenditures across all the different departments so that the club is profitable, or at least breaking even. … What Eric really showed me is how to look at budgets and understand budgets, how to look at how you spend things one year, how fertilizer or pesticide management is going to change the next year, and then how you budget for that. You develop that skill that makes you more valuable to the organization.

Not every business-savvy superintendent works at private clubs, though. Take Scott Rohlfsen, for instance.

A superintendent for more than 20 years, Rohlfsen has worked almost exclusively at a variety of 9-hole golf courses across Iowa. He has worked at more than one course constantly since 2007. He has worked for five courses since 2012. Rohlfsen once worked for each course, but in 2017 he formally launched Rohlfsen Golf, LLC, and now handles each course as an independent contractor.

“I’m the superintendent of the golf course, but I’m not an employee of the golf course. It’s just kind of a unique situation,” Rohlfsen says. “I had wanted to do it for a long time, but after talking to the golf courses where I worked, because I was just their employee, they could just pay me gross wages and not have to do employee taxes and stuff like that,” Rohlfsen says. “I have to pay my own liability insurance, which is really cheap, like $300 a year, and, because I’m not an employee, I have to carry my own pesticide applicator’s license.”

Setting up his LLC cost Rohlfsen about $600. He made the move “mostly for tax purposes,” he says. “It just made it easier to say I have this corporation, and then I could file tax write-offs on my mileage. It just got messy to be an employee of each course.”

The logistics of managing five different courses with five different ownerships is complicated, but Rohlfsen manages everything easily enough in his head. He works with a team of 33 this season — with none working on more than one course — most of whom handle one job per day. Rohlfsen hired each of them himself, but all are technically employees of the course rather than Rohlfsen. He sends out schedules for the week ahead on Sunday nights. He does all this, incredibly, without spreadsheets. “I don’t do spreadsheets,” he says. “I wish I did, I always liked spreadsheets, but I just don’t have time.”

Back to business: Perhaps the biggest professional perk for Rohlfsen Golf, LLC, is trimming each of his five annual maintenance budgets by being able to purchase directly from suppliers at a discount. Buy more, save more — and even more by buying most of his product via EOPs.

Rohlfsen has explored switching his LLC to an S corporation — LLCs, or limited liability corporations are better for maximizing flexibility in how businesses are run, while S corps are better for smaller corporations and allow only for a certain number of shareholders — but the move didn’t make financial sense because he doesn’t purchase large equipment. He uses and maintains equipment owned by and housed at each of the five courses. “It’s more involved and it just doesn’t seem worth it,” he says. “It might have saved me $500. If I actually owned equipment, it would be a no-brainer.”

Right now, Rohlfsen has no plans to build out and bring in other employees, but “the framework is there for expansion if needed, if I want to. But everything’s pretty cozy right now.

“Ultimately, it’s just a good feeling to know I got my own company. It looks nice to say you have a company. It’s not just Scott from Willow Run Country Club.”

Matt LaWell is Golf Course Industry’s managing editor.

Maintenance budgeting: Unsolved mysteries

Golf financial guru Larry Hirsh analyzes the finances of producing the product customers expect from a big-picture perspective.

The biggest expense a golf club often has is golf course maintenance. Because agronomy is a science, few of us who play the game, including green committees, chairpersons and even sometimes golf course owners, really understand the intricacies of golf course maintenance. It's a somewhat mysterious process that evokes comparison from one club to the next and criticism (one way or the other) when things go sour, whether agronomically, economically or even climatologically.

Accordingly, maintenance budgeting is sometimes uninformed, and decisions are made that may not be in the best interests of the care and feeding of the golf course, or the economics of the operation. That said, many golfers see themselves as experts and love to brag about their course being the best, even if the cost is outrageous and the agronomics may not be sound.

Earlier this year, Penn State professor Brad Jakubowski reached out to me in preparation for a presentation on budgeting he made at the GCSAA Conference and Trade Show. We talked about the elements of a golf course maintenance budget and the dynamics that can occur to disrupt the process resulting in potentially inefficient maintenance programs and funding. Sometimes clubs spend too little, sometimes too much, and sometimes they do things based on revenues rather than agronomics.

The maintenance budgeting process can have a profound impact on the financial success and market value of the club. In the simplest terms, if the maintenance budget can be reduced by $50,000, the relevant capitalization rate is 10 percent and there’s no impact on revenue from the reduction, the market value would theoretically be increased by $500,000.

What are the elements of a maintenance budget warranting attention?

First, we like to differentiate between operating expenses and capital expenses. Operating expenses are those that occur regularly (labor, water, materials, equipment maintenance, chemicals, etc.). Capital includes things like equipment, infrastructure, and the addition or renovation of facilities or elements. The most accurate method of developing a maintenance budget is to include an annualized cost of capital expenditures for the clearest picture of the true cost of maintaining the golf course.

There are numerous variables that exist, and an essential element of any maintenance budget process is having a written golf course maintenance plan. Such a document becomes a “go to” common ground for both the superintendent and the committee/ownership that describes in detail how the golf course is to be maintained and presented. If ownership seeks to cut dollars from the budget, the superintendent can show options of how the plan might change and what would look different to the golfer. For example, if the goal is to cut expenses by a certain amount, the plan can be modified to show what components of the program will either be changed or eliminated. Conversely, the same plan can have elements added showing a corresponding cost should a club seek to enhance or expand the level of maintenance.

There are numerous elements included in a golf course maintenance plan. Cutting heights, frequency of mowing and bunker maintenance, aerification scheduling, and desired green speeds are among the most prominent. Not only are there agronomic considerations to each of these, but economic as well. For instance, agronomists recommend aerification twice per year, in full-growing season, yet sometimes courses will aerify earlier or later to maximize revenues and minimize disruption. Increased green speeds usually means higher cost, thus the balancing act.

I like to talk about the three Cs:

• Communication
• Consistency
• Culture

Communication between superintendent and club ownership/leadership is essential. In a constant balancing act between conditions and costs, the course superintendent (just like the general manager and golf professional) needs to be able to “speak truth to power” and ownership/leadership needs to be able to listen. Not everyone has the personality to do this and not everyone is willing to listen. The simple concept of self-preservation (maintaining one’s employment) often interferes with facts. This can also work in reverse, where the superintendent has the confidence of ownership/leadership and can take advantage by inflating the budget and costs beyond the most appropriate level for the conditions desired and as described in the plan.

Given that at most member-owned clubs green chairs and committee members have limited (if any) knowledge about agronomy, it’s incumbent upon them to self-educate and retain independent consultants when necessary to monitor spending. The club’s focus on either the best conditions or the most cost-effective program can often dictate how this all works out.

Consistency is important so golfers know what to expect on a regular basis. The culture of any club will dictate to some degree the level of conditioning based on the willingness of the membership or patrons to pay for it.

The superintendent’s role is one of advocacy for the agronomic health of the golf course. Most consider themselves stewards of the land and course, and seek to be environmentally responsible. Ownership and leadership’s role is to advocate for presenting the best product possible within appropriate and realistic budgetary criteria, hopefully while also considering the environment.

Capital improvements should be justified by evaluating their contribution to overall value, either market value for sale or value to the membership. The club’s culture is essential to understand in order to match the level of desired conditions with the membership's (or patrons’) willingness to pay for it. We’ve observed clubs where the cost of maintenance is more than $300 per round! We've also seen some where it’s less than $10 per round. The many variables that impact the development of golf course maintenance budgets include (but aren’t limited to): climate, culture, ownership (members vs. investors), maintenance facilities and equipment, and infrastructure.

The three Cs, which should start with a written maintenance plan, are essential for sound budgeting. It's important for both ownership and management (superintendent) to “stay ahead of the airplane” and anticipate upcoming costs and events. If the irrigation system is 22 years old and still functioning, they should still be planning for its replacement within the next four to eight years.

The key is to get the best “bang for the buck.” Playing conditions are the most important part of the golfer experience in most cases. It’s an essential element of long-term financial success for any club, public or private. Playing conditions impact the entire operation. Like a speaker I once heard said, "If the greens are slow, the hamburger tastes bad." It's true. Developing an appropriate maintenance budget is a collaborative effort between all the stakeholders. Solicit their input and consider it seriously.

Larry Hirsh is the president of Golf Property Analysts and has executed assignments on more than 3,000 courses in the United States and Canada. He is a certified general appraiser, licensed real estate broker and author.