Get Your Budget Increase

Over the years it is often said by club officials that golf course superintendents are always asking for more staff, more equipment and more money. Superintendents are trying to meet the expectations of their club members or course players. Here are a few helpful tips with a strategy to communicate your needs that will lead to the success of the facility.

A thorough analysis of the history and the current condition of the golf course operation is necessary. Start off with a history of your operational budget in recent years. If it is helpful, you may even want to go back to pre-2007 before the recession. It should be clear that belt tightening has taken place in the last decade. During that same time, it is highly likely that the expectations of golfers have risen. This may include overall manicuring, increased green speed, lesser tolerance for pests and bunker perfection.

Additionally, a review of equipment purchases should cover recent history. Is your facility aware that the average cost for a fleet of equipment is approximately $1.5 million? The average life expectancy of the equipment is 10 years and will vary by item and the number of hours it is used. Other factors include climate and whether equipment is stored inside. Logic would dictate that each year replacement equipment costs would be approximately $150,000. Of course, there are leasing options which are becoming quite popular.

While there never seems to be enough money for labor and equipment, there tends to be money for projects. Projects are things near and dear to golfers as they see the immediate satisfaction from a remodel or a bunker renovation. Somehow a new irrigation system at close to $2 million doesn’t create a warm and fuzzy feeling.

How decision makers think

My dad taught me that you must understand how people think to be successful. Never was this philosophy truer than when making requests for budget increases and equipment. The golf course operations department is but one area of the overall club budget. Many clubs look solely at the golf course operations as an expense item with no revenue. Believe me there is a connection between the condition of the golf course and green fees, guest fees, merchandise sales, and even food and beverage revenues. If you don’t believe that, then check the parking lot on a rainy day and see how many meals are served, or lose a few greens and see what happens to overall revenues. All too often superintendents do not look at the big picture of the club finances. Sadly, many are not informed of the overall financial condition of the club. They only know their own budget. Here are some factors to consider:

• Profit or loss
• Waiting list
• Full membership
• F&B sales
• Pro Shop merchandise sales
• Cart revenue
• Practice facility revenue

The connection between increased play (and revenue) should be an easy sell into added expense for maintenance and upkeep.

Understand the process for budget approval

To be successful, you need to be able to answer the following questions about how things are done at your facility:

• Who makes the decisions?
• Is it a process through the GM and then the board of directors? Essentially, the hierarchy at your facility and where the buck is eventually going to stop.
• Is it first reviewed by the club controller? Again, become familiar with the bath that your budget will travel during the approval process.
• Have you pre-sold your budget by letting the powers to be know there are some major expenses in the year ahead? It’s best for your budget to be bomb free.
• Is your budget number limited by cost of living? Educate yourself on outside economic factors and how those influence your proposed budget amount.
• Have expectations of golfers been calculated into increased expenses? Don’t leave the customer out of this equation.

While there never seems to be enough money for labor and equipment, there tends to be money for projects. Projects are things near and dear to golfers as they see the immediate satisfaction from a remodel or a bunker renovation.”

Zero-base budgeting

All too often I see superintendents increasing their budget categories by a multiplier like the Consumer Price Index, which might be 3 percent in a given year. However, costs for items can vary greatly from year to year. For example, take the cost of fuel. It could increase by as much as 25 percent due to shortages and the world economy. Water is a big-ticket budget item for many facilities and usage will vary depending upon weather conditions and pre-determined water agency pricing.

Many golf courses have labor as their highest budget line item. Forward-thinking superintendents have a solid breakdown for their staff in anticipation of the required time to do tasks that have been agreed upon by written maintenance standards. So, if your labor is in line, your overall budget should be fine.

There are items the superintendent has no control over. If your budget includes administrative expenses for health insurance and such, then the controller would surely have an estimate of what that number will be for the year ahead. Again, increases of 10 to 20 percent are not uncommon and can really throw off a budget that used a 3 percent CPI multiplier.

Have additional cultural practices been added to your overall maintenance plan? If so, calculate those in as well. In recent years, many courses have moved to a sand topdressing program on fairways. Depending on your source of sand, the cost can add $100,000 per year to your budget. With your zero-base budget, it is easier to make decisions on applying real costs to various programs golfers want.

Business & Golf

The best way to sell a budget is to speak the language your employers understand. Most people in governance are smart business people who are also golfers. When selling your budget, never lose sight of what is important to people. Does your request make good business sense? Know how to make your case.

For example, I was asked to roll greens three to four times per week a few years back. A quick response was to calculate:

• Purchase price of two sidewinder rollers
• Trailers for the rollers
• Purchase price of two blowers to remove clippings after rolling
• Utility vehicles to pull the trailers
• Fuel
• Maintenance
• Man-hours to complete the process X number of days requested per week
• Administrative overhead cost added to the above

This is the way to present a business proposal. Of course, the common refrain of “Why can’t you use your own people and equipment?” is the normal reply. The answer to that is simply: “Would you prefer that they do that work instead of raking bunkers, mowing rough and fixing ball marks?”

ROI

A common business term is Return on Investment or ROI. Sometimes it costs money to save money. A recent conversation with Steven Tucker indicated that by using a specific rough mower at his course the team reduced the time to mow the rough had been reduced from four days to three days a week. It is pretty easy to calculate the reduction of 25 percent labor and overhead and then the number of hours on the machine, which would increase its longevity or trade in value.

Consider the fact that the cost of an irrigation system which can be close to $2 million. During a recent visit to a course in California, I was told their water cost was $1 million per year. If the efficiency of the system could be increased by 20 percent, then the savings would be $200,000 per year and the new system would pay for itself in 10 years.

Nobody knows what the cost of water will be in 10 years, but my best guess is it will surely be higher. By the way, irrigation systems can be financed over time and done in segments. A pump station may be done and the piping and head installation later if costs are tight.

With recent drought afflicting many regions, golf courses have adopted water-saving strategies such as converting areas to native plants and grasses, and low-water use plants. Be careful about promising overall cost reduction on that expense as there will be additional labor for weeding, pruning and managing irrigation water emitters.

FINAL THOUGHTS

Remember, the best superintendents are not always the best grass growers, but they surely know how to get the resources they need for success. Conduct yourself as a professional in your preparation and presentation of budget information. You only have one chance to needed resources. Make your case. Follow up with previous successes when resources have been provided and the results that have been accomplished

Superintendents are sales people. We sell ourselves, our budgets and our product.

Bruce Williams, CGCS, is GCI’s senior contributing editor.