Sharpen the pencil

Even though there are few surprises in golf course superintendents’ maintenance budgets from year to year, they still deal with line-item increases. This year, fuel seems to be the biggest increase for almost every superintendent. To compensate for increases, some line items are decreased to come up with budgets that owners approve.

Chris Gaughn, CGCS, at the private, 18-hole Eugene (Ore.) Country Club, has a maintenance budget of $919,000. Gaughn says the budget increases a little bit (2 or 3 percent) each year. Even though members would give him anything he wanted, Gaughn says his budget is less than most private clubs in the area.

“I don’t spend as much on sand and fungicides,” he says. “Sometimes members don’t think I’m spending enough money on the budget.”

Overall, Gaughn, who budgets in May, doesn’t think his budget will change much this year compared with last. However, gas and oil is budgeted for the biggest increase at 28 percent. Gaughn uses local suppliers for gas and oil and has multiple options from where to buy, but that purchase is handled mostly by the mechanic.

Rick Fiscus, golf course superintendent at West Chase Golf Club in Brownsburg, Ind., also budgeted for a considerable increase in fuel and oil – about 15 percent – and he says there’s not much he can do about it.

“Fuel went from $2.00 [a gallon] delivered to $2.50,” he says. “I can’t mow less. It’s an area in which we have to increase play or eat the cost because I need to maintain the course at a certain level. We’ve held the line on greens fees for the past four years.

“I shop distributors monthly for oil and gas,” he adds. “All of my petroleum for hydraulics increased 17 percent, and fuel will increase about 5 percent. But it’s hard to get comfortable with a price for the year because the price fluctuates so often. There was a 40-percent swing from April to July in 2005 for fuel and oil.”

In McKinney, Texas, Mark Johnson, CGCS, at the 18-hole TPC at Craig Ranch, says the most obvious cost increase in his budget for 2006 is fuel cost. Johnson budgeted a 12- to 13-percent increased compared with 2005. He’s also paying more per gallon for diesel and gas. But he says the bottom dollar isn’t huge compared to other line items such as labor.

Maintenance budgets are often determined by golfers' expectations.

Johnson budgeted a 10-percent increase for fertilizer and a 5-percent increase for irrigation supplies. The increases are because those products are manufactured with petroleum.

The biggest budget increase for Fiscus is fertilizer at 12 percent. He says it could increase as much as 30 percent, and fertilizer companies are telling him the cost of natural gas has increased and is the reason for the increased price of fertilizer.

Another considerable increase in Gaughn’s budget is topdressing sand. He budgeted a 33-percent increase because he recently finished a drainage upgrade, and he’ll continue to topdress the areas that have been upgraded to keep the profile firm.

Gaughn is budgeting a 15-percent increase for utilities, which is a bigger increase than in years past. Normally, that part of the budget increases slowly, he says. Utilities are the third biggest budget increase for Fiscus, but it’s a small item that doesn’t mean much, he says. The pump station and water well use most of the electricity.

The biggest dollar value in Johnson’s budget is payroll at $40,000. That increased 3 percent.

Johnson, whose budget increased from $659,000 to $759,000, says the budget increase is based on the increased cost of fuel, fertilizer and irrigations supplies ($70,000), as well as payroll ($30,000).

Because the TPC course opened in September of 2004, the 2005 budget had some extras, and the 2006 budget is more accurate, Johnson says.

The rest of the areas of Gaughn’s budget increase insignificantly – anywhere from 1 percent to 4 percent. Labor, which is 60 percent to 70 percent of his budget, is expected to increase 3 percent this year.

At Eugene (Ore.) Country Club, petroleum is the largest increase in the budget - jumping 28 percent from 2005 to 2006.

“Much of the budget is predictable because I’ve been doing this a long time,” he says. “The course is the main thing to the golfers, and the clubhouse isn’t as important. For example, we have lakes that are shallow and need to be sealed, but that’s a $1-million job the members don’t want to touch right now.”

Compensating
To combat the increases, superintendents are balancing their budgets with line-item decreases. Gaughn’s biggest cutback, at 28 percent, was uniforms. He had been using a service but now the staff’s uniforms are washed at the club. Each employee receives five shirts and two pairs of pants. Gaughn was spending $9,000 a year, and this year he budgeted $6,000.

Other declines in Gaughn’s budget include landscaping at 28 percent.

“I was tracking what [the landscaper] was spending, and he wasn’t spending what was budgeted,” he says. “We weren’t spending that much on plants. We’re using a lot of perennials and not as many annuals.”

Gaughn also reduced money spent on tree trimming. The budget was reduced from $42,000 to $32,000 because a tree-trimming cycle was completed.

Johnson also reduced the golf course landscaping line item. His declined 15 percent. He and his staff converted four acres of mulch beds to grass.

Water is another line item Johnson budgeted to decline. He says he’s hoping there won’t be a repeat of last year’s drought.

All the bids Fiscus received on the chemical side were very small increases, if any, but he purchases numerous generic products to help offset the increase in fertilizer.

“I’ve actually decrease the chemical end of the cost but haven’t decreased applications,” he says. “I can put up with a touch of dollar spot to save $2,000.”

Fiscus also cut back two full-time workers to part time, but the savings is minimal, he says.

“I rolled back on the crew a bit to offset the fuel and oil price increases,” he says. “My owner came to me and asked me to hold the line on certain items. The owner hasn’t asked for a decrease with anything, but I try to stay a step ahead of him.”

Eugene (Ore.) Country Club's budget increases a little bit each year.

Pricing
Even though superintendents deal with line-item increases and decreases, there are items that remain relatively the same year after year. Those include cleaning supplies, tools, flags, cups, sticks, ball washers – the stock items that increase about 2 percent a year. The cost increase is mostly related to shipping, according to Fiscus.

Fiscus also says irrigation and drainage, although expensive, remain consistent each year. Despite that, the price for machine parts is one big complaint he says superintendents have.

“[The manufacturers] have us over a barrel no matter what the color – green, orange or red,” he says. “We can’t go to Wal-Mart to buy a part. I’ve even bought aftermarket parts, and that has helped out, but you’re still not getting an [original equipment manufacturer] part. The equipment parts continue to rise. I can’t sustain an $80 seal that’s two inches in diameter. A lot of superintendents lease their equipment. We purchased our equipment, and luckily it’s paid for, so I’m hoping to get a few more years out of them.”

The cost of chemicals, fertilizer, gas and oil change a lot, but superintendents have no control over those costs, Fiscus says.

“I did research and priced fuel and oil pretty well but still went over,” he says. “Utilities, too, have increased because of deregulation. Price uncertainty and fluctuation can cause difficulty when budgeting.”

Capital expenditures
Aside from maintenance, superintendents capital expenditure budgets can fluctuate as well. Gaughn’s cap-ex budget is between $100,000 and $250,000. Part of that budget is being spent to contract-out the design and shaping of 10 new tees. This is being done because Gaughn is trying to keep up with technology. The course is on a tight piece of land, and some of the tees are becoming irrelevant because golfers are hitting the ball further.

Gaughn also will spend between $75,000 and $100,000 to replace bunker sand in 2007 as he prepares to host the Junior Amateur in 2008.

Johnson says he doesn’t get a lot of capital expenditure money because the TPC at Craig Ranch is two years old. However, he did get some cap-ex money for a piece of equipment and to pour a slab as a base for an organic dump.

Expectations
Even though budgets are different, they all come down to expectations related to course conditions. Johnson started budgeting in July and wasn’t finished until September.

“What I noticed about the budget process was that the g.m. and his bosses were scrutinizing everything,” he says. “We broke down every job task to determine how many man-hours it takes to complete. They were looking at the product for the golfers and were asking if we were overproducing or underproducing the product.

“We’re a high-end private club expected to produce,” he adds. “We have high-expectations daily because of our association with the PGA Tour. A public course with $50 green fees will base its budget on the expectations of their golfers. They might use triplex greens mowers instead of double-cut hand mowing the greens like we do.” GCN