Posts Tagged ‘hill’

Golf Costs – 2014

Were you to OPRA expense and revenue information for Union County golf operations you would get 34 pages in pdf format of about 20,000 numbers in 4-point type and if you squinted you might be able to see the county claiming total revenues rose from $6,325,759 in 2013 to $7,621,400 in 2014 and, after reduction for expenses, net income rising from $162,062 in 2013 to $501,587 in 2014.

But after taking out some columns and leaving only the 2013/2014 Actual Summary for All Units to put into an spreadsheet a different story emerges.

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Breaking News: Union County Folds on Galloping Hill Tax Appeal

At the December 5, 2013 freeholder meeting there was an executive session to discuss Kenilworth taxing the Galloping Hill clubhouse/banquet center/office complex:
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Based on an interview with Kenilworth tax assessor Paul Parsons on the situation this is likely what went down:

  1. Kenilworth levied the $120,000 annual tax on only the third floor of the clubhouse with a real value of about $5 million.
  2. There is precedent for this tax as Ursino restaurant on the campus of Kean University was taxed by Union Township.  Kean’s appeal of the $50,000 amount is in tax court now.
  3. The county appealed Kenilworth’s tax and assessment for Galloping Hill on December 2.
  4. Kenilworth immediately filed a counter-appeal looking to levy the  tax on the entire $15 million building.
  5. On Wednesday Kenilworth received a call from County Counsel Robert Barry that the county was withdrawing their appeal on the condition that Kenilworth withdraw their counter-appeal.
  6. On Thursday it was done.

Union County, like any other taxpayer, can still appeal the tax in future years but there are bigger questions:

  • How is Union County even allowed to set upon a venture susceptible to taxation?
  • Are those bonds used to build the Galloping Hill clubhouse now taxable also?
  • Can other towns now tax selected county property that has nothing to do with proper governing and is being used for the private gain of selected insiders instead of for the general welfare of the public?  For example, if Kenilworth can tax the third floor of the Galloping Hill clubhouse would the city of Elizabeth have a case for taxing the sixth floor of the Union County Administration building?

Kenilworth Gets a Little Bit Back

When Union County decided to go into the wedding banquet/restaurant business there was the question of whether Kenilworth could now tax that Galloping Hill property and, if so, for how much….
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The answer is in, per the freeholder Agenda minutes for this Tuesday’s meeting (page 4 of 7):

Authorizing the County Manager to pay taxes for Galloping Hill Golf Course in the amount of an added assessment of $69,341.00 to the Borough of Kenilworth.

By Union County standards it’s not a lot of money to be noticeable (in the ballpark of what they pay outside counsel to handle a lawsuit* or what a Department Head might extort from vendors in a typical year) but for Kenilworth (or most other cities that have to pay taxes to Union County) every little bit helps.
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* Also on the agenda for this Tuesday:

Amending Resolution Number 2012-763, to increase the appropriation to LaCorte, Bundy, Varady & Kinsella, Union, New Jersey, in the matter entitled Paul Takacs v. UC, et als. in an amount not to exceed $10,000.00 for a sum not to exceed $75,000.00.

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OZ – The Parallel Universe Otherwise Known As Union County


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This is some of what I heard at the last freeholder debate: bad math and a poor justification for one party rule.

During last week’s freeholder debate Ms Kowalski was asked to state how she would use her position as freeholder to generate jobs in Union County and spur economic development.  Freeholder Kowalski proudly stated that Galloping Hills (GH)  has generated 130 jobs.  Freeholder Granados used 100 jobs. 
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Ms Kowalski did not qualify the jobs as being full- time, part-time, county or private sector.  That being said I will accept her number in order to demonstrate the absurdity of her statement. 

I subsequently learned at last Thursday’s freeholder meeting that County Manager Faella believes that the cost of GH is 25 million dollars.  I will use that number also, though I contend it does not factor in ALL soft and hard costs, in order to continue the dialog.  Using basic math, the cost per job at GH works out to be $192,307.69 per job created.  I submit that at that rate, Ms Kowalski’s method of job creation is fiscally unsustainable and will bankrupt the county. 

I also heard Freeholder Granados state: “If Berkeley Heights left the county, our taxes would increase and our large cities would fail”. 
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That seems to contradict the democratic position that all municipalities pay their fair share, none being taxed heavier than another.  His argument seems to imply and support the contention that some municipalities are subsidizing other municipalities.   A position the Democrats say has no basis in fact.
Unfortunately, Ms Kowalski’s and Mr Granados’ statements demonstrate once again their lack of credentials in all matters financial. 

A second question that was asked the candidates, centered on whether the issue of at-large vs. districting to be the fairer system for electing our county government.   Freeholder Carter responded by defending her pro at-large position by stating: “we (the Democratic Party?) represent everyone”.  Well maybe in her world but not in the one in which I vote.  Union County is clearly a one-party government run by the majority.  She went on to claim: “The system that we have has been working”.  Yes, it has worked  very well for sixteen years to preserve one-party Democratic rule.  I ask: If it is working so well, and such a fair system, then why are the taxpayers of Berkeley Heights contemplating succession? 

Despite Ms Carter’s protestations to the contrary, America is not a government meant to function as a one party system where the majority rules over the minority unchecked.  It is obvious that our system of electing our governing board is broken.  Any argument to the contrary is clearly partisan or delusional.

The challengers have it correct when they ask for an opportunity to be able to look behind the curtain and participate on an equal footing.  Districting would help to safe guard minority rights against the tyranny of the majority.

Reasons for UCIA To Run Golf Operations

And maybe even more.  For now it’s Resolution No. 52-2013:

 ucia golf reso

Questions:
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Paying to be Thirty-three

Since 2009 Union County has paid over $35,000 to New Jersey Monthly for what appears to be Runnells-related ads but it did buy them a feature story in the July issue on the 40 best public golf courses in New Jersey.  Galloping Hill came in at number 33 and Ash Brook was number 36.  There were 32 other courses in 13 other counties who did not spend (supposedly) $17.6 million on their operations who still came out ahead of the  Galloping Hill money pit and even Ash Brook, without tens of millions of dollars being sunk into it, managed to come within 3 slots of Galloping Hill.

But the interesting aspect of this publicity was the machinations that the NJ Monthly staff had to go through, from distractions to outright lying, to make their puff piece fly.  Some excerpts form the article with (my comments):

The selection of Galloping Hill—a Union County course where registered residents can play 18 holes on a weekend for just $31 ($47 with cart)—is the fruit of a rare public-private partnership: Union County; the NJSGA; Kemper Sports, a leading golf course management company; and TaylorMade, the world’s No. 1 golf-equipment maker, have together brought about a stunning turnaround for a course that just seven years ago was an embarrassment  (like every other area that is within the direct control of this dysfunctional system of governance) .

Maintenance on the 27-hole layout was slipshod….Galloping Hill in the early 2000s “was being run like a park,” says Armando Sanchez, who was hired as Union County’s director of golf operations in 2008. “The attitude was, ‘If we don’t cut the greens today, we’ll cut them tomorrow.’” (2008: 11 years into total Democrat control and 7 years into the Devanney era.  Was it Bush’s fault?)

(The next four paragraphs are on the food in a restaurant and banquet center that was still months from opening at press time.)

“When golfers come to Galloping Hill now,” Sanchez points out, “they receive treatment they usually see only at high-end daily-fee and private courses. But most important, they will be doing so at very affordable prices.” (Since Union County taxpayers will be squeezed for the millions of dollars this fiasco will lose every year.)

In 1995, the county hired prominent New Jersey-based golf architect Stephen Kay to renovate Galloping Hill. The project, completed in 2000, used three different contractors, of whom the first two had little or no golf experience. In the end, says one veteran observer, Galloping Hill got only “a Band-Aid.” (So what were the first two contractors experienced in? Political donations?)

By 2007, Galloping Hill—far from being ready to wrest the most prestigious state championship from the private clubs—was barely holding on. That year, for the first time, the Union County Board of Chosen Freeholders examined the economics of its three golf courses separately from the operation of the Department of Parks and Recreation. It discovered that golf was losing about $500,000 a year. (They lied.)

Devanney brought in Sanchez, who has a degree in golf management and had worked with Jack Nicklaus’s Golden Bear Industries. (No experience in personal training?  And where does one get a degree in golf management?)

In 2009, the county signed a five-year contract with Kemper Sports to manage the daily operation of Galloping Hill and Ashbrook. In the deal, expected to be renewed when it expires at the end of next year, Kemper is paid a monthly management fee, and the county retains all revenues except for retail sales in the pro shop. (That’s a lie.  Kemper also gets a cut of gross revenue over a certain amount plus construction management fees.  For 2012 Kemper got $4,224,630.76 out of the county including $56,768,66 as an incentive fee.)

The freeholders took the biggest step in 2010, when they approved $17.6 million in bonds to pay for the Learning Center, a new maintenance facility and the new clubhouse, whose second floor includes a large banquet hall—expected to produce significant revenue for the county (which will go to Kemper, DeCotiis, Netta, et. alia while the county absorbs the far more significant expenses.)

In June of this year, the clubhouse opened with the NJSGA’s flag flying from the roof. “It’s a dream come true,” (finding these chumps) says NJSGA executive director Steve Foehl. “It’s vital to our branding to be associated with a first-class facility like Galloping Hill.” In the first two years, the association will pay the county $5,000 a month rent; then the sum will increase 3 percent every three years till the end of the 10-year lease. By the end of May, the banquet space had already booked 80 events through 2016. “We are on target to hit about $5.6 million in revenue this year,” says Sanchez, “with operational costs at about $5.3 million.” (by county math).

The next phase begins this fall, when Montclair’s eminent golf architect, Rees Jones, known as the Open Doctor, begins preparing the course for the 2016 NJ Open. While 200 to 300 yards will be added to Galloping Hill’s 6,639-yard length, much of the work—like bunker renovations—will aim to “restore the classic feel of the golf course,” says Jones, “and provide regular golfers with as enjoyable an experience as possible” (and taxpayers with as excruciating an experience as possible).

Freeholders’ Most Boneheaded Move

Commenters on today’s Star Ledger story about the overruns building the Galloping Hill Banquet Center seem to think it is. But there’s some stiff competition.

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Use comments here to post reasons for your vote.

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For the record on June 9, 2011  it was resolved to pay Claremont Construction Group, Inc. $14,878,776 to build a clubhouse and learning center at the Galloping Hill Golf Course.  On Thursday they upped that cost by $750,000.  So far from the check registry:
8/24/11: $117,600
9/14/11: $10,000
9/21/11: $220,634
10/19/11: $15,542
10/19/11: $393,531
11/30/11: $356,469
11/30/11: $447,992
12/21/11: $479,620
1/25/12: $843,291
2/29/12: $686,165
3/21/12: $1,114,899
4/18/12: $937,137
5/24/12: $235,679
5/24/12: $265,895
6/20/12: $8,000
6/27/12: $1,217,016
7/25/12: $839,805
8/29/12: $878,427
10/3/12: $844,069
11/14/12: $927,387
11/20/12: $860,743

TOTAL CLAREMONT: $11,699,901
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Plus KemperSports for Construction Management:
3/23/11: $142,788
5/4/11: $40,062
6/22/11: $45,868
6/22/11 $3,214
6/22/11 $6,912
6/22/11: $25,876
6/22/11: $108,166
7/27/11: $27,342
7/27/11: $26,724
7/27/11: $5,209
8/31/11: $37,109
9/21/11: $20,000
10/5/11: $65,548
10/5/11: $19,318
10/12/11: $36,367
11/9/11: $26,827
11/22/11: $79,343
11/30/11: $34,007
2/15/12: $35,639
2/22/12: $28,265
2/22/12: $41,172
4/5/12: $39,235
6/13/12: $27,028
8/29/12: $174,520
10/3/12: $30,572
10/17/12: $25,480
10/17/12: $42,409
10/17/12: $66,874
11/14/12: $50,015

TOTAL KEMPER: $1,278,409

Galloping Hill upgrade cost: $30 million?

33 of 64 votes

 

Galloping Hill upgrades are supposed to be costing $17 million, “which includes the construction of the the TaylorMade Performance Lab, the new driving range and the Clubhouse” according to a 9/27/11 Union County press release

It was reported that unexpected costs will boost the price tag.  Where do you think it will go?  Here are some clues:

Claremont Construction quoted $14,878,776 which includes the Learning Center.

Through July, 2012 Claremont Construction has been paid $8,171,276.60 and all improvements to Galloping Hill since 2009 total over $12.5 million though hidden fees for all the ‘on-call’ engineers, architects, and lawyers are not included (except in the UCIA billing which has DeCotiis, Fitzpatrick being paid $161,428, including $47,181 in 2012, for what is labeled on the UCIA Approved Bills listings as the ‘Union County Golf Course Project’.

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Five votes for ‘Other’:

Wave to your money when on the GSP! 1
Eleventy four hundred six thousand! 1
Over $50 million with interest and $500K to $1 million min operating losses a yr 1
nothing-they are using free money 1
I will take a mulligan

UC Golf Update

Union County is saying their golf operations are (or will be) profitable. They’re not and I say so within an article today where I’m quoted:

Critics are skeptical. John Bury, an actuary and active member of the Union County Watchdog Association, thinks the projections are exaggerated and that actual expenses in recent years have left out some personnel costs. And he doesn’t believe the county should be involved in the event business — something it plans to do with a large banquet space on the second floor of the new clubhouse.

“It’s not the business of government,” he said. “They’re just doing it because it’s an ego trip.”

in response to:

“In the next two years, once the clubhouse is finished, the golf operations will probably break even, said Sanchez, the golf director. They should be stabilized, however, by 2015, when he expects to once again earn a profit while paying down all the debt.”
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So where did the Summit Council president get his information:
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Through June golf operations made $2,595,505 according to official county numbers.

Based on the 2012 check registries, costs through June came to $6,863,660.

  • KemperSports hand check registry:$1,293,890
  • Claremont Construction: $5,308,083
  • Kemper Sports check registry:$225,046
  • Total Turf Golf Services: $36,641

Even without including any engineering, legal, or consulting fees that may be hidden under ‘professional services’ or any building material that may be hidden within the check registry, or salaries and benefits for Armando Sanchez and any ex-greenskeepers still on the county payroll,  the loss through June from golf operations in Union County comes to $4,268,155.  Black indeed.

Rushing into weddings in Union County

Union County is now on track to waste about $3.9 million on setting up a banquet facility at Galloping Hill golf course.  Why?  I can guess but I hope I’m wrong since it would be a sad commentary on representative democracy if I’m not.

Last summer KemperSports took over running Union County’s two remaining golf courses.  Their fee is a relatively modest $7,020 per month for five years.  But it appears there are extras.

At the December 17, 2009 freeholder meeting a presentation on the feasibility of catering weddings was made and, about twenty minutes later, resolution 2009-1181:

authorizing the County Manager to award a contract KemperSport, North Brook, Illinois pursuant to an RFP process for Galloping Hill Clubhouse Construction Management Services, in the amount not exceed 10% of the costs associated with the development, design and construction of the clubhouse in an amount of not to exceed $1,000,000.

was passed.  Here, thanks to my newly acquired video editing skills, is how it went down.

Armando Sanchez from Mareth Advisors, LLC was paid $17,400^ to prepare a feasibility study.  Among his findings:
1) There is not a lot of organic growth in the market (i.e. this new facility won’t create more weddings in the region).
2) In looking for similar public golf courses with banquet facilities he “searched long and hard for other daily fee or municipal clubs but there are none.”  (i.e. no other public golf course is in the wedding catering business*)
3) It would take three to five years to get this running.
4) 185 events is break-even.

With those points being made it would be obvious to any objective witness (there were two of us there) that this was insanity.  Another monumental waste of money that could be far better spent elsewhere.  No freeholders questioned the study and the resolution passed 9-0.
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^ Mareth Advisors, LLC was paid $17,400 on 12/2/09 for this study.  I believe $17,500 is the limit for requiring these types of contracts to go out for bid.  Though Mr. Sanchez did as thorough a job as possible under the circumstances he did not reach the obvious conclusion (i.e. this is a daffy idea) since he was paid, in part, not to.

* Though maybe the freeholders are thinking of moving their own catered meetings to this new venue as a step up from “pizza or a sandwich.”