Thursday, December 08, 2005

I seem to be bad at math

Looking at the article in todays paper about the golf courses and I don't seem able to add right.
Here is the breakdown, using very rough accounting.
4 full time employees @ $14.92 per hour x 40 hours = $2387.20 per week
15 seasonal employees @ $10.88 per hour x 40 hours = $6528.00 per week
So when the course is open they Must make $8910.00 per week just to cover the hourly wage!

Singer says in the article raw labor per year is $421,683.00 of which $171,652.00 is benefits.
Reardon says $457,000 per year of which $141,000 is benefits and seasonal workers only get "vacation, sick leave, holidays and the city pays FICA & those kinds of expenses" I am assuming that is in the $141,000.
(She also says that she doesn't know where NGA (Singer) got it's numbers. Hmm, who paid for the study he did? Who's accounting was he looking at?)
Now these numbers are Labor Only! How can the golf courses make money with these kinds of labor costs? This seems staggering to me. Add in all the other expenses, fertilizer, equipment, power, Water? The debt payments, and all the sudden why did we only lose $200,000?
Now I understand most business make money off labor, and I don't really see how you could here. An electrician makes x$ per hour, but the shop charges substantally more to cover operating expenses. I checked how much it costs to golf. City course is $25.00 green fee for 18 holes, MLCC is $50.00 for 18 holes.
So city courses would need 51 golfers per day to pay their employees. Add a few more to pay the benefits. add a few more to pay the other bills. And $200,000 divided by $25.00 = 8,000 more golfers a year.
Anybody know how many people in Great Falls golf?

posted by a-fire-fly at 10:46 AM

8 Old Comments:

Firefly;

With those numbers, I have trouble understanding how we only lost $200 grand.

Updated break even analyses are the first step in any business proposition. Without them, how can anyone know what they have to do to at least break even?

Your $8,910/week figure does not take into account the amount that must be broght in to cover the wages of the full-time employees when the courses are not open.

The city needs to make realistic revenue projections, and scale back expenses (labor) to make that revenue at least equal.

By Blogger Treasure State Jew, at 4:42 PM  

51 golfers a day isn't that many. That's roughly 12 foursomes. On a nice day, they're sending groups off every 7-10 minutes.

By Blogger GeeGuy, at 9:32 PM  

You fail to calculate the cost of Management. Patty Gummerberg Rearden is knocking down over $64,000.00 a year as interim Director. Then there are two other managers in the department making big money (for Great Falls). Then there is the benefits...

Dont blame the college kids pushing the lawn mowers. Start looking at all the high priced mismanagement.

By Anonymous Anonymous, at 9:51 PM  

This comment has been removed by a blog administrator.

By Blogger GeeGuy, at 8:04 AM  

High priced management that, apparently, is not doing much managing.

By Blogger GeeGuy, at 8:06 AM  

Anonymous-I did not fail to calculate the cost of management. In fact I did not make the effort. It is very difficult to factor management costs, especially if the manager has multiple duties. All I was addressing were the labor costs of employees whose only job is to support the golf courses. This is a starting point.

By Blogger a-fire-fly, at 10:49 AM  

While I don't have an accounting degree, I spend my day doing a lot of it (and am married to the best accountant in Great Falls).

It is pretty difficult to put together numbers that are not given to you in the first place. A GAPP compliant P&L for the municipal golf courses would be a great place to start.

This travesty highlights, for me, the need to either 1) hire an outside auditor to present GAPP compliant financials for the operation of the municipal golf courses to the city, or 2) instruct the city treasurer to make an internal audit of that operation.

(By the way, I am not pulling for work here; my wife doesn't take auditing jobs).

These financials should be posted on city websites, so that we can all view them.

Many of these numbers can be found on the $24 thousand golf report, available here (158 pages, pdf file).

The city does break out golf and acquatics expenses, among others, its budget document. One thing I would like to see is a budget-to-actual accounting.

By Blogger Treasure State Jew, at 1:22 PM  

"These financials should be posted on city websites, so that we can all view them."


They are public record, go on down to the Civic Center and get them. I am sure someone would be happy to scan them.

By Anonymous Anonymous, at 1:52 PM