Golf Course Maintenance budgets are comprised of 2 things:
1. Payroll Expenses
2. Operating Expenses
Budgeting for the 2nd is easy, and difficult to cut back on these expenses because we know what it takes a year in chemicals, for example, to keep the greens in good shape. We aren't going to skip a $5,000 fungicide application and gamble on the health of our greens. The $5,000 savings could turn into a $250,000 loss potentially. Every year, we know we need to buy things like flagsticks, cups, ballwasher towels. Paul has a fairly good idea of what it takes to keep our fleet of equipment sharp and running. Each year, I start with a zero based budgeting system and compare it to past years. I can also estimate the actuals of the current year and then factor in the objectives of the Green Committee for the coming year to determine where budget adjustments are needed.
Payroll isn't very difficult either but certainly more volatile. We know the amount of people we need to maintain the standard. It takes 4 people every morning to mow greens, 5 to do tees and approaches and 1 for course set up and so on. We have staff here 7 days a week, of course, so calculating OT isn't that challenging either. Other aspects of Payroll are health insurance, payroll taxes, 401K program and workers comp. Heath coverage is determined by the Board of Governors and those other line items fluctuate very little. Depending on the area of the country, Payroll expenses are generally in the 55% to the 75% range of the entire budget. So a course with a $1,000,000 maintenance budget would have as much as $750,000 in labor, while the remaining $250,000 is buying the "stuff" that is needed to operate.
15 years ago, a $1,000,000 was huge. Now, its relatively small. I recall reading the average budget of a golf course was $750,000, including public and municipal courses.
All this said, the difference between Clubs, is the labor budget. At Highlands CC, for example, if we increased our budget dramatically it would come in the form of additional labor. This would allow us to do things like increase mowing schedules, providing better conditions for members. It would allow us to expand the pushmow areas and take riding units off of hillsides. Since 2004, we've done a lot of this and currently reached a balance between meeting the expectations and getting mowers around the course several times a week. Our staffing level allows for rolling 3x a week, double cutting daily and mowing tees and approaches 3x a week. These are what we consider to be our standards. If a member comes to me and says, "Brian, we want you to start to roll approaches every other day." My response to that would be, "what do you want us to skip?" Our days are very, very routine and the schedule is extremely predictable using 100% of the labor we have each and every minute of the day. To change even one thing, would have a domino effect on other tasks. It's a well oiled machine. The point is, in most cases, the difference between a Club with a $1.7M budget and a $3M budget is details. The first $1M of any budget goes to the necessities. Anything above that, goes to enhancing conditions and details. It would be the difference between our 20 person HCC crew and a Club with 40 employees. Areas like the peripheries of the course, fescue beds and pinestraw beds would all receive more attention. Handwatering would even become more prominent to provide firmer conditions. We would have an individual on the greens daily fixing ballmarks. Divots would be filled more regularly. At some point, the law of diminishing returns comes into factor but where that is, I don't know. The saying, "you get what you pay for" is equally true in the golf business as it is in the rest of the world. In the Club business, or business of collecting dues, our income is directly proportional to the quality of the golf course. You will always get, "more bang for your buck" on the 1st $1M compared to the 2nd $1M. After all, the goal of most superintendents is to focus resources on where golf is played. This starts with greens, then fairways, then tees. Most likely, a Club with a $500,000 budget isn't picking up pinecones in the pinestraw beds. If they are, I would say their priorities are somewhat backwards. If nothing else, you would want great greens with 50% or more of the game being played on that particular surface.
Hopefully this gives you a slightly better idea about how I view the budget. Again, below is the June post.
Golf Course Maintenance Budgets, June 2016
I recently had a conversation with another superintendent and it always seems the first topic that arises when discussing golf maintenance is budgets. I am guilty of it too...it's a way to justify why we do or don't do things. Even members compare maintenance budgets between clubs they belong to. However, even though I am guilty as charged, this is not a fair comparison between Clubs or golf courses. Allow me to explain and site examples. Most time it's like comparing apples to oranges.
1. Golf courses vary greatly. This could mean something as simple as acreage maintained. In the case of HCC, acreage is relatively small, but the manpower required is enormous. The amount of weedeating and pushmowing due to slopes, creeks and trees adds to maintenance costs. At other golf courses I've worked, if it can't be mowed with a riding mower, it is left natural. Think of last week's US Open. No ponds, lakes or streams...
2. You can't compare a Bent/Poa annua course to that of Bermudagrass. There is simply no comparison from a fungicide budget. Bent/Poa will always require double the amount of fungicides as Bermuda. Even those in charge of maintaining Bermuda wall to wall will agree it is a weed. That doesn't mean it doesn't come without it's own host of challenges. Furthermore, over seeding (those that still do it) is another expense that doesn't compare course to course.
3. Some golf courses include huge monthly lease payments in their budgets, others separate it out as capital.
4. The older the golf course, the more required in R&M of infrastructure. This could include drainage enhancements, for example. The older the irrigation system, the more spent on annual upkeep.
5. In 2007, I was riding around a high end Club in the Banner Elk area when this same conversation arose. The Superintendent quoted his maintenance budget as a low ball number. After some prodding, it became clear that he DID NOT include labor! They only factored actual maintenance expenses in the budget! Labor can be as high as 75% of the entire budget!
6. Cost of living is always a factor. It is no question an issue in Highlands. Asking folks to drive 40 minutes each way to work sometimes requires more than a fair hourly wage.
7. Growing conditions- a course like HCC with greens growing in shade with poor air circulation will require more pesticides- always.
8. Water- we are fortunate to have an endless supply of irrigation water, with our only cost, the electricity to pump it. Some courses in California are paying over $1,000,000/yr for water! Other courses are forced to purchase city water. This can lead to huge fluctuations.
9. Realm of Responsibilities. Is the golf course crew in charge of landscape operations? Most facilities have a separate department who care for roadsides and common areas like the clubhouse.
10. Some courses view annual topdressing as a capital expense, not an operating expense. Another example, at HCC we have a healthy sod budget that most courses do not have.
11. Bunkers- the quantity of them is proportional to some aspects of the budget. Simply put, they consume 3-4x the amount of money per square foot compared to having grass!
In conclusion, if you compare budgets from course to course, do so with caution and make sure you have the facts. It can be a baseline for comparison but many times, it is far from a fair comparison.
1. Golf courses vary greatly. This could mean something as simple as acreage maintained. In the case of HCC, acreage is relatively small, but the manpower required is enormous. The amount of weedeating and pushmowing due to slopes, creeks and trees adds to maintenance costs. At other golf courses I've worked, if it can't be mowed with a riding mower, it is left natural. Think of last week's US Open. No ponds, lakes or streams...
2. You can't compare a Bent/Poa annua course to that of Bermudagrass. There is simply no comparison from a fungicide budget. Bent/Poa will always require double the amount of fungicides as Bermuda. Even those in charge of maintaining Bermuda wall to wall will agree it is a weed. That doesn't mean it doesn't come without it's own host of challenges. Furthermore, over seeding (those that still do it) is another expense that doesn't compare course to course.
3. Some golf courses include huge monthly lease payments in their budgets, others separate it out as capital.
4. The older the golf course, the more required in R&M of infrastructure. This could include drainage enhancements, for example. The older the irrigation system, the more spent on annual upkeep.
5. In 2007, I was riding around a high end Club in the Banner Elk area when this same conversation arose. The Superintendent quoted his maintenance budget as a low ball number. After some prodding, it became clear that he DID NOT include labor! They only factored actual maintenance expenses in the budget! Labor can be as high as 75% of the entire budget!
6. Cost of living is always a factor. It is no question an issue in Highlands. Asking folks to drive 40 minutes each way to work sometimes requires more than a fair hourly wage.
7. Growing conditions- a course like HCC with greens growing in shade with poor air circulation will require more pesticides- always.
8. Water- we are fortunate to have an endless supply of irrigation water, with our only cost, the electricity to pump it. Some courses in California are paying over $1,000,000/yr for water! Other courses are forced to purchase city water. This can lead to huge fluctuations.
9. Realm of Responsibilities. Is the golf course crew in charge of landscape operations? Most facilities have a separate department who care for roadsides and common areas like the clubhouse.
10. Some courses view annual topdressing as a capital expense, not an operating expense. Another example, at HCC we have a healthy sod budget that most courses do not have.
11. Bunkers- the quantity of them is proportional to some aspects of the budget. Simply put, they consume 3-4x the amount of money per square foot compared to having grass!
In conclusion, if you compare budgets from course to course, do so with caution and make sure you have the facts. It can be a baseline for comparison but many times, it is far from a fair comparison.