GREENS

PREPARING THE 2011 GREENS BUDGET

For any member who has been on the clubs Board of Directors, there is some understanding of the cost associated with running this golf club. Every fall the managers of each department put together a proposed operations, (usually referred to as Op's) and capital budget for the following year. Both budgets are then presented to the finance committee and the Board of Directors for review and approval. The total cost of running the club is very much reflective of the cost to each member.

As we all know the Strategic Plan overwhelmingly supported moving forward with improving all areas of our golf club.

Last fall I requested an increase of slightly over 7% from the 2009 to the 2010 Op's budget. At that time there was a lot of media attention on the recession, how deep it was impacting, and how long it might last. Some members demanded a cap on all budgets. So why did I ask for 7%? And maybe more importantly why did the Board approve the 7% increase? And, how on earth did I come up with these numbers in the first place? Did I ask for 7% figuring the Board would negotiate it down to 3.5% and we would all go home happy? Actually I was able to present the Board with very detailed information about where this money was being spent, and where the extra funds would be needed in the 2010 season. Once the Board understood the costs associated with running every facet of the turf department, it made perfect sense to approve the funds.

So, lets look at some of these details to help you better understand this department and it's budget.

The entire budget is broken down into 32 different line items. The largest single number (or cost) under one line item is labour. The labour cost represents 62% of the entire 2010 turf Op's budget. This labour cost has been very consistent between 60 and 65% of the entire turf budget over the last 7 years, even with the increase to minimum wage.

Of the 32 line items only 7 are over $10,000. These are, in order of highest to lowest: labour, pest control products (which are fungicides for disease control such as dollar spot and snow moulds, herbicides for weed control, and a very minor amount of insecticides for grubs and ants) fertilizers, equipment repairs, fuel and oil, hydro and environmental.

Of the remaining 25 line items, which include such things as safety supplies, flowers, bunker sand, seed/sod, waste/security, irrigation, course furniture (which would be items such as flag sticks, flags, cups, water coolers and cups, hazard paint, bunker rakes, garbage cans, ball washers, paint, spike cleaners, divot bottles ETC...), the average cost per line item for the year is about $3,650.

So lets have a closer look at the labour as it is the single highest cost within the turf Op's budget.

Since each employee is not paid exactly the same, we have to make some assumptions as we begin to build this part of the budget. We know how long (more or less) each job takes to complete. Early in the season when new employees are being trained to perform a new task, the time each job takes is longer than what we budget for.

For instance, it is very consistent for it to take 84 hours, per week to mow greens. These operators also fix ball marks within this time frame, (all the hours required to complete the following tasks include mobilization, refueling and clean up).

How do we know this? Everyday each employee must fill out a sheet of paper we call project hours. This is a record of what job each employee spent his or her day on. This helps us track both the cost of each job, and if the employee was being productive. If we know it takes 2.5 hours to service the water coolers, and we see an employee has recorded they spent 4 hours on that job, we can now investigate to see if they were wasting time and a disciplinary action is required, or if more detailed training is needed to improve productivity.

Now, how did I come up with 84 hours a week to mow greens? Well we multiply 4 people, which take 3 hours a day, by 7 days a week (4 x 3 x 7=84). We could send out 3 people, which we sometimes do, but 3 people can't get the job done properly and safely in 3 hours, since the work force has been reduced by 25% in this case! So now it takes 3 people 4 hours to complete the mow.

Now, we do the same calculation for every job. Mow fairways and approaches, 54 hours a week. Mow primary rough, 80 hours a week, Intermediate rough, 15 hours.

Service water coolers 17.5 hours, change holes 25 hours, roll greens 13.5 hours, fly mow bunkers 24 hours, rake bunkers 112 hours.........and so on for every job.

Now, if we are paying minimum wage to our bunker crew, it costs the club $1,148 in labour per week to get a rake in the bunkers. (112 hours x $10.25 an hour).

It's time consuming to go through all the jobs, and look at the different pay that different employees might be getting for doing the same job. I'll bet there are all kinds of jobs that you know get done, but never really thought of the cost that might be associated with doing them. Like painting hazards, or cleaning divots off the range tee. How about changing the water and soap in ball washers or edging the irrigation sprinklers and yardage plates. The job list is a long one, and we have all seen jobs which we think, "how easy would it be to just go do that"? Which we could, but that means pulling someone off another job, causing us to get behind there. So we are forever prioritizing jobs.

Now, not only do we track man hours required for each job, but the fuel required. We know each time we cut fairways we burn approximately 44 or 45 litres of fuel. And since we know how many hours will be put on the mower a week, we can calculate how often the engine oil and filter will need to be replaced. This is a process repeated for greens mowers, rough mowers, tee mowers and so on.

Now some of you may know I had 23 hourly staff working on the turf department for most of the summer. And many may think this is a pretty good number of bodies, but........did you know of the 23, that 6 only work part time? If we looked at 23 people working 8 hrs a day and a total of 6 hours every other weekend we would have a total of 3,956 man hours a month (during the main season, May through August).

So why have part time people on staff? This gives us more bodies first thing in the morning to get many jobs completed ahead of golfers. This reduces us interfering with your play, but more importantly it makes us more productive. As far as our tracking goes, we know it doubles the time it takes to complete most jobs when we have to watch out for, and get out of the way of members play. And that means doubling the cost to get that job complete. If you have ever played and wondered why you don't see or hardly ever see any work going on, then we are getting the job done efficiently and productively!

Now, getting back to the hours worked...............

In actual fact we only paid out on about 2,900 hours during this same time for actual hours worked. (which is the equivalent of only 16.8 full time people). And when I add up all the hours required to do the main recurring jobs such as the ones mentioned above, we have slightly under 2200 hours required. Which still leaves us with 700 hours a month unaccounted for right? Well..........actually, no. Because within these 700 hours we must magically get this other short list of jobs completed:

-moving traffic control, filling divots, top up divot mix at the back shop and driving range, spray greens, tees and fairways, apply fertilizer, spray moss, round up and ants, line trim under trees, plant and maintain gardens, water sod, seed, trees, flowers and hot spots, pick up sticks, pine cones and branches, blow off greens, tees, fairways and cart paths, vacuum leaves or maple keys, add sand to bunkers, make irrigation repairs or adjust sprinklers, conduct pond maintenance, prune branches or suckers, repairs to benches, water cooler towers, periscope or any other course furniture, move tee blocks, empty garbage's, blade out pot holes, prep the road for asphalt repairs.................... and we have not done any cultural practices yet (such as aerification, verti-cut, top dress, sodding, overseeding, spiking ETC...)!

On top of this we have what we call our Gantt chart. This is a list of jobs that require attention that may not be a regular job, such as drainage repairs or fixing irrigation leaks. There are areas which need bunker boards installed, we have had to do repairs to the bridges and on course bathrooms, there have been sink holes that appear and rocks that find their way to the top of the bunkers. There are blocked drainage pipes, erosion concerns, and things that need painting. I'll even bet most of you can think of a job that needs attention that I haven't mentioned. This list is currently almost two pages long.

Now, getting back to the other parts of the budget.

The other line items are budgeted for by both forecasting, and past history. For instance, the flags on the course have been out there two season, and are looking worn, I know it will cost the club $600 to get a replacement set. We know we want to continue adding long handled and wide head rakes to our bunkers, budget another $1,200 (which only gets us 25 rakes). I know it will cost approximately $1,500 for hazard paint for the year, why? Because I have been tracking it every year for the last 4 and it is relatively consistent at needing 20 to 25 cases per year. It will cost about $4,300 for security in 2011. I will need another $4,500 to pump out the septic tanks on the bathrooms over the season. And, I can tell you we will spend about $1,700 on toilet paper, paper towels and drinking cups on the course next season.

We also have to be aware of the American Dollar as this impacts the cost of most of the items we require. But this is a minor impact. What can and has had major impacts to the budget is when things have major increases that no one anticipated. Over the last few years fuel and oil costs jumped significantly. From 2007 to 2009 we had a greater than 25% increase in our fuel and oil cost. And when the cost of crude oil jumps, it hits the cost of fertilizer! In 2009 we had, never before seen jumps in the cost of all fertilizer products. No one had forecast the increases we experienced. An example of three different fertilizer products we regularly used had jumped in price from June 2008 to July 2009, one went from $24 to $38 per bag, another from $20 to $39 and another from $24 to $45. Reducing the fertilizer to save money is a bad idea as the turf must be fed to be healthy. Not only to stand up to all the traffic the turf takes, but to make it through the stresses of weather patterns. Had we reduced fertilizer rates last year to save money we would have had significant turf loss last winter because of the severity of the winter. Just like a bear feeding in the fall getting ready for hibernation, if he does not get food into him he will starve to death over the winter. Not feeding our turf correctly will result in the death of significant amount of turf in the heat of summer or cold of winter.

For any of us to simply say "cut the budget" would be miss management at it's worst.

If on the other hand the club was in financial trouble (which it most certainly is not)and we needed to cut costs, then we could sit down and determine what services we could reduce, which would in turn reduce costs, but not jeopardize the health of the turf ecosystem.

If for instance all members took extra time to carefully rake the bunkers, so the turf department could reduce our scheduled maintenance to one raking per week, I could save the club in the neighbourhood of $25,000 over the year.

Now then............ putting the time it takes to complete each job, multiplied by the wage paid and adding the materials required for that job comes up with a cost associated with each thing we do, or each thing we want to get accomplished. Throw in "Large Marge" to send us jobs we had not planned or budgeted for like wind storms, torrential rains or ice build up, and now we have to make changes to keep everything running smooth.............And within budget.

As our fiscal year ends on October 31, we are almost through the 2010 budget. And how did we do up until the end of September? Well we are currently $18,292 under budget. And I am forecasting at the end of October we will be about 1.5% under budget for the year.

So take a minute to think about 2011. If you were building a budget, would you think we will have one storm a month which will require us to fix the bunkers, or more?

Do you think we need to budget for one wind storm for the year, or one a week? Will it be the worst drought in 100 years requiring more hand watering than ever, or a wet year?

Will the disease pressure be more than usual or less? What about equipment break downs, will we need to do any major engine or transmission repairs? How many new employees will we have to train? Returning staff can start work with minimal training and be productive immediately, but new staff take significant training before they are self sufficient and productive.

Hopefully you now have an appreciation of the work involved with putting together a realistic Op's budget, and a bigger appreciation of the work it takes to maintain the course while being safe, productive and delivering a quality product...................and not go over budget.