Budgeting The Course Maintenance Program
(Golf Club Secretary, June 2005)
In general most golf clubs simply extend the previous year’s expenditure in preparing forward annual estimates of course maintenance costs. It is strange that in an enterprise where the income for the year can be fairly well estimated an agreed allocation towards course maintenance cannot be arrived at. The attitude of keeping the budget as low as possible when trying to maintain a set standard is puzzling.
In view of the magnitude of the task and the challenge to maintain a set standard preparing a five or ten year capital programme becomes a priority. Sure, new priorities will emerge but major expenditure items should be planned ahead in a systematic programme that should not be changed. The main capital expenditure involves the equipment and course improvements.
Annual on-course maintenance costs are numerous and are best controlled when they comprise a comprehensive list of the main items of expenditure. However, it is the further subdividing of these items by the course manager that is the key to the controlling of costs – namely material costs to include fertilisers, soil conditioners, pesticides, seed etc
The value of good well maintained equipment
Equipment determines the outcome of the maintenance exercise. Without good working units and minimum down time the task facing the greenkeepers can become impossible. Most of the reasonably well equipped golf courses have in the region of £250000 worth of equipment in the shed. Depreciating at 20% per year (some hard working equipment should realistically be 33% while others may well be less), at least £50000 must be considered an amount for depreciation and an allowance of this sum annually is essential to maintain the standard or upgrade the equipment. Yet how often do we see dramatic cut back in this vital investment – with clubs often only purchasing a unit when there is a critical need.
With the value and sophistication of modern equipment employing a full time fitter/mechanic is fast becoming a real consideration. Down time becomes easy to value when essential tasks just cannot be done. Currently a cost effective approach incorporates the adoption of leasing packages now available. Having a full fleet of good up to date equipment at all times at a reasonable monthly cost ensures the course manager that he has the resources to do the work.
There is always a need for improvements on the course
To maintain a set standard with all the competition of other local courses annual improvements become an essential consideration. Whether it is increasing tee surfaces, upgrading the irrigation system, renovating bunkers, extending pathways or improving drainage in greens – there is always something. Realistically, an amount should be allowed annually and this amount should be part of a five year programme. Attending to an urgent unplanned need becomes a strain on cash flow. Furthermore there is often dissension when sudden improvements are at the whim of the current club captain or green committee.
The ever increasing array of materials
Today there is an ever increasing variety of products, services and treatments that can be of benefit on the golf course. The range of fertilisers, soil conditioners, biotic stimulants and organic supplements alone make the choice for the course manager a difficult one. In addition to pathway materials, bunker sand, drainage piping and aggregates there is too the full set of golf course equipment of furniture. The annual shows at Harrogate and Saltex reveal a range of products, services and equipment that can become baffling in their enormity and choice. The decision is invariably left with the course manager or secretary but the need for the priority budgeting and monitoring of expenditure can become crucial in the management of available funds.
The number one expense – the staff
Labour costs will always account for the major proportion of course maintenance costs. With the average of five or six green keepers employed on an 18 hole golf course, their well being alone instils the motivation needed to make the maintenance programme a success. Course managers today play a different role to the head green keeper of the past. Like a managing director answering to a board, the course manager must produce the results and be accountable. To do this he must be given full rein to use his initiative within the bounds of management decisions. Daily directive from the secretary and/or green committee undermines his responsibility and lowers his confidence. Good green keeping staff produce the results and should be adequately compensated for their work. They too respond to acknowledgement and the budget should cover adequate presentable protective clothing and scope for further education and capability testing.
Today, with the increasing awareness of health and safety regulations, the maintenance facility has become a focal point. Providing neat and comfortable mess facilities as well as adequate and safe storage and workshop space for equipment are now prime requirements. In fact the upgrading of maintenance facilities has been neglected for far too long. There is no doubt that a well planned maintenance building contributes much to the moral of the staff – and it is their performance on the course that determines the final presentation. As in any smooth running operation daily housekeeping plays a major role too. This too takes time and involves a cost. A well maintained maintenance facility suggests a well managed golf course.
On-course administration is now vital
With all the items compiling the annual costs to maintain the golf course, the monitoring and control of costs is as vital to progress on the course as it is to the club’s cash flow. With annual expenditure varying from £150,000 to £500,000 proper control can only be attained where a sound recording system operates and the essential facts are collated so that they are immediately available for management decisions. Relying on inadequate diary entries cannot be satisfactory. Reporting back to the main club committee on the performance and financial expenditure over the last month is an essential responsibility of the course manager. Comparing actual costs with budget costs must be the basis of a sound costing system and the correct allocation of item costs can only initiate in the maintenance shed. The whole budgeting exercise takes much time but if done properly it gives greater insight into realistic costing and priority planning. There are software programmes available but individual requirements differ and the most practical examples seem to be those developed in-house by someone fully involved.