Is It Time to Rethink Maintenance Budgets?

In the December, 1999 issue of Crittenden GolfInc, a panel discussion brought out some interesting points regarding golf course maintenance. In light of current economic conditions and a later than usual spring in the Midwest and Northeast, the need to control expenses may finally get its due among golf course owners, managers and superintendents.

Our experience has shown that 40% to 60% of the overall expenses of operating a typical daily fee or semi-private golf facility relate to turf maintenance. While the 1999 article in Crittenden stimulated some indignant responses to charges of “empire building” in the maintenance area, Dr. Michael Hurdzan posed a very cogent question –“ If you get a superintendent for $50,000 and he’s taking $800,000 to maintain it (golf course), aren’t you better off paying $100,000 for a superintendent that can do it for $400,000? The answer is very simple math - about $350,000 better off.”

Another good question would be, is it really possible to have that big a variation in maintenance costs? That begs a multitude of other questions, but there can be a tremendous difference in maintenance costs with no discernable difference in visual imagery and playability for the average golfer.

In 1991 Edgehill studied the maintenance expenses of more than 15 Private Clubs in a major metropolitan area. The variation in maintenance costs was over 35%. While this may not be the 50% variation outlined by Dr. Hurdzan, it was interesting to note that 2 courses widely acclaimed (nationally and locally) for their course conditioning were in the lowest quartile of maintenance expenses, with costs that were 25% below the highest budget.

As we have continued to follow maintenance expenses over the past decade, the trend in maintenance costs has generally seemed to be increases well in excess of the increases in the Consumer Price Index. The trend has been to see Greens Fees increase at a similar rate. While this is good for revenues in the short term, it has also obscured the need to control expenses for many golf course operators. There are also some other factors:

1. Higher Labor costs
2. Higher Equipment prices
3. More Man/hours used

There will be further pressures on expenses due to increases in oil prices. The increase in oil prices will not only increase what is normally only 3% -5% of the typical budget, but will also increase the cost of most fertilizers and chemicals that are significantly larger budget items.

Then there is the question of competition and the number of golf courses that have been added in the past decade. In the US, we have added over 20% to golf course capacity since 1990. While it is true that basic demographics relating to the aging of the “baby boom” generation will support some additional golf capacity, it will not absorb all the capacity that has been built or is scheduled to open over the next several years. This will create a very competitive environment for golf course operators over the near term.

The current vogue in the industry has been to express phrases such as “affordable golf”, “increase play availability for juniors”, “lower construction costs” and a host of other platitudes. A recent search of the USGA Green Section Archives and the recap of the GCSAA Annual Convention revealed virtually nothing indicating an emphasis on expense management. To find helpful information, a superintendent has to go back to 1983’s great article “Controlling Golf Course Maintenance Expenses, An Owner’s Perspective” (USGA Green Section, July, 1983) or to 1988’s article, “Are You Adequately Staffed” (USGA Green Section, July, 1988).

We don’t begrudge superintendents their need for larger budgets in a lot of cases, but when was the last time a superintendent went to an owner or Board with the comment, I think I can do as well or better with less. More importantly, what kind of help is the superintendent getting? Unfortunately, not much.

Let’s look at equipment for a minute. A new fairway mower with a 10’ cutting width costs approximately $35,000 today. A mower with the same width cost $20,000 in 1991. This 75% increase in the cost of ownership is way beyond the increase in the CPI over that period. Is this new mower worth the extra money? Its productivity is identical. Do its blades and bed-knives need less maintenance? Even if you ascribe a 7 Year useful life, this new mower is costing about $20/hr. vs. $12/hr. in 1991. Fortunately, the hourly wages paid to the operator have not increased by the same margin.

An analysis of walking greens mowers also reveals a similar pattern. A 22” Mower in 1991 was $2,500 and is over $4,000 today. The machine is heavier, causing more compaction, and is more physically demanding to operate and transport from green to green. Clearly, today’s superintendent is not getting much help in lowering expenses from the equipment manufacturers.

There are also some other issues relating to chemical usage. In our part of the country, snow mold protection has actually decreased in price, but the new formulations without mercury appear to be less effective. Warm Season courses are going to have a very interesting time addressing their insect issues in light of the banning of a major insecticide base.

We have also encountered some significant issues relating to USGA Specification Greens. While the laudable attempt to equalize drainage, simplify watering programs and create a uniform growing medium has been widely accepted; the costs associated with USGA Greens maintenance are higher. That also does not address the “black layer” problem that has appeared in many new greens. The USGA Specifications have proven to eliminate some issues, but the vagaries of design, sunlight exposure and air movement usually still present superintendents with 18 unique growing mediums.

Dr. Hurdzan also addressed the potential for GPS to help minimize maintenance expenses. GPS may have a lot of potential, but the days of turning over greens mowing and ticklish chemical application to a remote control are still quite a ways off. When that day comes, get ready to have an on-staff MIS professional at a salary comparable to your current superintendent/agronomist. At present GPS based maintenance is an expensive luxury with very little real potential for cost saving.

GPS does have some real potential in an area that could help significantly reduce maintenance costs. That is in the area of GPS Mapping and its relationship to Time Study procedures mentioned in the 1983 and 1988 articles noted above. TOURGRAPHICS of Seattle, WA is probably the best known company doing GPS Golf Course Mapping. There are others as well. Any golf course wishing to do an in-depth analysis of its maintenance expenses would be well advised to look into this process. This process is relatively expensive to have done accurately, but can ultimately lead to a much better definition of maintenance costs in terms of actual green square footage, tee-space area, fairway/rough acreage and bunker area. This will allow a superintendent to calculate Time Study data that can be used for setting and measuring employee performance standards. This will also help the superintendent evaluate different equipment options and their relationship to man/hours needed to perform various tasks.

So, what can a golf course Owner/Manager or Board of Directors do to control costs?

* One major step would be to become more knowledgeable about basic maintenance practices. Without some basic information, it is very difficult to ask the right questions of the superintendent.
*Ask for alternatives. There are usually more than one method or piece of equipment for specific tasks.
*Demand Time Study information.

I once had a superintendent request a third fairway mower so that he could get the fairways done faster. My first naïve reaction was that the acquisition would save money since it would get the fairway mowing done faster. In some cases, some superintendents would accept the naïve conclusion and get the mower. In this case, the superintendent was honest and answered that it would only make the course ready earlier or allow his crew to get on to other tasks sooner. When I talked to the superintendent about the $8,000 annual cost of acquiring the new fairway mower (plus the labor to operate it), we compromised on getting him some more part-time help to mow fairways in the evening with one of our existing units at a cost of about $4,000.

This is one example of how Managers or Boards consisting of doctors, lawyers, bankers and accountants are generally unprepared to knowledgeably deal with maintenance issues. But the “citizen boards” usually found operating private clubs do not have a corner on maintenance ignorance. Golf course owners and golf professionals managing courses are often just as naïve and accept a superintendent’s recommendations with very little question.

In many cases, the superintendent is honestly trying to do the best job his/her budget allows. However, a recent article had a superintendent talking about how much his membership appreciated the fact that he mowed his fairways daily. I just about fell over. His budget allowed him to mow everyday, but was it necessary? I wonder how many average golfers can tell when a fairway has been mowed everyday.

How about golf course striping? Most people love the way it looks, including the people who run the PGA Tour. While striping doesn’t really add to the mowing cost, it is pretty funny to hear all the talk about consistent lies in the fairway, when striping can actually provide different lies (with or against the grain) within three feet on the same fairway. I wonder if that same superintendent that mows fairways everyday also stripes them?

The real point of this article is not to ridicule the golf course superintendent, but to call attention to the fact that the actual supervision of golf course maintenance budgets is being neglected. What can be done to correct the situation?

1. Superintendents need to start asking some new questions – How can we become more efficient?
2. Equipment manufacturers need to get focused on creating more cost efficient machinery.
3. Owner/Managers and Boards need to get educated and demand better results.
4. The USGA and GCSAA need to refocus their cooperative efforts on providing increased maintenance efficiency education for golf course superintendents.
5. Maintenance Time Study Data needs to become an operating standard.

It would also be nice if the collective powers of golf – USGA, PGA of America, GCSAA and PGA Tour – would collectively decide to show golfers the importance of ball mark repair, divot replacement and pace of play. The most effective way to get that done would be to give those facets of the game some “network face time”. A better educated golfer would benefit maintenance budgets and provide better playing conditions for their fellow golfers.