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TOAV works to trim AVCC costs (July 5, 2011)
APPLE VALLEY • In the wake of the Town Council’s decision to close escrow on Apple Valley Golf Course, staff plans to launch a series of cost-cutting measures expected to reduce the ongoing subsidy required to run the business and maintain the property.
If Apple Valley can implement all 11 proposed strategies, a staff report states expenses will drop between $741,000 and $886,000 annually.
That would mean a $134,540 to $279,540 operating profit during the 2011-12 fiscal year, instead of the $606,460 deficit Apple Valley Golf Course is otherwise expected to post.
Apple Valley has accumulated $3 million in debt since voting to take over the property in 2008. But with the proposed cuts and the approved sale of $2.9 million in water rights from the town’s golf course fund to its wastewater fund, staff is predicting the business may be in the black by next summer.
However, several of the suggested changes are not a lock and may rely on interfund transfers down the road.
The town is hoping to work out an arrangement where Victor Valley Wastewater Reclamation Authority will sink a new well to replace the one that broke down shortly after Apple Valley took over the course. That’s expected to eliminate a one-time $500,000 capital expense for the town, plus cut $280,000 in annual irrigation costs once Apple Valley can start utilizing the water rights it owns — if VVWRA’s board approves the move.
Roughly one-third of the projected revenue increase is attributed to a $250,000 spike from leasing out the water rights that would no longer be needed once the new well is in place. However, per council action approved last week, the town’s wastewater fund now owns the water rights and would therefore be expected to collect any lease revenue.
Apple Valley staff is also recommending that the town sublease the country club space to a restaurant, though that proposal would have to go to bid. And the town is counting on more revenue from increased play at the course, with staff noting in its report that
Hesperia’s course may close.
Several of Apple Valley’s cost-cutting measures couldn’t be implemented until the town owns the property, such as renegotiating an $83,000 annual operating contract with Landmark Golf, or allowing a cell phone company to locate a tower on the property.
Other suggestions that staff says can be implemented as soon as escrow closes include negotiating for less expensive phone and Internet service and doing less turf maintenance on the fairways.
Source, Brooke Edwards (with Beau Yarbrough), Apple Valley Review, applevalley-review.com/node/260