[BCrosby]

For those of you that might know about such things, what percentage of your course's maintenance budget is devoted to super and staff salaries? I'm trying to get a sense for typical percentages out there. No need to reference any clubs by name.

Are there industry guidelines?

Bob

[JMEvensky]

We've budgeted about 45% for compensation.My guess is the actual EOY percentage will be lower.

[Jim Sweeney]

Right about 50% including benefits. We had a full time employee leave this past December. We will replace him with two part timers to save some bucks.

[Tyler Kearns]

Bob,

50% at my club, including benefits.

TK

[Steve Okula]

The GCSAA publishes a survey on these matters every two years, and the number has consistently been in the range of 60-70%, which fits precisely with my experience.

[Ryan DeMay]

18 hole private club.  We are budgeted for 58% for salaries, wages, and benefits for 2010.

[Robert Emmons]

About 57% for wages, bonus, and benefits

[Michael Rossi]

http://turf.lib.msu.edu/1920s/1928/280589.pdf

1928 budget for Kittanset Club, interesting to look at.

[Dale Jackson]

Bob et al,

of the remaining budget where does the remainder of the budget go?  Regular "consumables" - fertilizer, sand, etc.?  Capital expenditures - mowers etc?  other?

[Bill Rocco]

I know a private course is 5o to 60 percent dedicated to labor...my guess is public would be lower (less overtime and staff, but increased benefits may offset that)

[BCrosby]

Thanks everyone. The budget I was looking at had it at about 60%. Which seemed high to me, but apparently it's not out of line.


Bob

[Jason Topp]

57% looks like our budget as well including taxes, insurance and food.  It was higher last year but we cut a position.  We do not have equipment replacement in our budget which concerns me.

[Steve Okula]

Bob et al,

of the remaining budget where does the remainder of the budget go?  Regular "consumables" - fertilizer, sand, etc.?  Capital expenditures - mowers etc?  other?

We spend about he following:

Salaries, including bonuses, payroll taxes, social security, insurances etc.    70%
Fertilzers & chemicals                      7%
Equipment repair & maint.               4%
Fuel & lubes                                  3%
Sand, gravel, & peat                       2%
Irrigation repair                              2%
Water                                          2%

Followed by a lot of little stuff like electricity, uniforms, health and safety, playing accessories, telephone, office supplies, small tools, seed, and so on.

Equipment purchases, considered capital expense apart from the maintenance budget, but run about 10% of total maintenance budget per year for turf equipment

[Dave McCollum]

18 hole public-- actual expense for labor in 09 was 43% of the total.

[Bill_McBride]

57% looks like our budget as well including taxes, insurance and food.  It was higher last year but we cut a position.  We do not have equipment replacement in our budget which concerns me.

Jason, is there a capital budget that's separate from the O&M budget?

[Matt MacIver]

Our 18 hole private, labor = 65% in '08 and '09.  This seems in line with others, but I would really like to find a way to reduce total G&G expenses by 20%, for all the reasons talked about here and elsewhere, but I don't even know where to begin -- they will all look at me as a raving lunactic.  Some want to convert three wooded acres to a short-game area...I'm thinking if I can get them to pay for it by reducing current G&G expenditures, once it's build they'll see that we don't need to spend as much as we've been in the past. 

[BCrosby]

Bill's reference to a capital budget raises another question. Perhaps there are clear rules in the golf biz with which I am not familiar, but the way items are slotted in maintenance vs. capital budgets seems to me to be fairly arbitrary.

For example, would you normally book the expense of fixing drainage problems around greens as a capital expenditure or a maintenance expense?

I do not ask as an academic question. In my world the answer matters.

Bob

[Michael Rossi]

Bob

I think you answer your own question, it is fixing (repairing or maintaining), when adding new it is different.

Fix, repair, maintain = operating

New = capital

Not to say that it is that simple, but that is how I view it when presenting a budget. I have experienced cases when the MD or GM have moved the items from capital to operating for different reason that fit better into the big picture.

[BCrosby]

Michael -

Left on my own, I would have given the same answer.

But that's not how the drainage fixes are being booked at the subject club, ergo my question.

I think the key is your last point, if I might paraphrase you:

"The super has moved the items from operating to capital for reasons..., well, it's a long story."

Bob

 

[Michael Rossi]

The only people it makes a difference to is the folks in accounting. The $$ are still being (proposed) spent.

In your particular situation, is the existing drainage to be repaired or abandoned and entirely new system installed?

EDIT - no need to answer just keep the question in mind when reviewing what has been proposed.

[BCrosby]

In some locations systems are being repaired, in others new systems installed where there were none before.

Bob

[Michael Rossi]

I would suggest that placing the drainage into the capital side might be a good idea. For the accountants they can work their magic with the costs, for the membership no difference still their $$, for the super well no real difference either except that the operational expenses will appear to be line with the past otherwise it appears that he is spending more.

Any way you do it install the drainage for the good of all involved.

[JMEvensky]

"The super has moved the items from operating to capital for reasons..., well, it's a long story."

Bob
 

Might just be a way to make things more palatable for the members.

As an operating expense,it might cause/add to an operating assessment.But,there might be a pool of Cap Ex money lying around that could be tapped instead.

The problem will be explaining the decision to your auditor if it's a grey area.

[Steve Okula]

Capital vs. maintenance expense depends on the tax structure of the situation.

Most situations that I've been in, expenses have been put into operating budget and not capital, because:

Capital expense means an addition to the value of the property, ergo, higher taxes.

Whereas maintenance expense reduces operating profits, therefore lower taxes.

Bur then I dropped out of business college to study grass, so what do I know?

[Patrick_Mucci]

For those of you that might know about such things, what percentage of your course's maintenance budget is devoted to super and staff salaries? I'm trying to get a sense for typical percentages out there. No need to reference any clubs by name.

Are there industry guidelines?


Bob, I think there's an accounting firm that specializes in golf/country clubs.  It might be McGladrey & Pullen.

I'm sure that they can provide that info as I saw a comparitive analysis from a firm that did the accounting for a great number of clubs in the Metro NY area about ten years ago when we requested the same type of info you seek.

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