By Jon Johnson
SAFFORD — Faced with the reality that the facility ran out of cash last week, the Safford City Council voted 6-1 on Monday, June 8, to amend its fiscal year 2026 budget and infuse an additional $440,000 into the Mt. Graham Municipal Golf Course.
The emergency budget adjustment ensures that the community recreation and tourism asset will remain fully operational through the end of June, without interruption to services for residents, visitors, tournaments, and league play. Councilmember Dusti Brantner cast the lone dissenting vote.
Safford Finance Director Troy Bingham and Safford City Manager Eric Bejarano presented the request along with Alan Ashton, General Manager and Golf Course Superintendent for the Mt. Graham Golf Club with Troon Golf Management. They noted that a perfect storm of inflationary pressures, supply chain disruptions, rising labor costs, and the termination of a municipal agreement with Thatcher pushed the course’s operational costs significantly beyond original projections.
What’s Driving the $440,000 Deficit?
According to city staff and representatives from Troon — the management company contracted to operate the course — the overwhelming driver of the budget overrun is payroll.
“The largest driver of the overruns is payroll,” Bingham stated, explaining that actual payroll expenses exceeded the budget by $170,000 through April. Furthermore, five pay periods remain across May and June, averaging roughly $40,000 per pay period ($200,000 total), while the remaining budget allocated for those two months was only $115,000.
In total, the payroll overage for the fiscal year is projected to reach approximately $255,000. Course managers attributed this to market-driven wage increases, minimum wage hikes affecting seasonal labor, and increased staffing hours in the course’s busier restaurant. It was also noted that eight course marshals who had previously been compensated with trade-free golf rounds were added to the official payroll this year to clean up accounting practices.
Beyond personnel costs, other core expense categories saw dramatic inflation:
- Food and Beverage Costs: Clubhouse restaurant cost of goods sold exceeded projections by $31,000 through April due to spiking wholesale prices for food, beverage, and paper goods.
- Agronomy Operations: Maintenance, repairs, and general operations ran $28,000 over budget, compounded by a $24,000 purchase of chemicals and specialized turf treatments last September.
- Routine Inflation: Rising utility fees, fuel costs, and structural building maintenance placed continuous strain on the facility.
Strong Revenues Partially Offset Costs
Despite expense overruns, the Mt. Graham Municipal Golf Course continues to see unprecedented demand from local and visiting golfers, making tee times difficult to secure.
Year-to-date golf revenues sit at $1,352,623.65, which already eclipses the full fiscal year’s original projection of $1,236,000. With June revenues estimated at an additional $97,641, total FY2026 revenue is expected to top out at $1,450,264.65—exceeding expectations by more than $214,000.
Councilmember Alma Flores highlighted that because of these robust revenues, the net impact on the city’s bottom line is mitigated. Originally, the city budgeted a $685,000 loss for the course this fiscal year. The updated projections put that net loss at roughly $855,000—an actual net loss increase of $170,000 rather than the full $440,000 cash injection.
Contractual Obligations and Moving Forward
The emergency request sparked tough questions from the council regarding financial forecasting. Council members questioned why the steep payroll increases weren’t anticipated sooner, prompting Troon’s regional manager, Ashton, to acknowledge that management “dropped the ball” during a leadership transition over the past year.
However, the council ultimately discovered its hands were tied by the fine print. The city’s current operating contract with Troon, signed in 2020 and on auto-renewal terms, explicitly requires the city, “shall provide sufficient funds” to cover any monthly operational deficiencies.
“You either break the contract or approve the budget,” noted Mayor Richard Ortega during the discussion.
City Manager Bejarano expressed a strong intent to rectify the situation so that the council isn’t facing the exact same problem in 10 months. Bejarano plans to meet face-to-face with Troon corporate leadership to tighten data sharing, improve communications, and renegotiate the contract terms.
Additionally, city leadership plans to explore restoring its previous partnership with the Town of Thatcher. Safford walked away from a loose agreement with Thatcher earlier in the year, which cost the course roughly $100,000 in shared revenue and electric utility support, as well as lost digital advertising space.
Mayor Ortega praised the staff’s forward-thinking efforts to build new revenue streams at the course to alleviate taxpayer burdens, including the development of a new driving range and an outdoor wedding and event venue.
