Golf Club: Digging into the Numbers


As I mentioned in my General Meeting Recap, one of the major policy decisions the new Board will tackle will be a potential Golf Club restaurant remodel. As you know, while all Association members use the restaurant, it is solely the Golf Club that operates it and bears its operating deficits. So as background to this policy debate, let’s look at the Golf Club finances.

Overall RSFA, Golf Club, Tennis Club and Osuna Budgets

The Association does a good job of breaking down revenues and expenses by club and here are the numbers from the 2019-2020 budget:

As you can see, golf club revenues are about 1.6x as big as the core Association functions of Patrol, Parks & Rec, building department, accounting, etc. It is by far the biggest revenue generator and operational activity of the Association. The Golf Club revenues this year are expected to be composed of $5.9M from yearly member dues, $2.9M from restaurant, $1.0M from enrollment fees, $0.6M in special assessments to the golf club members, and $0.3M in sales from the pro shop.

I put “Profit” in quotes because the Association doesn’t make a profit in any area, but instead keeps funds in excess of expenses into fund buckets. Thus the Golf Club is expected to put $361,354 back into its golf fund bucket for future use. Note this “Profit” number is AFTER other expenses such as purchase of property and equipment, loan repayments, property taxes, and reserve fund payments for future maintenance/upgrades have all been deducted. In particular, the Golf Club will pay $492,640 into a reserve account this year for future major maintenance projects.

The bottom line is that the Golf Club, financed solely through Golf Club member dues, is solidly in the black with 100% reserves against future major projects. 

Renovation Loan

In 2007/2008, the Golf Club completed a major renovation of its club house facilities and restaurant. The previous clubhouse was an antiquated affair that would have been embarrassing for a municipal golf course. The Golf Club absolutely needed to do a major renovation lest it lose even more members to neighboring high class golf courses such as The Farms, The Bridges, Fairbanks, Del Mar Country Club, The Crosby and others.

Timing is everything however, and the renovation was completed and the the $9M loan put into place just as the 2008 recession hit. This severely affected the ability of the golf course to repay the loan on its original schedule. While the loan was not paid off as quickly as originally anticipated, the Golf Club was able and continues to be able to pay down the loan by itself with no help from non golf club members. As a member of the golf club, I have paid and will continue to pay $1,200 per year to service the debt until it is paid off. 

It is important to emphasize again that non Golf Club Association members do not pay anything towards repayment of this renovation loan. Nor did Association members pay anything towards the renovation itself. The entire $12M renovation (including some renovation of the restaurant area) was entirely paid for by Golf Club members.

Oh, and an interesting side note. The original lender, La Jolla Bank, did not require collateral. The bank deemed the Golf Club’s ability to pay sufficient.

$1M Association Loan to Golf Club

in 2012, the Association refinanced the renovation loan since interest rates had fallen substantially by then. The Association Treasurer decided that as part of this refinancing, it could use $1M of the open space fund and loan it to the Golf Club instead of the Golf Club continuing to borrow that $1M from the bank. This was a win-win in that the Association was making nearly nothing on the Open Space fund money, so instead of the Golf Club paying the bank interest, they could pay it to the Association.

Interestingly, at the time there was opposition from the Golf Club Board for this $1M Association loan. They were worried that people would misconstrue this transaction as being a bail out of the Golf Club or a sweetheart deal for the Golf Club instead of being perceived as a plus for the Association. And indeed this is exactly what has come to pass.


Most Golf Club expenses and revenues are internal to Golf Club members and have no impact on non Golf Club members. There is one area where this is not the case and that is the restaurant. Every golf course needs to have some sort of snack bar/restaurant as part of their service to members, and private courses all have higher end restaurants rather than just snack bars. The Rancho Santa Fe Golf Course is no different. 

What is different is that all Association members can dine at the Golf Club restaurant, not just Golf Club members. Indeed, analysis shows that restaurant patrons are approximately 50% Golf Club members, and 50% non-Golf Club members. 

This is another win-win situation. Golf course restaurant operations are almost always a money losing operation for any golf course, and likewise at Rancho Santa Fe. By inviting all Association members to use the restaurant, the Golf Club presumably loses less money on restaurant operations since their overhead is spread over more revenue. 


As anyone who runs a large commercial operation knows, you can make the profit/loss financials look great if you defer maintenance. ie. if you do not do the constant daily upkeep as well as saving money for anticipated major capital maintenance expenses, you can “save” a lot of money for many years. Eventually, though, you have degraded your property to the point that it can only be sold at fire sale prices.

The Golf Club does not do this. Ask anyone who plays at the course, and they will tell you that the grounds are kept in tip top shape. In addition, the club always fully funds its capital improvements and maintenance fund, so future major expenses can be paid without requiring extra Golf Club member assessments.

Value to the Association

Many HOAs feature a golf course running through them, but Rancho is fairly unique in that you have to be a Covenant property owner to join. Make no mistake, this residency requirement is a significant draw for Rancho Santa Fe property ownership. Our course can go toe to toe with literally every single other golf course in the region, save maybe Torrey Pines, and then only because Torrey is literally on the ocean and hosts PGA events and US Opens (our course would be good enough to host a PGA event, but, of course, we haven’t the parking and access infrastructure!). Our Golf Course is truly one of the best in southern CA, kept in impeccable shape, and is a significant asset to the Association even if you aren’t a Golf Club member.


Discuss this article in the Association Forum.