Here is some information I found to help people who are confused about how the handicaps are being calculated...

How Are League Handicaps Calculated?  

     One of the wonderful features of the scoring system we are using is that it calculates a separate league handicap based solely on your league scores.  The staff in the shop have absolutely zero influence on handicaps.  Most importantly, the "system" should be recognized as an inanimate, unbiased mechanism to track, record, calculate, allocate,tabulate and publish numbers attached to names - nothing more.  The triggering device to set it in motion is the input of a player's score; how many strokes they took to complete 9 holes of golf.  The first calculation, with respect to determining a handicap, is to deduct the pre-determined course rating from the player's score.  This "index" or number is the basis for determining a league handicap.  League handicaps are determined by taking a players best four scores out of their last seven, adding them together and then dividing by 4.  The system then subtracts the league course rating which, in our case, is set at 35.   The final number is either rounded up or down.  In the case of players that are new to the league, the program produces three "dummy" scores to establish a handicap for each player.  This reduces the possibility of wild swings in handicaps for the first few weeks until a new player has established a league handicap that is representative of his skill level. 

Here is an example...

Jon Smith (New to the league in 2010)

     Because Jon was new to the league in 2010 and we didn't know his actual handicap he was set-up in the system with an 18-hole handicap of zero.  Every league handicap is calculated the same way.  The system produces three "dummy" (D) scores to help Jon establish a league handicap.

     Jon's scoring history looks like this...  36(D), 36(D), 36(D) plus his actual scores of 45 on July 16th, 51 on July 17th, 55 on July 18th and 44 on July 19th.

     Jon's four best scores are 36(D), 36(D), 36(D) and 44 which, when we add them together, equal 152.  The system divides 170 by 4 to get 38 and then subtracts the course rating (35) to get 3.  The system either rounds up or down so Jon's league handicap for his next round will be 3.

    Important - once Jon posts his 8th score the "Dummy" scores will gradually disappear from his history and be gone from his scoring history forever. Like his regular GAO handicap, your league handicap will carry forward
from year to year