[JMEvensky]

Tom - the best Savill Row suits cost $5k but that's out of my range so I buy accordingly, I'm sure clubs can get a perfectly acceptable system for a lot less money. It's obviously easier for Boards to spend other peoples money freely!

This is why member owned clubs should never try to turn an operating profit--somebody on the Board will try to spend it.

As was said previously,prudent clubs save money for capital expenses through initiation fees.Since initiation fees are dead/dying,a club must assess for Cap Ex. Assessments are the least of evils.

Mark,put a pound sign instead of a $ in front of your 5000 and you're still not at the best on The Row--and that doesn't even include plane tickets for fittings .

[Patrick_Mucci]

Lou,

The absolute worse thing that a member club can do is incur significant debt.

Pay as you go is the only way to go

Acquiring significant debt pushes the burden of repayment on future members.

Acquiring significant debt has caused club after club to go under.

Mark,

Normal attrition causes a club to lose 5 to 10 percent of it's membership each year
Adverse times increase that number.... Dramatically

You're clearly unfamiliar with costs at U.S. Clubs

Tom Doak,

I don't know about 1.5 million, but it's probably 1.0 to 1.5 in the greater Met area.

But here's my question to you.

If the club has retained an architect, and the club has a professional superintendent, and they construct an RFP for bidding purposes, and the RFP is sent to a dozen firms, do you think the green committee members and board possess the knowledge and experience to override the recommendations of the professionals that they've retained ?

Do the club members know if the irrigation system, as structured by their professionals is adequate or excessive ?

If that's the case, do you feel the same way about being second guessed on the alterations you recommend ?

This isn't an easy issue.

Green committee and board members have an obligation to exercise due diligence, and in the execution of that due diligence, they retain professionals, experts in their respective fields. And they rely upon the opinions and advice given by those experts.
 
So how can you suggest that they should ignore the recommendations of those experts ?

[Patrick_Mucci]

US member clubs have far more predictable revenues due to the lack of weather and economy sensitive visitor play.

Mark,

You're just not familiar with weather patterns and how they can affect clubs in the U.S.
In the UK you have a narrow, fairly consistent weather pattern, no prolonged droughts with 110 degree temperatures, no ice burn/mold from greens being under ice for most of the winter, no floods, no hurricanes.  Just to give you an example, aside from the normal wind damage caused by hurricane Sandy on Long Island, the wind blew the salt water from the ocean inland killing or severely damaging almost every Pine Tree, pine trees that frequently served as visual perimeter barriers.  How do you budget for replacing those perimeter trees ?  

Pat - if my club lost 12% of the membership I'd resign as well.

Doubling or tripling land taxes, where do you live, Zimbabwe?

It's not unusual to get a significant tax increase.
Appealing same is costly, even if you win.
How do you budget for unexpected increases in taxes, fuel,electricity, employee benefits, insurance, etc., etc ?

Structural deficit/malfunction is exactly why clubs should have reserves.

And how do you get adequate reserves without assessing or pumping up your dues and/or initiation ?

Natural disaster - contact the clubs insurer.

You must not be familiar with insurance, flood insurance or other coverages.
After hurricane Andrew and Wilma, insurance costs jumped through the roof and many items were excluded from coverage

Need more chemicals, it's a golf course not Bhopal.

This clearly shows your ignorance on agronomic issues

Member clubs need to make a sensible profit to build reserves and deal with the replace of capital assets.

OK, so when the DEP comes in and says you need a new facility to store your chemicals, and the cost of that facility is $ 1,000,000+, tell us how and where you get that money without an assessment ?

You're living in a dream world when it comes to budget items and unexpected costs

If your watering system cost £250k and is expected to last 30 years then you cannot be assessing them when it needs replacing.

$ 400,000 for an irrigation system ?
Again, what world are you living in ?

Despite Tom Doak's objections, you're talking about more than $ 1,000,000, and probably closer to $ 1,500,000 in the NYMet area.
If a club has 300 members, that's $ 5,000 per member, irrespective of how you amortize it.
And remember, the longer you amortize it, the more your cost to carry the loan is.

[Ulrich Mayring]

If a club has 300 members, it should get together with two other clubs and create a 900 member club. That would create an economically feasible operation that could build reserves over time. Stop subsidizing unsustainable businesses.

Ulrich

[Sean_A]

Aren't assessments another word for poor management? If you cannot balance the books and the members bail you out every time there is little insentive to get the numbers right.

Chappers

It depends is the obvious answer to your question.  While I could obviously see the benefits of creating a renwable water suppy for the course and replacing the watering system, I voted against both proposals based exactly on your ideals.  Since neither issue is an immediate threat (that we know of) to the health of the club, why not take measures to save money for five years then take another view?  If in the mean time it does come to pass that our water supply is threatened (which I believe eventually will be the case) or that the cost of water rises to intolerable levels, we can take emergency action and get the work done in two winters just as we did anyway.  As one writer stated earlier, I am dead set against huge reserves (the sort of reserves which can cover the cost of a watering system and a reservoir) just kicking around in the bank.  That sort of money in the hands of a bored committee is courting disaster!

Ciao  

[Thomas Dai]

As one writer stated earlier, I am dead set against huge reserves (the sort of reserves which can cover the cost of a watering system and a reservoir) just kicking around in the bank.  That sort of money in the hands of a bored committee is courting disaster!
Ciao  

Absolutely spot on IMO. Golf club committees and available funds is pretty much a disaster waiting to happen - any such funds available are more more likely to be frittered away on scented soap and towels, logo'd lavatory paper, fountains in ponds, chandelier light fittings, patio heaters and the like rather than on course improvements.

One of my favourite courses, and one favourably reported on by others herein, has no sprinker system and only two full-time greenkeepers, yet it has terrific greens and is a blast to play. Okay, I appreciate that different parts of the globe have different climates and club and conditioning expectations vary in different areas of the globe but in my experience available funds and golf club committees are not a recipe for success - unless maybe if there is some kind of legal/financial 'lock-in' that stops the money being spent except with the majority agreement of the members at say an AGM/EGM, and even then I wouldn't hold my breath that some committee or other won't try to navigate a route around the 'lock-in' to get their hands on the money. But that's just IMO, others are more than welcome to differ.
ATB

[Lou_Duran]

Lou,

The absolute worse thing that a member club can do is incur significant debt.

Pay as you go is the only way to go

Acquiring significant debt pushes the burden of repayment on future members.

Acquiring significant debt has caused club after club to go under.

My suggestion was that a club encountering cash flow problems over a budget year might consider a WORKING CAPITAL loan (as in short term), austerity, and a small dues increase in lieu of an assessment.  Being a conservative on financial matters, I tend to agree that debt can be extremely dangerous, particularly if it promotes over-spending (more going out than coming in over long periods of time).  But, depending on the conditions of the club, its position in the market, and its economic prospects, I can see using debt when the terms are attractive and the maturity can be matched to the income stream (through greater revenues, reduced costs, or both) from its use (what the borrowed funds are spent on).  While an assessment might make things easier if the membership is onboard, the probability is that it is no big deal for a small number of members who might be calling the shots, inconvenient, but doable for a large segment, and a deal-killer for a smaller group.  Ideally, assessments should be used only for extraordinary circumstances, primarily to improve the viability of the club, and subject to approval by a super-majority.

[SL_Solow]

I wonder how many of those commenting on this thread have any experience in managing member owned clubs?  In our experience, all of our significant equipment is scheduled with a useful life and anticipated replacement cost.  In creating our dues structure, we try to factor in the likely future needs.  From time to time unexpected needs arise and these are handled through assessments or short term loans which are covered by dues/periodic assessment increases.  As for paying dues while the course is renovated, we have experienced this issue when a major storm required a renovation which we used to bring back much of the Colt & Alison which we had lost.  We also shut down for several months when we gassed and regrassed our greens.  Both times dues continued.  How else could the club pay its bills.  A super majority voted in favor of the changes.  It was unfortunate but we lost a few more members than usual but very few.  The trick is to make sure the membership as a whole supports the project.  But if the changes require a temporary closure, there is no choice but to find a way to pay the bills.

[Patrick_Mucci]

Lou,

I know of a number of clubs that deliberately keep their dues lower than necessary to pay for expenses in order to preserve membership for the upcoming year, and then, hope for the best, with assessment being the final curative measure.

[Carl Johnson]

I'm curious to know the culture around "assessments" in the States as it's not something that really happens over here.

Has anyone come across a scenario whereby an assessment was raised for improvements / renovations etc and when the member suggested that they would have to leave because they could not afford to pay it (or would not as it didn't make financial sense to them), the club told them they were actually obligated to pay the assessment? Granted these sorts of clubs have different membership agreements but would this scenario be (a) pretty standard (b) not standard at all but not unheard of or (c) virtually unheard of?

Brian, as you say, whatever deal (set forth in the club's governing documents) the member has bought into by joining will apply.  But in my limited experience members who do not wish to pay the assessment, for whatever reason, may resign from the club before the assessment is due (or some other specified time) and avoid paying the assessment and further dues.  I've not heard of the experience you describe.

Follow-up: Here's an interesting situation regarding Desert Mountain Club (Scottsdale, AZ, USA) and assessment obligations brought to my attention by a friend of GCA -
http://desertmountaingolfscam.com/

[Patrick_Mucci]

Carl,

Are you aware that Desert Mountain is a huge residential gated community ?

I'm not familiar with the particular by-laws, although I do have about a dozen or so friends who are members.

But, I'd imagine that trying to sell your house, without a golf membership, would be difficult.

[Mark Chaplin]

Pat I'm a member of a Chicago golf club.


Also pretty much every chemical has been banned in Europe, we are clearly decades ahead of the USA in sustainable agronomic processes.

[Patrick_Mucci]

Pat I'm a member of a Chicago golf club.

I didn't think that CGC was a part of a gated, residential community.

[JMEvensky]

Pat I'm a member of a Chicago golf club.

I didn't think that CGC was a part of a gated, residential community.

Pat,note the article before Chicago.

[Mark Chaplin]

How wrong you can be, I've played at Wheaton several times but that's Chicago Golf Club not a Chicago golf club.

[Patrick_Mucci]

Pat I'm a member of a Chicago golf club.


Also pretty much every chemical has been banned in Europe, we are clearly decades ahead of the USA in sustainable agronomic processes.

Mark,

I don't know much about Europe in terms of golf courses or climate, but, could you list 10 great courses in Europe, outside of the UK ?

Then could you list the really good courses, outside of the UK, where the average high temperature in June, July and August is in excess of 100 degrees, as it is in Scottsdale, AZ ?

Thanks

[Patrick_Mucci]

Pat I'm a member of a Chicago golf club.

I didn't think that CGC was a part of a gated, residential community.

Pat, note the article before Chicago.

JME,

Noted.

Thanks

Mark, what has your being a member of "A" Chicago golf club got to do with anything ?

[Carl Johnson]

Carl,

Are you aware that Desert Mountain is a huge residential gated community ?

I'm not familiar with the particular by-laws, although I do have about a dozen or so friends who are members.

But, I'd imagine that trying to sell your house, without a golf membership, would be difficult.

Pat, a friend of mine who's a follower of GCA forwarded the link to me as relevant to this thread.  I'd never heard of Desert Mountain, but I looked it up and, yes, it appearded to be as you described.  So, I thought it was worth posting for informational purposes without editorial comment . . . for those who might be interested in looking at the issue further.  I read the link's author's first page and some of his further links, but have no real opinion on the legal (or otherwise) of the situation.  Best wishes to you and all for a Happy New Year (a day early)!

[Patrick_Mucci]

Carl,

The amazing thing about Desert Mountain is that it's 8,000 acres. Manhattan is 14,528 acres.
Think about that.

It's so huge that the different golf courses and I think there's  six of them,  each have their own clubhouses, and the clubhouses are huge.

It can take you about a half an hour just to get to the front gate from your home.

What really surprised me about the development was that the developer had Nicklaus design all of the courses.

The one I really liked was off the main property.  It was pretty neat

[Carl Johnson]

Carl,

Are you aware that Desert Mountain is a huge residential gated community ?

I'm not familiar with the particular by-laws, although I do have about a dozen or so friends who are members.

But, I'd imagine that trying to sell your house, without a golf membership, would be difficult.

Pat, a friend of mine who's a follower of GCA forwarded the link to me as relevant to this thread.  I'd never heard of Desert Mountain, but I looked it up and, yes, it appearded to be as you described.  So, I thought it was worth posting for informational purposes without editorial comment . . . for those who might be interested in looking at the issue further.  I read the link's author's first page and some of his further links, but have no real opinion on the legal (or otherwise) of the situation.  Best wishes to you and all for a Happy New Year (a day early)!

More - Pat, sounds like a unique place.  What do your dozen or so friends think about the assessment issue and arguments on the "fraud" side?

[Patrick_Mucci]

Carl,

I'll see some of them after the 1st of the year and I'm going to ask them for their views.

Happy New Year to you and all participants and lurkers on GCA.com

And, especially to Ran for making this all possible.

[Steve Pozaric]

To respond to the OP:

My club in StL was closed for about 8 months when we regrassed our greens several years ago   Full dues, no assessment  (due to a nice convergence of the timing of events).  We are a mid-tier club and every club in our area was more than generous with reciprocal play at no cost other than cart fee if used.

Most clubs around here have used the same model (other than no assessment).

As to assessments and capital improvements, it is a new world for non top tier clubs if StL is any indication.  Market is driving initiation fees down, yet capital costs continue to rise.  While a club used to depend on initiation fees to cover the costs, they now have to hit current members.

As to having reserves, they are good but need to be accumulated/designated for special projects, else they will be spent very quickly.  At least that is my experience from being on the board.

[Adam Warren]

Something I will add to this is the situation at Valhalla, besides the reciprocal that I know they set up on regular basis with some of the area courses during closures, I am not sure why people want to be members there besides social status.  Sure, it is great for them to have all of these PGA events, and that is only a couple weeks every couple years they are closed.  However, due to all of these events there are multiple times over the last 5-10 years the course has been closed for renovations.  They may be improving the course (more for the pros than anything) but how frustrating could that be to be shut down that often?  Again, many of the members at Valhalla have other memberships throughout the city and V sets up their members with other courses, but I am fairly certain that the members pay full dues during this time and they have been shut down multiple times.  Who knows how many more times they will shut down in the future in preparation for any other events.  I am guessing Valhalla does not have assessments as they have many avenues to make money and are PGA owned, but it would almost seem it is a requirement to be a member somewhere else when you are a member at the biggest name course in Kentucky.

[Mark Chaplin]

Pat my membership of a US club is only relevant in showing you I do understand a little about US golf, in fact in the last 3 years I've played many of the best courses in England, Scotland, New Zealand, Australia and the USA. Your passport picked up any stamps recently?

Rather than listing courses as you always demand I was wandering what percentage of US top 100 courses are in areas of extreme 100 degree heat?

[Patrick_Mucci]

Pat my membership of a US club is only relevant in showing you I do understand a little about US golf, in fact in the last 3 years I've played many of the best courses in England, Scotland, New Zealand, Australia and the USA. Your passport picked up any stamps recently?

Rather than listing courses as you always demand I was wandering what percentage of US top 100 courses are in areas of extreme 100 degree heat?

I didn't know that the topic of this thread was "Paying dues while your top 100 course is being renovated"

I thought it was about any private course.

But, to answer your question, just about every course in South Florida, like Seminole, Pine Tree, Streamsong Blue, Streamsong Red, Mountain Lake, Boca Rio,, etc..etc.

You could throw in courses in Texas, Arizona, Nevada, parts of Southern Cal, Alabama, Mississippi and Georgia as well.
High temperatures of 100 are not unique in the summer.
Even New Jersey gets 100 temperatures every now and then.
You have heard of Pine Valley and Merion, yes ?

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