2020 and Fee Increases

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Many Members have raised the concern this week that Your Board is on record stating that Your Club has performed well this year, despite everything that has happened.

True.

I would like, therefore, to explain on behalf of Management and Your Board some of the specifics behind the decisions to increase Competition Fees and related matters.

Here are some irrefutable facts:

  • Last year, at this time, the Club owed the Bank approximately $800,000, representing approximately $1,000 per Playing Member, including Juniors and Cadets;
  • For many years, the Club has traded using the above Bank Debt Facility, serviced by Fees paid in advance. Whilst financially strong because of the obvious Club Assets, this situation is both unsustainable and economically unsound;
  • The Club had no liquid Reserves, whatsoever. Even the new upstairs Toilets, delayed by 18 months, were financed through the above Debt Facility;
  • Had it not been for the Covid JobKeeper and Cash Boost stimuli which contributed $480,000 and $100,000 respectively, the Club would not have been able to survive without further debt provisions or a Call on Members;
  • As a direct result of Covid, Revenue has:
    • Decreased by $225,000 on Functions, Gaming, Restaurant, etc.;
    • Decreased by $50,000 on Membership (new memberships held off during Covid); and
    • Increased by $190,000 on Green Fees
  • During the slowdown period, several key Projects were completed; financed largely out of the Covid windfall. These were all prioritised and linked to Health and Safety Compliance and then future revenue streams, including:
    • Halfway Bar
    • Cellar/Keg Room
    • Gaming upgrades including the TAB
    • Server room upgrade
    • New Signage on Twin Road
    • Digital Sign-in machines
    • Beer lines and Taps to all Bars
    • Entertainment options
    • Course renovations (Bunkers, paths, etc.)
  • Jobkeeper eligibility ceased on 30 September and Cash Boost in October;
  • We continue to wear the increased cost of doing business in these times with additional staff (Covid Marshalls) and cleaning, etc;
  • In November, the Club broke even – just. And that is coming into our peak period and still with very high Golf numbers.

I am not sure how you read the above, but it should be self-evident. We have been lucky, extraordinarily so – BUT something must give if Your Club is going to remain viable in the medium to long term.

But that is only half the story…

Over many years, the Club has asked the Course Superintendent to “make things work for longer”. However, as time passes, this becomes uneconomical. We have over-reached the end of the useful life of many of our fleet of machinery. In fact, we will soon need to spend significant funds on either replacements or expensive maintenance. Whilst the timing and urgency may be questioned, Members would not want to see the Course deteriorate in any way and most would agree that this is money that needs to be spent. Details are included below:

Maintenance Item

Cost

Age/Comments

Bunker Bike

     34,000

13 years

Agri Metal Blower

     18,000

10 years

Toro Sidewinder

     63,000

Over 20 years

Toro Fairway Mower

     88,000

9 years

Greens Mower – Electric

     80,000

20 years

Number 2 Coring Machine

     43,000

Required for efficiency

Tru-Turf Roller – Electric

     22,000

6 years

Tru-Turf Roller 6.5HP Honda

     22,000

7 years

Estimated Total

370,000

 

In addition, Members’ and Public well-being (particularly where children are concerned) is of paramount importance. The Club has several projects that must be undertaken over the next 12-24 month to ensure this, including:

Item

Cost

Fire Compliance upgrade

30,000

School Fence (8th Hole)

     70,000

8th Tee Retaining Wall

40,000

Move 18th Green and Nets

120,000

Replace Club Air Conditioning (Roof) units

180,000

Entrance road/parking resurfacing

25,000

Men’s Locker Room

200,000

Security Cameras

25,000

Estimated Total

690,000

Continual upgrades and maintenance of the Course, including:

Item

Cost

Pathway program

180,000

Bunkers on 13th fairway x 2, 9th fairway x 2

32,000

Concreting the green keeping compound

100,000

Water from School

30,000

Estimated Total

342,000

 

Members will note that much of work has been needed for some time and must get addressed.
The total cost is over $1,400,000 and that does not even start to cover what we may need if (WHEN?) something goes wrong. What if we have another Covid?

As was mentioned earlier – we have no current Reserves.

Many Members point to the fact that the new “user pays” model does not apply to Members who play Social Rounds. It is not appropriate to discuss Board proceedings, however Your Board has and will continue to consider this issue and will continue to communicate with Members, when it is appropropriate.

I would like to point out one thing for the record; the Nearest the Pin Prize Allocations have not, contrary to what is being touted around the Club, found their way into Revenue. The 18 NTP Balls have been added to the general Ball Competition and distributed to Winners. E.g., on Saturday 5 Dec, 97 balls (additional 18) were distributed instead of the normally calculated 79.

Members have raised several other concerns and Your Board is (and has been) actively looking at ways to make it work in the changing environment. Members will remember how we moved tables onto the Practice Green under an umbrella in July! Some of the changes include:

  • Bubblers have been turned on (with Sanitiser – please use it)
  • NTP will soon return
  • Presentations are being planned
  • Shotgun Starts are being considered

So where does this leave us?

The above issues are not new – they have been hurtling towards us, like a Freight Train, for years.
Your Board has not arrived at its decision lightly and is acutely aware of the times we find ourselves in.

Most importantly, the commercial realities and financial forecasts must be considered and dealt with “in the best interests of all Members”.

That is why, as announced, there will be:

  • A decrease in the Member Bar Levy by $50. Transparently, Members will note that this is a corresponding effective increase in the Member Subscription, so that the Total Fee charged to most Playing Members remains the same as it was last year;
  • There will be a decrease in the Discounts, as these have continued to grow as they have traditionally applied as a percentage – which again is not sustainable into the future; and
  • There will be a “user pays” model.

Your Board will consider all the input from Members at its next meeting prior to Christmas and again in January, however I sincerely hope that Members see that there are many factors in play and that the move to “user pays” makes sense, is commercially sound and financially sustainable.

Lastly, contrary to some opinions, this is not a “cash grab”, it is a thought-through plan to place Your Club on a firm Financial footing. Should Your Club be lucky enough to build sustainable Reserves in the future, Your Board would be delighted to be able to possibly (albeit unlikely) announce a reduction of Fees accordingly.

Mark Mathieson – President

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