ppcc 2010 annual meeting

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Perry Park Country Club2010 Annual Meeting

October 9, 2010

4:00 PM

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Agenda• Registration of Attendees

• Call to Order

• Determination of Quorum Present

• Approval of 2009 Minutes

• Presidents Report – Ray Iversen

• Committee Reports House – Sandy Shoemaker

Golf/Tournament/Handicap – Don Armour

Grounds and Greens – Phil Bonfanti

Membership – Lee Richardson

Long Range Planning – Dan Branda

Finance – Dan Sederstrom

• Ballot Tally

Ballot Measures

Election of Directors

• Recognition of Retiring Directors

• Adjournment

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President‘s ReportRay Iversen

Annual Membership Meeting

October 9, 2010

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Adapting to Our Environment

• Our EnvironmentWeak national and Colorado economy

Colorado unemployment rises from nearly 7% to over 8%

Slow residential real estate market

Golf competing for discretionary dollars

Intense competition from public and private golf courses

Our course and it‘s conditions remain one of the best in Colorado.

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• Our Club 2009-2010 Surplus in 2009 avoided need of year-end assessment

Membership attrition most critical issue. Full (Equivalent) October 1, 2007 342.0

Full (Equivalent) October 1, 2008 297.3



Expectations of lower revenue drive cost reduction for 2010 budget.

Mid-year adjustments made to avoid 2010 year-end deficit. Modest dues increase

Additional outside revenue from outside play

Suggested modifications to by-laws

Long-term debt reduced from $756,000 to $630,000 (Oct-Oct).

New tees on #3, #7, #12 and #16 with Bunker renovation on #12

New tile placed in Manor House entry

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• Outlook for 2010-2011

A challenge in developing a budget for 2011.

Need to reverse the decline or at least stabilize membership level

Some capital expenditures necessary in 2011Course Maintenance equipment

Manor House

Carpet?

Continued focus to control costs.

Committees formed to review options for:Long-term Food & Beverage operations

Recapitalization of Club‘s financial structure

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House CommitteeSandy Shoemaker

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F&B committee

Mission Statement

To explore the current structure and

alternative structures for the food and

beverage operations at PPCC with the

objective being to be able to execute the

delivering of food and beverage at a

service level that is expected by our

membership and within a financial model

that is also acceptable to the members.

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House Committee

Changes for 2010

• Manor house—

The committee initially approved to move forward with

replacing all the flooring on the main level of the manor

house and the computer area on the lower level

Priority was the main foyer – which was accomplished in

Spring 2010

Other projects put on hold due to material choices and

eventually due to funding

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House Committee

• Upcoming manor house improvements

Recommendations

New carpets/flooring for the dining room is priority #1

Restroom improvements – priority #2

Remainder of flooring

PDR last priority

• Longer term Manor House needs

Chairs for dining room and grill

Light fixtures in PDR

Paint

Window coverings

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House Committee

• Events – central to keeping membership and

building community

Halloween » Snowball

Candlelight » Bingo – new event

Poker nights » Valentines Day

Guest chef » Putt-putt challenge

March Madness » Kentucky Derby

Wine & Jazz » Steve Barta – jazz night

Many more events sponsored by members

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House Committee

• Christmas at the Club

The house committee is also responsible for the

Christmas decoration – lots of hard work went into

this last year

We will be decorating this year on November 27 and

28th - would love more help

If anyone has LED lights that we can use to decorate

on the outside of the house – we‘d love to spruce the

place up over the holidays

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House Committee

• Upcoming EventsPoker

Bowling

Bacci ball

Halloween

Candlelight

Snowball

Chef cooking classes

Bingo

Jazz night

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House Committee

• Other House Items

Adopt – a – highway

Thanks to Andy for the suggestion

Kim Crosely has led this effort

Signs are up on 105

Thanks to the club for everyone‘s participation

Committee looking at F&B structure and

organization for long term

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House Committee

• Thanks to the following committee members:

Lynda Begler

Kendell Christensen

Trisha Peterson

Lorelie Branda

Kim Crosley

Steve Vecchione

Justin Daigle

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Food and Beverage

• A year of change

Hire of Asst. F&B - TJ

F&B director Tom Snell – Left in July

Wedding coordinator – removed in September

Highlight –

Max‘s – Mindy and Lana have done a great job

revitalizing and increasing sales at Max‘s

F&B cart on the course

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Food and Beverage

• 2009 compared to 2010 through 9/30

9/30/09 – Revenues: $564,000

9/30/10 – Revenues: $605,000

Gross margin 71%(‗09) - ___ (‗10)

Bottom line - $27k (‗09) - $___ (‗10)

• Outside income ( weddings)- $15,000 to

the bottom line

• Outside sales (play) - $34,404 revenues

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F&B committee

• Remember - no country club makes

money in F&B

• Best case scenario – break even

• Needs to be looked at in light of all staffing

issues at the club

• Weddings are key in us reaching break

even – we have at least 9 weddings

confirmed for 2011

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Golf, Tournament and Handicap Committee

Don Armour

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Tournaments Analysis – Outside Groups

• Total of 7 events generating $57,432 in revenue and $33,365

(56%) in profit for PPCC vs. $110,783 in revenue and $72,122

(65%) in profit in 2009 from 11 events.

• Although the trend was down from 2009 these groups

contributed to our profits. Thanks to John and all of the Pro Shop

staff for selling and taking care of all these Outside events!!!

• A major goal next year will be to increase outside group play.

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Tournaments Analysis – Member Events

• Total profit from member events (excluding Justin‘s Revenge)

was $31,561 compared to $30,544 in 2009.

• $12,818 is attributed to the Invitational, $3,498 to the Classic and

$3,941 to the Pow Wow (62% of total profit).

• Prices for tournaments was the same as 2009.

• Thanks to our members for their strong support for and

participation in the tournaments and to all of our staff to make

them a success.

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Golf Tournament and Handicap Committee

Activities/Accomplishments

• Updated the Golf Policies

• Updated the score card

Replaced USGA rules with local rules

Added Red Tee Yardages

Added space for initials for the second nine holes

Added pace of play language

• Held Rules of Golf Seminar in April

• Enhance ForeTees system

Groups helping the Pro Shop more

Spouse e-mail updates

Used for Tournament registration

• Parent/Child Tournament in June

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• Added tournament to benefit the Anchutz Cancer Center; raised

approximately $5,700

• Developed a brochure with golf events, associations, programs and

tournaments

• Analysis comparing Perry Park golf course length, slope and rating with

other private clubs published in Fairway Views

• Experimented with a men‘s 9 hole mid-week evening play event

• Experimented with holding starter times on Fridays, Saturdays and Sundays

to help manage tee times

• Restricted Member/Guest handicap differentials to 10 strokes for

tournaments

• Statistical analysis of hole-by-hole scoring in tournaments for 2009 and

2010

2009 results published in Fairway Views

2010 results show difference in scoring from the three new gold tees

Data used to re-rank holes for 2011 golf season

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• The policy regarding posting of scores and handicap

verification has been changed:

home course scores are expected to be posted on the day

of play, and all no later than 3 days after play

all winners in specified tournaments will be audited to

ensure that all scores have been posted

failure of winners to post scores will result in

disqualification and forfeiture of all prizes

tournament guests must provide contact information who

can verify handicaps

Thanks to our committee members:

Mary Craig, Alice Gordon, John Merrihew, Jeff

Anderson, Frank Pugliano, Jim Storms and

Bill Wood


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Grounds and GreensPhil Bonfanti

Mike Kronschnabel

Justin Daigle

Joe Clements

Marilyn Parker

Bill Cannon

Scott Christensen

Bert Rambo

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MISSION

• Based on membership input and survey, make long term improvements to the golf course that will result in improving member satisfaction, attract new members and improve overall play and beauty of course

• Maintain course on a daily basis

• Accomplish above in fiscally responsible manner

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METHOD

• Review membership survey in detail

• Solicit input from membership

• Prioritize items within budget

• Gain board approval

• Support Justin and his team

• Accomplish work

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CHALLENGES

• The winter was extremely difficult on our greens

Justin did a great job in restoring them and

today they all look great!

• Money money money – despite very restrictive

budget – we got some key items done on a

timely basis

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Key Accomplishments

• Bought trencher to improve drainage in bunkers

• Put in new forward tees on #3, #7 and # 16

• Made major improvements to # 12 – IT LOOKS

GREAT

• Put in new tee signs at NO COST!

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What needs to be done

• Still need bunker renovation in order prioritized as

budget permits

• Need to fix cart paths (too costly in today‘s environment)

• Do not soften the course – keep it a challenge!

• Leave the trees alone!

• Support Justin and his staff

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Membership CommitteeLee Richardson

Committee Members

Andy Morris

Herb Miller

Bob Buente

Val Duringer

Jim Dawson

Jenn Jaeger

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Membership Details

Full FOA Social Jr LOA Annual FNE FOA NE Jr NE Centennial

Jan ‗10 207 26 119 2 7 6 34 3 2 11

Oct ‗10 179 25 127 1 10 18 26 3 1 10

Variance (28) (1) 8 (1) 3 12 (8) - (1) (1)

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2010 Programs and Plans

• For 2010 we had the following programs and plansAnnual Golf Passes

$51,700 in revenue

Get Acquainted Days

New Homeowners mailings in surrounding Zip Codes

Resigned Member contact program

ACT database letter campaign

Golfhub.com campaign

Member referral program

Multiple email campaigns to members and prospects

Web site updates and redesign

New Welcome kit for new members

New Member Reception

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2010 Marketing and Awareness Programs

• For 2010 we had the following Marketing and Awareness

plans in place

FM 104.3 radio ad

Colorado Avid Golfer Magazine

Two Ads

One of which the cost was offset by a tournament that was co-sponsored

and advertised on the CAG website and email database

Denver Post Castle Rock Hub Ad

Perry Park Sentinel and Bell Mountaineer Ads

Paid Targeted Marketing list mailings

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ACT database

• Finally after 2 years I believe we have a working

software database of prospects that can be

followed up effectively

• Two staff members were sent to two days of

training in Colorado Springs.

• Complimented by an integrated application

called Swiftpage we can email thru the ACT

database and track the activity of that e-mail

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2011 Marketing Plan

• Membership committee will have ready in

November, a comprehensive marketing plan that

will be presented to the Board

• In Nov and Dec the committee will have a series

of workshops with the board to finalize

• For 2011 we hope to have a dedicated

Membership Sales Director. Over the last two

years I have realized that this is an absolute

must and we cannot share duties or go without a

Membership Sales Director.

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Acknowledgements

• My sincere thanks to Herb Miller, Bob Buente, Andy

Morris, Val Duringer for their time, dedication and

excellent work on the committee.

• We also have added in 2010 two additional

members, Jenn Jaeger and Jim Dawson.

• Herb Miller will be retiring from the membership

committee after 6 years

• For more detailed information please visit the PPCC web site and review

each months membership minutes

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Long Range Planning Committee2010 Annual Meeting

Dan Branda

Mike Kronschnabel

Andy Morris

Dru Foust

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The Plan

• 2010 – 2015 Plan Board

Committees

Briefing of new Board members

• Plan contents includeGolf industry and local market trends

Water Rights

Capital Maintenance items and potential project list

Committed funding

2010 Business plan

Financial scenario planning

Partnership criteria

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Marketplace• Reference DocumentsMcMahon 2009 Country Club Outlook

2009 bank appraisal

Douglas County 30 year plan

Futurespeaker.com

Marketing demographics from the Membership Committee

• ConclusionMarket place under stress and will be that way through

2015. In the USA multiple golf courses will close

Once a Golf Course always a Golf Course

PPCC will need to attract members from the 80104 & 80109 Castle Rock area

Perry Park and Larkspur will grow and will always be the primary market

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Water

• Water RightsOur Rights are secure

2010 final resolution of refill right ?

PPCC is obligated to keep dam in good repair

PPCC can not encumber our water rights

• Chatfield water storage option 100 acre feet storage option if projects move forward

$500,000 + for us to execute the right

Build out still years away

ConclusionNot a strategic asset, sell now

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Capital Maintenance• Major outside itemsGolf equipment, parking lot, roof, gas tanks, irrigation

system, dam, fencing, painting

• Major inside items HVAC system, IT equipment and software, carpets,

restrooms, painting, kitchen equipment - Manor House & Max‘s

• Funding requirements Minimum funding $70,000/yr

Full funding based on asset life $100,000/yr

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Potential Capital Projects

• Prioritizing project list Focus groups

Potential members and current members may have

different priorities

Projects can be done in phases

• Golf Course Bunker renovation, cart paths, putting greens, chipping

area, 18 hole green, level tee boxes

Total cost about $600,000

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Potential Capital Projects

• Manor House Carpets, bathroom, counter tops, locker rooms, exercise

room, upper level office area

Cost about $300,000

Birkey plan

• Other Projects Cart barn, cart barn/pro, pool & changing room

@ $220/sq-ft a 3,000 sq-ft cart barn cost $660,000

Cart barn & proshop at 6,000 sq-ft cost $1,320,000 but frees up space for the exercise room and larger women‘s locker room

Pool construction $75,000 - $100,000. Still may need a changing room

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Partnership / Alliance Criteria

• Partial Criteria includes Strategic intent of PPCC

Strategic intent of partner

Management of relationship

Compatibility of partners

MOU commencement, term, evaluation, benefits to both

parties

Value/ negatives to our members

Impact on future members

Define economic gain to both parties

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Finance CommitteeDan Sederstrom

• 2009 Calendar Year Audited by Van Dorn & Bossi – CPA

Opinion letter states that our financial statements reflect the

financial condition of The Club operations ended 2009 with a surplus of $33,300

Pro Shop golf revenue and retail sales generated a profit of $173,500

Food & Beverage incurred a loss of $14,500

Revenue from Members dues increased $30,400 over 2008

Revenue from sale of Annual Passes was $23,700 in 2009 vs $66,000 in 2008

Balance on the Line of Credit loan was 0 as of Dec 31, 2009

Long term debt decreased $107,500 in 2009 to a balance of $724,700

Sinking fund had a cash balance of $8,700 as of Dec 31, 2009

The Capital improvement fund had a cash balance of $57,700 as of Dec 31, 2009

The number of Full Equity and Non Equity memberships decreased by 12 to 256 at year end

Because of operating surplus there was no assessment for 2009

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Schedule of Last 3 years

Category

2007

Actual

2008

Actual

2009

Actual

Initiation Fees $ 104,600 $ 45,000 $ 3,700

Capital Improvement Fund

revenue

27,000 89,000 * 81,500

Capital improvement

expenditures

56,000 82,900 1,600

Annual operating profit (loss) 25,500 ** (177,500) 33,300

Food & Beverage profit (loss) (65,000) (138,200) (14,500)

Pro Shop profit (loss) 207,000 163,300 173,500

Golf Course maintenance costs 699,000 705,500 657,400

General & Admin costs 474,000 458,000 440,200

Line of Credit loan balance 40,400 174,000 0

Long Term debt loan balance 976,100 832,200 724,700

# of Dues Paying Members 306 268 256

Monthly Dues excluding debt $320 $373 $403

•* 2008 was first year of collecting $25/month

•** The surplus includes $49,600 of property tax rebates rx‘d for years 2005 and 2006

•*** 2007 does not include $25/month for the capital fund while 2008 and 2009 do. All 3 years

include the $50 for debt payments

Following schedule compares some of the major components for the last 3

years. This is helpful as it provides a glimpse of the financial trends of PPCC

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Capital Improvement Fund

• Fund had a cash balance of $6,900 as of Dec 31, 2008

• In addition there was $29,000 of unfunded 2008 expenditures

which was carried forward to 2009 as part of our LOC

• In 2009 the club expended $29,000 to pay for the 2008

carryover plus $1600 on new capital projects

• The board made a decision during 2009 that there would be

no further funds expended on capital projects until there was

sufficient cash in the fund to pay for the costs.

• The fund ended 2009 with a cash balance of $57,700

• Thru August 2010, $59,600 has been spent on capital

projects. It is projected this fund will have a cash balance of

approx $70,000 at year end 2010

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Sinking Fund(Debt Service Fund)

• On Dec 31, 2008 this fund had a negative cash balance of $4,100

• In 2009 our debt obligations totaled $151,800 while the $50 in dues

generated revenue of $164,600 leaving a cash balance of $8,700 at the

end of 2009

• In 2009 the board negotiated a restructuring of our long term debt

payments. The restructuring eliminated the $50,000 principal payment

which was payable every July on the smaller loan. The new monthly loan

payment is $13,000 plus monthly interest (approx $800) on the small loan

thru Oct 2013. The restructuring extended the final payoff date by 2 years

but our annual debt service requirement was significantly reduced.

• The new monthly loan payment is covered so long as we maintain 260 full

dues paying members. At the end of 2009 the club had 256 full dues

paying members.

• If the membership remains at the current level of 240 members there will

be a shortfall of approx $12,000 per year. The fund is projected to have a

negative balance of $6,000 on Dec 31, 2010.

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Line of Credit Loan

• On Dec 31st 2008 the loan balance was $174,000. This loan

was paid in full in April 2009 from the proceeds of the annual

assessment of $648 to each full member.

• In June 2009 the Club borrowed $50,000 to fund cash flow

requirements

• This loan was paid off in full prior to Dec 31, 2009 leaving a

zero balance at year end.

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2009 Financial Analysis and 2010 Projection

Operating Fund 2009

Budget

2009

Actual

Variance

Fav (Unfav)

2010 Projected

Membership revenue $ 1,063,900 $ 1,093,300 $ 29,400 $1,010,100

Annual Pass Sales 106,400 23,700 (82,700) 51,700

Pro Shop Net profit 148,100 173,500 25,400 160,300

Food & Bev net (loss) (50,200) (14,500) 35,700 (28,300)

Course Maint costs (673,900) (657,400) 16,500 (663,600)

General & Admin costs (473,600) (440,200) 33,400 (409,400)

Manor House costs (106,900) (107,900) (1,000) (99,600)

Operating Profit (loss) 13,800 70,500 56,700 21,200

Membership Marketing

Costs**

(15,300) (37,200) (21,900) (38,100)

Total Profit (Loss) (1,500) 33,300 34,800 (16,900)

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Summary 2009

• 2009 was a very good year financially, given the economic problems

of the country and our local area

• Surplus was the result of selling many Non-Equity memberships and

reducing the loss in Food & Beverage by $124,000, cutting

expenses and dues increase of $30 per month

• However we had a net decrease of 12 full members in spite of the

tremendous efforts of the Membership Committee

• This is a very disturbing trend but appears to be driven by the

economy and its related impact on the finances of our members

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Summary 2010

• 2010 has presented new issues and is proving to be more challenging than 2009

• Membership sales have been very difficult with only 8 sales thru Sept, with more

resignations during the first 6 months of this year than in previous years.

• As a consequence, revenue from dues is below budget and is less than collected in 2009

• In July the board was dealing with:

Decline of 15 memberships from end of 2009

Loss of several Monday golf tournaments

Significant drop in guest green fees and cart rentals

• Board decided that a mid year correction was necessary

Dept Managers were asked to reduce their expenses by 5% for remainder of the year

However the board decided that this would not be enough action as expenses can only be cut so far

without having a product to market

Therefore dues were raised by $15/month

Limited outside non-member play was allowed in afternoons after 12PM

• Projected that we could generate $30,000 in additional revenue from outside play

By Sept 15th we have already achieved this goal

• As a result it now appears that the operating loss could be $20,000 and perhaps less

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Summary 2010

• Food and Beverage Dept has had an incredible August and Sept, mostly due to exceeding

budget the number of weddings.

• Combined non-member green fees and cart rentals has improved our financial condition to

the extent that the operating loss in 2010 will be small.

• Some members have expressed their concern of allowing outside play as it diminishes our

image as a private club. The board is very sensitive to this issue, however the fact is that

241 members cannot financially support this club

• We need to focus on raising revenue not just cutting expenses.

• Board also realizes that membership sales will be difficult for the foreseeable future

• Outside play will be utilized only to the extent required to keep the club in a financially sound

condition which will be in direct proportion to the number of full members in the Club.

• This is a revenue source and marketing lead generation tool which will allow PPCC to

survive until we can grow our membership and or get us to Oct 2013, when a significant

portion of our long term debt is paid off.

• This revenue source is easily managed and can be controlled by limiting the number of tee

times allocated to outside play. In addition we are following up with all outside players and

believe that we can generate additional members from this source once they have

experienced what PPCC has to offer

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Summary 2010

• The board will continue to be very aggressive in 2011 with our

membership marketing. We must at a minimum sell as many new

memberships as we have resignations.

• We are not at this time anticipating that there will be an assessment

for 2010

• If the membership allows us to use some of the capital improvement

funds to cover some of the operating losses there should not be an

assessment.

• By supplementing our revenue with outside play in 2011 we are

hopeful that the 2011 budget will not require a dues increase, or if so

it will be minimal. However, there may be a need to raise dues to

cover the shortfall in the Sinking fund. The number of members at

year end will have a definite impact on whether dues have to be

increase or not.

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Summary 2010

Once again we need to ―Thank‖ our employees and

Department Managers for the effort they put forth in

managing our Club, controlling expenses and providing

service to our membership. Good employees who go

out of their way to please the members should never go

unrecognized and an occasional ―pat on the back‖ by

each of us sure improves their attitude.

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Ballot Tally

• Ballot Measures

• Election of New Directors

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Recognition of Retiring Directors

• Phil Bonfanti

• Lee Richardson

• Ray Iversen

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Adjournment