Estero Country Club Annual Meeting Monday, March 12, 2018 - - PowerPoint PPT Presentation

Estero Country Club Annual Meeting Monday, March 12, 2018

HURRICANE PREPAREDNESS

GLORIA BECK

ECC Financial Update

Claire Comstock, Treasurer

Review of our financial results for the first quarter of the fiscal year.

Controller

Dana Aerts

Finance Committee

Jeff Adair Leo Au Bob Collins Barry Freedman Mike Lanciotti Tom Young

Thank you to Finance Committee members and staff.

Membership

01.31.18 11.01.17 11.01.16 11.01.15 Golf Equity 281 274 275 289 Sport Equity 50 48 48 52 Social Equity 169 172 162 147 Annual Tennis 22 25 33 30 Honorary 1 1 1 1 Totals 523 520 519 518

2018 budget was built assuming we would begin the fiscal year with 265 golf members; we have exceeded our budget assumptions. We are now at 281 golf, 50 sport, 169 social and 22 annual tennis for a total of 523 members. We also had 16 seasonal trial members by January month end. Half of them have committed to becoming full golf members. We continue to keep our eye on membership mix as an important consideration in forecasting revenue and capital.

Balance Sheet

01.31.18 10.31.17 10.31.16 Cash 3,197,111 3,027,676 2,786,202 Other Current Assets 740,598 847,522 751,150 Property & Equipment 8,571,740 8,322,939 8,583,507 12,509,449 12,198,137 12,120,859 Deferred Dues 2,482,505 2,290,613 2,204,902 Other Current Liabilities 164,268 321,250 291,754 Member Bonds 390,750 420,750 446,250 Equipment Leases 160,717 189,964 322,627 3,198,240 3,222,577 3,265,533 Equity 9,311,209 8,975,560 8,855,326 12,509,449 12,198,137 12,120,859

Our cash position is $423,767 higher than at this point last year and currently stands at $3,197,111. It’s worth noting that our assets include some front-loaded items such as dues, trail fees, as well as Mill River and handicap fees. Liabilities are $125,369 less than a year ago primarily due to a decrease in our equipment loans payable. We are about to sign a new 2018 golf course maintenance lease package in the amount of $233,456 so this line item will increase in future months.

Operations

2017 Actual Budget

Revenue 4,588,016 4,786,853 Cost of Sales (610,634) (636,150) Operating Expenses (3,865,725) (4,149,417) Operating Income 111,657 1,286

By way of brief review and for context, our 2017 fiscal year ended with net operating income well above budget coming in at a positive $111,657. While revenues fell short of 2016 actuals by $73,166, we kept our cost of sales below budget and realized significant expense savings as well.

Operations

2018 YTD Actual Budget

Revenue 1,292,594 1,257,923 Cost of Sales (194,514 ) (204,364 ) Operating Expenses (1,105,521 ) (1,149,305 ) Operating Income (7,441 ) (95,746 )

Through January 31, 2018, our net operating loss was $7,441, which was $88,305 favorable to budget. Careful expense management and higher revenues contributed 60/40 respectively to this result. I am also pleased to report that February results are very strong. We are now in the black year to date and net operating income exceeds this month’s budget by $55,000. While these results are strong, our operating income does not reflect any post hurricane recovery activities. Proceeds and expenses are being reflected separately from our normal operating results as is proper accounting practice.

Operations

2018 YTD Actual Budget

Revenue 1,292,594 1,257,923 Cost of Sales (194,514 ) (204,364 ) Operating Expenses (1,105,521 ) (1,149,305 ) Operating Income (7,441 ) (95,746 )

Finally, a caveat regarding our budget. 2018 is a challenging year. In building a budget we needed to account for a shorter season on the revenue side and adjust key expense areas like payroll and hours of operation to make the numbers work during restoration. As I reported in November,

• ur budget does show an operating loss of almost $40,000 for 2018. To date we have identified close to $100,000 of items that could contribute

positively to the shortfall as the year progresses. We should feel good about where we are at this point but must be mindful and keep a very close eye on both revenues and expenses as we move into restoration.

Capital

2017 Actual Capital Dues 529,721 Clubhouse Renovation Payments 4,466 Net Membership Contributions 127,863 Proceeds from Sale of Equipment 17,850 Interest / Heritage Fund / VCA 2,116 682,016 Capital Expenditures (375,972) Restoration Project (76,109) 229,935

As of October 31, 2017, our capital expenditures totaled $375,972. Just a small portion were hurricane related. Our construction in progress for the 2018 course restoration stood at $76,109 which included work done by Gordon Lewis our course architect, LAI, our design/build contractor, Grady Minor engineering, and permitting fees from the Village of Estero. We ended the year at $229,935.

Capital

2017 Actual Capital Dues 529,721 Clubhouse Renovation Payments 4,466 Net Membership Contributions 127,863 Proceeds from Sale of Equipment 17,850 Interest / Heritage Fund / VCA 2,116 682,016 Capital Expenditures (375,972) Restoration Project (76,109) 229,935 Plus Capital Carryforward 2016 561,871 Carryforward to 2018 791,806

When you add 2016 and 2017 carryforwards together, they total $791,806. This is the capital that we carried forward into 2018.

Capital

2018 Projection Carryforward from 2017 791,806 Capital Dues 700,000 Clubhouse Renovation Payments Net Membership Contributions 85,000 Proceeds from Sale of Equipment 15,000 Interest / Heritage Fund / VCA 20,000 820,000 Capital Expenditures (433,563) 2018 Surplus 386,437 Available for Hurricane Cleanup & Restoration 1,178,243

Our 2018 capital budget reflects higher capital dues which we began collecting in November. Capital expenditures are budgeted to be somewhat higher than 2017 and total $433,563. We are now projecting a 2018 capital surplus of $386,437. Together the carryforward and this year’s projected surplus total $1,178, 243. These monies represent what we have available to fund hurricane cleanup and restoration.

Irma Damage and Restoration Project

Budgeted 2018 CapEx Greens & Tees Interior Remediation Fairways & Rough Drywall & Insulation Sand Traps Roof Bulkheads on #2 & #16 Exterior Trim, Gutters & Paint New Staging Area Hurricane Impact Windows Relocate / Expand Chipping Area Clubhouse Irrigation Tree Removal & Debris Cleanup Clubhouse Landscaping Storm Drains Golf Course Landscaping Cart Paths (Damaged & Elective)

Current Budget $3,773,274 + Contingency of $340,121 (Before Insurance Recovery)

Our current budget for the golf course restoration and Irma recovery is $3,773,274 plus a contingency of $340,121. Items included in this figure are listed here.

Insurance Coverage

Buildings Golf Course Inland Marine Total Debris Removal Damage Equipment, Carts and Tennis Courts Insured Value or Limit 12,671,670 250,000 250,000 2,072,137 Expenses 653,366* 256,830 43,398 48,187 1,001,781 Deductible (253,433) (25,000) (25,000) (8,099) (311,532 ) Exceeded Limit (6,830) (6,830) Maximum Recovery 399,933 225,000 18,398 40,088 683,419 Received-to-Date 390,088

* Does Not Include Clubhouse Windows

We have a comprehensive commercial insurance package and have filed claims in 4 categories—our buildings, the golf course which includes debris cleanup and course damage and what’s called inland marine coverage which includes things like the tennis courts, our equipment, and the golf carts. Each category has a limit shown in green here, meaning any claims above this amount won’t be covered. Coverage for our buildings is equal to their appraised value of $12,671,670. The same is true for our inland marine coverage at $2,072,137. We have typical limits for the two golf course categories.

Insurance Coverage

Buildings Golf Course Inland Marine Total Debris Removal Damage Equipment, Carts and Tennis Courts Insured Value or Limit 12,671,670 250,000 250,000 2,072,137 Expenses 653,366* 256,830 43,398 48,187 1,001,781 Deductible (253,433) (25,000) (25,000) (8,099) (311,532 ) Exceeded Limit (6,830) (6,830) Maximum Recovery 399,933 225,000 18,398 40,088 683,419 Received-to-Date 390,088

* Does Not Include Clubhouse Windows

On the next line you will see that our expenses or claims for Irma totaled $1,001,781. Note that this does not include the cost of the replacing the Clubhouse’s 30 year

• ld windows with impact resistant glass. We proceeded with this project to protect our repair investment and prevent future damage from severe weather.

Insurance Coverage

Buildings Golf Course Inland Marine Total Debris Removal Damage Equipment, Carts and Tennis Courts Insured Value or Limit 12,671,670 250,000 250,000 2,072,137 Expenses 653,366* 256,830 43,398 48,187 1,001,781 Deductible (253,433) (25,000) (25,000) (8,099) (311,532 ) Exceeded Limit (6,830) (6,830) Maximum Recovery 399,933 225,000 18,398 40,088 683,419 Received-to-Date 390,088

* Does Not Include Clubhouse Windows

On the next line I show that each type of coverage is subject to a deductible which sometimes is a flat amount as is the case with the golf course and in others it’s based on a percentage of the value of the item like our buildings whose deductible is 2 percent of the appraised value. We were within the limits of our coverage on all items except debris removal which we exceeded by $6,800.

Insurance Coverage

Buildings Golf Course Inland Marine Total Debris Removal Damage Equipment, Carts and Tennis Courts Insured Value or Limit 12,671,67 250,000 250,000 2,072,137 Expenses 653,366* 256,830 43,398 48,187 1,001,781 Deductible (253,433) (25,000) (25,000) (8,099) (311,532 ) Exceeded Limit (6,830) (6,830) Maximum Recovery 399,933 225,000 18,398 40,088 683,419 Received-to-Date 390,088

* Does Not Include Clubhouse Windows

Take a look at the far right column. In the end, if our policies paid out 100 percent, the maximum we could recover on that million dollars in claims is $683,419. To date, we have received $390,000 and continue to work with our broker and carriers to reach closure on our claims. However, as you can well imagine the inevitable interpretation of scope of damage means that proceeds will likely fall short of exposure. We are faced with funding some of our repairs out of capital. Now let me turn you over to Tom who will provide an update on how we will deploy our capital, leverage our cash flows and use debt to finance the Irma recovery and the golf course restoration.

FINANCING AND CASH FLOW TOM SPAETH

FINANCING

12 MONTH CONSTRUCTION LOAN INTEREST ONLY CLOSE IN LATE 2018 BORROW UP TO $2,000,000 FOR 6 YEARS AT 4.88% MONTHLY INTEREST SEMI-ANNUAL PRINCIPAL NO PREPAYMENT PENALTIES INCREASE LINE OF CREDIT FROM $1,250,000 TO $1,500,000

CASH FLOW

CASH FLOW

CASH FLOW

CASH FLOW

CASH FLOW

CASH FLOW

CASH FLOW

GOALS: *USE CASH FLOW TO OUR ADVANTAGE *BORROW ON LINE OF CREDIT FOR 2-3 MONTHS PER YEAR *MAKE EXTRA PRINCIPAL PAYMENTS OR RE-BUILD RESERVE *RETIRE DEBT IN LESS THAN 6 YEARS INTENDED RESULT: *REDUCE INTEREST EXPENSE TO $330,000 OR LESS VERSUS PAYING INTEREST OF $630,000 ON A $3,000,000 TRADITIONAL TERM LOAN FOR 8 YEARS

CRAIG ROLLINSON General Manager

ACCOUNTING

Dana Aerts

Controller

Gina Delevieleuse

Accounting Assistant

MEMBERSHIP

Colleen Sowerby

Membership Sales Director

Lisa Dillinger

Member Services Manager

FOOD & BEVERAGE

Justin Trent

Food & Beverage Director

Alidor Bennett

Dining Room Manager

CULINARY

Brandon Wheelock

Executive Chef

Dennis Smith

Sous Chef

GOLF

Ben Pittman

Head Golf Professional

Kevin Brand

Assistant Golf Professional

GOLF GROUNDS

T.J. Shine

Golf Course Superintendent

Cliff Thweatt

Assistant Golf Course Supt.

TENNIS

Tom Funk

Director of Tennis

Doug George

Assistant Tennis Professional

CLUBHOUSE MAINTENANCE

Wilton DeLaCruz

Building Maintenance Manager

HURRICANE IRMA SEPTEMBER 10, 2017 RECOVERY

IRMA HEROES

HURRICANE IRMA GOLF COURSE PROJECT

10 acres of Downed Trees/Plants Excavators, Dozers & Grinder Limited Development Order Burying, Berming & Mounds

HURRICANE IRMA CLUBHOUSE RECOVERY

REMEDIATION OF DAMAGE

Jim Sharp, Illinois Restoration Services

Secure LAI as Project GC Scope of Work

Windows – Drywall – Trim – Flooring Roof – Gutters/Downspouts – Facia Boards Exterior Paint

HURRICANE IRMA CLUBHOUSE RECOVERY

CLUBHOUSE SELECTION COMMITTEE

Barry Freedman – Chair Vicki Jackson Jane Jirsa Bob MacDougall Lorie Sonstein Pam Wortman Karen Adair Robin Babes Claire Comstock Tom Hochworter Brenda Hollander Color Palate – Interior/Exterior Paint, Roofing & Flooring

SUMMER CLUBHOUSE HOURS OF OPERATION

Snack Shop Lunch Breakfast Buffet Dinner Snack Shop Closed Lunch Dinner

SUMMER GOLF RECIPROCITY

Copperleaf Cypress Lake Grandezza Lexington Miromar Lakes Pelican Sound Spring Run The Forest Vasari Wildcat Run Worthington (Pending Opening)

GOLF COURSE RESTORATION T.J. SHINE

2018 Golf Course Restoration

Timeline

• March 12:
• March 19:
• March 26:
• April 2:
• April 11:
• April 12:
• April 13:
• October 30:

Turf kill program begins on all turf except Greens Entire course is fertilized to promote growth and the uptake of glyphosate 2nd turf kill application is made to entire course Entire course is fertilized to promote growth and the uptake of glyphosate Fairways are verticut and golf course closes until renovation complete 3rd and final turf kill application is made to entire course Earth Work Begins Projected Opening Day

Turf Kill Program

• Is Round-up safe??
• How long do we have to stay
• ff the grass?
• Why are you fertilizing when

you are trying to kill the grass?

• What can we expect the

course to look and play like

• ver the next month?

Hig ighlights and Scope of Work

• Permitting, Development Order
• Greens, Tees, Collars, Fairways, Rough
• Grass selection
• Cart Paths
• Bunkers
• Bulkheads
• Driving Range/Staging Area
• Landscaping
• Storm water connector pipes

Permitting/Development Order

• Development Order, Village of Estero
• Hardening of shoreline/surfaces
• Storm water pollution protection plan (SWP3)
• Limited Development Order for bury/berm along railroad
• Invasive/Exotic Vegetation
• Silt Fencing and Turbidity Barriers

Greens, Tees, , Fair irways and Rough

• Greens – Recapture original size, design to increase “pinable”

locations, remove organic matter build-up in root zone. Tif- Eagle will be the variety of turf installed (same as current turf).

• Tees – Re-grass with Celebration Bermudagrass, Laser level,

enlarge selected tees, reposition select tees that are in need.

• Fairways – Re-grass with Celebration Bermudagrass, Expanded

in strategic locations, improved drainage

• Rough – Re-grass with Bimini Bermudagrass, improve drainage

in select locations

Cart Paths

• Straighten paths where needed
• Reduce likelihood of paths coming into play
• Replace severely damaged sections of path

Hole #15

Bunkers

• Eliminate, Re-locate

and re-shape bunkers

• Replace sand with

“G-Angle” white bunker sand

• “Bunker Solutions”

bunker liner to be installed on traps with steep slopes to reduce washouts and prevent contamination

Replace Bulkhead Remove Cart Path Cart Path Starts here

New Bulkhead

Hole #2

New Bulk lkhead

Hole #16

Golf Cart Staging and Practice Area

• Eliminate congestion at bag drop area
• Create a better cart staging area to be used during shotguns
• Putting green will be shifted slightly to the North, and the

slopes softened to create more usable hole locations

• Chipping green expanded and moved to the Northwest

creating a larger/longer chipping area

• Enlarge width of the driving range tee, lower upper level and

expand back to the cart path. Eliminate artificial mat. Add target greens with bunkering

Landscaping

• Estero Mix – Bougainvillea, Cordgrass,

Silver buttonwood, Coco Plum, Thryalis, Firebush, Muhle grass, Copperleaf

• Specimen trees – Tabebuia, Magnolia,

Jacaranda, Royal Poinciana, Bald Cypress, Slash Pines, Royal Palm, Sabal Palm, Canary Island Date Palm

• Create clean, consistent look

throughout the course.

• More formal look around clubhouse

Before and After #2/#3 Transition

Before and After #2/#3 Transition

Before and After #8

Before and After #8

Before and After Maintenance Facility

Before and After Maintenance Facility

Storm Water Connector Pipe

Replace failing concrete drain pipe running under the golf course with HDPE pipe with expected life span of 100+ years

Frequently Asked Questions

• Could the driving range be open early?
• How much could weather impact the opening date?
• What can we expect the golf course to look like over the next month?
• Are the lakes getting smaller?
• Are the stumps and dead trees going to be removed?
• What will the area along the railroad tracks look like?