By Dick Sharp
Special correspondent to the Glade Sun
An overflow crowd of FGCC club members attended the Board’s Town Hall meeting Thursday, Nov. 29 at the Community Center. General Manager Bob Weber explained the Master Plan for 2013 to 2017. The detailed presentation identified which projects are scheduled for each year 2013 to 2017. Projects planned for the next five years were determined using input from the recent member’s priority survey, club committees, FFCC club management and the board of directors. The club’s five year financial plan showing the projected debt balances at the end of each year was included in the presentation.
Projects planned for 2013 include: Dorchester pool cabana, Druid Hills pool cabana, Multi-Purpose Building renovation, St. George Pavilion (for the fish fry) and ‘sense of arrival’ at FFG. However, very recent information on the Peavine Road project will delay any major changes to the sense of arrival improvements.
The budget for the five 2013 projects is $490,000 which will be funded initially with a bank line of credit. Weber said the FGCC board plans to maintain $2.5 million cash balance on hand. Due to much discussion with audience members during the meeting, President Stackhouse said that it may be decided to lower the cash on hand and borrow less. Weber pointed out that the club will be paying down debt at a rate of about $800,000 per year, as shown on the financials. He pointed out that the plan is to keep the amount of debt balance at $8.0-8.4 million over the five year period while making major improvements. The Convention Center portion of the debt balance is $6.6 million.
Weber first listed major improvements accomplished in 2012: Dartmoor marina new docks, Druid Hills pool improvements, the Stonehenge renovation (including new furniture and the outdoor deck) and the wastewater drip field project ($1.2 million) which is currently being installed. In addition, the Dorchester irrigation system project has begun which will be completed by March 2013.
Sewer services will remain at the current $33 per month for 2013. The 2013 monthly amenity assessment on a home on a sewer lot will be increased $3, for a total of $47.50. Homes on septic lots increase $4, for a total of $47.50. The FGCC A tier property transfer fee (paid by the buyer) will be increased from $200 to $600. A/B tier lots will increase to $200. The C tier lots remain at $40. All revenue from these fees will be put in a capitol fund for recreational amenities. The club expects about $186,000 from these fees in 2013.
The Upland Design analysis of FFG buildings identified $900,000 of needed repairs and maintenance. Weber said the club would begin by spending $361,000 on the most critical items in 2013. The largest cost will be on many HVAC systems that need major maintenance, repair or replacement.
A true kitchen will be installed at the St. George Marina pavilion so the popular fish fry can come back. The county health department caused the discontinuance of the fish fry in 2010 due to kitchen problems. The plan is to install restrooms by the pavilion.
Note: A video of the town hall presentation is on the FFG website.
The town hall meeting was opened up for comments and questions.
Q. There were estimates shown for each project. As we begin to do each of these projects are we going to obtain bids?
A. President Bob Stackhouse replied yes; bids will be put out locally, Knoxville and Cookeville.
Q. Has there been any thought to issuing FFCC bonds to fund the long term debt?
A. Stackhouse: We have talked about it; but not fully developed. We got hung up with questions like how long would a member agree to commit their money. What if the member needs the money for an emergency? If there was interest in that with a minimum of five years, we could look at it.
Q. What are the monthly amenity dues going to be in future years?
A. Stackhouse: “We can do all these amenity improvements based on current assessments. However, operating expenses [do] cause increases in monthly assessment fees.”
Bob Weber: “This year we reduced costs in order to get to the point where there is only a $3 per month increase. We will do that every year to make sure that the increases are reasonable and affordable for the population.”
President Stackhouse also addressed monthly dues increases over the next five years: We can make (budget) adjustments over time. “I can’t commit whether it will be $1, $2, $4. I don’t know. I don’t want to commit to it for five years because I won’t be on the board that long. It would be wrong for me to commit for a future board.”
Q. It appears that you are using the line of credit as a piggy bank rather than address the issues, cut some costs and live within your means. Also, this building [the Conference Center] has been referred to as an albatross [by President Stackhouse].
A. Stackhouse: “This is a $6.6 million dollar albatross. When people look at this building they say: Why don’t we have a nice banquet facility? Why do we not have good acoustics? Why do we have to spend $80,000 on a HVAC pool unit in a new building? Why did we have to replace the floor here? Why couldn’t we go back to the contractor and have them do it... because we redesigned it [the floor] ourselves. That’s what that I am referring to as an albatross.”
Member: “The paper didn’t point all that out.”
Editor’s note: Regarding the member’s comment: “The paper didn’t point all that out.” The Nov.1 Glade Sun story included the $80,000 for the HVAC system and the pool contraction problem at the Convetion Center on page 3A: “Former director confronts current board of directors about continuing losses at Legends Restaurant and the new Conference Center.”
However, the lack of a banquet facility, the acoustics problem and the floor problem were not in the Nov.1 story because they were not mentioned at the Oct. 25 board of directors meeting.
In addition, the Nov.1 story reported three items that were mentioned at the Oct. 25 board meeting, but were not mentioned at the Nov. 29 town hall. President Bob Stackhouse, on Oct. 25, identified these annual expenses at the Conference Center: $250,000 for utilities,
$200,000 for interest and $250,000 for salaries.
Q. The board will be voting on this [entire five year] budget in the next two weeks. Right?
A. Stackhouse: The board will be voting on the 2013 budget which includes the five amenity projects that are budgeted for next year. The years 2014 through 2017 are our best estimate of our five year plan. It can change.
Q. The decisions about which amenities to do and the projected costs are based on what?
A. Stackhouse: Based on member input per the survey, committee input, club management and the board. For example the ‘sense of arrival’ was the number one item on the member survey; but, due to the Peavine expansion we need to wait on any major changes. The costs projected in the presentation are rough estimates. However, we are committing to the $490,000 budget for the 2013 projects. We may go to $495,000. If an actual bid on a project is way over our estimated 2013 cost. Then it would be postponed.
Q. Could a committee of people that actually use the Dorchester pool be formed to help decide the changes that need to be done. Especially the chairs, tables and umbrellas.
A. Stackhouse said the board will meet with management to identify what is needed at the Dorchester pool and then present the plan to the members for comments and input.
Q. A member asked about the many signs along Peavine on state right of way that will have to be taken down. He wanted a petition to ask for zoning from the state or county to eliminate most of the eyesore signs on Peavine Road in the future.
A. Stackhouse pointed out that on the new (four lane) Lantana Road the signs are set way back so that they are not nearly as visible from the road. The state allows signs along the road. Fairfield Glade is a club. It is not a municipality. FFG does not have the authority to control signs.
Q. A member asked about the amenities survey that had 1,700 responses. She questioned the validity of the survey with only 1,700 participating. “What do we really want? Some of the 1,700 that responded to the survey have only lived here two years.”
A. Bob Weber said that 1,700 responses from 7,000 residents is a statistically valid sampling. Also, many other things were taken into consideration like return on investment and committee input. Bob Stackhouse: The board and management looked at the repairs or replacements that are needed per the engineering reports versus what dollars are available. Everything will be presented to the members for comments and input. “The 2013 projects are probably what we are going to do.”
Q. Are Peavine businesses that are connected to our sewer system paying their fair share?
A. Businesses that are connected to the FFG sewer system pay the commercial rate for their sewer service.
Q. “Bob Weber and Tommy Lee recently fired the full time tennis manager to fill the position on a part time basis. This was explained as a cost reduction move. We were told that it was done without any consultation with the board or the tennis committee. We were told that other recommendations will be made to the board of directors to reduce expenses.” The member then asked: “What recommendations have been made to reduce expenses and which ones have you adopted?”
A. Bob Stackhouse replied: “There are too many of them [to discuss here]. We went through meeting after meeting on this [reductions]. To address the tennis question: The board does not get involved with the day-to-day operations of the management. We have good management, we pay them well; they make decisions on how to run it. In the past, boards have been accused of micro-managing this place. I think that has happened a lot. Now you are asking us to do that. I don’t think it is the board’s job. So, we don’t do that.”
Stackhouse continued: “On the expense side there are a lot of things we look at to cut back on expenses. At the Legends restaurant we are losing too much [money]; so we cut back the hours during the slack times. We were told we were heartless in doing that. So, even when we do it [cut expenses] we get in trouble.”
Bob Weber: “We run a pretty lean ship here. As I go through the budget process with the senior managers we are constantly looking for ways to improve while cutting costs. We decided that this is a position we don’t really need for the long term health of the club. We will continue to look at every department; but, as I look at the other departments, they are pretty lean.”
Q. Is it true that some employees get free golf?
A. Stackhouse: Yes, depending if they are full time or part time they get free golf, as does the fire department. We find that we attract people with that as a benefit.
Weber: That is a standard in the industry.
Q. I think it is important to note that (2013) budgeted expenses are down and budgeted revenue is up which everybody needs to keep in mind. My question is that the Upland engineering survey identified $900,000 for needed repairs and replacement. But, the club is going to address only about a third of that (in 2013) and put more money somewhere else. Why?
A. Bob Weber answered: We looked at everything on the report. Some of that was done in 2012. Some items like $80,000 for the HVAC system for the pool here (Convention Center) need more analysis in 2013 and will be budgeted for 2014. Another is the Dorchester clubhouse. We do not want to do a lot of work there; then turn around in two years and tear it down. So, that is why we have only $361,000 budgeted for 2013. Some will be done in 2014 and 2015 as part of normal maintenance. Some will be done as a result of new buildings. Upland only analyzed amenity buildings. The other money is for repairs to other buildings that we have identified need work. We determined what really needs to be done in 2013 versus what can be done in 2014-’15.
Q. Why are we borrowing the $490,000 for the 2013 projects when we have $2.5 million cash on hand?
A. Stackhouse: “It’s a good question. Why carry $2.5 million in cash when we could spend $500,000 and reduce our debt. It’s another way to look at it. This is the conservative approach to keep cash for emergencies or problems. In a few months we could decide to use $500,000 and drop cash down to $2 million. That reduces the debt.” He pointed to an example: The unexpected broken pipe at Dartmoor cost the club $800,000. “Yes, I could see us going down to $2 million [cash on hand].” He said the club could use the bank credit line for an emergency.
Q. Getting out onto Peavine from St.George to go south is a huge problem. Is there something that can be done, like installing a traffic light?
A. Tim Martin said it is very unlikely that the state would allow another traffic light so close to the light at Food City. He pointed out that the new Peavine Road will have a turn lane that should help.
A. With all the expense required on the St. George pavilion for the fish fry, will the price (of the meal) go up significantly?
A. Weber: The price will be what the market will bear. The cost of the improvements are not factored into the price.
Q. First of all, this has been a very good presentation. Why doesn’t the club bring in an outside consultant to analyze the food and beverage operation to improve food revenue to get more people to eat here, since that seems to be the main problem?
A. Stackhouse: “Actually, we brought someone in to concentrate on Stonehenge and that revenue has increased dramatically. It has now become a favorite place for our membership. We changed the look; we changed the menu. To my mind it is fixed. It is operating well. Now we have to look at Legends and do the same thing.”
The member again pressed the issue as to the advantages of having an outside consultant look at the overall food and beverage operation.
Bob Weber addressed the situation: “A couple of things, first of all, James Ivankovich, our new food and beverage director, made a lot of changes and improvements at Stonehenge. He has now moved onto Legends to see where we can improve operations there.” Weber also announced that the club has engaged an audit firm that specializes in clubs. As part of the audit of club operations for 2012 they will audit food and beverage. Weber expects to get some additional information to help improve operations. The audit should be done by the end of May.
Q. Member’s comment: This member said she has lived here for 17 years and complemented the club for the most beautiful Christmas lights display ever at the entrance. She asked who did it? Bob Weber said Bill Heidle, the roads manager, was responsible. He is on Tim Martin’s team. A huge amount of applause followed.
Q. Will the club be removing silt from the lakes this year? We postponed de-silting last year.
A. Weber said $100,000 is budgeted for removing silt in 2013.
Q. Regina Welch has said that every $1 increase in dues brings in $150,000. Since a $3 dues increase should bring in $450,000 more revenue; why do we need to borrow $490,000?
A. Weber: “Because expenses go up as well and we deferred some expenses from 2012 into 2013.”
Q. There was discussion at board meetings a few months ago about refinancing this Conference Center. Is there a reason the refinancing has not taken place?
A. Stackhouse said the delay is because negotiation with timeshare has not been completed. He further explained that the board at the time (2008) did a bare agreement which deferred until later things such as what happens when the loan is refinanced. The board at that time, in a letter, said that there would be a final agreement (signed). That never happened. So now when the club has an opportunity to refinance the loan to save money; the club has to go back to timeshare to get a final agreement. That takes time.
Q. Regarding the St. George problem with no traffic light possible; what about a traffic circle?
A. Bob Stackhouse said: “We had them in New Jersey. You just step on the gas and go. With our population, I don’t think so.”
Member comment: I want to congratulate the board of directors for following the member amenity survey. (Applause)
Member comment: “I have been a resident here for 20 years. The people we have elected to be the decision makers have made the best decisions possible. So, I congratulate them and I thank them. (Huge amount of applause)