Happy Monday everyone,
And happy it is; Jerry received some excellent news this past week. Results from his PET CT-scan revealed a 50% decrease in tumor mass after only 7wks on Tarceva, his first line, targeted therapy, treatment. His oncologist said with a smile; “I’m now comfortable telling you to go ahead and plan a nice vacation”. The day after the good news, when asked how he slept that night, Jerry responded: “I felt like it was Christmas morning when I woke up”. Apparently, Santa Claus has moved from the North Pole and is now taking up residence at Stanford Medical Center.
Jerry’s not out of the woods, he’ll never be as it relates to his lung cancer unfortunately. But his medical team is confident that the disease can be managed, and quite possibly for a long time. It’s what we all prayed would happen for him – give him a high five and a hug when you see him.
Let’s talk about our Club because I need your help. There’s a fundamental problem with our Club in the way it’s structured and with its governance. It’s a common problem in non-profit, member owned organizations. The problem is a short-coming really; we don’t have a good long-term plan and we don’t do long-term planning very well.
The root of the problem is in our governance structure; Board composition. The Board is made up of 11 volunteer members serving 3yr terms and officers (Presidents primarily) who typically serve one year. It is effectively a one-year board (4 new BOG members per year with one year leadership) that lacks continuity over time. Its design is reactive in nature, not proactive. I’m not going to suggest restructuring the Club’s governance but we do need to establish a 5yr plan. There’s $1.6 million in the Club coffers currently. Our financial model budgets for approximately another $500k of new capital into the coffers each year for capital expenditures. This isn’t dues money nor is it debt retirement money, those are different buckets (refer to earlier letters for an explanation of the financial model).
The real challenge in developing a 5yr plan, and this is where I need your help, is looking out into the future and identifying the right point along a wide spectrum of possibilities of what the Club should look like in 5yrs. If you’ve read much of the past 31 letters, you know why this is so challenging; it’s the diversity of our membership. Our Club is made up of disparate, activity centric, members; swim, tennis, and fitness. And on top of that, across the whole Club, there are increasingly becoming two major constituencies; those who paid an $18,500 initiation and those who didn’t.
There are those who want to see no change at all at our Club; don’t upgrade the Bar & Grill furniture, don’t bring the south property (lower courts / parking lot) up to par with the rest of the Club, don’t bring the kitchen up to code, the pools are fine and who uses the fitness facility anyway – basically, don’t spend any money. Invariably, the members who have expressed these views are long time members who joined a Club substantially different from the one we all enjoy today and paid next to nothing to do so. Then there are the more recent additions to the membership (since 2007) who have the opposite view – our Club should look like a Four Seasons. These two points of view define the outer reaches of a spectrum – I suggest we identify some point between the two extremes that meets the wishes of the largest constituency. Identifying that point and setting it as our 5yr target is probably the most important thing I can do for our Club from here as temporary shepherd and cat herder.
As a club, what do we need? Yes, I know, it depends on how we define need. Let’s say it’s what we “need” to continue the Club on its current trajectory of evolution. At the top of the list is the kitchen. From the very beginning, in the design stages of the Grand Remodel Project, the kitchen has been undersized. It’s fine if the Bar & Grill is going to serve only hamburgers but if you want hot dogs on the menu the kitchen area is just too small. Even with the limited menu being offered today, the kitchen is not up to code. If the Club sees a Bar & Grill in its long-term future the kitchen needs to be expanded; it’s nonnegotiable (so says the Department of Health). If we want to go back in time to the snack bar that existed before the Grand Remodel (pre-2005) then we don’t have to upgrade the kitchen. This one is a no-brainer if you think of it in terms of what do you want the Club to look like in five years. It’s brutal however when you look at it short term and see that it will probably cost $500,000 to execute properly.
What else do we need? How about the new furnishings inside and out for the dining room and patio? I suspect most would agree that this is a very low ranking “need” but it may be a very high ranking “want”. I think most members who use the Bar & Grill (let’s define them as those who spend over $500 a year there) would agree that the seating inside and out is heinous and the tables we sit at aren’t that much better. New furnishings; tables and chairs with soft seating gathering areas inside and out and with a few fire pits – $200,000. Whether a “need” or not, the beauty of this spend is that you see every penny that you put into it – it’s all front and center. This is an easy one really and we’re almost set to push the go button but can’t if we don’t know the kitchen will be fixed. In this case, there is a progression that must be followed.
What about the lower court project, does it make the need list? No, it doesn’t in its entirety but there is an element of it that does: lights. For five months out of the year the Junior tennis program must vacate the lower court area at 5:00 pm and move to the upper court area until 7:00 pm because of darkness. That severely constrains court availability for the non—Junior membership on weekday evenings after work. Lights down below will not only cost about $100k but it will, in all likelihood, take years to get approved by the town. It will be a battle (everyone has said so) but with patience and persistence the experts have also said it will get done. We can’t embark on that project as a Club without a membership vote approving it from the beginning even if it will take several Boards to see it through.
Then there’s the broader property enhancement on the South side of Mar West. New courts? Bathrooms? If so, we’re going to need utilities down there (talk about an expense you don’t see – brutal!) Does that area always and forever need to look like public park courts in the Bronx or can we envision the look of a private club in line with the rest of the property someday. The pool area? Fitness? Stop it – I’m getting nauseous.
Here’s my thinking on all of this. I propose we take a few surveys in the coming weeks to learn where the membership lives on these and a few other issues. From there, we put a vote in front of the membership for a five-year plan. In general terms the vote will read as follows: under the condition that no additional debt will be incurred, no assessment will be applied, and dues will not increase in association with the following projects, the Club would like your vote to execute the following: (list and define the projects with rough cost estimates and their scope in five years). Then we can begin knocking down these projects as capital in-flows allow in the coming years.
What do you think?
All the best,