At the July 21 online board meeting VP Tom Kendrick presented the details of the golf course purchase and some of the current and ongoing expenses related to maintenance and capital improvements of the newly owned facilities.

A previous article in the Oakmont Observer had presented most of these details as were currently available at the time.  However, there was one sizable change between the figures presented for that article and the report given at the board meeting:  legal fees related to the purchase, the lease with AGP and other matters were updated by an additional $70,377 to a total of $291,474.

In the following slide on Tenant Improvements, only total dollar amounts were given for services performed, furnishings, construction and equipment.  At the board meeting Director Marianne Neufeld asked that further details be elaborated for the services subtotal of $96,540.59, almost a third of the total money expended.  Kendrick replied that the services category was comprised of design, architectural, demolition and other services but did not state what dollar amount portion of the total went to these individual services or the nature of the service provided and paid for.

Treasurer Elke Strunka mentioned that Nordby Construction and Matrix Construction had renovation and construction contracts with AGP that were open and which OVA/OVPC was funding.  Iris Harrell also said that “Nordby and Harris & Kasten are working on the restaurant.”  Harris & Kasten is a local architectural and interior design firm owned by two OVA members, David Harris and Richard Kasten.  On Febuary 13, 2020, they resigned from the Building Construction Committee (chaired by Harrell) to work on this project, according to Kendrick.

When asked again by email for the details of these services Kendrick replied, “The details that I reviewed are AGP’s data to release, not OVA’s.”  However, this was not the plan and procedure the board laid out prior to the vote on the dues increase.  For instance, at one of the town halls Director Jess Marzak said, “It will be absolutely laid out in detail, every expense for both the restaurant and golf course laid out in a spreadsheet so we can all review it. And by everything, I mean everything including capital expenditures. Any expense that is paid for out of the reserve fund has to be approved by the OVA. Now, there should be no surprises because these are big capital items, we will be talking about them for months in advance. So that kind of involvement is more of oversight kind of a responsibility by OVA and should be pretty straightforward.”

Take a look at the level of detail provided monthly in the Treasurer’s financial report regarding OVA facilities:

Just one of many pages of such detail in this report

Even greater detail is provided regarding Administration Expenses

Why is there less detail provided to OVA members when it comes to the golf course facilities?  OVA members should not be put in the position of having to speculate about how their money is spent on these facilities.  It should be clearly communicated to them just as every other detail of the budget and operating/maintenance expenses are clearly laid out on a monthly basis.

Kendrick was also asked by email for an accounting of how the $8.50 per member per month social membership funds were spent.  In the Lease Agreement with AGP these funds are termed the “OVA Contribution” and it specifies that “Lessee shall use such funds for leasehold improvements and operating expenses.” A breakdown of the subtotals for “leasehold improvements” and “operating expenses” of the $193,146 total OVA contribution to AGP from start of lease to termination was requested since, as above, the board claimed that capital expenditures (leasehold improvements) would be reported to and approved by OVA.

He replied: “In the lease, there was no obligation for AGP to report the use of Social Membership fees.  There is also no reason to suspect that the money was spent in any way inconsistent with the lease terms.  Due to the pandemic there were zero golf (or indeed, any) revenues for the initial portion of the lease period. As a result, AGP spent more than the amount you are asking about on operations and maintenance through the spring and were substantially in the hole when they terminated the lease.”

Again, it may not have been written into the lease but OVA members were told that all funds allocated for capital improvements would be reported to and approved by OVA.  The subtext here is that none of these social membership funds were used for capital improvements, even though such use was specified in the lease agreement.  Kendrick professes knowledge that the money was spent on operations and maintenance to the financial detriment of AGP; is it too much to ask that the membership also be apprised of how their social membership money was spent?

The AGP lease was signed on February 5, 2020; the Purchase and Sales Agreement with OGC closed on February 22, 2020; and Sonoma County closed golf courses due to the pandemic on March 17, 2020. The Oakmont golf courses had been closed since December 16, 2019 and were in need of maintenance and repairs prior to reopening.  So to say there were “zero revenues for the initial portion of the lease period” was to be expected by AGP as they readied the facilities for reopening prior to the pandemic closure.

At another point in the meeting the board was asked if there was interest from CourseCo, Billy Casper Golf and even Greenway Golf last year and why they were not pursued then?  Board President Spanier said that they had all submitted bids but that the board “preferred AGP,” that “we believe that AGP was the best operator in the land” and that “AGP was something pretty special.”  We will never know if their judgment on AGP’s specialness and “best operator” status was correct in the long run.  In the end, with the short time AGP was here, it did not prove to be a good call and we can only hope that better judgment prevails going forward.

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1 Comment

  1. SJohnson on August 4, 2020 at 11:34 am

    Another finely researched report from Mr. Connolly. Especially worrisome is litigation with the union. During the 7-21 board meeting Spanier remarked that OVPC was still named in the labor dispute. This is the corporation formed by the board to purchase the golf courses. Problems with labor board started in Feb but our board never informed us. Our manger Kevin resigned with no explanation so that causes some suspicion as to behind close door activities. This board has shown some very poor leadership and decisions and now we don’t have a manager. I voted for them but won’t do it again.

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