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Oakmont News, Opinion & More

OVA & Golf Club Informational Meeting – My Inputs to the Process

“Please provide your suggestion(s), no later than May 20, via Email or in writing, 6637 Oakmont Drive – AskOVA@oakmontvillage.com” ~ Steve Spanier, OVA

Suggested Alternative for Central Land Purchase from OGC

PHOTO: Yellow outline is just a crude boundary of the proposed property to be purchased, in order to illustrate the concept.

Bruce Bon, 2018-05-02

Description:

OVA and OGC negotiate a real estate land purchase of from 2 to 10 acres, immediately adjacent to the OVA property containing the Central Activity Center. Both the price and the boundary of the purchased property would have to be negotiated, in order to give OVA a valuable addition to the central facility, that might be used for buildings, parking, sports facilities, a dog park, a flower garden, a picnic area, or other purposes serving OVA members. The price would have to be fair and high enough to make the disruption to the OGC golf courses worth the trouble.

Pros:

  • The money transferred might be large enough to be very meaningful to OGC, possibly large enough to resolve financial difficulties for several years.
  • The land acquired would be extremely valuable to OVA, relieving the constraints that make it difficult to provide for new facilities, such as a dog park or the additional parking required for an expanded Berger.

Cons:

  • The largest obstacle would probably be the fact that this would require OGC to shorten the fairways for the third and fourth holes of the West Course, and to redesign and then landscape the green for hole 3 and the tee-off for hole 4. It would also require subdividing OGC property, with a new survey, city approval, etc. This would all be costly, disruptive and time-consuming.
  • OVA would have to pay OGC enough to make the sacrifice worthwhile, at a time when reserves are low. Almost certainly, much of the money would have to be borrowed and dues raised to make the payments.

Discussion:

In spite of the problems, this idea should be investigated, because of the pros mentioned above. The attached map is only illustrative. Actual boundary of the property transferred might only affect one of the 2 fairways, for example – the requirements for OVA to be interested are that it be a meaningful area and that it be contiguous with the OVA property on which the Central Activity Center is located. If agreement could be reached, it might solve OGC’s financial difficulties with a single OVA/OGC contract.


Suggested Alternative for OGC Facility Rental by OVA

Bruce Bon, 2018-05-02

Description:

OGC, in cooperation with OVA, develops a scheduling system that will allow OVA to rent meeting space from OGC, with a rental rate schedule negotiated in advance. Spaces to be rented under this agreement might include meeting/banquet rooms at the Quail Inn and the Golf Club House room at the East Course. OGC would have priority on such spaces, but once a room was scheduled, OGC would not have the right to bump an OVA reservation.

Pros:

  • This is an easy win-win, that would provide OGC income in return for what would otherwise be unused facility time.
  • For OVA, this would relieve the pressure on space that will occur when East Rec and Berger are closed for renovation.

Cons:

  • There might be times when an OGC event could not be scheduled at the preferred time, because the space was previously reserved for an OVA event.
  • OGC facilities may not have the audiovisual and hearing loop equipment that Oakmont clubs have come to expect.
  • The amount of additional income to OGC might not be enough to make it worth the trouble.

Suggested Alternative for Sale of Golf Courses to a Golf Management Corporation

Bruce Bon, 2018-05-04

Description:

OGC searches for a buyer who will continue to operate the golf courses and the Quail Inn. The buyer would need to be a company, such as ClubCorp, which has an interest in owning and managing golf courses as commercial enterprises.

Pros:

  • There would be no cost whatsoever to Oakmont owners.
  • The buying company would likely be more savvy at operating golf courses for profit, sothe future prospects of the property remaining in something like its current state wouldbe improved.
  •  The new corporate managers would be motivated to be good neighbors because of thelarge pool of potential golfers that is the Oakmont community.

Cons:

  • Management of OGC by Oakmont residents would be replaced by management by acorporate team, which would likely prioritize profit over being a good neighbor.
  • This would permanently remove any prospect of community control of the land.
  • Fees to become a member or to play golf at the new golf club might go up dramatically,dependent totally on what the new management felt was the best way to ensure profit.
  • Should Oakmont membership in the corporate-managed golf club fail to meet theirexpectations, their management would be less motivated than the current OGCmanagement to want to accommodate OVA concerns.
  • As one corporate property among many, the company might abruptly decide to sell theproperty for development or any other purpose that a buyer might have in mind. Oakmont concerns would likely have little effect on such an outcome.

Discussion:

Questions to be answered include whether or not such a buyer could be found.

 

Financial Questions for OGC

Bruce Bon, 2018-05-04

The following set of questions were sent to Barbara Robinson prior to the February 26 “town hall” meeting, but were neither acknowledged nor answered. OGC needs to understand that, unless they are willing to answer questions like these, they will continue to face strong opposition from many Oakmonters, and the OVA Board of Directors answers to us. The June 5 informational meeting will be a good opportunity for OGC representatives to demonstrate an openness that has been missing in the past, in order to begin to regain the trust that was lost by the failure to inform us adequately in the previous two meetings. If there is some good reason that this information cannot be divulged to us all, it will be the opportunity for OGC advocates to explain why, but such an explanation needs to be convincing. Failure to provide good reasons for coming to OVA for help will only solidify and increase opposition to any form of cooperation that might include dollars being transferred from OVA to OGC.

  • How much trouble is OGC in? What have been your annual income and expenditures for the past 5 years? How much in the red has OGC been in each of the past 5 years?
  • OGC must have an operating reserve, in order to pay bills in months where income falls short. How much is currently in this reserve, and what has been its balance at the end of each of the past 5 years?
  • Is the proposed OVA support of OGC expected to be for one year? Three years? Until your mortgage is paid off (and how long is that)? Forever?
  • What are the terms of the mortage recently refinanced? What are the total annual payments? What is the appraised value of the property, from the appraisal which must have been required for the most recent refinance? What is the loan-to-value?
  • Is the Quail Inn a money-maker or a money pit? What has been its gross profit/loss for each of the past 5 years?
  • Is OGC willing to open your books, so that OVA can evaluate these things and other relevant details, such as the actual cost to maintain the courses?
  • What will happen if OVA chooses NOT to subsidize OGC? Other than seeking funding from OVA, what are your plans for turning the OGC around? What have you tried, and what have you yet to try? On what basis was the lender willing to refinance? (Surely the lender wasn’t willing to assume OVA subsidy.)

Oakmont News Question for OGC

Bruce Bon, 2018-05-05

What is the approximate value of the two full pages that OGC receives for free in every issue of the Oakmont News? How much would it cost OGC if it was to pay the same amount as any commercial, for-profit business must for advertising space?

Discussion:

OGC has chosen to open negotiation concerning the cooperative relationship between them and OVA, so it seems only fair that, for us to understand the complete picture, the value of free publicity and advertising provided by the Oakmont News should be considered.


 

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11 Comments

  1. Lyn Cramer on May 7, 2018 at 8:33 am

    Bruce, when I read your earlier commentary a sentence stood out that is reinforced by the above ideas, all fine in themselves, about what is going on that troubles me.

    “I know that the intent is to have OGC proponents on the panel respond to questions and proposals that have been selected without bias toward supporting OGC.”

    Maybe my interpretation of the above is incorrect but it reads to me like we have bypassed the “should” question, and moved on to discussing specifics of how the OVA can assist the golf club. If so, when was this decision made? It seems to this observer that first we need to understand the problem and then decide whether the OVA should, or is legally permitted to, assist the OCG. If affirmative, then is the time to consider means.

    If the track we’re on bypasses the fundamental question that first needs to be asked and answered, then don’t be surprised that some members will be angry.

    That said, I appreciate the work of you and others to alter the path this subject would be taking if the OCG been able to proceed as it intended. Thanks.

    • Karen McMillen on May 7, 2018 at 9:31 am

      I have the exact opposite reaction to Bruce’s comments than Lyn. I want to know ahead of time, before voting if we “should”, all of the various ways possible including both legally and financially feasible, and how it will benefit the OVA and residents of Oakmont.

  2. Mike Baker on May 7, 2018 at 1:28 pm

    My concern is that the purchase of this property from the OGC is a precursor to the building of Burger II. A number of actions by the current board seems to be pointing in that direction. The disbanding of the committee that was developing the plans for the renewal of the area destroyed by the pickleball boards actions.is but another example.

  3. Jeannette Luini on May 7, 2018 at 3:33 pm

    There is no harm in gathering input from the community on how the OGC situation should be handled. The proposed meeting may be useful for that purpose. In education, we called it “brainstorming” However, at some point the committee in charge must sit down and work out details of a proposal. After that the next step should be a vote of the membership to reject or accept the proposal presented by the committee.

    Our BODs should learn to differentiate between their responsibility for the reserve study components that the association is OBLIGATED to repair, replace, restore, or maintain and a decision to add an expensive “discretionary new facility”. The decision whether or not to add a discretionary new facility is something to be voted upon by the membership. IMO our BODs should join newer California HOAs and not continue to operate on a loophole that exists in our outdated by-laws.

    Bruce, OVA has more than enough land and buildings to meet its current needs. The golf course land has the same problems as most other open space in Oakmont–neighbors who say “not in my backyard”. it would be no easier to build a dog park on golf course land than on land already owned by OVA.

  4. Gerry Gwynn on May 7, 2018 at 5:48 pm

    Common sense resolution of OGC’s self-inflicted woes.

    Resolved: Refer to my previous comments and explicit calculation on NextDoor. Resolved: OGC’s current members forego ONE SINGLE OUT FOR TWO EACH MONTH and instead give the same amount to OGC.

    The ‘trade-off’: OGC can continue to cause massive outrage and damage to the entire real Oakmont community of residents by extorting them for a rver bailout” totally MILLIONS OF DOLLARS out of their hard-earned dues funds. Such OVA funds to be illegally directed to the ongoing profits of the small number of actual, debt-liable OGC owners (“proprietary owners”).

    OR OGC MEMBERS CAN SIMPLY FOREGO A SINGLE NIGHT’S DINNER OUT FOR TWO EACH MONTH, PLEDGING THOSE FUNDS INSTEAD TO OGC.

    Pros:

    Legal. Respectful of others. Peaceful. Transparent. Honest. Common sense. Responsible. No cost to OVA or OGC at all. COMMON SENSE,

    Cons:

    To OGC: Can’t count on OVA to finance OGC’s owners profits and financial incompetence. No ‘forever and “devised structure” (per OGC’s Huber) to profit by establishing a permanent parasitic bleed of OVA funds.

    To OVA: Common sense and attention to legalities and priorities. OVA’s history clearly indicates an aversion to common sense, legalities, and fiduciary duties to members. Instead, OVA values and rewards self-serving malfeasance by its elected/appointed reps. So any legal and common sense approach to this issue will be abhorred by many if not most OVA members. Reality is one hard chew. So definitely common sense approach will be a very hard chew by many/most OVA members. Thus a “con”.

    Whatever. The fact is that we still have all of this outrageous behavior by OGC and its proponents causing righteous outrage and discord and divisiveness in our community for almost a year now.

    OGC claims a financial emergency “need” for what? To keep the ‘good times rolling’ for the few OGC proprietary members and, in the meantime on the OVA community’s funds, discharge their personal liability for goosing their profits with huge debts?

    WHERE ARE THE DATA DISCLOSING OGC’S OWNERSHIP AND PAST 5 YEARS OF FINANCIAL PERFORMANCE PER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) AS PER CA DEPT OF REVENUE, U.S. IRS, AND U.S. SEC REQUIREMENTS?

    In summary:

    Resolution: OGC needs to fix itself. It is a self-inflicted mess that is very profitable to just a few members.

    Pros: Common sense. Avoidance of OVA officials pursuing prohibited illegal activities with ill-founded hopes that the whole OVA community would be forced to finance the “defense” of their illegal activities. I.e., they are perhaps counting on the threat of the double-screw: that OVA residents would not only have to suffer the damages caused by their malfeasance but also pay under OVA insurance for the legal defense of the damagers. (Well, not so at all.)

    Cons: For OGC: Common sense and insistence on basic financial competence and accountability. OGC must change from within or shut-down. The OGC disease is deeply embedded internally and chronic and will not change because the status-quo is so profitable to so me members. Even more profitable if they can “devise a structure” (quote of Huber/ OGC) to permanently ‘access’ OVA funds.

    Cons: For OVA: Common sense and intolerance of ‘officials’ abusing their community-granted authority and instead violating their fiduciary duties to the people who count — we voters and payors

    (Sorry Bruce Bon — I’m aware of your statement that “the people who count” are Spainer et al. So we disagree again. Please do not go off on another angry, yelling rant. The sun will set this evening whether we disagree or not…)

    Let’s face it: Common sense and competence and accountability have — in simple point of fact — been severely tested (and defeated?) here in Oakmont for quite a while.

  5. Bruce Bon on May 7, 2018 at 6:01 pm

    I have gone all but inactive for a while, for reasons not relevant to this discussion, but I feel the need to clarify the original post of this thread.

    These are, word for word, suggestions and questions that I submitted to the June 5 process. I am not necessarily a strong proponent of any particular suggestion that I submitted — they are more like suggestions for discussion, and for seeking more information in order for them to be reasonably evaluated for feasibility, desirability and usefulness. My main reasons for posting them here are to suggest the range of ideas that might be relevant and to encourage others to come up with other ideas that might be useful.

    Relative to Lyn’s initial comment, suggesting that we need to first decide whether or not we *should* support the OGC, I am in agreement with Karen’s reply. I would add, though, that my list of “should’s”, in priority order, goes something like this:

    1. The OVA BOD should do nothing illegal or unethical. The BOD members who are connected with OGC in any significant way should probably recuse themselves from any decisions about OGC support, because of the appearance or reality of a conflict of interest.
    2. The OVA BOD should act in the best long-term interests of all of Oakmont, certainly not just the golf-playing few.
    3. The OVA BOD should be transparent, and involve Oakmonters in decision making.

    Nowhere on my list is that we should support OGC. In my view, we might choose to support OGC in some fashion, only insofar as such support is in the long-term best interests of Oakmont. I do foresee major and expensive trouble for Oakmont if/when the golf courses go out of use as golf courses, for all the of reasons that OGC has presented ad nauseam.

    But OGC hasn’t been willing, to date, to support their case with financial numbers provided to dues-paying members of OVA, and their approach has been so off-putting (one-sided, secretive, arrogant, etc) that many of us have become adamantly opposed to any cooperation.

    I am hopeful that the June 5 event will (1) provide information about the pros and cons of at least some ideas for OVA/OGC cooperation or otherwise avoiding the demise of the golf courses and (2) begin a friendlier, more open dialog on all of these issues, including OGC views but also including views opposing OGC interests. “Support” for OGC is not an either/or issue, or the debate originally planned would have been appropriate. I think there should be a collection of possible actions, each of which is evaluated by itself. If the OVA BOD, as our decision making body, and excluding any undue influence from OGC, decides that it is in the best interests of all of Oakmont to try to help OGC survive, then this would be one factor to be considered.

    I encourage anyone with ideas or questions to put them into the June 5 hopper, like I did. My list is certainly not comprehensive, and I’m sure that I haven’t asked all of the relevant questions. If the June 5 event turns out to be a fiasco, then all we will have lost by trying is some of our time, and sentiment against any cooperation with the OGC will harden (in my opinion). If it succeeds, then we will have taken the first step toward reconciliation, whether or not OVA decides on any cooperation that involves funds being transferred to OGC for any reason, and also to achieving my third “should”. I wish for success!

  6. Julie Cade on May 7, 2018 at 7:17 pm

    Excellent points, Lyn.

  7. Lyn Cramer on May 8, 2018 at 10:12 am

    Gerry Gywnn’s trenchant comments deserve repeating. If, as we are told, the golf club’s problem are manageable and require no more than a modest contribution from the OVA (owed anyway), the solution is simple. What does the unwillingness of current owners to invest any more capital in the club tell us about their assessment of the future? It’s sends a message, loud and clear. We ignore it at some risk.

    Like it or not, we need to question just how much to do we want change Oakmont in order the save the golf courses. A land-for-cash exchange may seem attractive at first. The golf club has more land than it can put to productive use. But we don’t have a surplus of cash, far from it. Nor have we given a moments thought to the cost and consequences of acquiring additional land. I fear we’re embarking on a path that leads in directions we’ve given no thought to. Those who favor transforming Oakmont into an upscale country club are going to push this option. That’s my speculation of the day.

  8. jim Golway on May 19, 2018 at 12:24 pm

    A land-for-cash exchange idea is never going to fly (assuming the OGC land is what is indicated in the map/graphic). This would require Hole #3 to be changed from a Par 5 to a Par 4 also; it would require Hole #4 to be shortened to a Par 3. For those who know little about golf perhaps this doesn’t seem like a big deal – trust me – it is.

    There is something called the Slope rating (the rating is determined independently by some Int. Golf Assoc, something like the PGA) the rating is used for players handicapping purposes but the important thing is that it governs whether a club can identify the course as “Championship” – which is why the West course is always referred to as “Oakmont’s Championship Course.”

    Perhaps you are still thinking “who cares, a golf course is a golf course…. Well, trust me – the OGC makes big money from outside tournaments that book the entire West course for their outings (the course is closed, but members seldom complain because they know these corporate/business/school functions help keep the dues low – so if the slope changes (the elimination of the Par 5 is a big change) the West course would no longer be the draw it is for outside tournaments.

    All of which is why Kemper would advise against selling that land and the majority of OGC membership would howl in protest.

  9. Bruce Bon on May 19, 2018 at 10:20 pm

    Jim — good details — the sort of thing that I would expect to come out from the panel on June 5, IF they are indeed transparent.

    Part of my intent in that proposal is to ask (1) is OGC serious enough to consider a trade-off that would actually hurt — though your explanation may indicate that it would hurt even more than I envisaged, and (2) to propose something that would be of serious value to OVA — for the future, if not the present.

    My only other comment is that I specified 2 to 10 acres, a wide range, and that the drawing is crude, at best. There might be an area on the low end of that range that would not have such an adverse effect on the golf course, but which might still be of substantial value.

    • jim Golway on May 20, 2018 at 9:47 am

      Presenting that type of land swap trade-off (even if it’s hypothetical) would be a good way to gauge how critical is the OGC‘s financial position. As a former member of the club, I’m nearly certain that the membership would never accept turning the West from a Par 72 track to into a Par 70 (which would have to happen if the land indicated were sold – regardless of the exact acreage.)

      However, the club could seriously contemplate such a drastic move IF it was the only way for them to ward off bankruptcy, selling the entire operation or even closing down the East.

      But yeah Bruce – it would be great if at the June 5, TH someone would ask the panel if they would consider such a plan. I can’t wait to see their reaction. (I bet they will ‘deflect’)

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