Some Concerns With OGC/OVA Affiliation
While it now appears that an OVA dues increase to send money directly to the Oakmont Golf Club (OGC) has been taken off the table, there are still several options under discussion for an OVA cash infusion to the OGC.
We have been informed that yet another OGC/OVA Joint Committee has been formed, comprised of three OVA Finance Committee members and two members of the OGC board. One of its tasks is to “develop a five-year overall projection” and “a real business plan” for OGC. It is unclear as to why the OVA Board feels it is its duty to formulate a business plan for a private for-profit entity such as OGC. The board’s primary purpose, oft-stated, is to provide recreational facilities for our members. Their primary focus should be on maintaining those facilities owned by OVA, many of which are in need of repairs and upgrades that have been deferred for years.
But leaving aside questions as to whether it is appropriate for OVA to get involved in the nuts and bolts of OGC business decisions, OGC recently completed their own Five Year Business Plan with the assistance of Kemper Sports, their management firm. Let’s take a look at their plan for how money from OVA was to be used.
Over the past year we have heard about deferred maintenance on the golf courses and a purported shared interest between OGC and OVA in maintaining the creeks and ponds. We heard OGC sound the alarms that, due to their weakened financial state, these maintenance needs required an infusion of funds from OVA.
A look at the Kemper/OGC five year plan with regards to “Capital and Maintenance Expenditures” tells a different story. While $245,000 was allocated to “Waterway Renovation,” a minimum of $530,000 was earmarked for bar and dining room renovation, new flooring, a deck addition, interior and exterior paint and kitchen equipment. This is not what was sold to OVA members in two different town hall presentations. It is a significant capital improvement that exclusively benefits the shareholders of OGC.
There is a bit of history here as well. Twenty years ago there was a similar capital improvement plan for the Quail Inn and other OGC facilities known as Vision 2000. A portion of this $3.5 million capital improvement plan involved reconstruction of the existing Chalais restaurant into the Quail Inn. According to the 2014 Long Range Planning Committee report: “Unfortunately, a series of tactical errors in restaurant management led to massive losses sustained by the restaurant and a drastic cutback in its activities. This financial hemorrhaging depleted a significant part of the reserves of the club and seriously weakened its ability to continue to upgrade its operation.”
This is not to say that the results will be the same but the OGC has been down this road before.
Oak Leaf Drive lot
Another idea being explored in the OGC/OVA affiliation is a “property transfer from OGC to OVA,” in other words a purchase of OGC land by OVA. One of the parcels that has been discussed is on Oak Leaf Drive across from the 12th tee of the West Course. From the appearance, it has not been used in years. OGC must be overjoyed by any discussion to take this abandoned lot off their hands. Who else would possibly be interested in it? With high voltage power lines directly overhead, it is not desirable for a residence. Is this really in the best interests of OVA?
In regards to a “property transfer,” it should be pointed out that the earlier (and now abandoned) discussion of a five dollar dues transfer per OVA member to OGC would raise $284,000 per year in 12 monthly increments of around $23,670. A real estate purchase could raise a similar amount in a single payment.
A final note: OGC shared their Five Year Business Plan with the OVA Board in early September. According to OGC Board member Gary Smith at the October 2nd workshop: “Our expectation, frankly, when we sent that five year plan to the OVA was, just as we got that information out to all of our members, we thought you would get it out to the community. And that didn’t happen.”
After he made this statement, Director Greg Goodwin asked the OVA Board to release it to the community in the interest of transparency. It has now been released (link) but with an added cover letter/preface, evidently written by OVA, downplaying its relevance and calling it a “wish list.”
A phrase I often heard in all my years working in courtrooms would seem to apply here: The document speaks for itself.
(Top photo by Robert Starkey)
Wow talk about delusional. OVA money to remodel the Quail Inn “A minimum of $530,000 is earmarked for physical improvements of the Quail Inn that benefit all of Oakmont” I’ve lived-in Oakmont for almost 4 years and have never been to the Quail Inn. I wonder how many other Oakmont residents have never been there?
Excellent summary and observations, Michael. Thanks. There is nothing in the OGC’s spending plan and wish list that would in any way qualify as a business plan. It contains no information, rationale or projections upon which to believe that the spending sought would have the desired outcome of turning around this long struggling business.
With that in mind, we ought to think long and hard before becoming financially entangled with the OGC. Oakmont has a long tradition of being member driven. It is members, not the OVA, upon which activities and events depend for their initiation. If one needs a ride to a doctor’s appointment, call the Oakmont Helpers and so on for so many other recreational and educational activities of this community. This is a perfect time for those who believe it is in the interest of this community to come to the aid of the golf club to step forward and form a “Friends of the OGC” club to further that end. I wish them well.
The “Five Year Business Plan” is, indeed, just a wish list for what OGC might spend the money on if OVA gave them a $5/member/month direct subsidy. I find it fairly consistent with what they said back in June, but with numbers added — it is useful primarily to flesh out the OGC Board’s fantasy about how they would spend the money, and serves best to convince anyone reviewing it that they should NOT be supported in this fashion.
In my opinion, both the Quail Inn improvements ($530k minimum) and the $245k asked for “waterway restoration” would be completely inappropriate uses of OVA dues or (mandatory) assessments. The former because we are already borrowing money for our own deferred maintenance needs and it doesn’t make any sense at all, in this environment, for us to give OGC money to do capital improvements. The latter because what OGC plans to spend this on is, from the notes of their Plan, “essentially pond restoration (dredging) of critical ponds”. Until I see some expert opinion (other than Warfel’s) that the golf course ponds are somehow related to flood control, this will continue to be a “non-starter” – the ponds may serve the golf courses as water features/traps and as water storage, but I cannot imagine them being relevant for flood control. This means that funds given to OGC for this purpose would be just a gift with a deceptive wrapper — I’d rather it be termed a simple subsidy.
One possibility that received some support at the meeting was some sort of *voluntary* contribution by OVA members to OGC. Nick Beltrano, an ardent OGC member and supporter, advocated an Opt-In system where voluntary contributions might be made along with our OVA dues payments each month. This has a number of advantages and could be done at no cost to OVA (administrative costs could be deducted before handing the money over to OGC), and I fully support this proposal. One of the features of such a system would be that it would make evident the level of actual support by OVA members for OGC (unlike Emails sent to the Board, people would have to “put their money where their mouth is”). It would also avoid adding a financial burden to the poorer members of our community, who simply wouldn’t contribute, while the wealthier members who chose to do so could contribute as much as they liked. If the level of support is substantial, it might resolve OGC’s problems with no impact on OVA dues, and it could be implemented fairly quickly. I would not object to OGC using their Oakmont News space to promote contributions, sort of like a KQED pledge drive!