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 Board Reps Meet with LU

December 7, 2015

RE: Landscapes Unlimited, Ocean Pines Association and the Ocean Pines Golf and Country Club

Appointed golf representatives by the Ocean Pines Board: Pat Renaud, President; Tom Terry, Treasurer; Bill Cordwell, Director, and Bob Thompson the General Manager, met with representatives of Landscapes Unlimited (LU): Tom Everett, President; Scott Nissley, Regional Manager; John Malinowski, Golf Pro; and Rusty McClendon, Superintendent to discuss year to date results for the Ocean Pines Golf and Country Club as well as the draft of their 2016/2017 Fiscal Year Business Plan. A summary of the findings from the meeting was distributed to the remainder of the Board.  The finalized LU Business Plan will be presented during the January Budget meetings.  The budget meetings are open to the public and are posted on the website.  A copy of the summary report from the meeting is shown below.  

Final copy of the OPABR review of the LU report.

Representatives of the OPA Board (OPABR): Pat Renaud, President; Tom Terry, Treasurer; Bill Cordwell, Director and Bob Thompson, General Manager met with representatives of Landscapes Unlimited (LU): Tom Everett, President; Scott Nissley Regional Manager; John Malinowski, Golf Pro and Rusty McClendon Superintendent to discuss their results to date and their Draft Fiscal year 2016/17 Business Plan for the Ocean Pines Country Club and Golf course.

The OPABR suggested the use of the recently received LU draft business plan as a framework for discussion. The OPABR team made it very clear that this review of the draft was only a means of organizing our initial executive review and that this did not replace the need for full budget process review.

Using the Executive Summary of the above mentioned draft report; the OPABR began at the beginning on page 4 in the first paragraph asking LU what they meant by an emphasis on “grow Member numbers”. A discussion followed which covered membership numbers which were 143 (not counting life time) members in March of 2015 but were at 116 (not counting life time) members in September 2015. This was a loss of 27. The group discussed the need to focus on membership growth and challenged the draft plan in that it only showed adding 10 new members in 2016/17. LU agreed they needed to re-look at the projected growth objectives in their Membership Plan.

The discussion continued with the OPABR emphasizing the critical need to maintain and serve our existing golf membership. It was shared that there are loyal members who have stayed through all the construction and diminished use of the course; who are now saying they could likely be leaving for other courses in the area. The OPABR also inquired what actions LU has taken to identify previous golf members and how many have been contacted to entice them to return. LU stated they have identified over 300 previous members but they have not been contacted.

The strategy to reestablish membership would be found in the membership recruitment plan found later in the Business Plan.

The OPABR then asked for some clarification on the LU reference of “reorganized with the establishment of the Golf General Manager/Head Golf Professional model”. LU pointed out that they inherited a model where the Superintendent directly reported to a regional superintendent rather than the local Golf General Manager. The reorganization has the local Superintendent directly reporting to the Golf General Manager. This creates a clear line of operational control. The OPABR agreed with the adjustment and reinforced the same need for a clear operational line of reporting in LU/OPA relationship. The Local and Regional LU team would work with and report directly to the OPA GM for day to day operations of the course and Country Club campus.

The OPABR then discussed LU’s position on lowering maintenance costs as a product achieves some level of standardization (page 4). The OPABR pointed out that we desired to maintain a quality product over cost savings quantity management. We all agreed the standards could be modified slightly to maintain the product at a lower cost but shared the concern that cost savings alone are not the answer.

Moving to page 5, we discussed some of the operational problems raised in the second paragraph.

The OPABR discussed that in recent Golf Council meetings it became apparent that LU was saying they had agreed to keep the commitments that Bill Casper Golf (BCG) had made with certain outside groups; which were having a negative effect on the availability of tee times. The OPABR asked if there were in fact contracts with these groups which precluded LU from changing tee times with these groups. LU said it never determined if there were contracts but would be using contracts in the future to better manage these outside groups. The OPABR advised that blaming BCG, which has been done in numerous Golf Council meetings on various issues, was not productive in that there were and are many OPA Golf Members who did support the change. We all agreed to move forward with LU as our team and manage for success while leaving BCG out of the discussions.

The OPABR then discussed a statement that was recently made at the Golf Council meeting. The LU told the golf group it could not accommodate them and book their events in the upstairs at the Country Club. They were told that the Yacht Club was in control of the upstairs although LU was responsible for keeping it clean and paying for the utilities. The LU contract was referenced on page one, item A. “Owner desires to provide for the operation and management of the clubhouse,” which makes it clear LU was responsible for the facility. LU was advised that the Yacht Club would notify them immediately upon a potential booking of the upstairs of the Country Club, to ensure availability. LU could book events at the facility and the Yacht Club Team would have to work with LU for scheduling events.

In further discussion, under the LU Golf Operations Plan on page 17, LU says, "we are concerned that mold may be causing unhealthy working conditions in the clubhouse". In a recent meeting, with the OPA members, Mr. Nissley also made the comment that some of their employees seemed to always be sick and it might be from the building. The OPABR asked if they were requesting for something to be done in this regard. LU asked for more time to discuss this situation and they would get back to Bob Thompson.

The OPABR then turned to discuss the availability of the Tern Grille. The OPABR is well aware that LU inherited the limited hours of the Tern Grille. The hours of service appear to miss an opportunity to serve our members, and outside players, who have tee times between 7:00 and 9:00 since the grille does not open till 9:00. It also closes at 4:00 which again misses an opportunity to serve our members. Both of these timing issues appear to be negatively affecting possible revenue during those times. Members and outsiders came to the Grille in the past on Wednesday and Friday nights to socialize. The removal of this opportunity is very important to our members. LU agreed to look into the situation.

The OPABR then asked when the LU National Food and Beverage Manager (LUNFBM) came to visit OPA did he interview any of the golf members. LU stated they did not believe he had any discussions with Golf members. The OPABR asked if LU was following the advice of the LUNFBM in managing our facility. After further discussion it was determined that LU needed

to adhere to the guidance more closely. The OPABR asked if LU Executive Management was aware that we had had issues with some regulatory items and that the LU response was not timely. The OPABR made it very clear we expected much more urgent response from LU in matters of regulatory compliance.

In the fifth paragraph the draft plan referred to “policies driving revenue”. The OPABR asked what policies OPA has enacted were the problem. LU stated there were no OPA policy issues. LU stated it was more inherited business practices. There was no action LU needed from the OPA Board.

In reviewing the budget plan discussions began with Bob Thompson reflecting that the September bottom line numbers have a positive variance to budget. It was noted however, the majority of the positive variance is contributed directly to the reduced maintenance costs. The reductions in maintenance costs have been ongoing since LU was brought on board. It was discussed that one primary factor is the difference in accounting procedures with LU vs the prior golf management company. LU allocates expenses in the month the product is being used vs when it is actually purchased. Concerns were raised by the OPABR as they related to the continued decline in revenues punctuated by the continual decline in membership. YTD gross revenues are $87,907 behind budget projections and $19,993 behind the previous year’s actuals. Total memberships YTD reflect a drop from 140 last year in September of 2014 to 116 this year. All agreed steps need to be taken to reduce these trends.

The OPABR then moved to discuss the LU reference to there being bad weather in March and April in 2015. The OPABR wanted to know why weather from a time before LU’s arrival would be included in their plan discussions for 2016/17. LU stated they would look into this inclusion.

The group then reviewed the list of metric measurements on page 6. As referenced before the most egregious item on this page was found in the last sentence on the page which stated: “Add the equivalent of 10 Individual Memberships.” OPABR pointed out that if we just added a net 10 new members for the next year we would still have a net loss of members from where we were when LU took over. After some discussion,

LU agreed to review the possibility of revising the target of new members to 32 or approximately 10% of the members we have lost over the years. LU advised that they have a list of approximately 300 past members but are not sure of the personal situations of these members or if they can, in fact, still be contacted.

Page 7 we discussed maintenance issues. LU brought up the need for OPA to complete requested repairs, however, during the discussions it was determined the majority of items and all the priority items had indeed already been accomplished. There were only a few minor items left to be addressed. Examples included some re-caulking, minor painting and replacement of screws. The OPABR referenced many comments being made by LU during Golf Council meetings where lack of response from the OPA for repairs has been reported to our Golf Members. The LU Executive team agreed the critical issues have already been addressed.

The OPABR referenced there had been many complaints about the general cleanliness of the facility. LU referenced the need for a deep cleaning of the facility. LU reported they were working on additional bids from Stanley Steamer; however it would not include a deep cleaning of the kitchen. After further discussion on cleaning and responsibilities identified in the contract, all parties agreed the basic cleaning such as vacuuming; dusting, taking trash out, wiping down areas, etc. were the ongoing responsibility of LU. LU wanted to continue its work to provide a scope of work for hiring a firm for a deep cleaning of the facility. The OPABR said it would look to LU for the cleanliness of the facility, per the contract.

Page 8 we discussed concerns about the double booking and changes in strategies involving membership development. One strategy identified to better manage the tee sheets was the implementation of “double booking”. The rational provided was too utilize this process to maximize the bookings allowing for better management of tee sheets to accommodate for last minute cancelations and no-shows. While this strategy did not appear to be customer centric, the LU team assured us this strategy is being successfully deployed at the majority of their other courses with great success.

Once we had covered pages 4- 9 of the executive summary of the draft plan we moved to the Membership Development Plan pertaining to page 15 and the three pronged elements approach suggested in the draft.

1. Golfer Member Registration Process – after discussion; Bob Thompson recommended the process could be enhanced by allowing the LU team to gather the appropriate documentation to include a completed application and the acceptance of a check for fees at the golf course. They would then be required to bring this information to OPA Administration no later than the next business day for processing of the membership and actual depositing of the check. The member would still be required to come to admin to have his/her picture taken and issuance of a membership card.

2. Combination of Golf / Aquatics amenity pricing – after discussions of pros and cons it was determined this strategy would probably not be supported and was not a good fit for the OPA community which does not generally support one amenity’s revenues being used to offset another amenity’s costs unless there is a direct synergy.

3. LU Planning and managing important member events – this strategy was understood and generally supported while noting it would take some work by the LU team to have OPA Membership buy in to the change.

We concluded the session with the OPABR stating it was a positive move to have the LU Regional Manager at the OPA Golf Membership Council meetings. The LU presence was seen as very much a step in the right direction. However, the OPABR also shared the need for a softer presence from LU’s Regional Manager. We shared that he needed to remember that the OPA course was not populated with Corporate Memberships like Renditions or other Country Clubs. The OPA course is our community course and our Members have a very personal sense of ownership. He accepted the coaching saying he had been offered that advice before in other courses; and thanked us for the open discussion.

The OPABR team made it very clear we were there to support LU and these executive sessions are meant to create an opportunity for direct unfiltered communication. LU stated they greatly appreciated this model and approach.

The two plus hour meeting ended on a positive note as Mr. Everett pledged to review his draft Business Plan. He was most appreciative of the Executive session, our OPABR commitment to LU and for clarifying the operational reporting procedure directly to our General Manager, Bob Thompson. The OPAR members also felt very positive about the meeting and looked forward to continuing the positive relationship and these Executive sessions where the corporate level issues and performance could be reviewed and directly discussed.

Uploaded: 12/8/2015