Annual Club Meeting

A NNUAL M EMBERS ’ M EETING

Sunday, September 22, 2024 3:00 p.m.

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A GENDA  Board and Committee Recognition & Thanks  Update from Club President, Bruce Johnson  Brief State of the Club Update – Chris Conner  Local Area Club Comparison of Fees & Metrics  Membership Update – Chris Conner  Membership Growth  Current Member Demographics  Club Finance - Tim Lamphier  Current and Potential Capital Improvements  Election Results  Adjournment – Reception in the Clubhouse 2

2024 B OARD OF G OVERNORS Executive Committee & Officers Bruce Johnson, President Hugh Woltzen, Vice President

Lewis Collins, Secretary Jacquie Harris, Treasurer Jack Hill, Ex-Officio

Directors of the Board of Governors Nancy Harrison Lee Martino Jim Moore Alice Quinif Bruce Van Fleet

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2024 C LUB C OMMITTEE C HAIRS COMMITTEE COMMITTEE CHAIR By-Laws and Legal: Lewis Collins Compensation & Benefits: Hugh Woltzen Croquet: Julie Wright Facilities & Property: Michael Howard Finance & Audit: Jacquie Harris Golf: Jim Moore Green: Lee Martino Grievance: Jo Hill House & Social: Alice Quinif Long Range Planning: Nancy Harrison Membership: Bruce Van Fleet Nominating: Jack Hill Tennis: Anne Schaeffer 4

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C LUB U PDATE AND P RIORITIES

Bruce Johnson, Club President

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S TATE OF THE C LUB

 We have a strong governance model with trusted Board and committee leadership, a talented group of highly dedicated employees; and an engaged and active membership.  The Long-Range Planning Committee, Facilities & Property, House & Social, Green, Golf, Membership, Finance & Audit, Croquet and Tennis Committees have all been instrumental as we look to what is possible in the future.

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S TATE OF THE C LUB  Our Membership Level is currently 340 (289 General/Full Golf and 51 Social)

 We currently have 9 vetted memberships on the wait list.  We should outperform the 2024 Operating Budget which projects a little better than break even performance.  The current Member approved capital campaign to improve the golf course amenities, new Wellness Center, and smaller improvements are going to cost more than first proposed in 2021, but the debt per member will remain below $10,000 and the debt could be fully paid off by 2029. 8

S TATE OF THE C LUB

 Phase II of the Golf Course Improvement Plan is complete with only Phase III remaining which includes the short game area and driving range improvements. The new Short Game area will open in mid July 2025.  Conversion of the 1785 home into a Wellness Center will begin this November and be completed in late June or July 2025.  The new Tennis Viewing Deck and Pro Shop/Office was completed this past winter/spring.  We continue to work with architects to create a comprehensive Activity Center renovation plan with a goal of renovating it in 2026.  We are continuing to look at options for new employee housing. We are currently in need of 7 additional bedrooms.

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Local Area Club Comparisons

Chris Conner

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Total Club Members as of 9-15-2024 Average of all Clubs= 379

500

480

470

457

460

450

440

420

400

380

380

368

355

360

340 340

340

321

320

307

300

Wade Hampton

Highlands Falls

Cullasaja Club

Wildcat Cliffs

Mountain Top

Trillium High

Sapphire Valley

Lake Toxaway

Highlands CC

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Hampton

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13

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15

16

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Membership Update Chris Conner, GM/COO

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Recent Changes

Initiation Fees Have Increased  General or Full Member: $125,000 (up from $100,000)  Social Member: $100,000 (up from $75,000)  Age Incentive Member: $95,000 (up from $85,000)  The Club offered limited Preview Memberships this season. There were no preview opportunities in the months of July and August, and no more than 5 couples at any given time in the other months.

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21

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Membership Demographics

Chris Conner

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M EMBERSHIP D EMOGRAPHICS  Currently, there are 642 people in the membership database…330 females and 312 males.  Average age of the 609 Cullasaja members that we have age info is 70.86.  At this point last year, the overall average age was 70.76

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A GE D EMOGRAPHICS

Cullasaja Club Overall Age Range

Membership 9-1-24 # of Members% of Total 49 & Younger 21 3% 50-59 54 9% 60-69 149 24% 70-79 272 45% 80-89 105 17% 90 & Older 8 1% 609 100%

80-89, 105, 17% 90 & Older, 8, 1%

49 & Younger, 21, 3%

70-79, 272, 45%

50-59, 54, 9%

60-69, 149, 25%

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N EW M EMBER A GE D EMOGRAPHICS

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S TATE OF O RIGIN D EMOGRAPHICS

Place of Residency for Members

100 150 200 250 300

277

160

79

45

0 50

16 27

1122222222289

IN MS AZ KS KY MO OH OK PA VA UT LA TN AL TX SC NC GA FL

OFF-SEASON PLACE OF RESIDENCE

NC, 79, 12%

GA, 160, 25%

SC, 45, 7%

TX, 27, 4% AL, 16, 3% TN, 9, 2% LA, 8, 1% 11 Other States, 20, 3%

FL, 277, 43%

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Winter Residency of 2024 New Members and Waitlist

GA, 5%

IN, 5%

NC, 10%

FL, 62%

NJ, 5%

SC, 5%

TX, 10%

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S TATE OF THE M EMBERSHIP R ECAP

 Membership invitations have returned to pre covid averages while attrition remains steady.  We will continue to have vetted Members on the waitlist to join.  New members’ average age range is 62-64, meaning the Membership is getting younger and the average membership tenure should increase.  Financially the Club is performing very well with new initiation fees and dues income. 30

Financial Review

Tim Lamphier, CFO

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A NNUAL A UDIT Cullasaja Club engages with FORVIS accounting firm on an annual basis to conduct an external audit of the accounting records. The 2023 audit resulted in an unmodified, or “clean” opinion, meaning the Financial Statements of Cullasaja Club present fairly, in all material respects, the financial position of Cullasaja Club. The audit reports and internal financial statements are available for review at anytime in my office.

A CTUAL 2023 C LUB O PERATING R ESULTS , E XCLUDING D EPRECIATION ( DOLLARS IN THOUSANDS )

Actual 2023 $4,472 $2,508 $6,980

Budget 2023 $4,307 $2,295 $6,602

Favorable (Unfavorable)

Dues

$165 $213 $378 $118

Other Revenue Total Income Payroll Expense

<$3,482> <$3,600>

<$89>

Other Operating Expense <$3,087> <$2,998>

$29

Total Expense

<$6,569> <$6,598>

Net Club Operations

$411

$4

$407

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A CTUAL 2023 C LUB N ON -O PERATING R ESULTS ( DOLLARS IN THOUSANDS )

Actual 2023 $1,680

Budget 2023

Favorable (Unfavorable)

Initiation Fees Capital Dues

$1,335

$345

$847

$818

$29 $20

Other Non-Op Revenue

$93

$73

Total Non-Op Revenue $2,620

$2,226

$394

Member Acquisition Exp <$91> <$64>

<$27>

Other Non-Op Expense

<$13> <$38>

$25

Total Non-Op Expense <$104> <$102>

<$2> $392

Net Non-Operating

$2,516 $2,124

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Favorable Operating Variance from Budget (excluding depreciation)

2018

2019

2020

2021

2022

2023

$800,000

$730,135

$700,000

$600,000

$500,000

$406,473

$400,000

$313,223

$275,841

$300,000

$243,342

$166,467

$200,000

$100,000

$0

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Non-Operating Variance from Budget

2018

2019

2020

2021

2022

2023

$1,211,645 $1,199,138

$1,250,000

$1,045,175

$1,000,000

$750,000

$500,000

$391,051

$250,000

$89,617 $101,669

$0

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W HERE DO Y OUR D UES GO ? (C APITAL & O PERATING )

Activity Center/Pool 4%

Food & Beverage 16%

Capital Reserves Fund 5%

Tennis & Croquet 3%

Capital Projects/Debt 11%

General & Admin 23%

1785 House 1%

Employee Housing 1%

Clubhouse 7%

Golf 29%

A CTUAL 2024 C LUB O PERATING R ESULTS , E XCLUDING D EPRECIATION ( DOLLARS IN THOUSANDS ) T HRU A UGUST 31, 2024

Actual YTD $3,090

Budget YTD

Favorable (Unfavorable)

Dues

$3,052 $1,630

$38

Other Revenue Total Income Payroll Expense

$1,764

$134 $172

$4,854 $4,682 <$2,522> <$2,605>

$83

Other Operating Expense <$2,278> <$2,184>

<$94> <$11>

Total Expense

<$4,800> <$4,789>

Net Club Operations

$54

<$107>

$161

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A CTUAL 2024 C LUB N ON -O PERATING R ESULTS , E XCLUDING D EPRECIATION ( DOLLARS IN THOUSANDS ) T HRU A UGUST 31, 2024

Actual YTD $1,300

Budget YTD

Favorable (Unfavorable)

Initiation Fees Capital Dues

$1,100

$200

$855 $129

$838

$17 $75

$54

Other Non-Op Revenue

Total Non-Op Revenue $2,284

$1,992

$292 <$2>

Member Acquisition Exp <$62> <$60>

<$12>

$4 $2

Other Non-Op Expense

<$8>

Total Non-Op Expense <$70> <$72>

Net Non-Operating

$2,214 $1,920

$294

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2021 C APITAL I MPROVEMENT P ROGRAM (D OLLARS IN THOUSANDS ) S OURCES & U SES – P ROJECTED 2022 THRU 2028 Funding Sources: Beginning Cash $1,331 Transfer from Accumulated Operating Surplus $550 Capital Dues $4,097 Initiation Fees (Net) $9,640 Total Funding Sources $15,618 Projects/Uses: Croquet Pavilion (complete) <$347> Golf Course Master Plan Phases 1 & 2 (complete) <$4,242> 1785 House Purchase (complete) <$2,461> Tennis Facility (complete) <$697> Golf Driving Range & Short Game Practice Area <$2,065> Wellness Center (estimate) <$4,005> Activity Center (estimate) <$2,818> Employee Housing (estimate) <$1,577> Debt Service/Interest Exp: <$416> Total Projects/Uses <$18,628>

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2021 C APITAL I MPROVEMENT P ROGRAM (D OLLARS IN THOUSANDS ) P ROJECTED D EBT & C ASH B ALANCES 2028 Year-End Gross /Surplus <$3,008> Projected Cash Balance $2,135 Net /Surplus <$872> Net Debt per Member $3 • Purchase of 1785 House not in original plan. • Construction costs have increased significantly since plan was approved in 2021. • Timing of projects to be determined and will impact debt balances. • Projected Net Debt per Member never exceeds $10K. Based on current numbers:

• Debt level peaks in 2026 with net debt per member at $10K. • Gross debt fully paid in 2029-2030 (original plan was 2026). Other projects being considered for the future include: • Golf Learning Center • Complete Golf Cart Path Repaving • Cart Barn Reconstruction

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Current and Potential Future Club Improvements

Chris Conner

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Current Capital Improvements

 Phase III of the Golf Improvement Plan will commence on November 1st. This will complete the plan and will refurbish the driving range and also create a new short-game area and putting green.  Plan is for driving range to be completed by May 1, 2025; and the short-game area/putting green to be ready in mid July 2025.  Renovation of 1785 House to begin this fall with anticipated opening of new Wellness Center in June 2025.

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New Wellness Center

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New Wellness Center

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New Wellness Center

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New Wellness Center

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New Wellness Center

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Short Game Area

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Driving Range

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Potential Future Improvements

 Continue to search for a feasible location to add 3 pickleball courts.

 Investigating additional employee housing options. We spend over $75K annually securing Airbnb or other local rental options to house seasonal staff.

 Waiting to see if demand/desire increases to build a golf learning center.

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Potential Future Improvements

 Working with Facilities and Property Committee, House and Social Committee, the Board, and architects to develop a plan for the existing Activity Center.

 Might possibly look at expanding the Fairway Café once the short game area is utilized.

 The Board of Governors, working with various committees, has done an outstanding job approving and implementing improvements throughout the Club.

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Activity Center

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Activity Center

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Employee Housing

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Meeting Recap

 We have a wonderful group of volunteer leaders that are active in providing strategic assistance via our Committee and Board governance.  We have a very engaged membership that cherishes the relationships with one another, and your outgoing nature is #1 reason prospects continue to have a strong desire to join.  We have an amazing group of dedicated, and professional staff that work diligently to ensure you have a remarkable and memorable experience at the Club.  We are competitively positioned to improve or add amenities that are desired by the Membership.  The Club’s financial position is very strong, and both the short term and long-term outlook is very healthy.

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Election Results

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Questions and Answers

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