February Board Meeting ~ Proposed Budget

Board Members Present:

President Gary Pritsch                Sharon Carr

Vice President D.J. Bell              Diane Jones

Secretary Debbie Clement          Dan Hodson

Treasurer Martha Lindval

General Manager Dennis Dubuque

Board Members Absent:

Jim Ott

James Meredith                                          

7:pm Board was called to order ~~ meeting lasted 2 hours, ending at 9:pm

January Board minutes were approved unanimously

GM Report:

Irrigation – RainBird Water heads

The Board approved $2,690.94 & $2,630.21 expenditures for Irrigation water-heads.

60% of this issue has been ‘fixed’.

• Eddie was authorized to spend $12,400 in this year’s budget.  He has spent $8,444.

The Golf Committee fixed the roof(s) of two golf course bathrooms - @ the committee’s volunteer service.

Golf Cart Lease is in need of renewal June 1^st.  GM Dennis recommends a 5 year lease / purchase agreement with “E-Z Go” golf cart.     8/4 payment plan ( 8 months on / 4 months off)  48 month straight lease with warranty – 1,145 per month (At the highest $1,740.00) – gas carts.

Buy out option at the end of the lease = 1872.47 per cart. 

This recommendation was approved by the Board – unanimously

Greens Mower needs a motor replaced at a cost of $1,800.   Mower is 3-> 4 years old. The mower should last years longer.  This motor can not be repaired… possible defect in the motor.  GM Dennis was asked to check into this situation.

The older mowers will allow us to ‘get by for a while longer’.  The two other mowers are nearly 15 years old, but working properly.

• Issue was ‘tabled’ until next month.

Boat Dock Issue:  A request was made to build a boat dock before a home is built on the property.  Diane Jones stated:  According to Article 1 of the Bill of Assurance:  Boat Docks are for residential purposes, only.  Sometimes boat docks are built before the house is built when the building permit and plans have been submitted.  In this case the request did not have plans for building a house.

• The Board agreed to deny this request.

Golf Cart Path Verification:  Last month, Director Jim Ott asked for clarification of policy # 2002-18-07A.  GM Dennis suggested approval for changes to this policy. 

• 1) 40% à 50%
• 2) eliminate the $2.00 trail fee
• 3) All fees shall be outlined as:
• Greens Fees = 60%
• Cart Rental = 35%
• Trail Fees = 5%
• This new policy # 2002-18-07B for golf path construction and maintenance was approved unanimously.

New Golf Shop Manager starts March 15^th.  A second, part time employee starts tomorrow.  “With this wonderful weather, golf revenue is up from last year by about $3,500 à $4,000.” 

19^th Hole sales ‘are up a little’:  GM Dennis says expenses are lower this year.  The percentages are better.  Several Board members agreed that the food and service is much improved.  Director Dan Hodson stated “we are going to have to prove (to DH members) that the service and food is better.”

Golf Fees are in negotiations with the Golf committee & GM.  We should know more by next month.

Delinquent Lots:  No more responses from letters sent out by the attorneys.

The next step in this process of collecting delinquent Lot Dues will be costly:

• Title Search – $125-150 per lot.  ($75,000)
• Register Letter -- $ 6-7,000   ($50,000)
• Total approximate cost $250,000

One suggestion:  Ask for $500 per lot to make this go away.

*Which property owners are still alive?  Which Property owners have stopped paying taxes on the property.

Sharon Carr:  Every time they don’t pay, they are stealing from the community.

GM Dennis:  “The community said at the last Town meeting, ‘If they don’t pay, why should we?’”

Current Status of Delinquent Lots:

• 132 lots à 5 or more years in the rears = $364,000.00
• 342 lots à 4 years in the rears = $756,000.00
• 20 lots à 3 years in the rears = $33,000.00
• 12 lots à 2 years in the rears = $13,500.00
• 54 lots à 1 year in the rears = $ 30,000.00

Of the 579 lots that were sent to Brandon Moffit – Diamondhead’s attorney:

• 19 have paid $15,700.00
•   4 have agreed to pay, but not received the $4823.00

Question:  Can we do this in stages? 

Answer: Those who are current on their taxes might pay.  Those who are delinquent on state taxes have been (or will be) taken over by the state.  The properties are not separated according to tax status, yet. (Paraphrased)  Once the state takes the property, delinquent dues will not be paid.

Director Sharon Carr:  We should talk with DH member, Bob Mitchel, regarding his volunteer offer to take over this collection process. 

President Gary Pritsch:  The attorney has stated, there is no guarantee they will get any money back…(even with the investment into this process).

New Business:

Article 6, section 1d of the ByLaws:  allows the President of the Board to enter into discussion regarding Finances – according to Robert’s Rules of Order.

Director Martha Lindvall:  I move that any and all funds collected from past due accounts will be added to the Capital Improvement Fund.  Motion passed unanimously

• Delinquent dues would need to collected in such a way as to decipher which funds would be applied to the Capital Improvement Fund

 2017-2018 Budget

2017-2018 Proposed Budget

Employees = 17 full time, 9 part time

President Gary Pritsch stated: “ …what this Board sets tonight will set the future of Diamondhead.  It won’t be any other – some board in the past did this and we are making up.  We are the ones that go forward from tonight once we decide on the budget.”

Gary proceeded to go through line items in next year’s budget, starting with the 19^th Hole.  Explaining the projected / budgeted loss to the 19^th Hole:

• 2014 – $44,449.00 
• 2017 - $84,000 (currently the loss is $65,000)
• “At some point we are going to have to decide that we are not going to loose money in the 19^th Hole.”
• Payroll for this year was budgeted at $99,000.  They have used $76,000. 
• “I see no reason to give them more than what they used this year.”
• “Any time that the total revenue exceeds cost of sales + labor, that means that money is coming directly out of somebody’s dues money.  I think that’s wrong.  I think the 19^th Hole should be self sufficient.”
• “It will never be totally self sufficient due to the overhead cost of the facility.  If we shut the doors to the 19^th Hole, we still have to pay the mortgage of $1876.00 to the bank each month.” Total = $182,000.00 mortgage due on Country Club / 19th Hole facility.
• This change in the proposed Budget will bring the total loss of the 19^th Hole to $48,136.
• GM Dennis has requested funds for advertising the Banquet Hall to rent for functions. 

Golf Course Budget:

President Gary Pritsch:  (paraphrased) ~This year’s proposed Budget says $141,000 for the golf course.  The golf course went $32,000 over budget and no body can tell me why.  A wish list of $45,000 was received, but no one can explain why.  I suggest we move the golf course budget back to last year’s $112,000 (and insist this budget be met).

• Director Diane Jones stated her concern for the Roads.
• GM Dennis explained a solution by using time cards for each employee according to their allocation of time.

Rates for Golf Membership:  If everything stays the same, the following increase should be about $43,000. Referring to the golf committee’s proposed budget: “There is a reason we pay our dues out here.  To say that outside play should be the same fee is just plain Wrong.”

New proposed greens fee schedule:

• $25.00  =  DH + Golf member 
• $32.00  =  DH Member  
• $42.00  =  Non POA member   (Rack Rate / Standard Rate)

Active Duty Military personnel and high school students will receive free green fee.  A charge of $18 for the golf cart will be applied.

***In summary:  This will result in a reduction of $76,000 in the golf course budget.  Instead of a projected loss for the golf course of $197.000, it will be a loss of $120,000.

GM Dennis expressed his appreciation for the golf course committee for their volunteer service. J

Employee Wages:        

President Gary recommends a 2% merit raise for those working over one (1) year and has not received a raise during that period.  The GM will be responsible for this action.

2% of $556.157.00 = $11,000 

President Gary Pritsch expressed his agreement with the golf committee’s recommendation for a Cost of Living Increase.  However, with the approximately $80,000 decrease in the proposed budget, this increase is not needed this year.

Throughout the discussion regarding the proposed budget, various board members expressed their agreement with the President’s thoughts and suggestions.  In the end, the budget was sent back to the Finance Committee to revise next year’s budget with the Board’s recommendations.

Board members did receive a number of email messages stating “Don’t vote for the Budget”.

The 2017-2018 proposed budget will be voted on at next month’s Board meeting.  Since there is no increase in dues or assessment, the Annual Dues statements can be sent out by the 1^st of March.

Director Debbie Clement expressed her concern regarding the lack of a Cost of Living Increase.

Front Gate:  A proposal for a new gate system has been received.  This new system will prevent tail-gating by moving the gate forward – closer to the monitor.  This will also allow the use of existing stickers currently in use.

Our current gate can NOT have the tail-gating feature turned on.

The entrance gate must be a one-way entrance – only.

Tennis Court signs:  Gary requested a sign be present to forbid skate-boarders from using the courts.

Meeting adjourned to Executive session: 9:pm

Notes provided by,

Diane Porterfield

adianerdh@att.net

620-3167