Table of Contents
The 2019-2020 fiscal year results reflect the focus and efforts of this and prior Boards along with the continued efforts of management and staff. Looking back the challenge was to grow membership, restore the golf course, rebuild the cart barn, begin funding the long-term capital fund and short-term capital (break-fix) fund and use the strategic planning committee to assist the Board in charting the direction of the club. Looking forward the challenges are to invest in capital projects; some new and most repairs to existing structures, continued growth of membership and expansion of services to keep pace with a larger membership. The COVID-19 pandemic has caused us to pause these efforts until we better understand the new challenges we face. We are committed to creating the best experience possible within the public health guidelines issued. As we better understand the financial impact and revised guidelines, we will be able to refine the goals and objectives.
We ended the fiscal year with 550 members in all categories. Golf memberships represent 86% of dues income, which grew by 5% during the year. We added 56 new golf members and had a net gain of 20 golf members. Despite the disruption to operations caused by the pandemic we continue to see a high level of interest from prospective new members.
Food and Beverage covered their expenses for the second consecutive year and avoided a long trend of being a drain on operating cash. A 13% increase in banquet business and continued member dinning support helped the F&B result. Chef Darrin and Christie continue to deliver quality food with balanced and attentive service. The pandemic has created lasting changes to F&B and our entire team is up to the challenge of finding the path forward.
We saw the completion of several large projects over the course of the year. Restoration of hole #11 with a new tee box and rerouted fairway, construction of a new cart storage facility, demolition of the old cart garages, construction of a new storage building for mowers and golf maintenance equipment and new ADA compliant driveways. There remains some more landscaping work along #10 and some cosmetic work and landscaping around the cart barn. We have set aside $100,000 for potential additional restoration of holes #10 and #11 should it become necessary. Collectively these projects strained our resources but are now behind us.
We ended the fiscal year with $400,000 in operating cash along with roughly $100,000 in each of the long-term and short-term capital accounts and $100,000 set aside for course restorations mentioned above. With the bank debt retired, both accounts receive monthly funding. During the past year, the short-term account financed the swimming pool repairs, a new ice machine, irrigation control panel circuit board, kitchen equipment and other break-fix repairs. Capital expenditures from operations cash funded a new beverage cart, pressure washer, athletic equipment, maintenance storage building and extension of the driving range.
We formed a strategic planning committee in June 2019, and they have worked diligently since then to update the strategic plan for the club. They presented an interim report to the board in January 2020, which included recommendations that were incorporated into the budget for the 2020-21 fiscal year. They were completing a final report when the COVID-19 situation struck. When the situation is more stable, they will review their recommendations and make changes prior to submitting a final report to the Board. Many thanks to committee members Eric Wiseman (chair), Judy Drake, Ray Helm, Bill Rich, Barb Gahr and Susanna Ross. We look forward to receiving their final report and recommendations soon.
We face continued long-term challenges in Central Oregon with a hyper-competitive golf marketplace and an economy with a boom to bust history. The pandemic has moved the region into a down economic cycle with high unemployment and stressed municipal service budgets. The impact on our vendors, members and operating costs are still to be seen. We are hopeful for a speedy recovery but will be vigilant to keep the club in a solid financial position.
Scott and his crew have again spoiled us with a top-quality golf course. Coming out of a mild winter the course was in mid-season form by April. As everything around, us shut down the access to golf was appreciated by a record number of members. The golf course truly is our most important asset.
Athletic Committee Report
Barb Gahr, Board Liaison
Jeri Boe, Chair
The Athletic Center at Bend Golf Club is an integral part of the club, as the usage figures have shown, but it needs both deferred maintenance and long overdue upgrades. One of the goals of the committee and the staff has been to identify and prioritize some of the areas that need attention. This past year the pool area received some of the necessary repairs to the roof, the circulation for the spa improved to read the flow meter (health department requirement), and the door to the men’s locker room into the pool area was revised (health department requirement). New tennis lines were painted onto the courts (done by BGC staff). The simulator room was painted, and a sound barrier curtain to help reduce simulator noise was installed. We are striving to improve communication between the athletic center and the members with increased signage, updated website information, and a newsletter. During the COVID-19 shut down, Margaret Collier spent 30 hours power washing the pool deck, which needs repair work. We are truly grateful for her ability to identify areas that need attention, and to get as much done as she can within the confines of her budget. Other maintenance items, as well as some new pool furniture were planned for the Athletic area, but these items have been placed on hold due to COVID-19.
Phase 2 reopening of the Athletic Center is currently underway. The pool area, workout areas and the courts are open. The simulator remains closed. Maintaining distancing as well as sanitization are top priorities for the center. We acknowledge that it is important for people to be able to maintain and enhance their health by using the facility in a safe and healthy manner. Safety procedures for the court and workout areas have been communicated to members and have been posted. The hours of the Athletic area have been reduced. We are grateful to have wonderful staff and members who are cooperating so that members can continue utilize the facility.
Connie Newport, Board Representative
Brad Patrick, Chairman
Following a mild winter the grounds staff was able to get to work early and accomplished a lot. Tree removal to provide additional sunlight to #’s 3, 7 and 15 greens and #8 fairway have been successful. Half the work to correct the sink hole on #1 is done and sprinkler heads were added to some treed areas to promote turf growth. The left side bunker on #17 was removed to facilitate drainage and prevent an ice dam from forming in the winter.
Development is underway along #10 and the berm is in place and there is some landscaping. Unfinished landscape areas on #”s 2, 11 and 16 were hydro seeded with fescue grass. We will monitor the impact of the development on #’s 10 and 11 and work with course architect Dan Hixson to recommend any changes that may be needed.
The cart barn is finished and an expansion for the driving range is graded but all capital improvements are on hold during this extraordinary time. Scott is working with a limited crew and doing an amazing job of getting the course in excellent condition.
Total Membership Counts
|March 31, 2020||March 31, 2019|
|Full Golf (Regular & Honored)||200||190|
|Intermediate & Corporate Golf||59||55|
Bill Rich, Treasurer
Karen Goodman, CFO
Earl Seekins, Committee Chair
The accompanying Financial Statements for the fiscal years ending March 31, 2020, 2019 and 2018 provide a trend of the club operations. Our Fiscal Year begins April 1 and ends on March 31 the following year. The Financial Statements and results for 2018 and 2019 have been reviewed by the accounting firm Price & Fronk. The review of 2020 Financial Statements and results has started and is in process, but not completed.
I will briefly outline the past results for 2020 and prior years. Of greater significance is the near-term outlook for your club.
Financial Results: The results for the year ending March 31, 2020 show continued improvement overall and a strengthening of an already solid financial footing. As a quick review of past years, the year ending March 31, 2019 had two major developments. First, the sale of the two land parcels was completed and long-term bank debt was fully retired saving approximately annual payments of $145,000 in interest and principal. Secondly, Food and Beverage performance (revenues less direct costs) improved by over $125,000 from prior year performance achieving a positive result for the first time in several years.
For the year ending March 31, 2020, Dues Revenues increased as the result of strengthening membership levels. Please note that Dues Revenues also include Tennis and Athletic Dues which were approximately $248,000 for 2020 and $234,000 for 2019. The Athletic Facilities Revenue line item in the P&L does not include these dues, but includes only tennis and swim lessons, tennis merchandise sales, and other miscellaneous Athletic revenues. Food and Beverage performance continued to be positive in 2020 despite reductions due to a very cold April and May and the onset of the COVID19 impact in late February and March. Pro Shop performance continued to struggle. Merchandise sales were lower than prior year levels. Pro Shop costs for 2020 are higher than the prior year primarily as the result of higher rental costs for the new fleet of club carts and inventory write-offs which were the result of poor inventory management. Our new head pro, Emily Anderson has made several corrections and restored sorely needed controls in inventory management and Pro Shop operations. Golf Course, Administration, and Club House costs were well controlled. Overall, BGC achieved similar P&L results compared to 2019 and much better results compared to 2018.
On the Balance Sheet, Cash balances decreased by approximately $364,000 in 2020 primarily the result of over $700,000 of capital expenditures which was offset by Depreciation of $396,000. Major projects included the new cart barn (and its related projects), the restoration of the golf course (primarily holes #10 and #11), a new equipment shed (now all golf course equipment can be stored under a roof), and certain pieces of much needed new golf course equipment. Other notable Balance Sheet items include the 2019 retirement of $1.8 million of long-term debt and the recognition of certain tax obligations in 2019 resulting from the land sale. These tax obligations were subsequently paid in 2020.
Outlook for 2020/2021
Membership levels for golf have increased since the end of last fiscal year and COVID19 has not negatively impacted golf memberships at this point (June 15). Athletic and Tennis memberships are lower by only 8% since the end of March which is a positive development since their facilities were totally shutdown for most of March and all of April and May. Those facilities only reopened in early June. Social memberships are at the same level.
Fortunately, your club has a very strong cash position. In early March, the COVID19 virus severely impacted BGC’s ability to provide services/access at the Athletic center, the Restaurant, and essentially all other non-golf functions. Some golf functions were severely restricted or eliminated such as Pro Shop sales and the use of certain golf course implements such as sand trap rakes, sand bottles, etc. Much planning and reprioritizing was required to minimize cash consumption/cash burn rate. As a result, much of the staff was either laid off and seasonal staff was not rehired at the start of the golf season. BGC made key investments, however, in retaining certain employees to assure a fully functioning club when restrictions were eased.
In April, take out and curb side service became available from the Restaurant and later capped beverages and packaged snacks could be sold from the takeout window at Mulligans. The membership responded very well with its support of the Restaurant. In addition, BGC’s GM, head Golf Pro, and Course Superintendent were very diligent in staying abreast of, implementing, and adhering to the many changing, evolving, and sometimes contradictory COVID19 rules which kept BGC’s most valuable asset, the golf course, properly maintained and available for member play. They are to be commended.
As of May 31, 2020, fiscal year-to-date Food and Beverage revenues were down about 75% from prior year levels. Athletic/Tennis dues were down 33% from prior year levels. Pro Shop merchandise sales were down 25% from the prior year. These decreases were offset by management’s cash conservation actions and as a result, BCG’s Cash balance at May 31, 2020 was approximately $736,000, which was slightly higher than the previous fiscal year end balance of March. Strong golf dues receipts, initiation fees, and receipts for such one-time item’s charges (season cart leases) also provided some cash relief.
Starting in mid/late May, the full contingent of Golf Course Maintenance and Pro Shop staff were back on board to assure a properly managed golf operation given extraordinarily high usage. Indeed, by the end of May approximately 9,500 rounds of golf had been played compared to less than 4,000 from a year earlier. The course has remained in great shape. With the recent loosening of many COVID19 rules, Food and Beverage operations have now returned to dine-in service however social distancing and limits on group numbers are still in place and will negatively affect overall Food and Beverage performance going forward particularly with banquet and outside group functions.
This means that with the start of in June, BGC will be incur its highest costs of operations which will continue at high levels through the end of the golf season. We have reviewed a lot of data and while we cannot guarantee results, we anticipate BGC will consume cash (i.e. cash expenditures exceeding cash receipts) at a high level through the end of the fiscal year. BGC will defer all non-essential expenditures including all capital projects. BGC will continue to suspend its monthly funding of the Short Term and Long-Term Capital accounts. While we expect to have sufficient cash to remain operational and stable there can be no assurances. Your Board of Directors will monitor the cash position closely and make appropriate changes as needed or restore capital projects when it is confident in cash flow.
On a special note, at the onset of the COVID19 shutdown, BGC evaluated the many financial assistance programs offered by the federal government, the most noteworthy being the Payroll Protection Program (“PPP”). Under this program, a loan could be received from the government and under certain conditions this loan could be partially or completely forgiven. Originally this program was not available to tax exempt organizations operating under section 501(c)7 of the Internal Revenue Code. BGC has been a 501(c)7 entity for decades.
Because PPP was still evolving and it was thought that 501(c)7 organizations like BGC would eventually become eligible for this program, BGC applied. To date, BGC has not been approved. BGC’s primary competitors, Broken Top and Awbrey Glen are both organized as for-profit entities, and both initially qualified for and received PPP loans. Recently however, the IRS ruled that organizations that placed limits on its number of members would be ineligible for PPP loans. It became obvious that Congress did not intend private country clubs to participate in this program. While this has been a disappointment for BGC, we believe that both Broken Top and Awbrey Glen may eventually be required to pay back in full the funds they received plus interest/penalties unless further changes to the PPP rules are legislated.
Mission, Vision, and Motto
Provide a traditional golf club experience in a private, member-owned, family-oriented club
in an atmosphere that builds enduring friendships and promotes exceptional service in an inviting,
well maintained facility
- Provide a high quality, traditional, Chandler Egan designed golf course and practice facilities for
members and guests of all skill levels
- Uphold our shared values of integrity, courtesy and respect between members, guests, and employees
- Provide a full array of athletic facilities, activities, and events, in a safe, comfortable, attractive
environment for members and guests
- Offer a variety of enjoyable dining alternatives and maintain a level of service throughout the club
where every member and guest are treated as a preferred customer
- Make positive contributions to our community and utilizing best environmental practices with respect
to stewardship of our land
- Assure our long-term success through dedication to financial soundness and fiscal responsibility
“Classic golf, warm friendships- in Central Oregon’s most complete and comfortable country club…since 1925”
Questions? Comments? Email General Manager Jeff Keller.
This is obviously a different year. We have included the annual report in a website format, though we have hard copies at the office. Each section has an area where you may write out comments or questions. (“screen shot w/ comments”). All of these questions will be gathered, answered and sent out to everyone. After the July 15, we will put together all the questions and answers and at the end of July we will have two sessions, with reservations, to go over comments or questions. But with no more than 50 at a gathering to go over all the questions.
Thanks for your patience,