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Country Club meeting

About 75 people attended the Country Club board's meeting Tuesday evening.

The Country Club’s board said it wanted to address rumors at Tuesday evening’s meeting, and it spent much of the session doing just that. It confirmed the hottest rumor – that it is considering the possibility of filing for Chapter 11 bankruptcy.

Vince Lepera, the board president, addressed some of the rumors in his opening comments: “One, the club is not closing. The club is not filing Chapter 11 – excuse me, Chapter 7. We are not in the process of asking for an assessment.”

He said the club will have a town hall meeting 7 p.m. Aug. 23, and the board will be ready to discuss issues in depth then. “A lot of positive things are going to be happening here in a short period of time,” he said, suggesting that members stay away from the rumor mill, “because it’s not true.” He said later, “things will be happening very quickly” after the town hall meeting.

About 75 members attended the session.

Longtime club member Ted Hart announced a slate of six candidates who will run for six board seats that are up for election.

“I would ask that the present board not make any major decisions in deference to the new board,” he said, suggesting that three board members whose terms end Dec. 31 resign on Oct. 12 – the day of the annual meeting and vote tabulation – to get the new directors into office as soon as possible to deal with the club’s crisis. He also asked that candidates be allowed to attend closed board sessions that don’t deal with personnel matters or contracts so there’s no time lost in transition.

Member Greg Baugher, an attorney, asked, “The rumor is going around that you guys are heading for filing Chapter 11 bankruptcy soon, even before the election. Is that not true?”

Lepera replied, “I believe it’s a very strong possibility. ... We’re still looking at all the angles....”

In a back and forth with another member, Lepera argued that members wouldn’t see a difference if the club filed for bankruptcy under Chapter 11. “The doors stay open, we reorganize,” he said. “There would be zero changes to the membership.” Under Chapter 11, a business is given time to operate while it reorganizes its finances.

Dick Brandt, an attorney and a member of the slate of candidates announced at the session, said the club should not file under Chapter 11.

Doing that would cause all the club’s property to go to the landlord under its lease, he said, adding that the club would need a reorganization plan to go into Chapter 11. “We seem to have proven over the course of the last half-decade that ... we can’t show that,” he said. Down the line, he acknowledged, Chapter 11 may be the correct course, but not now.

Lepera said the club has a differing legal opinion of bankruptcy’s impact on the lease. He added the North developers – the club’s landlord – have asked that the club file under Chapter 7. Unlike Chapter 11, it calls for assets to be sold off to pay creditors.

Also at the meeting:

  • “Just so you know, (potential buyer) Bob Husband and Bellagio, he’s still very much in the picture,” Lepera said. He said Husband is negotiating to buy the club’s land from the present owners, the North developers. “So there’s a possibility he could be our landlord,” Lepera said. Beyond Husband as a potential buyer, “I can tell you there are other interested parties I really don’t want to disclose at this time.”
  • On the sale that didn’t happen with Husband, Lepera said: “One reason why it did not happen, and one reason only, is the union situation. It has nothing to do with the developer. If anything – and I want to clear this up – the developers have been nothing but supportive of getting this done. They’re on the same page as us. They want something to happen as much as we do.”
  • Virgil and Lynette Flores offered support to the board, including a handshake from Virgil Flores for every director, as well as their own business insights about difficulties with the unfunded pension situation with the Operating Engineers that scuttled the recent sale possibility. Virgil Flores called for the board to “stop the bleeding” and get rid of the union.
  • Kathleen Solorio, also announced by Hart as a board candidate, said the club needs to offer “more and clearer” communication and said what is shared with members doesn’t always line up with what can be seen in the club’s financial reports.
  • Later, as Lepera touted the accomplishments of Don Thames, the club pro, in qualifying for two U.S. Senior Opens and now the British Senior Open, Solorio asked, “So what?” Lepera paused and asked, “Seriously?” She responded, “Yeah, seriously. It’s really neat for him. What does it do for our financials, what does it do for our club?” Lepera argued that accomplishments by the club’s pro help sell the club.
  • The rumor that the club will be out of cash by September was addressed by Bill Armstrong, the general manager: “No. ... We’ve made some cuts. I’ve made some layoffs, reduction in force. It generated enough cash to carry us through.” He suggested that if members want to step up and help the club, they can pre-pay their dues to help the club through the winter months. Lepera: “The club’s in the same position we are at this time every year, every year.
  • Another rumor: The club is having trouble paying vendors. Armstrong replied that the club has been operating with a $50,000 hole in its budget in recent months – $25,000 for a rent payment it thought would go away with the club sale that didn’t happen and $25,000 in lost revenues for the member assessment that ended in March. “That’s what this budget was predicated on,” he said.
  • Lepera was asked about the rumor that Armstrong had quit as the general manager. Mid-question, Armstrong walked back into the room carrying an iced tea, and said, “I got pissed off. I quit.” Lepera said the board’s meetings can get heated, and he got in touch immediately with Armstrong, who has been serving as volunteer GM for almost three years, and talked him into returning.

Phillip Sexton's picture
Joined: 04/01/2008
Posts: 23
Post rating: 24

RMCC Board Resumes

When will the resumes for the new board members be available?  We need to elect board members with a vision not a agenda.   

Thank you

Phil Sexton

 

 

Phillip Sexton

Phillip Sexton's picture
Joined: 04/01/2008
Posts: 23
Post rating: 24

Don Thames, Director of Golf

I would like to address the comments regarding Don and his accomplishments in qualifying twice for two US Senior Opens and recently for the British Senior Open. This had zero cost to our club, but should make EVERY member proud. Most Country Clubs are very proud of the accomplishments of their Professional Golf Directors, espescally on the national stage. Many PGA teaching Professioals spend coutless hours developing member programs and promoting programs within their clubs.  The Green Pea's and the very successful Junior Program was develpoed by our very Qualified Golf management team led by Don.  Let's not forget that for the last five years we have had at least one major USGA tournament at RMCC and there is more to come in the future thanks to Don and the entire management RMCC team.  So congrats to Don and his personal accomplishments and his continued support in develping member programs for our members.

Phillip Sexton

David Houdeshell's picture
Joined: 04/21/2008
Posts: 41
Post rating: 35

What Chapter Bankruptcy?

Perhaps we should start a Go Fund Me page for the Country Club as this is what anchors our community and our property values. 

Deborah Houdeshell

RM.com's picture
Joined: 06/19/2007
Posts: 26645
Post rating: 1291

Correcting meeting date/time

The story has been changed to give the correct date and time for the club's town hall meeting. It will be 7 p.m. Aug. 23.

Chris Woods's picture
Joined: 06/15/2016
Posts: 7
Post rating: 1

Town Hall Meeting, Aug 23rd

The community and the Board should get representatives from the Operating Engineers Union to give their side and what they will agree to. We need to understand what the Club actually owes to withdraw from the Union contract.

C L Woods

John Brock's picture
Joined: 03/20/2010
Posts: 11
Post rating: 24

Over the past 10 years over

Over the past 10 years over 800 golf clubs have closed their doors due to over building  and the economy. While our Club has had significant challenges, the doors have remained open and the courses are available for play. The course is in pretty good condition, sans bunkers, the food is pretty good and the golf staff is doing an amazing job of creating interest in golf in the community. Don and his staff have done a fantastic job in the development and implementation of a junior program plus many of the other related activities. We are fortunate to have a staff as dedicated as ours in making this an enjoyable experience.

You may not like someone personally, but Vince and our Board have done a great job in keeping this place open and operating. We also owe a debt of gratitude to Bill for being our GM. I am sure that these people share the same objectives as all members - having an asset in the community that provides an enjoyable place to play golf and to socialize with our friends.

To Mr Hart and his slate of six candidates for the Board - if the other five share the view of the one who commented about the accomplishments of our Director of Golf, then you need a different slate. In my opinion there is at least one who will not get my vote. It will be interesting to see what their plan is for the future of RMCC.

Kathleen Solorio's picture
Joined: 11/03/2008
Posts: 34
Post rating: 1

Don Thames, Director of Golf

I totally agree with Phil's comments about Don's accomplishments along with the efforts of our pro shop staff.

I'd like to clarify the comment I made at the Board meeting.  In the context of discussing serious issues of the club's financial crisis and potential bankruptcy, I didn't think it was relevant at the moment to comment about Don's participation at the Senior Open. In fact, I think the timing of the comment diminished the kudos that Don deserves. Let's celebrate Don's participation during a more festive time rather than in the middle of what should be a serious business discussion.


Greg Cannon's picture
Joined: 09/07/2016
Posts: 11
Post rating: 4

Take a deep breath

I think everyone needs to calm down a bit. Assigning blame is pointless when the ship is sinking. We have common interests and a common goal. The fact that the deal did not close is not the fault of the board.

We need to take stock of where we are, what we have and what we can do to remedy the situation. We obviously need to get out from under the burden the union's mismanagement of the pension fund has caused, but that's going to take time and finesse. In the near term, we should maximize the assets we have and try to build the membership.

For example, this particular area could use more dining options. We have excellent dining facilities, and a fine kitchen staff, both of which are under-used. We should use those assets and target them toward the local population. Create a reasonably-priced restaurant that serves families from the neighborhood. Relax the dress code for this so that people won't feel they have to get all gassed up to go out to dinner at the end of the work day. Set up a golf-themed play room for the kids and teens, perhaps with a putting course and a practice bay, so that the kids can play while they wait for their dinner.

We also can use the kitchen and dining facilities for cooking classes. Why not bring in a Vietnamese or Thai chef for a Saturday class? My wife and I have done cooking classes in Thailand and in Vietnam and both were hilarious fun.

We don't have to make a lot of money from these efforts. The idea is to increase the traffic from the community while trying to interest them in membership. Unless and until Scott Road is upgraded significantly, our best source of new members is the local community. Mr. Husband's idea of turning the club into a focal point for the community is exactly what is needed for long-term health and growth.

I know that some of this runs contrary to the idea of a private club, but what good is exclusivity if the club dies? Nor do I think that these ideas will stave off the financial crisis we find ourselves in, but resolving the big problems likely will take time. We should use that time, and our assets, as best we can.

By the way, qualifying for the British Seniors was an amazing accomplishment, and we should all be proud of Don.

Jacque Villa's picture
Joined: 07/11/2009
Posts: 496
Post rating: 629

RMCC

Mr. Cannon...I couldn't agree with you more....a little history...several years ago, my husband was on the board and I was on a committee....when the membership started to wane, we suggested that the club start a resident dinner night.....the resident would show that they live here and pay cash for the food so the club would not have to deal with any billing....at the time new residents were moving into the community and we felt it would be a good introduction to the club and facilities and hopefully gain some memberships from it.   We were told " no way, we are a private country club "!!!!!  Well, maybe so but a sinking private country club is no club !!!!!!  As long as that is the opinion, RMCC will sink...remember, our club is a Club In The Country !!!!  Not a whole lot of folks will drive out here to play golf !!!!  We are no longer members so tonight we will be going into town for our anniversary dinner and spend money we could have spent here in our own community........JMHO

Margie Brock's picture
Joined: 09/05/2007
Posts: 11
Post rating: 11

Don Thames, Director of Golf

You were rude Ms Solorio and you can't get out of that fact.  Your excuses are just that, excuses.  You plainly are not RMCC board worthy because you don't understand all that Mr. Thames does and has done to make our club the best it can be.  The way you dismissed the comment regarding Don Thames was unacceptable and shows poor judgement on your part. and that poor judgement is the reason you will not get my vote.

 

Alicia Correia's picture
Joined: 10/02/2008
Posts: 48
Post rating: 25

Big kudos to Don Thames

Big kudos to Don Thames for all he has accomplished as a golfer all while being our Director of Golf.  Having someone qualify for three opens is prestigious for our club, plus helps sell the club to new members.  Any person running for the board should realize that having him is “relevant” to the success of our club.  Keep up the good work Don!!

John Hein's picture
Joined: 08/07/2007
Posts: 270
Post rating: 322

It was a BOD meeting. The BOD

It was a BOD meeting. The BOD was kind enough to give two minutes per member for questions and comments prior to the scheduled BOD meeting with a written agenda. Questions and comments were over and the agenda was being followed. When it came to the golf commitee report the report was given and the president, at the end of the report, made the comment about Don.  Some in the crowd took exception! They should not have, it was a commitee report.

I'd like to see what the gang of 6 is proposing! So bring it without attitude please. And BTW the gang of 6 only has one who ever served on the CC BOD or ANY CC commitee. So of course they have all the answers, right? I'm sceptical of their agenda and experience.

John Hein

Chris Woods's picture
Joined: 06/15/2016
Posts: 7
Post rating: 1

OE3 will be at Town Hall meeting

i spoke to Jesse Greer at the Operating Engineers local 3. He said they will be at the town hall meeting and would like to carve outs a few minutes to answer questions. 

C L Woods

Al Dolata's picture
Joined: 08/09/2007
Posts: 84
Post rating: 94

Stay the course

Vince Lepera and the current board are on the right track.   They made an excellent deal with Bellagio, and when that deal ran into the rock of the union's demand for an enormous indemnity to bolster their mismanaged and failing pension plan, the board did not panic, but rather they have a plan.  We are on the cusp of success.  The developer and the club are on the same side.  Bellagio is still in the picture.  The era of amateur management in an intensely competitive business is over.   It's time to bring in some new money and professional expertise.

Al Dolata

RM.com's picture
Joined: 06/19/2007
Posts: 26645
Post rating: 1291

Country Club president responds...

Vince Lepera, the club's president, asked that the following be posted:

After reading the latest post from a former member regarding the Country Club, I reached out to RanchoMurieta.com and asked them to post my response.

First, I believe everyone needs to take a step back and a take a deep breath.  The club is going to be here for a very long time and nothing we say on Wednesday will change that.

This past Tuesday we held our regular board meeting and over 75 concerned members attended the meeting.  We allowed any member in attendance to speak and we attempted to clear up any rumors that we could.

This Board understands that the Club is not only a place to play golf and get away from the daily up’s and downs of life but we also understand how important the Club is to the community both in value and in water.

The Board looks at every situation from every angle we possibly can.  When the deal for the club did not close, it was extremely frustrating for everyone.  We believe that both the buyer and the seller of the land that the club sits on did everything they could do close this deal with terms that brought the best value to the Club.  We had one issue and one only that would not allow us to close and it was a pension trust issue that’s still there and we as a Board, believe it needs to be dealt with once and for all.

During the past 18 months and really over the last 8 months, in much greater detail and thought, the management and Board has been reviewing the strengths and weaknesses of the club’s operation both from a point of staffing and financially. We have started a program to prepare for the future as we have made personnel changes and some restructuring.   The revenues during the same has remained stagnant and in some instances, have fallen.  While reviewing our financial position we have looked at items that the costs are warranted and needed, and cost that need to be dealt it. Thus, our cash has become tighter than normal and every year at this same time the Board must make some decisions that will carry us through the winter months.

We have for the past several years asked our members to “pre-pay” their dues and receive a discount.  This program has been very beneficial to the club as we bring in revenue over a 45-day period of at least $425,000 dollars.  This in turns allows the club to operate with no loss of services during the winter period of November, December, January and February.

Then beginning in March, the weather changes and members start playing golf, tournaments come in and special events take place and we can maintain during those months.  Unfortunately, we are unable to save anything for a “rainy day” and we still have a couple of costs that we firmly believe are unnecessary. 

The other issue we had is the assessment funds of close to $26,000 per month expired in March of this year and we used those funds to pay for the new irrigation system and much needed repairs to a facility that’s over 44 years old. 

These issues led the Board to find a buyer in the first place, the club is over 44 years old, we don’t have the amenities like a swimming pool and wellness center.   So, we are not having a flock of new members joining the club at this point, and that creates the revenue/cash shortfall.  However, the Board and management deals with it and with the support of the members, we have made it the past 44 years and there’s no reason not to believe we will continue to do that.

It’s the job of this Board and management to keep the club functioning and looking for ways to improve it. When we see situations like just how handcuffed we are with our pension plans, then we must look at every situation to resolve that and that’s exactly what we are doing.  We have recommendations from several experts both from outside and from experts within our membership base on these matters. 

While I mentioned on Tuesday evening that a Chapter 11 was a strong possibility as it would in fact allow the club to reorganize in a matter that makes sense but it’s not the only possibility.  However, the one possibility that is not being chosen or acted upon is a Chapter 7 filing (closing and liquidation), it’s just not needed!

We have worked very closely with the developers (current land owners) and they have been nothing but supportive of our needs and yes while we may not agree 100% on how to arrive at the end goal, we both are on the same page 100% that this club is the best asset of the community.  It’s true that the developers have made suggestions and recommendations on which path to take but it’s always in the form of just looking at every angle and we have always looked for their input and advice and will continue to do so.

Regarding the Union situation attending the Town Hall meeting and the main reason for me responding, if OE3 has any official representative there it’s without our knowledge, support or permission, plus the name mentioned we have never heard of this person. 

I think it’s important to remember for all members to understand, we have a contract with OE3 that runs through the end of 2017 and we are honoring that contract.  Our issues are not with the employees of that Union or the Culinary Union as those people work hard for the members and do their best for the club.  Our issues are based in the pensions and the type of pension plan we are under as of today and moving forward we must look for ways to find a solution that makes sense for the Club and the members.

Finally, I noticed several times and have heard comments that the community needs to come to the meeting and learn what is going on.  The club does have a major role in the value of the property, plus the water we take and the revenues we supply to CSD but because the Club has lacked the resources to add amenities necessary to attract new members, 57% of the community is not involved with the Club.

So, the Board will continue to find a way working alongside the developers (current owners, MCP) to find a new owner with the funds and management expertise to run the club.  It’s a little like if we built it they will come, and that’s what we need from the community and that’s the focus of this Board….

Vince Lepera

Daniel Maglionico's picture
Joined: 08/08/2007
Posts: 206
Post rating: 23

CC president

How about getting the 57% involved?  Meet with RMA and get the 57% to kick in.  They are getting the benefit of the Club in property values.  If the Club were not here, there would be no Rancho Murieta.  Many other clubs require all residents to pay something if they do not belong to the Club.  Why not get RMA to put it to a vote?  Why has this been resisted?  If all paid, perhaps a pool and fitness center could be funded.  Why is this not being pushed?

Jacque Villa's picture
Joined: 07/11/2009
Posts: 496
Post rating: 629

RMCC

Beg to differ with you Daniel, all residents should not pay for the CC or into it!  Why should we pay for something we are not usuing ????  Many residents that live in the South didn't come here for golf..they came for the security and to live out of the city enviorment. Why should they pay ????  There are tons of young families out here with children and between the house payments and dues and their expenses, they simply cannot afford to pay any additional costs for something they don't need or use......JMHO

Daniel Maglionico's picture
Joined: 08/08/2007
Posts: 206
Post rating: 23

RMCC

What do you think will happen to RM property values if the golf courses go away?  Many of those that are here because of the golf will leave for other golf communities.  Do you think the security and enviorment will attract enough new families to keep your property value?  Homes are being built and selling at a torrid pace in El Dorado Hills and soon in Folsom. How many new homes are selling here?  All homeowners are reaping the benefits of the Country Club and shoud contribute something to keep it here.  

Jacque Villa's picture
Joined: 07/11/2009
Posts: 496
Post rating: 629

RMCC

Daniel, according to the 2010 census, we have a population of 5468. That was 7 years ago..so I'm sure it's higher now. However, the country club membership is 350 , so I'm told !!!!  That tells me that lots of folks have moved here for other reasons than golf. What do those numbers tell you ?

Daniel Maglionico's picture
Joined: 08/08/2007
Posts: 206
Post rating: 23

RMCC

Those numbers tell me that you not only have incorrect information but you are using it incorrectly.  First of all there are 1000 members in the club, whomever told you the number is 350, told you wrong.  Your population estimate is a little low, actually it is 5488 in 2010.  So lets say the population is 6000 now.  I think we could conservatively say there is an average of 2.5 residents in each dwelling (men, women and children).  Dividing 6000 by 2.5 would give 2400 homes. Of these 1000 (trust me this is correct) belong to the Country club as either golf or social members.  This would equal 42% or of the residences that do belong or 58% that do not. Pretty close to the 57% that i originally quoted.  That tells me that an additonal 200 households (1000 + 200 = 1200 or 50% of 2400) need to agree that all should become members and/or contribute a minimum amount to get to 50% of the vote.  

Bunky Svendsen's picture
Joined: 08/07/2007
Posts: 92
Post rating: 106

RMCC

Daniel. I would argue that Rancho Murieta residents are an asset to the country club, regardless of whether they are members of the club, or not. Our RMA and CSD dues pay for security, street and common area maintenence, along with compliance regulation(that needs some attention...by the way) that all contribute to making Rancho Murieta a desirable place to live. Thus, encouraging those that would be interested in moving here and possibly joining the country club. So it works both ways.

RM.com's picture
Joined: 06/19/2007
Posts: 26645
Post rating: 1291

Country Club postpones town hall

The Country Club's board sent a note to members today postponing the town hall meeting set for Wednesday and making other points:

Members –

The town hall/member meeting has been delayed for Wednesday the 23rd and will be rescheduled as soon as possible.

We believe that this delay will be a short one, hopefully no more than a week to 10 days.  Our attorneys, who will be attending the town hall and will be responding directly to member questions, has asked for a bit more time to fully research some specific legal issues that are related club issues, reorganization or filing of a chapter 11 bankruptcy by RMCC. 

As everyone is aware, reorganization or bankruptcy proceedings can be complicated and the board has been and will continue to do our due diligence before any decisions are made. 

On another note, today members received an email regarding a petition for the Board and there were specific claims made, one of them via email to all club members that any filing of bankruptcy will trigger a default of the lease and will cause the club to revert to the landlord.  This assertion is false.

Based on the review of both of our attorneys, the lease provisions that purport to affect the term of the Lease upon filing Bankruptcy are subject to the Bankruptcy Court's review and approval (there are actual rules/statutes that address this).  As a result, the Board is confident that the lease cannot revert to the landlord.  The Board also has a legal opinion that bankruptcy overrides section 8 or our lease (section 8 is part in question).

The next issue in the email is the fact that we should look for a management team/company to come in and “run” the club.  First, we have reached out to firms in the past and as recently as a month ago and all of them have come back with “no” we have no interest in running a club/facility that is Union.  We even have reached out to a couple of prominent restaurant business owners as they too stated “no, they don’t want a Union headache”.

Finally, due to the complex issues regarding the pension trust fund, the club retained the services of a labor/pension attorney who has negotiated and has had legal proceedings with several pension fund plans that include a multi-employer plan and they have participated in litigation against OE3 (our employees Union).

We also have retained the services of a legal firm that has bankruptcy expertise and has experience in dealing with complex pension trust issues. 

When we have the member/town hall meeting, the Board will be fully prepared to discuss and present a carefully spelled out plan.  Therefore, we want to make sure we have all the details worked out prior to the meeting.  Thank you!

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