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Al Dolata's picture
Joined: 08/09/2007
Posts: 88
RMCC

Yes, golf is not what it was twenty years ago, and the Sacramento market is an especially competitive one in which part- time volunteer management is no longer appropriate.  However. RMCC’s circumstance is uniquely complicated. For any country club, labor is by far the largest cost, but for RMCC it is 25% more than industry average, most of that overage in the benefits package.   This is because RMCC is saddled with a defined benefit pension plan the union management of which has permitted its promises to far outrun its assets.   Not only is this a constant drag, but it precludes other needed spending, and it renders the club unsaleable, since no buyer is willing to take on that obligation.

Although it would be far less expensive to sub- contract course maintenance to an outside firm, this option is foreclosed for it would trigger the ruinous pension plan withdrawal fee, which amounts to millions of dollars.   Dissolution of the club also triggers the fee which is what torpedoed the Bellagio deal.

So, what to do?  The current RMCC board says it has a plan which probably involves Ch. 11 bankruptcy. Bankruptcy is one of the great inventions of the law.  In Ch. 11 cases it makes possible the continued success of otherwise doomed enterprises.   For proof of this, one need look no further than the airlines industry, which several years ago underwent a wave of major Ch. 11s and is now thriving.   The problems there were similar to those here.

This plan is opposed by a slate of eight challengers.  They are accomplished citizens with good standing in the community.   Their interest in the welfare of the club is proof of RMCC’s vitality   However, they are late comers.  Only one has ever served on the board, and only one on a committee.  And this they regard as virtue. 

Of course, being new is not a disqualifier, especially if there is a plan, or at least a good set of ideas.  However, the slates recent letter to the RVT does not contain these.  Rather, it calls for a “fresh look”, for “transparency”, for a “careful review of the financials”, for better marketing and more involvement by RMA and CSD.   Well, yeaah.   Every member of RMCC can support that platform, INCLUDING every member of the current board.   In other words, there is no difference between the Slate of Eight and the current board, EXCEPT, the latter has studied the situation, while the former is still planning a careful look at the financials, and the board has developed a plan to escape the club’s crippling obligations, while the slate knows intuitively that this is wrong.

There is still Candidates Night.

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Chris Boudreaux's picture
Joined: 08/22/2007
Posts: 6
RMCC's Future

Al, your assessment is 100% on point.  The club is currently on life support and anything less than a total restructuring through Chapter 11 would be woefully inadequate.  A “fresh look”, “transparency”,  a “careful review of the financials”, more involvement by RMA and CSD?  Huh?  Those are just a bunch of empty and tired cliches.  I have confidence that the current board thoroughly understands the gravity of the situation, is acting in the best interests of the club and the community, and is recommending the correct course of action.  The other suggestions that have been brought forth thus far amount to little more than rearranging deck chairs on the Titanic.

Bill McCarver's picture
Joined: 08/19/2007
Posts: 62
RMCC

Just received my RMCC ballot and was surprised to see that Vince Lepera's name was not included on the ballot.  His application and bio is attached to the ballot, but his name does not appear for voting.  Hmmmmm.

Frank Pumilia's picture
Joined: 08/08/2007
Posts: 124
RMCC Situation

I offer this as a 36 year member of RMCC and as a voluunter member of numerous club committees since I retired in 1994.   For the past 8-10 years I have been a member of the Finance Committee and the Infrastructer and Maintenance Committees.  I think I can speak from experience on the situation facing the club.based on working, studying and learning at over 300 committee meeting...

The views expressed by Al Dolata and Chris Boudreaux are spot on.   Those searching for a fresh look must think the no one has been doing this!!!   I can assure them that is not the case....think incentatives to attract new members.

I wonder how many of them have taken the time to examine the "Unknown" Infrastructure and Maintenance Monthly Report"    I'm looking at the current one which is 13 single typed pages listing major projects recently completed and currently underway.  In addition it documents problems RMCC faces in the future with our 40+++year old facility and Golf Courses. Most of the current projects are "emergency repairs"  no money is available for getting ahead of identified things to come.

The clubs problem now is cash flow....where is the $$$ going to come from to fund the current leases entered into when we had a special assessment to pay for them.   This $24,000/month cash inflow stopped in March, however the roughly $20,000 equipment and $23,000 Golf Course leases continue.....not to mention regular equipment break downs.

A "carefull review of the finiancials " will show no money and few prospects to get some...

I see two options.

A....All RMA members become some class of RMCC member and have some skin in the game to protect their home values..  Back in the day if you owned a lot , you were a club member, paid your member class dues and supported the place...if this can happen things are good

B...Short of the above in my opinion we need a buyer and since no one will buy RMCC with the Pension withdrawal fee over their heads..Chapter 11 if it can be done and eliminate the union pension problem is the way out.

 

David Tirapelle's picture
Joined: 08/06/2012
Posts: 3
RMCC

I totally agree with the above posts and especially appreciate the insight of Frank Pumilia about the clubs financials.  The want-a-be board members are running on the tried and true platform of "drain the swamp", "any thing is better than what we have."  What they (collectively or individually) have failed to do is put forward a plan or a proposal as to what they are going to do to resolve the clubs fiscal and pension issues.  The old platitudes of politicians running for office of "we need more transparency"; "careful review of financials to cut costs", etc is not a plan to rectify the clubs financials.  The financials are available now so why haven't these candidates already reviewed the financials and identified what they are going to do different than the current board. 

The proposition of the slate of 8 that "we need involvement by the whole community, including RMA and CSD" I think is a disquised way of saying we want all of the non golf member residence of Rancho Murieta to help pay for the country country.  If that is their plan, I think that is a failed proposition and I want to know what plan B is going to be.   If you think non club member residence paying for RMCC is the solution, ask any of your neighbors who are not members of the county club if they are willing to put up one thin dime to pay for the country club.  Better yet, ask them what it would take to get them to pay for the club. 

Who has to pay for the country club is the current members.  It is my understanding there are 10 different dues structures for the club.  Close to half of the full golf members are paying $179 a month less than the full dues as a result of the failed Recruit and Reward program.  If those members paid the full dues that would generate around $40,000 a month which would resolve a lot of the clubs financial problems. 

Also if you think having lawyers on the board or hiring and paying for more lawyers are going to resolve the union pension obligation issues, ask yourself this question, "if the potential buyer's lawyers couldn't resolve the probelm, why would more lawyers help?"

Filing a Chapter 11 restructuring plan that includes 1) a none union workforce; 2) eliminating the current pension obligation; and 3) a member dues structure to where all full golf members pay the same dues is a plan that I think is viable for a bankruptcy court to approve.  The membership overwhelmingly voted to sell the club and these actions would make the club attractive to any potential buyers  

Just one man's opinion.

 David Tirapelle

Kathleen Solorio's picture
Joined: 11/03/2008
Posts: 34
RMCC

I support the non-incombent candidates platform and see a clear difference from the current board. The biggest difference is that the current board has already decided that Chapter 11 is the only option going forward, and the other candidates want to explore other options.

Chapter 11 will cause a significant impact to the entire community in how it affects home values -whether you are a golf member or not, whether you live on the course or not. Local real estate agents have said that they have already had deals fall through and sales slow just since the last Board meeting. 

Mr. Dolata suggests that the airline industry is an example of how Chapter 11 can result in a thriving industry. I suggest you take a look at Sunset Whitney golf course which filed in 2009. This is not an example of how RMCC could thrive.

According to attorneys who are experts on pension law, Chapter 11 will not relieve the club of the pension trust fund liability. Also, the average Chapter 11 proceeding for a golf course ranges from 3 - 5 years. All the while, home values decline. Clearly this  calls for a "fresh look" at the options.

I support a platform that calls for "transparency" -particularly when reviewing the club's financials. The financials are available for candidates and members to review, but there are details that are missing and questions from members that haven't been answered. In fact, some of the Board meeting notes are missing (discovered when looking for information related to prior elections). 

I welcome "late comers" to the Board. If you read the candidates profiles you will see people with vast experience running successful Boards. It's time to bring in some turnaround experts and take this club in the right direction. 


Jacque Villa's picture
Joined: 07/11/2009
Posts: 498
Suggestion that all RMA members become some class of RMCC

Option A of Franks suggestion is not going to fly with the residents of Rancho Murieta....many residents moved out here for the Security and other reasons and are not golfers....to saddle them with the expense of supporting the CC is totally crazy and would burden them with an expense they cannot afford !!!!  If the club cannot support the two courses, close the South down and just have the North......Also, RMA has nothing to do with the CC and the courses so why should they be the collector of funds to go to the club ?????  Better rethink that option....!!!!! 

John Merchant's picture
Joined: 08/30/2007
Posts: 108
I am NOT a country club

I am NOT a country club member.  It would not be my place to offer a suggestion to remedy the country club problem. I would say, however, that it might be a good idea to listen to Frank Pumilla.  I have worked on Finance Committees with Frank in the past and he has a pretty good grip on such matters.

 That said,  I do feel I may comment on the suggestion that I pay money to the Country Club to keep it afloat.  I was very interested in the proposal by Mr. Husbands that offered  "community center" type infrastructure to attract new members. Husbands also offered amuch needed infusion of capital.  Many residents use club facilities outside RM to swim and work out. The idea of a pool and workout facility proposed by Mr. Husbands offered the promise of change to the forty year old "dynamic" of the RMCC. That "status quo" has helped keep 60 percent of the community outside the RMCC membership. 

RM may have a development problem. Serious developers make an up front infrastructure commitment to sell homes.( example: Lincoln, California). Our problem is that we never get a real developer. We get developers who invest the minimum in infrastructure necessary to sell lots to builders and then the developer goes away.  We now have a "developer" who also has a huge financial interest in the existing club facilities. I would be looking for signs that this developer would put a proposal on the table similar to that proposed by Mr. Husbands. With that commitment,  I could envision a  conversation between the RMA , the RMCC and the community as a whole. I don't see how the non-member communtiy can be convinced that they should provide the infrastructure necessary to foster future development.  That is not our job. There is also something really wrong with a marketing pitch that says "you must join to preserve your home value".

RM is a transformed community.  What once was a "golfing community" is now a "community with a golf course". There is a difference in those community concepts. Targeting development to attract golfers may, (over a ten year period), attract enough golfers to keep the RMCC solvent. A large group of folks who moved here over the past 15 years are not RMCC members. These neighbors moved here for security, the quality of life, the trails and open spaces, an outdoor lifestyle, an excellent public school and the RM sense of community. Development needs to recognize this as the demographic of the future and begin to market this community in a way that targets this demographic group. Our problem is compounded as potential RM (RMCC) buyers choose a club that offers what we cannot provide. We are surrounded by country clubs loaded with family oriented, community activites. It is hard to understand how a developer would not make an up-front infrastructure investment to correct that marketing deficiency. The Retreats project may be evidence that that marketing may have missed that mark, We will see how long it takes to get 84 of those houses built and integrated into the RMCC.

The RMCC/RM/RMA dilema presents a community wide crossroads. Preserving a 70's style faciltiy with substandard ammenities will not attract new members from EITHER the outside or from within the existing community. There must be a plan that goes beyond asking those of us who do not belong to the RMCC to bail out an organization whose reluctance to change has contributed significantly to it's present financial dilemma. 

 The community should explore a solution that increases club membership, preserves valuable open space, and protects the overall quality of life we enjoy here.  This is a solution that encompasses ALL the reasons people live here. I have not seen that in vision the campaign information published publicly by the candidates in this very important election. I did meet with Mr. Husbands and he seemed to have both a vision and a plan Asking development to provide that vision and some of the investment that would be required might be too large of an ask. However, asking the rest of our residents to pony it up is more than unreasonable and at first glance. appears to be the proverbial "snowball in hell".

 

Joanne Brandt's picture
Joined: 06/12/2014
Posts: 15
Did PTF fully disclose?

Did PTF fully disclose at the time of sale that the transfer of the encumbrances could cause financial harm to the club?

It would be reasonable that PTF would know based on their long history with the club and it turned out to be true. Maybe the Dept. of Real Estate should look at the entire transaction.

Country Club Member/RMA Board Candidate

Joanne Brandt

John Hein's picture
Joined: 08/07/2007
Posts: 278
Soth course

Jackie, this is a really bad idea!! With an average age of 65 and perhaps a couple hundred members over 70 you need to know that there are dozens of members who do not play the north because it is simply to hard for them. So sure, close the south course and watch a hundred or more quit over night.  I like the north but if I had to play it 100 percent of the time I would resign. It's all about the two courses. I do agree that there needs to be skin in the game from all RMA dues payers. Perhaps a smalll monthly fee for the rights to use the bar and food service facilities.

John Hein

Robert Denham's picture
Joined: 10/01/2007
Posts: 75
RMCC

Sad this this is the view of some residents of Rancho Murieta, even if they do not play golf.  I was one of the first non resident members that joined RMCC in 2001.  At that time a membership for non residents cost $15,000 cash which I gladly paid for the priviledge of joining this fine club, one of only five private country clubs in the state with two championship golf courses.  I have valued my membership even thru the most trying of times.  What is sad is that there is failure to recognize that even if a family does not play golf they have a vested interest in seeing the counrty club thrive and continue.  It is a centerpiece of the community and a valuable asset for the entire property.  Take a drive out to Sunset Whitney or El Dorado Hills and look those sad stretches of land.  Is that what you want in the middle of your community?  Then look at a different approach that enlightened communities have taken in such places a the Del Webb Communities of Timber Creek or Lincoln Hills.   In both of those communities every household pays a small stipend which includes access to the community center.  In the dining room, a buffet breakfast is served every morning for a very reasonalble rate.  Every resident has access to the facilities, and can play golf if they desire for a residents rate. Full golf memberships are available for those so inclined.  It is my understanding the at stipend is maintained for capital improvements and unforseen expenses and that the golf course is expected to maintain sufficient revenue for operations.

Imagine if every household had an interest in the Country Club, we could see expanded dining options and other amenties that are not currently available.  You will not realize what you had until it is gone.  

 

 

Frank Pumilia's picture
Joined: 08/08/2007
Posts: 124
RMCC

To clarify my above post "Option A"

I do not mean to turn RMCC into an RMA Community Owned Club..forcing all to join...

My thoughts are

1....All RMA lot owners (North, South, Villas, Retreats,etc) pay a small ($10-$15) monthly assessment to be part of the entire community. 

Originally all lot owners paid a minimun of Social Dues, this did not include golf.  I know because I lived in the Bay Area when I bought my lot in 1981 and paid these until I converted to golf in 1987.and paid golf dues because a cap was put on golf memberships. and if you wanted one you needed to upgrade then.   So from 1981 to 1992 when I retired and actually moved here I paid for the future. 

This suggested small monthly assessment  benefits to all lot owners even if they are not some category of dues paying club member they are..a different category  call it ."Community Members"

Benefits to them might be as follows  as Community Mebers

     A.... Protects their real estate value,  (See Bob Denham' post above.)

     B.....As Community Member option allowed to use club dining facilities at  their option. (no minium)

     C....Allowed to play Golf /Tennis on daily fee schedule if they want to use these options.

I am not saying all RM lot owners will be forced to join the RMCC  but would be able to use the facilities.on some basis.

I do not want the Club to file Chapter 11 but it has to be the backup plan B if the commmunity does not get together .

 

 

Bunky Svendsen's picture
Joined: 08/07/2007
Posts: 96
Feeling left out

Im hearing a lot of suggestions in this forum that RMA members should pitch in to keep the Country Club solvent. But curiously, I havent received an invitation to any of their "Town Hall" meetings. I guess they dont need my contribution or input THAT much!

Marklin Brown's picture
Joined: 08/12/2007
Posts: 192
PTF Shortfall

The pension shortfall skewd the whole deal. Why was it not known to anyone prior to negotiations with Mr. Husband? There is something wrong right there. It is a failure of a previous disclosure or disclosure at that moment in time by some entity and the focus should be on this legal requirement. If it was PTF then they should carry the ball in this bail out. Maybe a long term loan the CC can easily spread over 30 - 50 years. If it was the CC then maybe negoitate the same. Where will they or the CC be if it's out of business?  Member or not, I don't see how the failure of the CC will help property values. However, the North developers bought the land and not the club. Can houses be built on the golf course land? Possibly that might help.

Greg Cannon's picture
Joined: 09/07/2016
Posts: 15
Bankruptcy vs. Being a Union Shop

I think many may be missing a fundamental point in arguing against bankruptcy. The only way to avoid bankruptcy would be to sign up to continue as a union shop rather than allowing the contract to expire. If we terminate the relationship with the union, pretty much in any way as I understand it, we trigger a duty to pay somewhere in the neighborhood of $3 million or so. At that point, we would in fact be bankrupt.

Continuing on as a union shop will defer the issue, but it also will result both in the continuation of the ever expanding pension obligation and the growing inability of the club to pay its debts and make needed improvements. It also will continue to make the club unmarketable. Absent some miracle, we still may end up in bankruptcy.

Bottom line, from my perspective, is that bankruptcy may be inevitable. I'll be interested to hear what the board has come up with.

 

Julie Cager's picture
Joined: 08/18/2016
Posts: 2
RMCC Meeting

Went to the meeting and realized two of the biggest questions were never asked/answered directly.

What are the risks to the club associated with Chapter 11 bankruptcy?

If a judge approved a Chapter 11 (which removed/reduced our pension obligation) at what point could the club then be sold?

 

John Hein's picture
Joined: 08/07/2007
Posts: 278
RMCC

I ask again, all of you who wanted a witch hunt last night, how many of you are willing to "write a check" for several thousand dollars to eliminate the problem. Last night about 10 hands went up! The assessment will go down in flames. The gang of potential BOD members has, in my opinion, NO solutions either, except for complaining about the current BOD.

This issue is far to serious for any RM resident to ignore. If you think the CC has no effect on your property value you must drinking Kool Aid.

Sad that there are so many residents who don't understand the the importance!!

John Hein

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