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Country Club meeting

Country Club President Vince Lepera, right, and General Manager William Armstrong talk about problems closing a deal to sell the club.

Leaders of Rancho Murieta Country Club spoke for an hour Saturday morning about the lone remaining issue blocking the effort to sell the club – an underfunded union pension that has become a $3 million problem for the club.

Vince Lepera, the club’s president, said he has been circumspect about discussing the situation because it involves the livelihoods of 22 employees. They’re course maintenance workers, members of Operating Engineers Local 3, and Lepera said the club doesn’t want to leave the impression that it’s trying to walk away from its union employees, despite repeated calls from club members over the years to do exactly that to help the club’s finances.

“You just, legally, can’t do that,” Lepera said.

He and William Armstrong, the club’s general manager, met Saturday with RanchoMurieta.com and the River Valley Times to explain the situation and squelch the rumors and half-truths that seem to pop up around every significant event here.

Lepera referred to the union’s pension fund as being “upside-down $3 billion – that’s fact.”

Under federal law, an entity like the club is responsible for its share of the shortfall in a multi-employer, defined-benefit pension fund for its employees, even if, as Lepera claimed, the club has made all necessary payments to the pension under its contract.

Country Club interview audio files

Clips from the interview with Vince Lepera and William Armstrong. Click the blue arrow to start each clip.

Lepera and Armstrong estimated the club’s share of the problem at more than $3 million, which Lepera said needs to be addressed before potential buyer James A. (Bob) Husband can buy the club. Lepera said the club has been trying to reach an agreement with the union’s pension fund administrators and has made an offer. Husband would pay the money, they said.

A $3 million liability that’s increasing every year would soon eclipse the $4 million club purchase price that Husband reached with the club and the land’s owners.

Husband and the union were not available to talk about the situation Saturday.

Lepera said the union has always been a fair, reasonable negotiator, not to mention the $10 million in free work it has performed for the club over the years.

“They know where the club’s at,” he said of the pension fund. “They’re willing to help out, but I think we’ve pushed them as far as we can push them. I think with the union being underfunded, their pension fund, it’s not the employees’ fault. It’s definitely not the club’s fault. It’s not the members’ fault. But unfortunately, we’re going to be held liable for it. And we need to deal with it, and that’s what we’re doing.”

Operating Engineers Local 3 represents 35,000 heavy equipment operators in California, Hawaii, Nevada and Utah. In the late 1960s the union’s pension trust fund bought 3,500 acres as a training center, land that would become Rancho Murieta. Trainees built Murieta’s original infrastructure in the 1970s as well as many community and Country Club projects in the years since.

Armstrong said the situation does not involve the club’s 30 or 35 Culinary Workers Union employees, who handle food and beverage service and have a pension fund that is not an issue.

Lepera said the club is urging the pension administrators to deliver an answer by May 30, when its purchase option with Husband expires.

Both Lepera and Armstrong said they remain optimistic that this deal will happen. They pointed out that Husband has an incentive to follow through, because he has already invested more than $400,000 in purchase expenses.

“Bob is very excited about this, more than excited,” Lepera said of the purchase, “but you just can’t expect him to step in and assume such an unknown. It’s not fair. I would highly recommend he doesn’t do that until there’s a solution.”

If the union accepts the club’s offer, “Bob said he’s prepared to close on the club within 48 to 72 hours,” Lepera said. “And everything is ready to do that. There would be no other holdups.”

The club’s present financial limbo isn’t sustainable, Lepera said.

Its member assessment, which brought in $25,000 a month, expired in March. “So cash is going to be extremely tight,” he said. “...With that being gone, and this deal not done, that’s putting pressure on the club.”

Over its history, the club has lost more than $16 million, Lepera said, but he added that Armstrong has managed to stabilize the bottom line.

Despite holding the financial line, Lepera added, “...There’s nothing we can do to improve this club. So all the money we get in, we can maintain it to the best of our ability, but to me it’s never going to be in a situation where we can add new members and sell this club and get some new cash in here, some new lifeline, some new ideas....”

Lepera was dismissive of the rumors that Husband isn’t funded well enough to do the deal.

“When I read that somebody’s concerned that maybe Bob doesn’t have (the funds), I just laughed, because that’s not the issue at all,” Lepera said. “He’s buying the club for $4 million. He’s got to put in $3.5 million right off the bat. He’s already told us, over the next five to seven years, this club’s probably going to need another $5 million on top of that.”

But what if Husband walks away?

“I feel very confident about having the club continue to be a club,” Lepera said. “Will it thrive or improve without a buyer? No.

“If Bob chooses (to) ... walk away, I promise you we would still go out and find a buyer that’s attractive for this country club. Because that’s the ultimate goal – to bring someone in here that can bring the new ideas and cash. That’s what this club needs.”

In an email to members Saturday afternoon, Armstrong announced a club membership meeting 7 p.m. June 20, to either, as the email says, “introduce the new owners or update the members as to the status at that time and what other steps would need to be taken.”

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  • Stefany Alwazani In the article it quotes Lepara as saying "upside down 3 billion, that's a fact. I assume that 3 billion is a typo?
    • RanchoMurieta.com He said, and meant, billions. (If it were a $3 million shortfall, the Country Club would be covering the whole thing.)
      • Stefany Alwazani So the $3 million is the country club's share that is owed. Got it.
  • Debbie Alires-Kolmodin I wish this would just get done once and for all! Hard to understand how huge corporations can figure this out but the powers that be here can't seem to get it finished and wrapped up!! Oh well life goes on here inside the Rancho despite the shortcomings of decision makers concerning the RMCC. I'll just wait until this becomes a real country club. I have faith it will happen one day hopefully in my lifetime ....ok people don't get offended that last remark was meant as a joke!! Have a great Sunday!!
  • Robin Albee-Kesich So frustrating !! Many have worked so hard to make this a reality only to get it stalled by some other entities mess. Thank you all for your steadfastness on this daunting project. Wishing you all well in this endeavor!!

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