President's Annual Report and Upcoming Budget

La Cumbre Country Club • January 19, 2022

President's Annual 2021 Report and 2022 Budget

COVID is coming to an end; be it vaccinations, pills, masks, or herd immunity, LCCC has conquered variants, lockdowns, staffing and supply shortages, and a great deal of frustration to become even stronger. Our memberships are full. We experienced a relatively small operating loss because of COVID and increased water related costs. Member equity is at an all-time high.

Membership

All categories are full and have waiting lists. To date we have added 79 new members with a record $2.9 million from initiation and transfer fees, as a result we have increased our capital reserves and member equity. The average of the last three equity sales was $212,500.

Golf Course

Wayne’s world continues to stand out above all. Reclaimed water is in the final phases of testing and governmental approvals. He expanded natives on the 10th and 11th fairways, while accommodating a record number of golf rounds. The cost of water is up 43% over last year and it is extremely unlikely that rates will be reduced, even if we get substantial rains going forward.

Clubhouse Renovation

We are still sorting all the data and comments.

I want to thank the more than 600 members who have responded (including 347 equity members), for their input and perspectives.

In varying degrees we overwhelmingly agree that our clubhouse needs a lot of help. While Club Insights is still sorting all the data, it is unlikely that the late returns will statistically change the initial flash report. Sixty seven percent agree or strongly agree on the importance of the clubhouse renovation project and another twenty six percent are neutral. On the question of “Has the conceptual information been helpful to understand the scope,” fifty six percent agree or strongly agree, and twenty nine percent are neutral. Still, lots of work to do, and we will keep you posted.

Management

Eric and his team have had to deal with a high level of uncertainty, staffing, and cost issues. Not only have they helped shepherd us through the year, but we have seen a dramatic upgrade and improved levels of service and staff support in food and beverage, golf, and tennis operations.

The financial results for FY 2021 actuals, the operating budget, and dues information for FY 2022 are attached.

Congratulations to Russ Werner as the new President elect for FY 2022.

In closing, I recognize that this has been a very long and frustrating year for all of us. I would especially like to thank all Board members, their committees, Eric, our entire staff, and all our members for the work, encouragement, patience, and support that keeps La Cumbre special.

Best regards,

Robert Lowes
LCCC President

Record initiation and transfer fees of $2.9m, and a large tax credit of $872k have significantly increased member equity and capital reserves.

September year-end cash was $3.2m (after funding the entire reclaimed water project!)

Audited financials will be available March 2022 due to the change from fiscal year to a calendar year.

* Net of $250k transfer to capital reserves

FY 2022

While there is still a great deal of uncertainty about the economic realities next year, the one thing we are sure of is that our costs for everything from labor to food, supplies and water are up and expected to continue in that direction. This budget forecasts returning to a breakeven operating budget and has been extensively reviewed and unanimously approved by both the Finance Committee and the Board of Directors.

Key Assumptions

Revenue

A more normal non-COVID year
Offer 5 nights per week Clubhouse dinner service and seasonal lunch service
Membership remains full at 815
Dues increase of $140 per month for regular members and pro-rata increases across other applicable membership classes as of January 1, 2022

Expenses

Full year of food and beverage staff, Club ownership of tennis operations with new employees, and the golf shop maintaining full staffing levels
Minimum wage increase and cost of insurance benefits up 3% to 10%
Water rates continue to increase but at a slower rate

Capital Expenditures

Ongoing repair, maintenance, and replacement activities $1,080 preliminary estimate
Clubhouse roof and HVAC upgrades $800k
Continued expansion of natives around the lake $500k

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Wayne's World May/June 2022

By La Cumbre Country Club • May 13, 2022

Good Morning La Cumbre! We are starting to transition from spring to early summer. The property is transitioning too. So, the Greens and Kikuyu are taking on a different look and feel in fairways. Both need constant irrigation, so less roll on both surfaces than in winter. Ball marks and divots repair faster this time of year, but we still need your support in fixing these blemishes from your execution of that perfect shot. This year's weather is very eradicated, and everything seems to be a month to two ahead of historical growth patterns. But all our contractors and material suppliers are a month or two behind. So, the work we have slated for this year will get done, but it looks like the window of June to early September is when this will be completed. On the waterfront, the deliveries of reclaimed have been steady. Again, this came online just as the State and local agencies beat the drought drums. They are looking for a 35% reduction in water usage throughout the system. Agriculture rates are being adjusted way up with the mandated reduction. As this intensifies, different groups will be pointing fingers at each other. Being a private club, they would love to point them at us. With the continued drought, certain tree species show signs of heavy stress and decline. Mainly the Redwoods and Monterey Cypress currently. Using water with lower qualities will only add to this if we do not get heavy winter rains to clean the soils. But the property is in good shape with some excellent additions planned for the season. See you on the course. I'll be somewhere behind Rusty.

Wayne's World Spring 2022

By La Cumbre Country Club • February 17, 2022

Spring has come early this year, and it feels like it started on January 1st! Our greens are trying to produce seed heads, a typical March through April event. Our fairways have good color and are growing. Our native planting areas are trying to bloom, and the bugs are out! Nothing is following our typical patterns. I know we are enjoying some of the best-golfing weather, as the rest of the country is frozen stiff. So, I hope you enjoy the facility, as it may be the best weather days for golf over any place in the United States.

One With The Land: Sustainability Actions Speak Louder Than Words - FORE Magazine

By La Cumbre Country Club • January 31, 2022

“I don’t use the word ‘sustainability,’” said Wayne Mills, superintendent at La Cumbre CC in Santa Barbara. “I use the words ‘reduced inputs that benefit society.’ Potable water is a fluid people need to sustain life,and we were using it to irrigate turf. If we use reclaimed water, we use less potable water and still employ people, create living wages, and give people a place to enjoy themselves.”