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TPC 2010 Annual Financial Review - Strong Year for the Club

The Tiburon Peninsula Club had an exceptionally strong financial year in 2010, with profitable activities and debt retirement. The GM and staff have done an excellent job. This review includes the club's strategic and tactical financial models, operating assumptions, and future plans.

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TPC 2010 Annual Financial Review - Strong Year for the Club

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  1. Tiburon Peninsula Club 2010 Annual Member Meeting Financial Review November 16, 2010

  2. Financial Review - 2010 In 2010 the TPC is having an exceptionally strong year financially for the second year in a row. This year may be the club’s best ever: • For the first time, each “activity” is profitable for the year • $1 million of debt was retired ($750k in Q3-2010 / $250k in Q1-2011) • ~$150k spent on club “refurbishments” / ~$150k spent on club “enhancements” • Post $1MM debt retirement, $750k of cash remains in the coffers • It’s not a coincidence that the club is having its second strong year in a row, your GM is in the second full year of his tenure…Jerry Pang and his staff have done an excellent job for our members again this year

  3. TPC’s Financial Model – A Review Two Major Constraints: • Membership roll limited by Town of Tiburon (700/175) • TPC is a multi-activity club Operating Assumptions: • Dues pay for operations only • Five “Activities” are engineered to be financially self-sufficient (Tennis, Swim, Fitness, F&B, Youth) • An Emergency Reserve Savings Account is maintained (set at 3 months or oper. expenses = $550,000) • Capital Replacement funds are reserved annually (reserves for depreciation) • New member initiation $ pay for capital expenses and debt reduction

  4. TPC - Strategic Financial Model Dues Non-Member Surcharges Initiation Fees Monthly Debt Retirement Fees Revenues Expenses Administration Cap-Ex and Debt Retirement Mortgage Payments Facility Operations Activities – Set at Operational Breakeven Aquatics Personnel/Operations- Aqua Activity Specific Member Charges Personnel/Operations - Fit Fitness Food/Bev Personnel /Operations– F/B Non-Member Activity Charges Tennis Personnel/Operations - Tennis 80% Activity Fee Personnel/Operations - Youth Youth 20%

  5. TPC - Tactical Financial Model Dues Non-Member Surcharges Monthly Debt Retirement Fees Initiation Fees Reserve Savings Account (2 mos. of Ops Expense) Operating Cash/Checking Acct Mortgage Payments Cap Ex Cash/Checking Acct Administration Facility Operations Cap-Ex and Debt Retirement Operating Condition “Code” Code RED – An unexpected event wipes out Reserve Account – immediate member assessment is considered 0% of the time Code Orange – Reserve Savings Account is Not Full; All Initiation Fees Flow into Reserve Savings until Full + Examine Expense Cuts + Consider Dues Increase 20% of the time Code Green – Reserve Savings is full; all initiation goes toward Capital Expenses & Debt Retirement. 80% of the time * Currently 3 months of Op Expense = $550,000

  6. TPC – Capital Reserve and Accelerated Debt Retirement Initiation Fees $495,000 Assume Membership “roll” – 33 members/yr at “steady state” Gross Initiation Fees (@$15,000 non-refundable fee) - $495,000 Reserve Savings Account (2 mos. of Ops Expense) • To meet upkeep and replacement demands • To fund “new” Cap Ex projects In the event of a slow new membership period, I. has preference to II. by 2:1 until $250k is deposited into I. At the end of every year – one half of I and II balances will be applied to mortgage prepayment. Cap Ex Cash/Checking Acct I Capital Reserve “Replacement” ~$250,000/yr II Cap-Ex New Projects ~$245,000/yr Half of Year End Balance Mortgage Debt Retirement

  7. TPC Comprehensive Financial Model Monthly Debt Retirement Fees Initiation Fees Dues Non-Member Surcharges Revenues Expenses Mortgage Emergency Reserve Savings Account (3 mos. of Ops Expense) Operating Cash/Checking Acct I Capital Reserve “Replacement” $250,000/yr II Capital Expense New Administration Half of Year End Balance Facility Operations Capital Expenses Activities – Set at Operational Breakeven Activity Specific Member Charges Aquatics Personnel/Operations- Aqua Fitness Personnel/Operations - Fit Food/Bev Personnel /Operations– F/B Non-Member Activity Charges Tennis Persn/Ops - Tennis 80% Youth Persn/Ops - Youth Activity Fee 20%

  8. 2010 Activity Performance Comparison

  9. 2010 Club Finances – Snapshot Comparison

  10. Looking Ahead - 2011 • Operations are set to breakeven, consider small (2-3%) dues increase mid-year • The Big Five are set to breakeven – 5 of 5 confident • Undertake the Youth Tennis Center project (Rut Row!) • Re-sign our GM to a new long term contract and replace our Club Treasurer (yeah!)

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