Annual Report of the Chair, Board of Governors And the General and Special Committees 2024
Budget Development: The Finance Committee fulfills its fiduciary responsibilities to proactively plan and invest in the future sustainment of the Club and its facilities. This committee developed the ANCC FY2024 budget incorporating the Chairman of the Board’s Fiscal Planning and Strategic Budget Guidance to 1.) Meet the Club’s mission; 2.) Continue to improve overall Club operations and service to members; 3.) Improve the Golf courses: 4.) Do no harm to the Corrective and Preventive Maintenance Program; 5.) Meet our Club’s Long Term debt obligations; and 6.) Manage and maintain the Strategic Capital Budget plan. The FY2024 ANCC budget adopted the staffing assumptions required, and risks derived to maintain the facilities we have; facilitate the continued enhancement of our service operations, maintain a positive cash flow for “unknowns” and manage risk. As with FY 2023, one of the more significant challenges and fiscal considerations addressed was the projected budget required to support the competitive wages and benefits we would need to align our recruitment and facility and service staffing requirements. A limited availability of Northern Virginia pool staffing, and competitive pay scale issues continue to contribute to some of the most difficult conditions impacting both golf courses and retention in the Food and Beverage staffing levels. The simple fact is our ANCC starting wages have not kept up with conditions in the extremely competitive Northern Virginia labor market. This Committee noted these same issues in last year’s report to the Membership. Things have not gotten any better. The Finance Committee fiscal objectives for FY 2024 were to increase flexibility in staff hiring; maintain a positive cash balance for “unknowns”; manage risk; maximize service commitment and opportunities; and build upon the successes of the FY2023 operations. Membership fiscal revenue projections for Resident Equivalent Members (REM) were derived from analysis of both FY2023 actual data and historical trend date for the last five years whilst adjusting for the COVID 19 Pandemic. For FY2024, the Committee adopted a conservative approach with regards to membership revenue projections balancing both the past year’s positive growth in membership levels with the pre-COVID prior year’s historical declines in membership growth. In light of the growing waitlist for all Membership Categories, the Finance Committee along with Membership and the rest of the Board of Governors decided to keep the Resident Membership Cap at 2,400. We heard loud and clear from the majority of Members that capacity remained an issue and to consider increasing the Cap any further would only exacerbate the high demand our current Membership has for Club functions and activities. The Funded Depreciation line which had been eliminated in 2009, was revised to reconstitute the facilities lifecycle management replacement pool to pre-2006 sustainment levels . This Funded Depreciation line facilitates the long-term sustainment funding reserve required to rebuild the Capital Account for Projected Strategic Large Dollar Facility Life Cycle Management Replacement projects’ both known and unknown. As a Club, we depreciate assets in excess of $6M annually, however we only replenish Capital Depreciation to the tune of ~$1.04M through our current Funded Capital Depreciation contributions. This is simply not sustainable. It is my goal and the goal of this Committee to further accelerate Funded Capital Depreciation so as to eventually catch up to that which we depreciate each year. The ability to maintain what we have and provide dollars for aspirational Capital Projects depends on this crucial task. Reducing or even eliminating Funded Capital Depreciation would result in a future Capital catastrophe for ANCC.
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