PRESIDENT'S MESSAGE | David E. Wilks
In previous Bulletin messages, I have addressed the way in which we pay for the diverse and luxurious member experience that we all enjoy. Our Club has been managed very well over the years and we are in excellent financial health. We have an enormously valuable capital asset base and remarkably little debt. We have never charged the membership an assessment and we have no plans ever to do so. But how can that be? How can we pay for the depreciation and replacement of all those capital assets without charging assessments? For one thing, assessments are, by definition, one-time capital calls to pay for specific capital expenditures. When we have large expenditures -- such as a new indoor tennis and sports facility or a new kitchen -- we like to fund them with a combination of short-term debt and capital reserves we accumulate from new members’ stock purchases. But what about routine capital expenses -- everything from new HVAC systems to new glassware in the Pub and everything in between? Where does the money come from for those items and how do we plan for those expenditures? I mentioned in the May Bulletin that, for a very long time, that money has been buried within our quarterly dues. Let me explain that a bit further. Every year, Phil and our department heads prepare a budget for the cost to operate our Club at the level we all expect in our member experience. The Finance Committee (composed of Club members and led by our Treasurer) sets to work on that budget to ensure that it is both adequate and appropriate. The Executive Committee and the Board of Directors then examine it and ultimately approve a final budget. On top of that operations budget is an amount that will address our routine -- or obligatory -- capital expenses. Over the years, we generally budgeted to have one million dollars or so left over after operational expenses to fund depreciation every year. That combined budget figure is then divided among the membership and charged quarterly as a single line item on our bills as “Dues.” That means that the operations component and the capital component of our bills have been indistinguishable to the membership, even though all of us have always funded capital expenditures with our quarterly dues. The point wasn’t to keep capital contributions a secret; it was just a matter of simplicity. Bear in mind that while this streamlined way of doing things has simplicity in its favor, it presents a risk: if our operations budget ever falls short -- which it can do at times -- we necessarily fall short in our routine capital planning budget also. Because operations come first, that means that we need to dip into routine capital reserves to fund operations. And then we need to fund routine capital needs by dipping into new member stock purchases which we would much rather save for big new projects. So, as you can see, it does not seem wise to fund both operations and capital reserves from the same bucket.
BOARD OF DIRECTORS David E. Wilks President Adam G. Landis Vice President David D. Wilkinson Treasurer Thomas A. Beck Secretary Class of 2024 David E. Wilks Rachel W. Heinle Douglas D. Herrmann Jennifer J. Hopkins Adam G. Landis Jonathan N. Saunders Pamela S. Tikellis David D. Wilkinson James R. Selsor, Jr. Class of 2025 Thomas A. Beck Zachary L. Chipman Robert W. Friz Lisa A. Schmidt Meghan A. Adams Stephen J. Crifasi, Jr. Andrew J. Podolsky Becky Allen George “Tripp” Way, III Honorary Directors Gary W. Ferguson Melissa Riegel Advisory Directors Joseph F. Hacker, III Allen M. Terrell, Jr. John F. Porter, III
03
Made with FlippingBook - Online catalogs