| President's Comments - October 11, 2010 |
Dear DCC Members:
At last, Wachovia is permanently out of our DCC lives. Our Wachovia mortgage was purchased by an LLC composed of 10 members who want to insure the success and continuity of our club in its current form. This sale was completed on September 28. We are all deeply indebted to this group willing to put up this large sum of money to save our club.
This investor group will hold the mortgage until we can organize and fund Club Properties, LLC as outlined in our Plan of Restructure. Once Club Properties, LLC is formed and funded it will buy the mortgage, then execute a sale-leaseback of the club property and facilities at a rate that is very favorable to DCC. This agreement, combined with increased membership, will insure the long term survival and financial stability of our club.
Your Board of directors has worked very hard to help reach this goal, and Larry Weaver and colleagues have worked untold (and unpaid ) hours to guide us through this complicated legal process. Hopefully we are about to see the fruits of our labor.
Once this group purchases the mortgage, DCC will enter a forbearance agreement with them, allowing us to make favorable interest only payments on the lower mortgage amount. This minimizes our cash flow and removes the threat of foreclosure from our future. It also means our interest payments are going to members saving the club, rather than to a bank trying to close the club. Once foreclosure by Wachovia is removed as a threat to DCC, we can begin rebuilding our finances and our membership.
With the threat of foreclosure by Wachovia ended, we will enter a two-year forbearance agreement with this LLC. We will now have a poitive cash flow in our operating expenses including the assessment money collected from the Class A One members who paid $10,000 for their membership.
John Dupes and his staff have done an excellent job of cutting and minimizing expenses, but without use of the assessment money we will operate at a loss until we add enough members and revenue to offset these expenses. We are currently at a point where there are really very few cost savings left to claim unless we make a drastic cut in member services. Your board feels a cut in services would be very detrimental and will result in a loss of members that would offset any cost savings. We need continue current services as inexpensively as possible while increasing membership and revenues as quickly as possible.
Our budget projections indicate we can break even on cash flow and begin to set aside a small amount each month for emergencies and capital improvements when we reach a membership of 425 members. Our current membership is 338 total members. Your Board estimates it will take 12-18 months to reach this goal, although it could be sooner since we are already seeing the return of many previous members.
Now that the mortgage sale is completed, we have introduce several aggressive membership incentives and programs to attract new members, including corporate memberships, some type of incentives for widows of former members, and a 2 for 1 membership incentive. Would you like to cut your dues in half for a year and bring your friends to the club as new members at ½ the normal dues rate? Read the membership section of the DCC web page for details of the 2 for 1 membership program.
We still have several things that must happen to continue on the road to success. :
1. We have instituted a voluntary Capital Program to raise money for a number of capital needs throughout the club. A description of the program and a list of suggested projects is detailed on a separate page in the Members Only section of the DCC web page. This program will allow each of you to donate any amount you wish to the project of your choice. We hope that you will reduce your dues by bringing in a new member under our Share The Dues program, then using part of your savings to support the capital project of your choice. This is a great opportunity to help improve your club facilities and restore your club to its former high status.
2· We need more members to pay the $10,000 voluntary assessment and become Class A One voting members of Decatur Country Club. This will broaden the governance of our club and will provide adequate cash to get us through the next 12-15 months as we rebuild our club and membership and fill some vital capital and maintenance needs. With the mortgage in the hands of sympathetic members, the risk associated with becoming a Class A One member has been greatly reduced. Remember that your assessment fee will be converted to an income producing unit in Club Properties, LLC when that corporation is complete and funded.
3· We need 6 more members to make a $1000 interest free LOAN to Club Properties, LLC so we can pay the retainer fee of the securities lawyer hired to handle those issues. Since Club Properties, LLC will have more than 10 members, it must be structured in accordance with state securities laws, a process that could take up to 6 months. We need to get started now. These loans will be repaid when Club Properties, LC is finalized and funded.
We currently have 33 members who have paid the assessment (names are on the web site). To make the forbearance agreement work with minimum risk, we need at least 40-50 members to participate. In addition, we need a much larger portion of our membership to be Class A One members with voting rights helping us bring our club back to financial and managerial stability. I know each of you have a strong interest in the club and the Decatur community, and I urge you to strongly consider joining those who have already stepped up to help save Decatur Country Club.
We have a page ( DCC Talking Points ) on the Members Only section of the DCC web site that we think gives a good description of the major talking points of the DCC plan of restructure. Please visit this plan and read this material. There have been many misconceptions and misunderstandings about the assessment and the subsequent formation of the LLC. Hopefully this information will make our entire plan clear and you will see the benefit to you and to DCC if you choose to participate. We need your support to save and rebuild our club.
Thanks for your interest. If you choose to participate, you can bring a check to the DCC office or to Larry Weaver's office. Checks are made out to Wilmer and Lee Trust Account. I have also included a link to an Assessment Agreement that needs to be filled out and submitted with your check. Please know that absolutely no assessment money will be spent for any purpose until we have a satisfactory forbearance agreement with Wachovia and it has been approved by your board of directors. Feel free to call me any time if you wish to discuss this in more detail or to ask any questions you might have.
Regards,
John Peters
President
Decatur Country Club
256-318-0020
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