With a detailed an accurate “to do” list in hand, Columbus Country Club has taken a proactive approach to facilities management.
While all physical assets deteriorate with time, some cases are more obvious than others. It’s not as easy to spot deterioration in an exhaust fan, or a telephone system, as it is to see cracked sidewalks or carpeting that is wearing thin. Nevertheless, deterioration, observed or unobserved, is inevitable.
To offset the cost of repairing or replacing aging physical assets, clubs typically collect an appropriate amount of money, either through initiation fees or capital campaigns, and then hold it in a reserve fund. But what happens when there isn’t enough money in the fund to cover the costs of repairs?
“When something broke, we fixed it,” says Dwight Penn, a third-generation member of Columbus (Ohio) Country Club (CCC), who was appointed to the club’s Board of Trustees in 2004. “Over time, the budget for these types of expenditures was slowly drying up. We needed to identify and budget for future capital improvements, so the club’s common elements would continue to look attractive and well-kept.”
Penn, founder and President of Real Property Management, Inc., a condo association management firm based in Lewis Center, Ohio, suggested that CCC use Reserve Advisors of Milwaukee, Wis.—an engineering consulting firm that specializes in property replacement reserve studies—to conduct a full reserve study of the club’s assets.
“I’ve had Reserve Advisors study a number of properties that my company manages,” Penn notes. “In those cases, they were able to provide us with a comprehensive component list and plan for going forward. As a business, that type of inventory is invaluable to your operation.”
After a thorough, on-site inspection of CCC, Reserve Advisors provided a study that detailed anticipated replacements or repairs to common-area elements at the club, such as sidewalks, kitchen equipment, roofing, and even HVAC equipment. The study applied cost estimates to each and then recommended the level of annual reserve funding that would be needed to cover capital expenditures for the next 30 years.
“We find the biggest challenge clubs have in maintaining proper facilities is learning how to develop a long-range plan for future improvements,” says John Poehlmann, Principal of Reserve Advisors. “That’s where we come in.”
At the outset, Reserve’s Director of Production Management, Todd Walter, spoke with CCC’s Board members, to gain a better understanding of the club’s exact needs.
“The board was basically looking to establish sound financial planning and budget direction,” says Walter. “The study became a blueprint for its future.”
Acing the Test
CCC boasts approximately 600 members. It was established in 1904 and the current clubhouse was built in 1963, after a fire destroyed the previous one. CCC has a Donald Ross-designed 18-hole course; a par-3 course; a newly constructed driving range with professional teaching tees; a tennis center featuring both soft and hard surface courts, with night lighting; and next to it, two paddle tennis courts. It also has a large maintenance facility (see photo, bottom right).
The Reserve Advisors study covered all parts of the club except the golf courses. And one year after it was conducted, the study faced its first big test. “The pool broke down,” says Penn. “We had a decision to make: repair it or replace it.”
The pool, constructed in 1974, had a gutter system that was 15 years old. Leaks were plentiful, and there was significant deterioration to the pool deck as well.
The Reserve Advisors study had suggested that the pool be replaced no later than 2006, and had estimated the cost based on a number of conditions, including interest rates and local construction rates.
“When we put the bids out, the contractors came back with estimates almost to the dollar of what the study predicted,” says Penn.
Having used the study to plan and budget properly for a new pool’s construction, the club had the funds on hand to build a state-of-the-art, Olympic-sized pool, with adjacent snack bar and children’s playground.
“Many variables change after an initial study is conducted that may result in significant overfunding or underfunding of a reserve account,” Poehlmann notes.
Those variables can include deferred or accelerated capital projects, changes in interest rates on reserve investments, the presence or absence of maintenance programs, or unusually mild or extreme weather conditions. So periodic updates are advisable, to keep a study current.
And so in 2008, Reserve Advisors conducted a study update at CCC, to ensure that an equitable funding plan was still in place.
“We’ve started to rely on this study as a ‘to do’ list,” notes Timothy Boyer, CCC’s Club House Manager. “It’s helped us be more proactive toward facilities maintenance, instead of being reactive. We spend money far more intelligently, and can plan better for capital improvements.”
To fund its reserve account, CCC instituted monthly capital dues of $75 for resident members (other member classes pay proportionally less). Today, members take comfort in knowing their club is being managed properly.
“With this study in hand, we can address today’s needs, and yet be visionary enough to accommodate a futuristic window,” says Penn.
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