“The single biggest problem in communication is the illusion that it has taken place”
(George Bernard Shaw).
I write this letter to you with the hope that the weekly newsletters from Robyn, monthly updates from Damon, a good website, function / event text messages, Information Evenings, AGMs, access to GC and Damon, and a quarterly communique from the President on behalf of the General Committee (GC), will go a long way to ensuring our member communication is not an illusion. The topics covered below were mentioned by members in the 2014 Member Experience Survey as areas for more effective communication from GC. Please let us know if we are succeeding in helping to keep you up to date with the important matters occurring within our wonderful club.
Strategic Plan
Since the inception of a formal strategic planning process in 2005, the GC and Representatives from our sub committees and Finance Committee have met annually, to review progress and update the plan. This document is a rolling plan so that we are constantly looking five years ahead. As many of you know from downloading the web version or reading the hard copy version, it comprises our Vision for the future (“To provide a pre-eminent membership experience”), our Values and our six Strategic Drivers which provide alignment and focus for the GC, Committees, and the General Manager and his team. Our progress over the last six months is shown in the document which can be accessed by opening the attached document (click here) or for those of you wishing to have a hard copy, please contact Robyn.
The progress is reflected with a colour coding system whereby green indicates completed or on target, blue in progress and red not yet commenced or unsatisfactory progress. The GC is pleased with our progress on almost all fronts with additional focus on junior member integration, slow play, greens and bunker condition, F&B staff service training and risk management still requiring extra effort.
Governance Review
We are on track with the review of the governance matters as per the resolution passed six months ago at the AGM. A Governance Working Party comprising six of our members (Professor Alec Cameron (chair), Hayden Chrystal, Peter Davies, Ken Hellsten, Jonathan Ilbery and Anne Kofoed) have met five times and tabled a report to GC on 8th September. They solicited members’ views and received 50 submissions to aid in their deliberations. The Club has received the requested Senior Counsel’s opinion on our Constitution and rules and this opinion has been made available to the Working Party. Their report and recommendations will be discussed at length at a two hour GC meeting on 24th September solely for this purpose.
On behalf of all members I would like to thank the Working Party for the significant time and resources which they have contributed to bring this very well-reasoned set of recommendations to the GC.
The next steps are that the GC will prepare a recommended framework from all of the available information and make this available in written form prior to a number of information sessions leading to formal tabling at an EGM or AGM in 2015. Significant and further consultation will take place before this framework is put to members for a vote. It is intended that all of the significant documentation will be made available to members together with the GC recommended framework in October or November.
Lake Project
After member feedback at the AGM about the importance of getting the appearance and functionality of the lake right the General Committee provided the Lake Working Group with the task of reviewing the project to ensure that it met the needs of the club and its members, specifically with regard to design with the provisio that the overall budget should be managed prudently.
The outcome is that the Course Advisory Committee were invited to participate in the process to seek their views on final design. In addition course architect Michael Clayton was engaged to provide his impressions of the end result and a concept plan on how the lake should appear in 2 to 3 years’ time. A copy of this concept plan has been included with this update – click here to view.
In summary the advice from Michael Clayton was that there was nothing to be gained by materially moving the internal bund wall however attention should be paid to creating interesting shapes when viewed from both 3rd fairway and the 13th and 15th greens. He also recommended establishing small “islands” in the main body of the lake to break up the expanse. Critical to the final appearance is landscaping and to that end a landscaping plan has been developed with the architect’s approval which will provide a more natural appearance throughout the entire area.
The concept plan and the landscape plan have received endorsement from both the Course Advisory Committee and the General Committee and the Lake Working Group have now commenced the process of developing a construction program and final budget based on this concept. At this point in time it is anticipated that the project will be commenced in late January with landscaping proceeding in early May. Once final costings have been calculated further information will be provided to members.
Capital Fund
The following is an update on the Capital Fund from the Finance Committee.
“We are pleased to report that the year ending June 2014 has again seen a year of solid investment performance from the Capital Fund. The closing balance of the fund as at the 30th June was $17,816,296 which is an increase of $1,348,144 from the 30th June 2013 closing balance. In addition to this increase a further $247,022 was transferred to the LKCC general account In December, bringing total return for the year to $1,595,166.
The fund was established in March 2008, with a total of $13,576,650 being deposited by January 2010. Since inception of the fund a total of $475,022 has been transferred to the club’s general account, which brings the adjusted closing balance before transfers to $18,291,318 representing an increase in value of $4,714,667 or 35% since inception.
Our Constitution states that the amount available that can be transferred to the Club cannot reduce the value of the Capital Fund below the inflated (real) value of the initial capital deposited. At the 30th June the amount available to be transferred to the Club was $3,206,525 of which our General Committee has requested the transfer of $2,404,893. This is in accordance with the approved Capital Fund Distribution Policy. Our President will provide further details on these funds transferred.
A quick update on our investment strategy. Since inception of the Fund we have deliberately taken a conservative and staged approach to the amount of funds invested in growth assets (Australian and international shares and property). Our strategy was not to react to hype or historical market performance, rather have a disciplined approach to gradually increase the amount invested in growth assets to reach our fully invested position of 50% in growth assets and 50% in defensive assets (including cash and fixed interest). We are in the process of implementing stage 3 of this strategy with the final stage set for July 2015.
Finally as a committee we have made the decision to outsource some of the administration of the fund to an external 3rd party provider. Currently Alison in accounts is spending many hours each month on the administration of the Fund. Our expectation is there will be substantial time savings, together with improved financial reporting.”
Following the transfer of funds from the Capital Fund to the Club accounts as reported above, members will want to know why that amount was transferred and how these funds are going to be used.
As to the “why” – rather than hold the money in the Fund until needed; it was felt that having the money available for capital projects in this financial year, rather than at the vagaries of the markets, was a better option. Further, the interest earned on these funds will help to offset expenses in running the Club.
Our Constitution allows for such a transfer and our Policy for “how” the distribution will be used is as follows:
- In July the LKCF will be valued as at 30 June and the amount that the Club is entitled to take as a distribution will be calculated. In some years there could be no funds available to the Club because of investment returns being lower than CPI.
- In August the Club will be paid 75% of the amount which it is entitled to be paid from the LKCF.
- 25% of the entitlement is retained in the LKCF as a buffer for future low investment returns and to slowly build the total funds in the LKCF.
- The Club will invest the 75% into interest bearing investments immediately on receipt.
- Any monies paid to the Club from the LKCF shall only be used by the Club, in the first instance, to fund General Committee approved Capital Expenditure where that Capital Expenditure cannot be paid for out of surplus funds in the Club’s bank account.
Once Capital Expenditure requirements are paid for, the remaining distribution amount (if any) will be placed into an interest bearing bank account so that the Club’s income is increased by the interest earned.
A decision by the GC on the 27th February 2014 to use these funds for capital purposes only was ratified again at the August GC meeting. The existing prudential controls were further strengthened with unanimous agreement that the funds were to be used for “special purpose” or non-recurring capital items. In all cases the overriding principle is that the funds are to be applied for the benefit of present and future members.
The GC has identified the following uses for these funds in the near term – new road to the maintenance facility ($113,000), boundary fence replacement ($90,000 for 2014 and the same for 2105) to complete the fence, new club buggy storage facility ($85,000), solar panels ($36,000 with 2.7 years payback), LED lighting ($60,000 with 2.5 years payback) and ladies / men locker room refurbishment. To ensure the funds are properly secured for their specific purpose the balance will be invested in accord with the policy in interest bearing bank accounts with the interest being applied to improve the club’s surplus and thus reduce the impost on members.
The Member Experience
As part of the major re-focus on ensuring members have the best possible experience at Lake Karrinyup a number of initiatives have been introduced since April. It is important to note that most importantly the GC first sought feedback from members by way of the survey conducted earlier this year before implementing these initiatives. In terms of the club’s hospitality offering the clear message was, more variety and consistency, competitive pricing, healthy options and less formality around the dining experience.
The changes include the following:
- An overhaul of the style of food being offered
- Reduced pricing across items on the club’s menus
- A consolidation of menus to provide members broader options daily
- Improvements to the “Buffet” in terms of variety
- The introduction of the “Buffet” on Thursdays
- More healthy options
- More competitive pricing across most price ranges on the revised wine list
In addition to this the club will ensure that all menus clearly indicate items that suit those members with dietary needs such as gluten free items. In recent days the club has commenced a trial Grill Service on Wednesdays and Saturdays over the lunch period. The purpose of this trial is to determine member’s interest in a less formal dining experience, better quality options and improved ambience. We encourage all members patronising the club on these days to try the Grill. Friday nights have proven very popular through winter and the commitment to providing live music is a major aspect of this success. This will continue in to the warmer months when the “pizza oven” makes a return during the Perth International.
Other aspects of the member experience have also been reviewed. Areas requiring attention/improvement included the service provided to members in the Buggy Room. Recently the club has employed a more senior and experienced person dedicated to improving the service offered in the Buggy Room. In addition to this the club is moving forward with the erection of a new shed to house all club owned carts thus freeing up room under the pool for the storage of members’ clubs and electric buggies. The club is currently awaiting Council approval and it is expected that the project will be completed by the end of November.
As mentioned previously the GC has considered a number of projects which it believes will provide members with indirect benefits. These include replacing the boundary fencing encompassing our property. Fences had previously fallen in to disrepair and the replacement program including automatic gates to the maintenance compound will further secure our assets and ensure no stray kangaroos leave our property. Other initiatives include the changing out of many of our light fittings to LEDs and installing solar panels to reduce our energy costs. Both of these projects when combined will reduce our running costs by several tens of thousands of dollars.
I wish you ongoing enjoyment of your golf club and importantly greater enjoyment of our wonderful facilities.
Jim Crockett
September 2014