Friday, December 4, 2009

A Full Asset Reserve Study Report, for Private Clubs

By Michael Vogt, CGCS, CGIA

When assembling a long-range plan for properly funding capital projects on the golf course, a club manager, superintendent, and green committee should know when the funds will be required. A sound plan must provide the appropriate amount of funds to meet the needs of each golf course component, feature, or piece of equipment. A stable contribution to a fund that supports capital replacement will guard against the diminishing of the long-term and short-term assets for the golf course. A funding plan should not very wildly from year to year; it is recommended that funding a capital replacement plan be done on a monthly allocated basis to avoid large sudden expenditures that upset a club’s normal cash flow. A reserve study for golf asset replacement is good business and makes good sense.

A Reserve Study for a golf or country club consists of two parts, one: Physical Analysis (visual inspection by a golf course expert, architect, engineer, kitchen expert) that result in a comprehensive inventory of design / equipment elements and a prioritized schedule of future replacement costs; and two: The Financial Analysis that recommends a minimum and stable level of funding into a reserve account over the next 15 to 20 years, so your club has the money for capital projects when it is needed. The well executed Reserve Study becomes the basis of your long-range financial plan to provide continuity and dependability for maintaining a high quality course for years to come.

The report below is a comprehensive study for your examination; I believe you will find the true value of such a study to the club’s long term strategic plans.

Existing Conditions Asset Reserve Study Private Country Club

At clubs today, the need for long-range planning is paramount to each club’s success. Many of the distressed clubs in this economy have poorly planned for future funding of capital and are now paying the price though diminished memberships and facilities that are becoming less than adequate. While day-to-day club and course maintenance is vital, the truly wise clubs have forward thinkers and have a plan for continuous improvement to the club facilities and golf course and its associated buildings and equipment.

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