News

Over the last several years, we at Egypt Valley have been fortunate to grow our membership and improve the financial position of the Club while still reinvesting in the property.

One thing that has become apparent while budgeting is that there are not only aspirational investments our membership would like to make, but there are also ongoing capital requirements to maintain a facility like we have at EVCC. Frankly, determining the next place to invest is difficult, despite our strong financial position, due to the number of projects that we would like to address. For example, we know there are things that after 30 years need to be replaced or updated, like the Clubhouse roof (completed in 2021), re-paving the parking lot, replacing and upgrading the generator, updating the locker rooms and kitchen, a new pump house and on-course irrigation system, redoing the bunkers, etc.

We also know that investing in the refresh of the West Patio and pool have significantly enhanced the experience at the Club and allowed us to further attract and retain members. The balancing act of reinvesting in items that need to be done and those we want to do is difficult. This is why we decided to engage Club Benchmarking to perform the Capital Reserve Study and estimate the remaining useful life of all of our assets, as well as the cost and projected timing for replacing those assets over the next 20 years.

The results of the Reserve Study have been reviewed with Club Benchmarking, EVCC Management, the Board, Finance Committee and a smaller ad hoc Committee focused solely on the Capital Reserve Study. Through feedback from all parties and testing the assumptions provided by Club Benchmarking, we have continued to refine the analysis to what we believe to be the most likely scenarios. The results show that over the next 20 years, we will need to invest over $32 million to just maintain the facilities we have. This of course layers in assumptions for inflation and timing of completing the projects, and we know that some of the assumptions will be wrong. No matter if the analysis is exactly correct, it is obvious we will need to focus on catching up on investing in our facilities to make sure we continue to thrive as a Club.

Our challenge over the last several months of working on this project was to determine how best to fund the necessary maintenance and improvements to the Club, as well as aspirational projects. I am excited to say the Board has agreed to a plan that focuses on the short outline below to succeed in this endeavor. In addition, Kyle Lundy, Mark Mossing (Finance Committee Chair) and I will be available on Wednesday, August 10 at 5:30 p.m. and Tuesday, August 16 at 7 p.m. in the Small Ballroom to discuss with anyone who has questions.

Future Dues/Initiation Fee Strategy

• Split our existing dues structure into two categories: Operating Dues and Capital Dues. It should be noted, this is not a capital assessment, but rather a change of how we account for our existing dues, splitting your existing dues payments between the two categories. This split structure for dues is used by the majority of private clubs across the country. A hypothetical example would be that the 2022 Full Playing Member monthly dues of $803 would be split—$550 per month for Operating Dues and $253 per month for Capital Dues. Going forward, we can adjust each category as necessary based on membership levels, how costs are changing, the scope of projects we are reviewing, etc.
  • Operating Dues are meant to run the day-to-day operations of the Club and should be budgeted to breakeven. Operating Dues should be high enough to cover an excellent service level that our members deserve but not necessarily anything more as that would be profiting off the membership. If we do exceed budget, profits could be directed to aspirational capital projects.
  • Capital Dues are meant to pay for the ongoing reinvestment in the Club’s physical assets and debt service. The goal is that between the Capital Dues, non-member revenue (weddings, outings, etc.) and initiation fees, we will fund a capital reserve to accomplish all of our capital needs over time. The intent would be for these funds to be reserved, or earmarked, for capital and debt service only, and future Boards would be accountable to the members to maintain this philosophy.
• Strive to at least maintain, if not increase, our initiation fee—regardless of economic cycles. Egypt Valley is a special place, and membership initiation fees will not only help fund our future aspirational capital projects, it will also ensure our future members are financially committed to the Club. With ongoing reinvestment in the Club, as well as everything else EVCC has to offer, we should recognize the value we provide in the market regardless of how full our membership levels are.

It is the Board’s belief that the accountability of reserving Capital Dues for capital projects and a significant and consistent initiation fee will keep us from ever falling back into a period where we can’t adequately reinvest in the Club. From talking with industry experts, the long-term health of a country club is driven by the membership experience, which is broken into two components: service level and welcoming and updated amenities. We believe this is an important step in further securing the future of our Club.

I am excited about the path this puts us on, and look forward to discussing it with anyone who has questions or would like to learn more.

Justin Karl
Club President