(Oct. 27, 2016) Funding for new golf carts and roof repairs at the Ocean Pines Golf & Country Club, as well as possibly retaining an executive recruiting firm to hire a general manager and financial controller were voted on at the Ocean Pines Association meeting on Saturday at the Ocean Pines Community Center.
The board voted 6-1, with Director Cheryl Jacobs dissenting, to spend more than $300,000 to purchase a fleet of 2017 Yamaha golf carts.
Interim General Manager Brett Hill said the issue became especially relevant after Yamaha filed suit against the OPA several weeks ago based on a debt of more than $100,000 incurred in May without board approval.
“On May 18, Pat Renaud signed a lease with Yamaha financial systems for 28 golf carts from another course,” he said. “I didn’t see anywhere an approval from the board for such a filing of debt.”
Hill presented the board with two options to remedy the situation.
“The board can approve to maintain this lease and keep the debt on their books,” he said. “We can pay Yamaha $103,600 for these used carts and keep them, which would leave us with a mixed fleet.”
In lieu of that scenario, Hill said Yamaha would take back the 28 golf carts negotiated by Renaud if the entire fleet is replaced.
“Which would be 76 new carts going on to the fleet,” he said. “That was originally included in the budget but was removed for this year.”
The board mulled its options to either pay $103,600 for the 28 electric golf carts Renaud leased or spend $319,936 for 76 new gas-powered carts, contingent on trading in 55 electric carts currently in use.
Based on higher maintenance costs for electric golf carts, Hill recommended the higher priced alternative.
“My recommendation is accept the offer to turn the carts back in and get out of that lease and execute a capital purchase of $319,936 with Yamaha Financial for the purchase of 76 new carts,” he said. “That would stipulate the return of the carts under that lease and the trade in of our 55 existing electric carts.”
Director Dave Stevens said the matter needed to be addressed by the end of the month to avoid further legal action by Yamaha.
“We are under a lease situation which has never been brought to the attention of the board and was signed unilaterally by our past president,” he said. “How we ended up in this situation is totally beyond me. It’s a bad situation and I think we need to get out of it.”
Director Slobodan Trendic said from his recent research gas-powered carts are coming back into vogue.
“The gas carts maintain their value much better than the electric carts,” he said. “The electric carts — the largest component is the battery which lasts on average three to four years. We’re at the point now where were going through a second series of batteries.”
He also noted the perceived value in an electric fleet has been a lower decibel level on the greens.
“The electric carts are generally preferred because of the noise, and gas carts have in general been loud with more pollutants,” he said. “The fleet that’s proposed is a 2017 model from Yamaha and is the best state-of-the art-technology for noise levels. It’s at the same level as electric.”
Jacobs said there was a $300,000 request for golf cart acquisition last year.
“The board as it was constituted at the time decided that wasn’t appropriate,” she said. “There were lots of discussions about the golf carts and where that fell in our list of priorities of what we wanted to spend money on.”
Hill also said the current lease arrangement does not include a purchase option, limiting the possibility to retaining the electric carts signed for by Renaud.
“We’re going to incur interest and we keep this debt filing against us, which is by our practice against the way we operate as an association,” he said.
In other business, the board unanimously approved budgeting funds to complete repairs to the Country Club roof but is still awaiting a third proposal for the project.
“Our facilities department is to remove the existing … roof and replace the rotten wood underneath, which we’re estimating is on two sections of the roof,” he said. “With the request today for the approval in the capital budget not to exceed the amount of $93,250 contingent on three proposals.”
Hill said the project would be awarded to the lowest bidding contractor.
The board also discussed an unbudgeted operating expense to engage an executive recruiting firm to seek candidates for the general manager position and to find a replacement for former Controller Art Carmine.
Hill said recent developments have brightened the possibility of locating a replacement for Carmine.
“Over the course of this week we received a large number of applicants and almost every one was somewhat relevant to the position,” he said.
Hill said third interviews are being scheduled with a handful of qualified candidates.
“At this point, I do not think we need to move forward with the outsource recruiting for the director of finance,” he said.
By comparison, the hunt for a new general manager is progressing more slowly based on the request for proposals the board recently issued to potential recruiting firms, Hill said.
“Right now we have two parties declining to bid on the RFP because they didn’t feel they had the relevant skill set to bring in the someone for the general manager role,” he said. “We need to go further into the resources for recruiting. I would say we are looking at a budget expense, out of the operating fund, it will be greater than $15,000 and could be $30,000 potentially for the executive recruiter.”
The board voted unanimously to continue the RFP process and will examine future responses as they are received.