Tiburon Peninsula ClubPre-ballot Town HallJanuary 26, 2014

In This Meeting We Will Address:

The TPC’s Current Financial Position The TPC’s 5 Year Plan & Financial

Projection The Measures on the Upcoming Ballot Reasons for the Items on the Ballot If We Do and If We Don’t Areas in the Club Not Addressed in

Current Ballot (Pool, Fitness, Etc.) Your Questions & Comments

Financial Highlights & 5 Year Capital Plan Overview -

The TPC finances have improved every year since ‘07 – we expect that trend will continue!!

Cash Position: $1.7 million Surplus Capital grows $650K/yr – 5% membership turnover (35 new members/yr) Total Available Capital in 5yrs - $5MM ($1.7MM cash today + $650k/yr for 5yrs) 5 yr Plan Spending – 50% of Total Capital $2.5MM (Kitchen/Dining, South Property,

Pool Replacement, Fitness Enhancement) Membership Demand – 100+ families on waitlist (50 in-town/50 out-town) and

30+ members are waiting to transition to senior status Debt: Original loan amount $5,620,000 refinanced in ‘08, ‘09 and most recently in

’11. It has gone from an interest only 10Yr loan with a $5+ million balloon payment in 2018 to a fixed , 5.35%, 15Yr, fully amortizing loan at $37,000/mo. The current loan amount $4,020,000, and will be zero in 12yrs under the current monthly member charge.

$300,000 in pool replacement fund currently - adding $150,000/yr for 5 more years, if we have that long (pool life?)

All Business Units are profitable (Fitness, Swim, Tennis, Youth) F&B operating at a loss (target -$120K - 2014 budget) – will require dues

increase/food minimum Dues currently cover Club Operating Costs (x-café). Expect inflation rate like dues

increases over the next 5yrs (x-café)

Initiation Fees Dues Non-Member Surcharges

Revenues

Expenses

Aquatics

Fitness

Tennis

Youth

Activity Specific Member Charges

Non-Member Activity Charges

Activity Fee

Activities – Set at Operational Breakeven

Monthly Debt Retirement Fees

Mortgage

Personnel/Operations- Aqua

Personnel/Operations - Fit

Persn/Ops - Tennis

Persn/Ops - Youth

TPC Comprehensive Financial Model

20%

80%

Administration

Facility Operations (to include Café)

“A” - Operating Cash/Checking Acct

I

“C” - Capital Reserve“Replacement”$250,000/yr

“B” - Emergency Reserve Savings Account

Half of Year End

Balance

II

“D” - Capital Expense (New)

Capital Expenses

iii

2013 P&L Year EndOperating Results

2013 P&L Pre-Bonus Operating Resultsby Unit (through December 2013)

Needs final numbers!!!!!

TPC Wages & Commissions as a % of Revenue

Revenue Wages & Commissions

1 2 3 4 5 6 7 $-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

(2007) 74% (2008) 53% (2009) 44% (2010) 44% (2011)44% (2012) 44% (2013) 47%

TPC Cash Reserves

“A” Operating Cash Account - $61,569 “B” Emergency Reserve Savings -

$559,151 “C” Cap Ex Replacement - $734,645 “D” Cap Ex “New” - $40,158 “E” Cap Ex Swimming Pool - $275,242

TOTAL CAPITAL ON HAND:

$1,670,881

Membership Initiation Income

Initiation Fee: $18,500 Per Family 46 Families on In Town Waiting List 30 Members on Senior Conversion Wait List TPC Averages 5% (700*5% = 35/year) Annual

Membership Turnover $18,500*35 = $647,500

Annual turnover average 2007 – 2013 - 2012 Membership

Additions - 32 Initiation Income - $589,783 2013 Membership

Additions – 39 Initiation Income – $658,588

Current Debt - First Republic Loan

First Republic 2011 Refinance Loan Amount: $4,500,000

Current Interest Rate: 5.35%Current Loan Amount: $4,020,000Amortization: 12.5 years Monthly Payment: $37,000 (monthly assessment covers 100%)

Prepayment Penalty: None

*Refinancing explored in 4/2012. BOG determined terms were not in the best interest of TPC because breakeven period pushed out over 3 years.

TPC 5 Year Plan

Facilities Utilization and Financial Ratios

Need help with this…;)

The Ballot

Projects on The Ballot Will be Completed: 1. Without a special assessment 2. Without additional debt 3. Without extraordinary dues increases 4. On a progressive basis, in accordance with

a 5 year plan Taking other areas of the club into

consideration, including but not limited to the construction of a new pool (on an as needed basis) and improvements to the fitness center

The Ballot – Kitchen

The Kitchen and Dining Area: Estimated Cost: $882,000 +/- 10%** Estimated 12 weeks to complete project The existing kitchen is:

Too small to meet current and future needs Creating questions about building codes Bar and serving area not efficient Insufficient storage space for supplies and food Limits menu options and service speed Not self contained – open to the elements

Café/Kitchen Building Costs

Estimated Cost Total: $882,112 Construction Cost (estimate) $413,920 Banis Restaurant Design (Kitchen/Bar Equip) $245,000 Interior Café Furnishings $37,000 Exterior Café Furnishings (Fire Pits/Umbrellas) $106,000 Contingency – 10% $80,192 Architect Fee TBD Structural Engineering Fee TBD Filing Fees TBD County/City Fees TBD Misc. TBD

Café Survey Says.....

68% Agree the TPC Kitchen Should be Expanded!

81% Want Good Quality, Healthy Food Available for Lunch, Dinner & Snacks

65% Want the Café Furnishings and Patio Environment Upgraded

45% Agree With a $400 Per Family Food Minimum

Confucius Says…TPC Needs F&B Minimum to Operate Expanded, Upgraded Facility (current business model not sustainable)

The State of the Café

Café Returned to In-House Management Due to Lack of Satisfaction With Outsourced Mgmt.

March 2013 - Café Changed From Profit Center to Break Even Service for Members

Mark Kohtz Hired in March 2013 to Bring Customer Service Focus Back to Café

Break Even Nature of Café Requires Food Minimum to Support Inconsistent and Unpredictable Member Usage

Continued Financial Losses Not in Best Interest of General Membership or Club’s Fiscal Health

Café Operations Severely Reduced Due to Inadequately Designed Kitchen and Lack of Space – Potential for Break Even Unlikely in Current Condition

Do we want to include café financials ?

The Ballot – Food & Beverage Minimum

Proposed: Annual $400 Food and Beverage Minimum per Member Family

- Billed Semi-annually - Seniors Will Not be Charged Minimum - Will Allow More Comprehensive Menu - Consistent With Most Similarly Sized Clubs - Allows for More Efficiency With Service - Helps Keep Menu Prices Down - Gives Staff an Operating Base of Revenue - Start Date Determined by Café Building

Vote/Completion

The Ballot – South Property Facilities

South Property Facilities - Estimated Cost: $398,000 - Facilities Include:

* Men’s and Women’s Restrooms With Changing Bench

* Equipment Storage 300 sq. ft.* Entry Terrace/Patio, Gate, Roof,

Card Reader* Entry Control for Lower Courts* Utilities, Overflow Parking,

Drainage

The Ballot – South Property Facilities

Benefits include: - Club Standard Restrooms for Lower Courts –

No More “Porta-Potties” - Move Supplies to Building Storage From

Sheds - Controlled Entrance To Lower Courts to

Prevent Unauthorized Usage - Beautification of South Property to Meet Club

Standards – Consistent Look Throughout - Provide Patio for Tournaments and Court

Viewing

The Ballot – South Property Tennis Court Lights

South Property Tennis Court Lights - Estimated Cost: $140,000 - Lights Include:

* Lighting for 6 Courts* Environmental Impact Report

- Benefits Include:* Brings Total From 6 to 12 Usable Courts With Lights* Junior Program on Lower Courts Year Round

The Ballot – South Property Tennis Court Additions

South Property Tennis Court Additions - Estimated Costs: $267,000 - Facilities Include:

* 2 New Hardcourts w/Fencing and Windscreens ($185,000)* 2 New QuickStart Courts w/Fencing and Windscreens ($36,000)* Architect, Engineer, Permit Fees: $47,100

The Ballot – South Property Tennis Court Additions

Benefits Include: - Additional Courts to Meet Needs of Clinics

and Lessons – Current Demands Exceed Capacity

- Additional Courts to Meet Member Playing Needs During Peek Playing Hours, Reduce Wait Time

- 2 QuickStart Courts – Beginner Clinics/Lessons Don’t Take Room on Full Size Courts

- Attract New Beginning Tennis Players With Popular QuickStart Program

The Ballot – Details & Timeline

Ballot Sent Electronically to Members January 27, 2014

Quorum: 30% of Members Voting - Needed to Make Valid Vote

50.01% Needed to Pass One Vote Per Regular Member Family (Seniors

Non-Voting) Voting Period Open From January 27, 2014

Through ???? Ballots Counted Electronically by ___(who)____ Ballot Results Given to Members ______

Down the road….

The Pool – Not on This Ballot Needs of All Swimmer Members Taken Into

Consideration Pool Structural Condition Evaluated Semi-Annually Club Will Continue to Increase Pool Reserves

Annually The Fitness Center – Not on this Ballot

Currently Reviewing Ideas for Space Expansion and Improvements to Equipment

Further South Property Improvement – Not on This Ballot Some Day….

In Conclusion…

The TPC BOG recommends: