By Frank Leeming, December 11, 2019
The Perfect Business Plan for operating Village golf pro shops
All right, class, it’s time to wind down our year by taking a look at what some might call The Perfect Business Plan. Here’s what it involves:
- The exclusive right to sell all the balls, clubs, shirts and other merchandise at four of Hot Spring Village’s four golf courses – Cortez, DeSoto, Granada and Coronado.
- The exclusive right to give all golf lessons at the four courses.
- The exclusive right to rent clubs, bags and other equipment.
- The POA will hire and pay the employees in the pro shops to handle all the counter sales and rentals. All you have to do is make sure there’s enough stock on hand.
- You don’t have to pay any rent or utilities for using the space in the POA buildings.
- Every day the POA will tally up your sales and handle all the accounting. Twice a month the POA will cut you a check for what was sold and rented, less a 4-percent handling fee.
- If you die, the POA will pay your estate up to $65,000 for whatever inventory is still on the shelves. If you decide to quit, the POA might still buy your inventory.
- To tide you over, the POA will hire you as director of all golf operations at a salary of between $87,638 and $136,945 a year and provide all the benefits due to a top-level department head.
This is the deal golf director Tom Heffer has with the POA to operate the Cortez, DeSoto, Granada and Coronado pro shops. Rick Ross has an identical contract to run the pro shops at the Ponce de Leon, Balboa, Isabella and Magellan golf courses, but he doesn’t have a side job as golf director. ***
How much are these deals worth?
In the 12 months ending Nov. 30, the pro shops generated $343,829 in revenue. By way of comparison, Bella Vista’s pro shops had $497,066 in revenue in 2017, with only five courses.
From the total here, the POA took 4 percent – $13,224 – for doing all the accounting and paperwork and sent Heffer checks for $154,590 and Ross checks for $176,014.
From that, the two entrepreneurs had to buy all the balls, clubs, bags, clothing and other merchandise they sold, and pay all the sales taxes.
Golf equipment usually gets marked up 20-30 percent. Clothing is normally marked up about 50 percent.
In these business plans, we don’t know exactly what total costs our two entrepreneurs had, but they were probably well below the average 70 percent facing other pro-shop operators because the other operators also have to pay for rent, utilities, insurance and salaries for the employees who work the counters.
So, good students, your assignment is to consider these issues:
- Why is the POA contracting out the operation of its pro shops? Do we need middlemen taking an estimated $100,000 profit out of the equation when the POA needs every dollar it can find?
- What recourse do members have if they find the selection of pro-shop merchandise is inadequate or overpriced? For example, some say our pro shops are missing out by not selling a wide selection of apparel and other items branded with the Village name and logo.
- There’s a time limit on getting your assignment finished because both of these contracts are due to be renewed at the end of this month.
- In a few days, we’ll be back to take a broader look at whether our pro shops are generating the kind of revenue they should be.
By Frank Leeming, Former HSVPOA Board Director, 12/11/2019
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Editor’s note
Tom Blakeman talked about this very issue, starting on page 39 of his New Plan. This is what Tom had to say:
“What about the Director of Golf? Our Director is a PGA Professional and that’s great. We need people with those qualifications to help market our golf programs, supervise tournaments, keep up with the rules, monitor our course ratings, give golf lessons and hob-nob with the low handicappers. The question is why are we paying a Golf Director’s salary and also providing him with the franchise to the pro shops’ retail business? And then he (they) – we also have two other PGA Pros on staff – additionally get the prize of having their own private lesson monopoly?
“How can we expect our Golf Director to manage the overall operation effectively while at the same time having other competing and possibly conflicting interests? From a traditional golf perspective this may be the way it has been always done but it does not make sense in the modern business world for an organization losing $2 million per year. It needs to be looked at – and fixed!”
*** Click below to view/download POA REQUEST OF INFORMATION FORM. Follow the instructions on the form in order to view and copy the contracts at the POA Administration Office. You must be a member in good standing of the HSVPOA to obtain this information.
HSVPOA-Records-Inspection-Form-new-8.14.19
GARY PUFFER
12/11/2019 — 4:23 pm
THESE PEOPLE HAVE GOT TO GO. AS I HAVE MENTIONED IN THE PAST IN OTHER UNITS, I HAVE NO IDEA WHAT A GOLF DIRECTOR DOES. WE HAVE GOLF SHOP EMPLOYEES, COURSE MAINTENANCE WORKERS, GREENS KEEPER, COURSE SUPERINTENDENTS, AND AGRONOMIST TO KEEP OUR COURSES OPERATING, SO WHAT DOES TOM HEFFER DO TO EARN OVER $130K A YEAR. I HAD NO IDEA THAT HE WAS ALSO RAKING IN MONEY FROM MONOPOLISTIC CONCESSION. THAT ALONE SHOULD BE A REASON ENOUGH TO GET RID OF THE POSITION, SOMETHING LIKE A CONFLICT OF INTEREST? I HAVE HAD ENOUGH OF THIS GANG OF THIEVES STARTING WITH LN, OUR SO CALLED CEO. ON TOP OF ALL THAT, THIS DIRECTOR OF GOLF LOSES APPROXIMATELY $2 MILLION A YEAR FOR THE PAST SEVERAL YEARS. HE HAS NO MORE IDEA OF HOW TO RUN MONEY MAKING OPERATION EXCEPT TO LINE HIS OWN POCKETS. WE NEED TO HIRE A MANAGER THAT WILL ADDRESS ALL THESE ISSUES. BUT FIRST OF ALL WE NEED TO VOTE IN RIGHT BOARD OF DIRECTORS THAT CARE ABOUT THE VILLAGE, HAVE THEM HIRE A RIGHT PERSON AS A MANAGER AND GET RID OF THE MANY UNNECESSARY POSITIONS AT THE TOP OF THE Management AT POA.
Patrick J. McCullough
12/11/2019 — 8:51 pm
Thank you Frank for the expertly written exposure of this travesty. I am sure we will find even worse.
Carla
12/12/2019 — 5:48 am
Guess what people?? Everything in this article pales in comparison to the ripoff of the Troon contract. Trust me on that. We have lost hundreds of thousands of dollars on this Troon fiasco and have absolutely nothing to show for it. Nothing.
It is no wonder we lose so much money.
These fools no nothing about running a profitable business and could not do so if their lives depended on it.
End the madness before it is too late.
Sadly, methinks it is already way, way too late.
And this is your money being tossed around like candy on Halloween. Don’t forget that.
Maybe we are all the hapless fools for allowing this insane nonsense to continue unabated year after money-losing year…with no end in sight.
Makes you wonder who else is lining their pockets at our expense, doesn’t it?????
I seriously feel like I am living in Cuba. Corruption all around us and we stoop to pick up the leavings like the peasants we are. And in our little police state we are intimidated and afraid to speak out. New board members are forcefully indoctrinated to the “way of the POA” without complaint. Group speak abounds. 1984? Actually, it is worse. Luckily I live in SOBO.
And to top it off some crazy writes a letter to the Voice saying he has full confidence in the “ceo” and this board and the “CMP”.
Things are not going well here in HSV in the event you haven’t noticed.
Not well at all.
Unless you are the receiving end. Nice work if you can get. And get it they do.
Sad. Very sad indeed.
Anonymous
12/13/2019 — 3:26 pm
Have you been to Cuba? I have and it is very different from what you described.
Anonymous
12/13/2019 — 6:31 pm
Since Cuba is “very different from what you described.” Shall we all just accept fascism in the Village with the CEO’s CMP?
Jack
12/12/2019 — 6:16 am
Did Dick Garrison write this article for Leeming? Sounds like his words from his last campaign. How sad to see a former board member display such a lack of integrity. No wonder we are in the shape we are in.
HSVP C
12/12/2019 — 8:12 am
Read the article, Jack. This was obviously written by Frank Leeming. What is sad is to see your obvious attempt to derail this thread by attacking Dick Garrison. There were numerous people who were already aware of this situation. Tom Blakeman wrote about this same subject months ago. He was only one of many others who knew about this. Dick Garrison did not display a lack of integrity, but HSVPOA surely did by allowing this. You are correct in stating “No wonder we are in the shape we are in.” We are in this shape due to the desire of people like you to continuously sweep things under the rug. We have the right to this information.
Melinda Noble
12/12/2019 — 8:24 am
Jack ,and we all know who you are, think about the lack of integrity as you drive to your POA office. We also know why we are in this mess and it has nothing to do with Mr. Garrison.
Anonymous
12/12/2019 — 10:21 am
There is also the fact of a husband/wife team bring in over 200K a year, and not really qualified for the jobs!
Steve Bylow
12/12/2019 — 10:55 am
Frank
Thanks for sharing another data point which reinforces the lack of business acumen and judgment of our CEO.
Also, I disagree with those who are critical of the Golf Directors. In my opinion they are not responsible for our CEO’s poor judgment and Board members apparent lack of oversight in holding the CEO accountable.
Thanks
Steve
Jacob
12/12/2019 — 10:56 am
“……….both of these contracts are due to be renewed at the end of this month.”
And we all know for sure that these ridiculous contracts that are tantamount to stealing money from Property Owners, will most certainly be renewed because of who is at the helm of our sinking ship!
Pathetic!
HSV is in big trouble. This is just another example of how poorly we are managed. And the buck clearly stops on CEO Lesley Nalley’s desk. She is the root cause of ALL the discontent in our Village.
Lesley must go! The legacy BOD members and turncoat Tormey must go!
We MUST elect Tucker, Lloyd and Dick in the next election.
WOW – this is borderline criminal behavior. And it IS nepotism for sure!
NOT ONE DIME Lesley! NOT ONE DIME of increased assessments will We The People vote for in the upcoming election. NOT ONE DIME!
Anonymous 2
12/12/2019 — 11:00 am
The PGA way is not working! You can’t keep running things the same way year after year and expect a different result! There needs to be an independent evaluation to determine what changes could/should be made in personnel and organization structure to reverse the continuing deficit.
In years past, country clubs were managed by business managers who were held accountable for the success of the club. PGA members sole responsibility was running the proshop, tournaments, and golf lessons. The Director of Golf position was a PGA member position description that actually evolved to replace general managers in smaller clubs where the Head Golf Professional began to serve in a club management position.
POSITION DESCRIPTION: DIRECTOR OF GOLF
REPORTS TO: General Manager/COO
SUPERVISES: Head Golf Professionals Golf Shop Manager
Assistant Golf Professionals and teaching Professionals
BASIC FUNCTION: The Director of Golf manages all the golf and golf related activities of Sample Golf Club and implements the golf policies established by the ownership. As the director of the golf operation, he/she is responsible for the promotion of the golf business and the dissemination of hospitality, friendliness and goodwill among all guests.
MAJOR DUTIES AND RESPONSIBILITIES:
1. Plans, promotes, and directs all golf activities.
2. Prepares annual and monthly budgets for golf operations; takes corrective actions as necessary to help assure that budget goals are attained.
3. Orders merchandise for golf shop and provides the best selection possible within the constraints of inventory and quality limits set by ownership.
4. Orders supplies associated with golf activities.
5. Maintains attractive, orderly appearance in pro shop.
6. Selects, supervises, trains and evaluates pro shop, golf range, golf bag and club
storage employees and starters and rangers.
6. Provides golf lessons to guests.
7. Plays golf with guests of all skill levels to generate good will and enthusiasm.
8. Designs and executes golf clinics.
9. Plans professional development and training activities for subordinates.
10. Organizes and conducts club tournaments and related events.
11. Interprets and enforces golf rules and regulations.
12. Interprets and enforces club policies, rules and regulations.
13. Consults with the General Manager about golf course and practice range operations, maintenance and rules.
14. Coordinates with the ground superintendent about maintenance issues that affect the playability of the golf course.
15. Represents the club in area professional events including local, state, or national events with the approval of ownership.
16. Attends all staff, management, and other applicable meetings.
17. Maintains records on rounds played and other important usage statistics.
18. Provides marshals for any tournaments hosted and run by club and supervises marshals to ensure expected performance is delivered.
19. Adheres to all federal, state, and local laws regarding health, safety, and employment.
20. Schedules staff hours to assure that customers are fully served and that labor costs are maintained, periodically check timecards for adherence to posted schedules.
21. Assists in the development of short-term and long-range plans for improvements to the club facilities and courses.
22. Attends national and sectional conferences/meetings, merchandise shows, educational and professional shows to encourage development and enhance the quality and image of the club.
23. Assists in supervising and inspecting design improvements and capital outlays to golf courses and golf facilities.
WHO IS RESPONSIBLE FOR THE CONDITION OF THE BALBOA CLUB HOUSE?
Chipmunk
12/12/2019 — 1:04 pm
Who is responsible? Simple. Just go back 12 years and name all the POA Directors.
Anonymous
12/13/2019 — 6:47 pm
And every director and CEO/GM especially the last 8 years.
Linda anderson
12/12/2019 — 3:23 pm
THANK YOU FRANK LEEMING.
If the BOD were in charge and responsible, they would address LN about this Golf Business Plan -Side deals ( Contracts ). With LN’s approval, it proves money for special friends and associates is more important then the community she represents. No wonder the BOD/CEO does not want the new Finance Committee to know about everything.
Julie
12/12/2019 — 4:23 pm
These morons are crazy insane….and we are all dupes for putting up with it.
mike fleming
12/13/2019 — 6:52 am
Hi there! Folks, I don’t have the answer to all of our problems that have come up. But one thing is for sure. We are stuck in limbo. This place will not flourish even with all the great things going on at present. We are finally addressing the lack of marketing and that to me is a wonderful thing to be proud of. We are addressing the broadband issue. Needed that. We have some wonderful employees and volunteers that really care about the village and the many amenities HSV offers.
How do we as a community address something that is a giant dam blocking the flowing stream of ideas and progress in this community?
2019
REVENUE 36,571,375
COMPENSATION 17,526,685
OPERATING EXP 15,319,186
No way those last two numbers should not be at the very least inverted. Operating expense should be outclassing compensations. Our services and amenities are suffering.
Salaried upper management is taking too big a bite of the pie.
Someone is going to have a very Merry Christmas.
Wishing you a very Merry Christmas.
Moe
12/13/2019 — 8:02 am
It’s over the whole HSV experiment unless and until these inept people are gone.
Anonymous
12/13/2019 — 3:35 pm
While this arrangement should be examined closely and some changes need to be made. IMO Mr. Lemmings does not divulge or publish where he obtained his information other than salaries. Did you see Heffers’ and Ross’ income statements or balance sheets? How much inventory is stolen? How much inventory is sold at up to 40% off? What are their inventory carry costs? Do you realize that golf equipment has extremely low margins? Traditionally head pros are paid for the cart rental revenue. Here, that is not justifiable. I know of one club that the head pro has the same arrangement with his inventory.
Mr. Lemming, since you were on the board at one time, what is your excuse as how we got into the situation that we are in? This didn’t happen overnight and there are many that are to fault. I read/hear all the complaints but few viable proposals.
Anonymous
12/13/2019 — 6:51 pm
There is only one person that is at fault and that is the CEO.
Anonymous
12/13/2019 — 9:16 pm
Really? One person? Twiggs? John Paul? or others that made poor decisions? You point fingers and really that doesn’t solve anything but you won’t face the fact that viable alternatives are needed. I am just as frustrated as you on many things going on but ignorance solves nothing.
Tom Blakeman
12/13/2019 — 6:00 pm
Anonymous: Viable proposals fall on deaf ears. I wrote one several months back. Never even got so much as an acknowledgement from anyone in POA or BOD. Of course they didn’t ask for it or pay me half a million bucks either.
If you are interested in reading just look at the top of this website where it is posted. It’s title: A New Plan. It’s lengthy so grab a beer and sit back in your recliner.
But the way, what’s your proposal to fix the ever growing losses from golf and other amenities? How much more do you think we all should pay in assessments and just how did you figure that out? Or should we maybe stop the bleeding that’s been going on for years?
Anonymous
12/13/2019 — 7:07 pm
Can someone share here the analysis that was done a few years back, I believe by at least one committee on this very topic? Haven’t we seen some articles years back in the Voice written by Dick Garrison who also campaigned last time to have some golf folks fired? Does anyone have those articles and comments handy so we have the full picture here?
Cheryl Dowden indicated in the last Board meeting and on other posts that this site removes or disallows posts that target property owners. Apparently, that does not apply to POA employees and Board members, who are also property owners.
Shame on Frank Leeming for his lack of integrity in continuing to target POA employees when he was unable to build consensus with his fellow board members on this and for making false statements above his signature. And shame on this website for creating conditions that negate our marketing efforts.
Anonymous
12/23/2019 — 10:24 pm
Your marketing efforts cannot be negated more than they already are, your “efforts” cost one million dollars per year and produce nothing but a one million dollar deficit per year.
Anonymous
12/23/2019 — 10:24 pm
The shame is all on you.
Dave Sintich
12/13/2019 — 7:13 pm
Even in the Village Voice we are called naysayers by the people who wish to be on the managements Christmas card list and sit and dine with them on their dime. Are they blinded by the disaster going on around us ? Their homes also will drop in value if things aren’t changed. We do not need a ceo going to meetings off site or on social media during work hours when so much needs to be done here. So do we just hire more managers to compensate for that?? Find reality and elect and hire desirable people to head and run our Village so we have it down the road. We use our monies on a pool and need to take out loans for repairs and necessities. Something doesn’t jive here because of a lack of experience. And put your names out here so we know who is hiding behind the bushes attacking us.
Anonymous
12/13/2019 — 7:15 pm
The real Golf Pro issue.
There was a study done by the RASP committee in 2009 after a group of property owners that included Dick Garrison suggested to the Board that the POA take over the operation and terminate the PGA Pros (Rick Ross and Tom Heffer). The committee recommended against taking over the operations based on the numbers. We all know that online sales are crushing retailers across the nation. Imagine what those number might show today and the investment that would have to be made by the POA in inventory and staffing up. How sad that Frank and Dick have nothing new to contribute and just can’t let that subject go. How sad that Dick has targeted Tom and Stephanie Heffer for so long. Dick indicated to me (in a round-about way) that it had something to do with a former library employee. Since Dick and Frank are both involved in the library, it seems obvious that the two have an old ax to grind.
Anonymous
12/13/2019 — 9:17 pm
Was the RASP committee made up illegally by board members like the Governance committee?
Jack
12/13/2019 — 10:19 pm
Can you point us to the law you are citing by this comment?
Anonymous
12/14/2019 — 7:03 pm
How quickly you pretend to forget, the statute of limitations is 3 years of which all BODs are guilty with the exception of Diana. Governance Committee violates Article XII, Section 4, H. This bylaw reads: ‘a member who is serving on the Board of Directors, or whose spouse presently serves on the Board of Directors, shall not serve on a Standing Committee, until after completion of service on the Board of Directors‘.”
Anonymous
12/14/2019 — 7:40 pm
Was the library employee a 15-year-old male?
Tom Blakeman
12/13/2019 — 10:52 pm
Anonymous: So maybe the 2009 RASP committee was wrong? If you look at the numbers our golf program has been a drain (loss) on the village for at least that long. Maybe we don’t need a “pro shop” at all. Maybe just a rack of gloves and extra balls would suffice.
To take it to another level, does anyone remember how we ran off at least two decent restaurant operators because Troon said they must serve breakfast for everyone. . . Except no one was buying? Which committee was behind hiring of Troon?
You know what, Anonymous. I and a lot of others are tired of hearing from you. If you have something to say either ‘man up’ or ‘woman up’ (your choice) and let us know who is speaking.
Jack
12/13/2019 — 11:17 pm
Tom Blakeman are you willing to make the up front investment? Maybe Frank would step up and fund it. And where is this study? Do Cheryl and Joe plan to post it for us?
John P
12/13/2019 — 11:35 pm
Or maybe Tom Blakeman or Frank Leeming would like to step up and take over the operation. Post the RASP report and you can let us know how much you will invest.
Anonymous
12/17/2019 — 9:21 pm
I’ll bet a dollar to a donut that the ceo is invested.
Phil Lemler
12/14/2019 — 9:38 am
Jack and John P – I find your comments typical of those who have no solutions, truly misunderstand the problems, and can only toss irrelevant, and snide, comments at those who offer their commentary. I mean really? In place of seeking a resolution, you sarcastically ask Mr. Blakeman and Mr. Leeming to invest/fund the operations (although you don’t say specifically what you want them to fund). Mr. Leeming is identifying a real problem. Mr. Blakeman (and others) have offered plans/solutions that have been refused. You are simply misdirecting the conversation away from the issues. This “pay no attention to the man behind the curtains” strategy is exactly what the POA board and management has been offering for years now! Instead of diligently evaluating other options, you choose to denigrate those who see a better way!