Current Financial Update

Welcome to the 6^th edition in our series designed to keep members on the same financial page!  Every season is a new chapter in the evolving saga of MGC.  In the nearly 25 years since Greywalls construction began, we have developed some classic financial history.  We started behind the financial 8-ball, with previous boards and managers diligently working to keep the club afloat.  In recent years, we seemed to have “turned the corner” and the good news is – there is good news to share – and can’t we all use a little of that these days?

If you are new to MGC, or simply need a financial refresher, previous versions are archived on our website (access instructions at the bottom).  Updates are published twice a year with the “Fall Financial Update” discussing how the season went financially and the “Interim (spring) Update” sharing how we managed operational surplus from the previous year, along with other pertinent financial considerations. 

You may remember our Fall issue discussed the Heritage irrigation system replacement – yet again.  After five years of trying to hit a moving target, we are finally getting things nailed down.  We have a contractor, we have a contract, and we have a timeline.  Originally, we told you we would need $800,000 to replace our complete Heritage system, including the pumphouse on #2 pond.  Our newly signed replacement contract is for $1,610,500, and does not include the pump house which we had to replace a few years ago for nearly $300,000.

So, for some of that good news – we are on track to pay cash for the entire amount without impacting operating cash flow at all.  Appendix B illustrates our current Heritage fund balance of $1,234,735, with projected operating surplus and earned investment interest from 2024 forecasted to provide final funding.  With the work beginning in the spring of 2025, we are going to have enough capital to make an old issue old news.  Eliminating our biggest known operational threat is finally in the crosshairs.  

And for more good news – the Heritage project has not diverted all of our capital for facility improvements.  During the winter, the board approved a Finance Committee recommendation for an additional $100,000 allocation to our Capital Investment Fund (CIF), established in 2023 to finance items on our Capital Investment List.  See “Appendix A” below for a summary of the CIF balance.  Items approved / paid from this fund in 2024 to date include:   

• New cooler, chiller and tap lines for additional draft beer options
• Mat for the driving range
• New plow for the club truck (not as fun as beer taps, but sorely needed)
• Heritage Roof Shop Repair (not fun either, but neither is a leaky roof)
• Renovation of the Pro Shop Bathrooms/Indoor Access to them
• New Driving Range Ball Cleaner
• Additional Beverage Cart
• Fall Paving on Greywalls (with more to come as this is a high priority but is dependent on the paver’s availability, weather and the club not being open)
• Hardware and software upgrades for our managers’ computers
• Slat wall in the pro shop to better display golf clubs
• New Televisions for the clubhouse
• New 36” cooler for clubhouse
• Narrow chairs at low side of bar to allow for extra seating
• High-top table for bar under marketing signs

Our managers continually review and prioritize additional items throughout the year for board approval.  Reviewing Capital Investment Fund status will be a part of every Financial Update.  We are constantly balancing resource allocation between keeping our club in working order by addressing those not-so-fun deferred maintenance projects, providing visible value by investing in things that make us proud to be members, while managing our debt and ensuring we can keep the lights on if the economy turns and our membership and outside play numbers dwindle. 

And speaking of outside play, early indications are that it will increase again this season.  Balancing the necessity of outside play with member tee times continues to be a priority focus.  Member tee times on Greywalls were expanded again this year to preserve member access. We also prioritize our members with premium tee times.  Our outside play arrangements and green fees from guest play continue to be fortunate critical necessities.  Without external play, our financial equation simply could not be balanced.  Outside green fees from all sources totaled 140% of all membership dues paid last season and will widen further in 2024.

This business model allowed us to keep member dues the same for the third year in a row, while raising all other external service fees.  Considering the significant inflation in recent years, your dues are actually getting cheaper as a component of household expenditures since everything else has increased substantially in cost.  Our members comprise our cherished culture, exemplifying the welcoming warmth the UP is famous for, and we will always prioritize your interests to the extent practical business decisions provide.  So, once again, we send out a big THANK YOU to all members who make the effort to thank our guests for coming here to play our courses, making them feel welcome, and even playing with them – you’re helping keep our dues down!

We dealt with one big operating snag during the winter months – our Tagmarshal system. We spent a lot of time working with Tagmarshal in the off season to get issues fixed, had them pay for fixes that were their fault and they are also giving us 14 months of free service!  We and the staff are pleased with how the system is now working.

Our debt renewal (currently $2.5M) is not yet on the horizon, but will appear as a discussion item on the next Finance Committee agenda in August/September.  The November election, inflation, and interest rates will all shape our strategy as the time approaches, none of which are known at this time.  What we do know is that we will be in a far different negotiating position by 2026 than we were in 2021.  We will have no trouble finding financing with one bank (instead of six) and no drama.  In the interim, the inverted yield curve is generating premium returns for all three of our money market accounts with zero principal risk.      

As we do with all of our financial updates, here are 5 things we’d like you to remember:

1. Past success does not guarantee future success as economies slow and interests change.  We must and will continue to practice sound financial stewardship to best ensure the long-term viability of MGC.
2. Outside play is a fortunate necessity for club finances, member dues rates, and our community economy.  It is also a balancing act to be closely managed toward maximizing member access and thus 2024 membership dues were not raised, but outside play rates were and those outside players should continue to drive merchandise and clubhouse sales.
3. We are committed to keeping members apprised of our financial status, the reasons behind the decisions we make, and all things MGC. 
4. We truly thank every one of you for being a critical part of the exciting future of MGC.  If you have any questions or concerns regarding our finances, please contact a board member.
5. Did we mention this is the third year in a row we haven’t increased dues?  

MGC Board of Directors and Finance Committee

Appendix A

Appendix B

How to Access Financial Updates from the “Member Home” Section of our Website: Go to: “golfgreywalls.com”

• Click on “Member Home”
• Enter the password
• If you do not know the password, please contact the Business Office at 906-225-0721, ext. 3 
• Select the box titled “Current Financial Update” or “Archived Financial Updates”