I wanted to offer my thoughts on the current proposed capital assessments in light of some of the comments I have seen or heard. It’s not my intent to debate any of the opinions offered, nor am I trying to sway anyone’s opinion, but since I have come to a decision and have probably pondered many common points along the way, I share the following. My apologies for the extended discussion. My wife often chides me for writing more than anyone cares to read. I have voted in favor of all of the proposed assessments, not enthusiastically but pragmatically. Concerns and questions remain, which I will get to after I explain why I reached this decision. The proposals involve a significant amount of money, which is stating the obvious, but they also, I believe, have a significant impact on the future success of Haig Point. There are both needs and wants or “nice to haves” included in the plans, although there may be differences of opinion on which item goes where. I have not tried to sort to that level, and I will come back to that point. A little background. My wife and I are retired. Our income is entirely based on withdrawals from an IRA and social security. We are an engineer and accountant, spending our careers in the middle of the corporate structure. The capital assessments are significant challenge for us. We don’t play golf, tennis or pickleball. We don’t own or ride horses. We don’t participate in many of the Club social activities unless we have guests or family visiting. We are full time HP residents, Signature Club level members, and our home is not just our primary residence, it is our only residence, and we have been here going on two years. You may now be thinking, “So why are you here?”. The short answer is that we first decided to move to Daufuskie, then chose Haig Point. Our comparables, when looking for a home, were Melrose, Bloody Point and the Historic District, not Belfair, Berkeley Hall of Colleton River. I won’t go through our decision-making process, but at the time we bought, prices of homes we were looking at were similar inside and outside the gate, with the membership in HP being a differentiator, as well as the type/location of the homes available. In talking to folks outside the gate, several had some sort of membership to HP to take advantage of the ferry transportation or other amenities, so the differences didn’t seem as significant. In other words, if I need to join HP anyway, why not live inside? Looking at it today, frankly, with the increases in joining deposit, increases in dues and the rapid rise in home prices subsequent to our joining, we would not be moving here if making the same choices. But we are here, and I think there is a lot of diversity to the reasoning current residents used to select HP, not necessarily recognized by the administration. The fee structure, and the capital assessments proposed, don’t really reflect that diversity, and I don’t say that as criticism, just recognition of the situation. In moving here, we recognized that this is a “Club”, with a variety of amenities and offerings designed to attract a broad range of members. It is not a residential neighborhood with an available country club, it is a country club with available residential areas. Our last home was located in the first model, which allowed us to choose whether we wanted the club amenities, Haig Point would not survive in such a scheme, I don’t believe, based on the population size, nor can it exist as an “a la carte” club where each of us pays only for the amenities we choose to take advantage of. That doesn’t suggest that the Club should try and offer any amenity that any member might want, a sure path to failure, but living here is a package deal, paying for amenities whether we use them or not, and we accepted that in becoming HP members. We also recognized that upkeep of the amenities we don’t use will have to be part of the deal. So, on to the specifics of the proposed assessments. The total of $21M breaks down to about 57% for the golf course, 23% for the ferry/docks, 14% for roads (with more money probable later), 4% for the Clubhouse patio and 2% for the pickleball courts. Taking them in reverse order, I already stated I don’t play pickleball, and really don’t have any interest, but it’s only 2% of the proposal. It’s a passing fad, in my opinion, but probably does register with some possible new members, given some claims I have seen that it’s the fastest growing sport in America. In any case, rejecting it doesn’t save much (about $1000 on my share over the 7 years). So, I can go along with it. I know that the $1000 is not insignificant but rejecting it just seems like only symbolic. Regarding the Clubhouse patio expansion, I like the plans shown, maybe because this is one of the few Club amenities I use from time to time, and I am receptive to the argument that this may pay for itself with increased bookings for events. As with the pickleball courts, it is a relatively small part of the overall plan and given that it might actually generate some revenue, I accept this part. Given the scarcity of dining options on the island, I appreciate our Food & Beverage folks and the amenities. Big fan of Pizza night! The roads, in my opinion, should be part of an ongoing maintenance plan, but that is really quibbling over how we pay, not how much. Maybe this should have been done earlier, but it doesn’t matter, road maintenance is needed, so I support it. The roads aren’t going to get any better by waiting, and costs just go up, and I hope bridges are included in the plan. I am sure there will be disagreements over prioritization, but we shouldn’t wait to resolve these before we agree to authorize the money. We can argue about where once the funds are available. To the big-ticket items. The ferries and docks are the lifeline to Haig Point, and a differentiator from other clubs in the area. And, they are the first and last things visitors and potential new members see when they come over. Appearances are not a primary reason for the upgrades, but are important too. However, the main issue here appears to be deterioration of the docks and barges supporting the landing. I have to rely on the engineering studies here, and it seems to me that some repairs are needed. Is it due to past neglect? Does that matter? Will it wait for a future revisit? I don’t know, but I accept the need for repair/replacement. If you really study the docks and landings as you board, it is easily seen that repairs are needed. The wood is rotting, the steel is rusting, and I don’t want to wait for a storm to do the demolition for us. The elephant in the plan is the golf courses and practice facility. Obviously, there are some wants in here among the needs (the practice facility?). Not being a golfer, I have no way of judging much about the specifics. Is a redesign needed? Can it be done piecemeal? Do both courses need to be done? My view is that the golf course is the signature feature at Haig Point, and it does significantly impact the reputation of the Club, property values and the desirability of membership. Subtract the course from the fancy marketing materials and assess whether Haig Point is really attractive as a destination. Make sure you consider the current state of Melrose and Bloody Point in your thinking, (I think those are the appropriate comparables here.) I don’t question that there is value to the course. The question is how much and what level is desirable. It appears to me that the golf committee, as well as the Board, want HP to be a top-level facility, a championship level course. I have the toughest time with this one. Is this a golfer’s dream proposal, or will it really benefit the club with higher demand, and thus higher revenues? Will it drive higher property values, thus benefitting non-golf-playing members also? Do we really need the practice facility? I am very skeptical about the assumptions around increased values. The economy and COVID-driven recent demand for housing here is not sustainable, in my opinion. It will be cyclical, and we are not entering a favorable swing of the cycle. If this investment were to be justified solely by the promised return, I would not support it. Maybe there is a lesser baseline project that may make sense. I don’t think there is any question the HP course is in need of some repair, and the Osprey course maybe more so. The plan to upgrade the Osprey course allowing for rotational use of the courses makes sense to me to reduce downtime. I have heard other members expressing their preference for the Osprey course, and it hasn’t been paid much attention to, it appears. The plan to do everything in one sequence to avoid mobilizing workforce and machinery just once also makes sense to me. So, what would be saved by doing only one course at a time, by repairing rather than upgrading? I can’t answer, but I think delaying to find out is not necessarily the right call. More on timing below. So, I reluctantly support this one and hope it provides all the benefits claimed. This one item seems like a fundamental vote on direction of the club. World class facility or average? (note here that recent articles featuring Daufuskie as a destination reference the Haig Point golf as a defining feature of the island.) My bottom line is that we can probably line-item veto certain of the expenses, but probably not significantly affect the overall total (30% reduction or more, I am guessing, and it is just a guess). 80% of the total is golf and ferries/docks, and delaying to continue to refine the projects might produce some results but ultimately, we are just delaying the inevitable, in my opinion. I am open to more educated members here, but can you just fix the bunkers and tee boxes now, and defer the rest? But for how long? Didn’t the Golf Committee consider this? I used to say that there ought to be a very different approach to training for the corporate world. To get a business degree, there will only be one assignment, and that is to write a paper on any subject, of any length, that is reviewed and accepted by every professor in the university without comment or change. Complete that and you get your degree. Ought to take at least four years. That skeptic’s view does influence my vote here. I am not sure delay to try and find a better solution will produce a consensus. Dissenters views are legitimate, and should be addressed, but not all can be accommodated. Some general comments. I have seen and heard some members say that we should not approve because these expenditures are the result of past inaction and mismanagement. I’m sorry, but this seems irrelevant to me. We can’t make up for past non-performance by continuing the practice. Kicking the can down the road does not resolve the underlying issues., and doesn’t punish anyone but the current membership. I have heard some say that if these projects are intended to generate future benefits, particularly the golf course, then let future members foot the bill by raising joining fees and possibly non-equity member fees. This one I don’t get at all. How would it work? Do we raise the fees and collect the money until we have enough to fund the improvements, or do we finance the improvements and repay with the higher fees? If the latter, how do we get a bank to provide the money on the premise that we will get the future revenue from new members? Don’t current members basically have to guarantee the loan anyway? I use similar logic in being skeptical about claims that these improvements will generate lots of new revenue for the Club. I don’t believe the capital plan should count on any future new revenues or other benefits to be adopted, so the future benefits may not come to pay for this. I don’t say that to reject the improvements/repairs, just to recognize that I think we have to approve/disapprove on their current merits for current members. This is a terrible time to be putting this plan forward, with increasing interest rates and high inflation. Most of us have to deal with these issues in daily living and don’t need the extra expense. However, these same factors argue against delay to some degree. Facilities will continue to deteriorate, costs will continue to increase, including financing costs with higher interest rates. Should we wait a couple of years to let things normalize and interest rates to lower? No guarantee it will come back to normal but it is guaranteed that more will be needed at a higher cost. Regarding financing, I think I have heard questions about the ability to finance, related to improving the Club balance sheet. Specifically, there is a question about past financial presentations that said that improving our financial position would make it easier to obtain loans going forward. This doesn’t really go to the heart of the matter as far as the need for the improvements, but I would guess indicates a desire to lower and levelized costs for them. I think this is partially addressed by the payment options offered, up to 7 years with zero down payment. Getting some up-front money and using bridge loans to fill in to essentially subsidize the payments we make seems to make sense and lowers the overall cost vs long-term financing. Long-term financing lowers our payments but raises total cost. Lowest cost, of course, is just to charge one assessment up front and asking us each to arrange our own financing, which is really unrealistic for many of us. Some credit (no pun intended) is deserved for offering these options. Longer term financing improves payment but significantly adds cost. Ten-year financing is probably about the best that could be expected, I think, and probably doesn’t accomplish as much as some might think as interest rates continue to rise. And, I have heard rumblings that the money will not be managed properly, or there will be additional costs, etc. If this is a concern, it will always be there and result in nothing ever being done. So, I have forwarded to Club management my suggestion that a project management reporting structure be implemented. Quarterly or maybe even monthly reporting on each project should be provided in a readily accessible format, maybe a CEO note, showing total initial/approved budget, original completion date, expenses to date, expected expenses to completion, projected completion date and a discussion of any issues which will impact costs or schedule. On large projects, there will undoubtedly be a project manager with the contractor who will be tracking this stuff anyway so it shouldn’t cost extra to get it. The Club should also appoint a management liaison responsible for communicating with the vendors on each project. This doesn’t prevent problems but should make them easier to catch and address sooner. Unfortunately, I think that we’re stuck once the projects begin. All we can do is force accountability. Finally, a few remaining concerns/questions. In my view, at least, there seems to be a disconnect between the proposed capital plan, and the operating plan,. Maybe I missed it, but I would have liked to see a 3-5 year projection of club operation expense and dues/fees for all services to add to the capital expenses. It seems like we are hiring and creating new positions consistent with some strategic plan, which ought to include the capital side, but I have no idea of what my total payments to the Club will include over the next few years. Dues have gone up over the past couple of years, but it seems expenses are being increased too, so are we projected to catch up to the financial plan or not, and what does the strategic plan really commit us to do? Isn’t implementation of the Strategic plan, at least on the expense side, subject to ability to afford? And shouldn’t we know our total commitment as we vote on these assessments? Maybe related to the Strategic Plan, but I believe there are a number of Club facilities/amenities not covered which may result in more assessments in the future. The mansion, the embarkation center, the equestrian center, and other items (water facilities?) may need attention. What is the Master Plan here, and what are the total member payments associated with that plan? Are there committees working on additional items, and, if so, where are they in their work? The planning seems disjointed, as if every need or desire is independent, with no prioritization or realization that funding is limited. I could be wrong here since I am not privy to the inner club workings, but we really need to get a clearer “big picture”. I don’t suggest delaying this capital plan until we get one for the reasons already discussed, but there should be a message here that we shouldn’t presented with any more increases in assessments or fees/dues until we have that. The well is dry after this one. Related to the big picture discussion, I have a very big concern that we have no reserves or contingency funds for a major problem (aside from maybe the short-term loan availability which was overused historically). If we have a major storm, or a ferry engine fails catastrophically. Insurance may provide part of the answer, but my background was in the electric power business, and after major storms, insurance companies tend to back away from the market a little more each time, leading to power companies establishing storm reserve funds. At the very least, I would like to know that the plan has been run through some contingency planning, some “what-is”, to ensure a little bit of protection for us against piling on of costs and more assessments. Financial planners do it, I did is as a utility planner, so why shouldn’t expect it for our Club planning, especially for very large decisions like this? There may be a few members who legitimately cannot afford this assessment, some of whom may have been here for many years. Is there a way to qualify who they might be and ensure that no one is forced to leave? Choosing to leave is a different matter, but I would hope that if someone has been here through the trials and tribulations of the past 20-30 years, that there is a way to keep them here. I sincerely hope that the strategic plan is designed to create the best club for those of us who have chosen to be here, and not to attract a different class of membership to replace us. And, on that note, one other thing, basically feedback. The capital plan was presented with benchmarking against other clubs. This is only appropriate to a point, given that a number of us are here who never considered any of those alternatives, unless the messaging is that we want to be like those clubs to the exclusion of some of us. The benchmarking seemed to imply that the more we spend the better we are, which was probably not intended, but given the nature of our island existence, is it really appropriate to benchmark only to the Hilton Head and Bluffton clubs? The ferry ride separates us in more ways than just location. Lifestyle is different no matter what amenities are offered, and do we really need to match them step for step? Is an alternative to also present HP as a lot for less money, rather than implying we can spend and build everything the others do? Just a thought. If you read this far, thanks for the effort. I want to express again that “the opinions expressed are those of the author and do not reflect management opinions or those of others”. If you don’t agree with everything or anything, that’s fine. I am not looking for support, but I did want to address some of the issues I have seen in posts, and get it all out of my head. Working for an electric utility for many years, I never once saw a single customer say “I wholeheartedly support the utility’s request for a rate increase”. The first reaction was usually that the utility was ripping people off, mismanaged, didn’t really need the money, etc. As is always the case, there are legitimate reasons to question any need for additional funds in this capital proposal, but the focus should be on need, value, availability and evaluation of alternatives, with the focus being on having the best Club for all members, not just a select few. I tried to take a balanced view and will live with the outcome.