LEADERSHIP
Dirck Iacobelli, Board President Patty Ashbrook, General Manager / COO
As we head into the final 4 weeks of the 2023 Season and the beginning of the annual budget process for 2024, I thought I would provide you with an update on the overall Club operation this year, our current financial position and projection for the end of the fiscal year, and what we are anticipating for 2024. Forest Highlands remains in an enviable position in the private club industry. We are debt free, we offer first class amenities that appeal to a broad range of interests and demographics, and we reflect solid value when compared to our peer set of similar clubs and communities. According to recent statistics provided by our real estate partners Forest Highlands Group, Forest Highlands has seen home value increases in excess of 195%, all within the last 4-5 years, and we remain in a strong seller’s market with extremely low inventory of properties for sale. We continue to maintain a waitlist of individuals interested in purchasing Special Memberships and based on demand for these we anticipate running out of this type of membership by 2025. Membership satisfaction and loyalty measured by our Net Promoter Score is the highest it has ever been at 86 versus the benchmark of 63 for our peer set. This is a wonderful testament to the exceptional staff we have had this summer, as well as to the membership and the overwhelming support you have given to the Club. With the Club functioning near record levels of participation and usage, (above record levels in some areas) we are experiencing higher costs for labor, and many supply costs and expenses such as fuel and utilities, have also exceeded budget expectations. Our financial projections through December 31 currently show projected revenues to end the year 3.2% higher than budget with $320,000 in more revenue coming primarily from F&B, Recreation & Racquets. Expenses are projected to end the year 3.8% higher than budget with $670,000 in higher costs in those
same areas of F&B, Recreation & Racquets. The projected Net Loss for 2023 is ($276,500) which is nearly identical to the Net Loss experienced in 2022 of ($274,500). The back-to-back years of net losses are having a negative impact on our operating cash flow, which will require that we withdraw funds out of the investment account set aside for operations for just such an occurrence. Rebuilding our operating cash funds so we are not subject to taking out a loan on our line of credit will be a top priority for 2024 and will require budgeting for adequate net income in 2024. The Finance Committee and Board have established initial assumptions for the 2024 Operating and Capital/Reserve budgets and the committees have each provided valuable input as your Leadership Team works on developing the financial plan for 2024. A key part of the annual plan is ensuring that the budget reflects membership expectations for service,quality,hours of operation and enhanced facilities and amenities while also taking into account increased labor costs due to mandated minimum wage increases and staffing levels necessary to cover the increase in member use and participation we are experiencing. Labor & related personnel costs account for 67% of our overall expense so while there is no way to avoid a cost increase, and therefore a dues increase in 2024, the intention is to minimize the increase where possible without sacrificing the service and quality the membership expects. Throughout the budget cycle the Leadership Team works diligently, not only to reduce unnecessary spending, but also to review our programming very carefully and ensure your dollars are best spent. With the help and advisement of the various committees and Board, the Leadership Team will carefully evaluate all areas of the operation to find ways of generating additional revenues while also modifying or eliminating programs, services and non-essential expenses with the ultimate goal of continuing to elevate Forest Highlands’ stature in the world of private golf communities.
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