Deferred maintenance items are simply those things that have been “put off until next year” for far too long. This past year, considerable work has been done to understand and plan for the long term deferred maintenance needs for our Golf Course and to put into place a solution.
Normally a business sets aside a certain percentage of its profits each year to replace and upgrade its plant and equipment. Translating that type of planning to a golf course is much the same. The green space (fairways, tee boxes and greens) of the course functions as the golf course “plant”: they are the production sites and where recreation is “produced”.
It is this plant that produces revenues for the business and it is also how all our homes achieve a premium value. Equipment and staging areas are just as important because they are required to keep the plant functioning in an optimal manner. Certainly course equipment such as mowers, grinders, rollers and top dressers fall in this category. But the front end of our business, the sales office or pro shop, is important as well because it drives production through our plant (the golf course).
The Golf Course had not been profitable for many years. Therefore the Board of Directors has found it necessary to defer considerable maintenance and reinvestment simply to fund basic operations (paying for salaries, materials, and minor repairs). Since the business of the golf course needs to remain viable both for recreational enthusiasts and for home values and community ambiance, the board of Charbonneau Golf Club has sought numerous avenues over the years to improving profitability. And while the club has been able to fund its operations and some necessary upgrades, it has not been able to replace all of its plant and equipment at a rate that offsets aging and deterioration.
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