Finance & Budgets

Budgeted Project Cost

As detailed in the Irrigation section, the irrigation system is in need of a complete overhaul. The current system is up to 40 years old in many cases and this presents many challenges, including significant spending and staff effort on repairs and maintenance. The new system has been quoted at $1.24 Million. This replacement is necessary for the successful future of our Club as it will significantly improve efficiencies across the board and most importantly improve the quality of all areas of our golf course.

Whilst trenching a majority of the course for the new irrigation system, it was decided to take the opportunity to engage our Architect to produce an enhancement plan for our golf course. There were a number of key criteria including course sustainability, quality, and safety. Combining the Course Enhancement with the irrigation replacement was financially the most logical option. Sharing the costs by doing work in conjunction would not only save money, but also minimise impact on Members by completing the work in its entirety. Spreading the work over four years, and together with our upgraded 19th hole, will ensure that 18 quality holes are always in play with no temporary greens at any stage. The Course Enhancement work will add $2.36 Million to the total cost of the project.

Any top-quality golf club needs a green replacement and bunker maintenance program, something Glenelg has not had in the past. The Course Enhancement Plan addresses these two key elements. Following the completion of the enhancement project we will put in place a regular and ongoing greens replacement program to ensure our greens are maintained at high quality and continue that way for future generations. Similarly, our bunkers are well known for their revetted style and are a highlight for many Members. To sustain this point of difference we are implementing synthetic revetting, which is being used in many Clubs overseas for its longevity, maintenance efficiencies, aesthetics and point of distinction. We are confident that the upcoming enhancement project will ensure quality surfaces and superior bunkers, ones that Members can proudly say are the best in the state.

As we know with all major projects a contingency should be considered. In particular with this course enhancement given that it will be constructed over 4 years, we can only speculate what prices will be at that stage, and whilst we have a detailed project budget and schedule, there are many factors which are outside of our control. We have included a buffer for prices rises as well as an additional 10% contingency totalling $360,077. This combines for a total Irrigation Replacement and Course Enhancement cost of $3.96 Million.

Cash Flow Forecast

The data above shows our forecasted cash flow over the next 6 years with the new Course Enhancement and Irrigation Replacement projects. We opened this financial year at 1st April 2021 with $917,391 cash at bank and $10,000 debt. To fund the project, we can utilise our existing available facilities and at this stage we do not expect there will be any requirement from the Club to secure any additional debt over and above the current cap. Therefore, the Club is in a solid financial position as we embark on the Course Enhancement and Irrigation Replacement project.

The detailed cash flow forecast table highlights all income and expenditure expected over the next six years. The special projects are listed at the bottom, and include $400,000 in unallocated projects set aside as available funds for unknown repairs and/or upgrades. In addition to the special project funds, we also have an allocation of $320,000 – $350,000 per year for asset replacement. This is our normal annual machinery and capital replacement program and will not be compromised at any stage during the Course Enhancement project. It will also ensure that the quality of our golf course is maintained throughout the enhancement works.

A number of assumptions are included, and can definitely vary, however we have taken a conservative approach with most numbers. With membership full at the moment, we have assumed that membership levels will remain the same over the next six years. Subscription increases have been kept consistent with past increases at 5%. The average over the past four years has seen an increase of 4.2% p.a. so it was important to maintain this level and not impact heavily on Members. It is worthwhile noting that with the Club’s current strong position it is expected we can complete this $3.96 Million project with no additional call on Members and no fee increase over and above the normal. Whilst a debt of $650k remains at the end of March 2027, subscription fees are collected throughout the March/April period and therefore it is anticipated that this remaining debt will be cleared by the end of April. Under normal operating conditions this means it is expected we can repay the costs of this project in 6-7 years. This Course Enhancement and Irrigation Replacement will secure the future of our golf course and our Club will be the envy of many around the country… Definitely an exciting time to be a Member of Glenelg Golf Club.

Projected Debt Level at End of Financial Year

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