Knee-Jerks and Funny Money
Commentary by Joe Reynolds
Once again OPA Board member Heather Cook proved she is the master of knee-jerk management.
Even not-so-close followers of the board may recall Cook's knee-jerk decision that the OPA election process needed to be modernized. The results of that knee-jerk are still reverberating around the community. Then there was the on-again, off-again, do-nothing Cook handling of the golf course fee structure. That classic bit of knee-jerking is another item rolling around the fairways and greens, and costing all of us money. Incredibly she convinced a majority of the board to knee-jerk in unison.
Her latest knee-jerk in regard to the Yacht Club, saw similar majority support, not to mention the applause of Candidate Ray Unger. Unger, touring Ocean Pines and talking with anyone willing to listen, stepped up to the podium during the July 22 board meeting and said unless the board changed the Yacht Club upstairs dining and catering policy, a policy Cook supported only a few months ago, that OPA was heading for financial disaster.
Cook rose to the occasion with another classic example of knee-jerk management, one that kinda falls into the Ripley's Believe It or Not category.
During the July 22 OPA Board meeting, the weeping and gnashing of teeth about mounting losses at the Yacht Club bounced off what’s left of the crumbling Community Hall.
Heather Cook and Janet Kelley were strident in their views that the Yacht Club marketing was a disaster; losses were escalating at an alarming rate after only twenty or so days of the new upstairs dining menu. The issue of "fine dining" was beat to death during the meeting and in newspapers after the meeting. Accusations and recrimination were the order of the day.
Candidate Ray Unger rose for public comments and predicted the Yacht Club was heading for a $350,000 loss, as he bemoaned the cost of labor for upstairs dining and a lack of patrons; he suggested the board take immediate action to avert a financial disaster of biblical proportions.
Cook took Unger's advice and introduced a motion to rescind the recently passed board motion on catering and return to the status quo. The status quo essentially allows the food service manager to run the place as he chooses. Cook, Kelley, Sterrett, and Stachurski were the cavalry coming to the rescue of our assessment dollars, and the motion passed.
Many folks left the meeting with an intense sense of relief at having averted a financial disaster, thanks to the quick board action.
It is now a little over one week since Cook's momentous motion propelled a financial life jacket to the drowning Yacht Club. However, it appears the board forgot to notify the food service manager. A call to the Yacht Club today revealed that "fine dining" upstairs continues to be available. Believe it or not.
Why would management refuse to grab the life jacket and continue this free fall into the depths of financial ruin predicted by Unger, Cook, and Kelley?
One might also ask about Unger's basis for predicting this financial disaster. He offered nothing but the $350,000 number during his public comments, but a copy of his prepared notes for the meeting reveals the details. It is clear why he did not share those detailed calculations.
Unger's numbers actually predicted losses of $386,000 at the Yacht Club if the board did not take immediate action. He calculated the loss as follows:
Loss of 15 weddings per year at $10,000 each = $150,000
Losses on "fine dining" = $236,000
Unger's calculation to arrive at the "fine dining" loss is really interesting -- to say the least. He starts with what he claims is a $650 per day loss on upstairs dining ($4,550 per week). He then multiplies by 52 and concludes the yearly loss will be $236,600.
This is absolutely incredible. The Yacht Club isn't even open 365 days per year, for starters. The upstairs dining operation was only set to be open for the summer season, but not even every day. A calculation of open days, about 36, indicates a loss closer to $23,400 – assuming Unger’s $650 number is correct.
Unger's suggestion that using the upstairs dining facility for dining and not catering would result in the loss of fifteen $10,000-weddings is belied by the facts. This year the Yacht Club had free rein to book catered events for the entire month of June, arguably the most popular month of the year for weddings.
Final OPA Food and Beverage numbers for June 2006 indicate total catering income for the Yacht Club of $34,800. The most expensive catered event for the month was $11,186 on June 24. There were 10 catered events for the entire month, as follows in dollars: 11,186; 6,190; 5,990; 3,060; 1,860; 1,679; 1,606; 1,500; 1,379; 350. Seven of the ten events were on a Thursday, Friday or Saturday. Every Saturday was booked.
The average for all ten June banquets was $3,480 per event. Again, let's assume 15 events were lost per year during only the summer season at an average of $3,480, or a total loss of $52,200.
Even giving Unger the benefit of the doubt, the numbers would be more like:
Loss of 15 catered events = $52,200
Loss on "fine dining" = $23,400
Total = $75,600 ---- a far cry from Unger's highly publicized loss projections of $386,000
Uploaded: 8/1/2006
