From: Art Carmine, Controller & Pudge Ruppert, Clubs Manager cc:

Date: 9/28/2001

The report from the Clubs Advisory Committee states that it will be impossible to meet the goal of break-even by the year 2003-04 the way we are currently operating. The Committee also states that over-staffing, problems raising prices and not being able to charge uniform banquet prices are all contributing factors. Obviously, these are all areas that could keep us from reaching the goals set in the vision statement and should be addressed ..

The Committee also states that the Clubs Manager should be accountable to them. We believe that the Clubs Manager should continue to be accountable to the General Manager. The finanCial statements are reviewed by the Clubs Manager, Controller, B & F Committee, General Manager, Board Members and the Clubs Committee at present. We do not feel that another Committee to review the financials is necessary.

That being said, starting on Page 2:

1)        Regarding ghost employees: Work schedules and time cards are closely reviewed by Pudge, Mike, and Beverly. Accordingly, we are confident that this problem does not exist.

2)        Regarding financial statements to the Clubs Committee by the second Thursday: This time frame is difficult. Further, we feel that the Clubs Committee should not receive the information before the General Manager, Board, Clubs Manager and the B & F committee.

a) Two persons conducting food inventories: Currently being done.

b)           Purveyor pricing to be reviewed semi-annually: We do this weekly.

c)          Menu selections being monitored quarterly: Currently we start with a summer menu, then modify it in October and again in January. Items are constantly reviewed for cost compliance and number of sales.

d)           Group menus, bookings, and special menus: Every effort is made to accomplish this, but extremely difficult with some functions, such as, Kiwanis, Card Parties and certain Golf functions.

e)            Banquet menus to be reviewed semi-annually: Currently the practice.

f)           Delivery of goods to be counted and placed into inventory: Done immediately. Rear delivery door should be locked during business hours:

Door is locked to prevent entrance. It is, however, a fire exit. Employees should not enter or exit this area: Current preference is for employees to exit this area.

g)          Reduce the number of food storage areas: We only have one perishable food area and one dry storage area. Preliminary plans have been suggested to move the loading dock walk-ins to the second floor, which may solve some of the problems in (f) above as well as ease of inventory taking.

h)         Train wait staff to sell higher priced items and desserts: We constantly remind wait staff to do this.

4) Beverage Cost Controls:

a)                              Conduct in-house weekly inventories: We think monthly inventories are sufficient Two persons conducting beverage inventories: Currently being done.

b)                              Unopened bottles of liquor used for functions: Our practice is to use existing inventories. Use' of new bottles each time would double the need for inventory or reduce options.

c)                               Liquor deliveries counted immediately: All liquor deliveries are counted Immediately and locked up. Breaking the bottles is not necessary in our opinion.

d)       Only authorized staff having access to liquor: Currently being done.

Liquor storage areas locked at all times: Currently being done.

e)       Bar staff being trained in standard pouring procedures: Currently trained this way. Policy re-emphasized regularly. No deviations from policy are permitted.

f)                                Complimentary food and drinks given: Currently only Manager and Assistant Manager may approve. Charged to manager's personal account: Currently discussing the method and need for this.

g)All beverage items priced for cost projections: Currently being done.

5) Labor Costs:

a. Re-examine dining room demographics: We schedule based upon estimated demographics and send home when volume is not there.

b. Re-evaluate kitchen staff to meet needs: Currently being done as (a) above.

c. Guest histories need to be studied to predict guest counts: Currently used by staff.

d. Proper scheduling to prevent overtime: Currently being done. Exception for lack of staff at beginning and end of season.

e)                              Hourly wages must be competitive: Wages for various positions were adjusted to compete with local labor rates. This also causes a variance from the budget.

f)                             Continuing staff training program: Management is constantly working with staff on these items.

g)                              Reduce hostess positions when necessary: Currently being done.

h)                            Assistant I Night Manager must be attired properly: We believe attire is proper. Better recognition to be worked upon.

i)                              Assistant Manager should have authority to reduce staff. Currently has the authority and exercises it.

j)                              Assistant Manager should be trained regarding expected levels of food, beverage and labor costs: Currently being done.

k)                               Employees must not check other staff members in or out: Current policy for all OPA employees.

6) Sales and promotional Activities:

a)Promotional accounts to record complimented food and beverage: Management is currently discussing the method and need.

b)                                  Promotional accounts for special Board events, etc.: Management is currently discussing the method and need.