Chairman’s Newsletter No.3 – 1 June 2017
CHAIRMANS NEWSLETTER: No. 3: 1 JUNE 2017: A speech delivered on 1 June 2017 at a cocktail party to thank sponsors
- Thank you for joining us on this occasion aimed at thanking you, supporters and friends of the club, for your support and generosity.
- I have made it my task, and the task of my committee, to strike a balance between dispelling an attitude among members that the club exists to meet their needs without effort or support and an attitude that says ‘this is my club – what can I do to help?!’.
- You were invited here because you fit into the second category as I intend to demonstrate. It is because of your generosity, effort and commitment that we have been able to move towards the implementation of a turnaround strategy for the club.
3.1 In the first place, we have moved from a situation where the management and control of the club was in the hands of a manager – to a situation where the committee and co-opted members do the work of management themselves. This in addition to the usual work of committees in relation to policy and direction. This takes hours and hours of work and huge commitment from those who are your committee. Since election during December 2016, the committee has met on a weekly basis. More recently, and because of better management systems and implementation of controls, we have met bi- weekly. The sub-committee of the Ski Boat section meets regularly. My concern is whether this can be sustained going forward. Most certainly it has been necessary, and is likely to remain necessary, until the turnaround strategy is implemented and the club placed on an even keel. Going forward, the issue is whether those serving on future committees, who have jobs and businesses to run, can reasonably be expected to give up each and every weekend and every other day to manage the club or whether it may prove necessary to outsource management functions – probably financial and bookkeeping. This will come at a cost which we can ill afford. Having identified the problem, I am happy to defer it for the attention of the next committee. For now, all I need to do, is to thank my committee and those members who allow themselves to be co-opted to help.
3.2 We have, as we undertook to do at the annual general meeting, severed the operation of the kitchen and function facilities from the operation of the club and rented the facilities in terms of a written agreement to Graham Kelbrick for a period of 6 months against the payment of rental. From a financial stand point, the approach has been a success. Both the club and, apparently the tenant, are happy with the deal. The implementation of the separation is continuously monitored and refined. Lessons learned include the need to make provision for the club’s entitlement to use the facilities for its functions. Going forward, rental agreements, will cater for this.
3.3 We have been happy to appoint Bongani as the bar manager and to up skill him to assume control of its operation including, the determination of stock levels, the ordering of stock, stock control, staff management and cash-ups. He has proved to be more than equal to the task. Bongani, his wife and children are resident in the club flat. This benefit forms part of Bongani’s salary package and allows Bongani to be on hand for opening and closing the club.
3.4 We have reduced staff from 7 to 4 and have reemployed the staff on different terms after compliance of the provisions of the LRA. We have terminated their membership of a provident fund (to which the club failed to contribute over years, but nevertheless effected deductions from salaries) and are presently engaged in a proper calculation of benefits to which they are entitled. Once calculated, the staff will be paid that to which they are entitled. We have made provision for this.
3.5 We have incentivised the staff and won their cooperation in our endeavours. We are proud of our staff and are committed to their welfare and their protection from any and all forms of abuse. A visitor to the club who abused our staff was asked never to return.
3.6 We have reduced bar trading hours. We are firmly convinced that the club cannot afford to stay open and incur the cost of the overhead in order to serve drinks to a hand full of members, no matter how enthusiastically they apply themselves to the task. Far less can the club stay open to serve drinks to visitors. On the other hand we are keenly aware that there is no prospect of trading unless the doors are open. We are keenly aware that our faithful members who pay their subscriptions should have the benefit of socializing at their club. A balance has to be struck. We have sought to achieve this by investing Bongani with a discretion. Of late you will notice that, when trade is slow, Bongani will call last round. The system appears to be working. There has been some grumbling but no complaints as such.
3.7 Mike Beaumont, assisted by Keith Reid, have worked for months on the production of financial accounts. The starting point in this exercise was unreliable and inaccurate financial information going back for years. In addition, Mike controls cash flow, produces management accounts to the committee for planning purposes and authorizes payments. We undertake no project which we cannot afford. We no longer have trade creditors. We have cancelled contracts, re-negotiated and contracts and cleaned up debit orders.
3.8 This effort has brought us to a situation where, functions and donations aside, we are able to break even month by month with small profits.
3.9 We have restricted and overhauled the management of our banking accounts. Wherever possible we trade for cash. Our overdraft which averaged R70 000.00 month on month has been liquidated and our banking account now operates on a credit balance of between R70 000.00 and R100 000.00 month on month after meeting month end overheads.
3.10 I need to make it clear that this has been achieved through organizing and hosting functions. Most notable of these was Junior Nationals. Here all thanks are due to Peter Steyl, Ryan Reynolds, Gerrit Cloete and Jen Nelson. A weeks hard work produced a net profit of the order of R26 000.00. We as a committee has learned that money is hard to come by. Hard work and dedication is required. We have held a post-mortem and have learned lessons which we will employ going forward. Chief amongst these is that – if you want to make money, you cannot outsource food and beverage – you have to do it yourself and then, on the basis of donations to, at the very least, reduce the cost of sales.
3.11 We have very recently had our golf day. This used to be something of a freebee for members. No more. It is now a fundraising event. Final figures are not available but indications are that we made a profit of the order of R15 000.00. Here again this must be ascribed to the work of the committee and co-opted members, the work of wives and partners with regards to catering, and most important of all donations received to defray the cost of hosting the event.
- As regards policy and direction, and planned projects, I have the following to report:
4.1 The club is blue. This has been achieved at a total cost of R7000.00 to club funds, the rest was donated. Buco for a good deal on the paint and Glyn Purdon for a rock bottom price for the painting.
4.2 We have paid a hefty deposit to Niel’s Electrical who are shortly to undertake the rewiring of the club to allow the consumption of municipal services to the kitchen and function facilities to be separately monitored and paid for by the tenant.
4.3 We are presently engaged in re-writing the Constitution. When we have settled on a draft we will workshop it to members before calling a special general meeting for its adoption. Salient points are:
4.3.1 There is one club with one membership
4.3.2 There are sub-committees for special interests constituted by members of the club
4.3.3 All sub-committees account to the executive committee on which they have direct elected representation.
4.3.4 All funds are controlled by the executive committee who have a responsibility to produce monthly management accounts certifying payments of VAT, PAYE, UIF and that the club is not trading in insolvent circumstances.
4.3.5 We have overhauled and already instituted a graduated fee structure for subscriptions. We cater senior members, student members and have provision for temporary members.
4.3.6 There can be no ‘club capture’. If the chairman gets out of hand he can be removed. If the South African Government wants to copy our Constitution, we will allow them to do so.
4.3.7 We also are going to have a disciplinary code and procedure of application to staff and members and visitors. May we never have to use it.
4.4 We are engaged in a project to review and rectify our records as regards membership. Available records have proved to be inaccurate and unreliable. If and when we discover that members have not paid subscriptions, they are contacted and invited to do so. After this, a failure to pay subscriptions results, in terms of the Constitution, in automatic termination of membership and a cancellation of club privileges. As regards club discounts, we discovered that certain persons were receiving club discounts without having paid their subscriptions. Their club cards were disabled. We have, since taking office, approved nine applications for membership. We have lost about the same number of members through attrition and because we were unable to accede to the demands of a grouping of members and non-members who constituted the Rock and Surf section.
4.5 After consultation with our snooker players, the committee has decided to expand the bar and halve the size of the snooker room. This can be achieved easily without significant expense. The idea is to establish a facility for pool tables and incorporate that into the bar. Pool is popular and becoming increasingly so. We believe a bigger space will be created for hosting functions without effecting the ambiance of our pub.
4.6 Next is an exciting project which will see the creation of a fuel facility for boats. This will entail underground storage facility, an extension of the jetty and sophisticated software which will allow customers to load their accounts with credit and pump their own fuel only to the limit of their credit. The implications for profits and increased membership of the club by boat owners, are obvious.
- OUTSTANDING CHALLENGES
5.1 Principal amongst these is SARS. We owe SARS a total of R550 000.00 for non-payment of VAT, PAYE and UIF over 6 years. To remedy this, we have made a written offer of compromise, to which we have not had a response, notwithstanding weekly correspondence which also goes unanswered.
5.2 You will remember that we advised that there was no prospect of trading out of the problem. What I have told you about the finances of the club confirms this. So we again turned to you our members and friends of the club to subscribe to debentures. Some took debentures repayable in 3 years with interest. Some preferred to pay 20 years, 10 years or 5 years membership in advance. The money is safely in the trust account of our attorneys Changfoot Van Breda of East London and is ring fenced for payment to SARS when a compromise is achieved.
5.3 Tonight we are to unveil an Honours Board to make known the identify of those who have so generously contributed.
5.4 That a sum of R210 000.00 was collected from our membership under the debenture scheme was a source of amazement to me. It demonstrated the extent to which our members are devoted to this club and justified the hard work that the committee have done and still need to do.
5.5 We continue to chip away at the historic debt owed to Ndlambe Municipality for service charges. It now stands at about R150 000.00. It is serviced at the rate of R25 000.00 per month against decreasing consumption of about 17 000.00 per month. The hope is that the rewiring of the club will further reduce consumption.
5.6 We need to re-establish a Rock and Surf section and establish also a River Fishing section. We were most disappointed to lose four members when we were unable to accede to a demand that a group of anglers, most of whom were not in fact members of the club but had been allowed to claim membership for years and use our facilities, pay an annual subscription of R150.00 per annum. Our offer of a reduced subscription and the accommodation of individual anglers who could not afford the clubs subscription by further reduction, was rejected. So too was the offer of direct representation on the executive committee. Obviously the implication of assuming responsibility for the overall management and direction of the club was considered not to be attractive. This brings to an end the idea that there can exist a club within the club.
5.7 A final challenge (which is more of a distraction) is the need to devote time and energy to resolving disputes amongst members (which often originate outside the club) and the need to combat a tendency amongst the old guard to second guess resolutions of the committee. While this is regrettable, I ascribe it to the fact that the club has no shortage of characters (which is perhaps why we are here in the first place) and the influence of Captain Morgan.
CONCLUSION
This brings me full circle. It starts and ends with our membership. We are here because of fellowship, fun and laughter and if we get a little fishing and boating done, so much the better. We have searched the records, (such as they are) to identify Honoury Members. We may have missed some – that can easily be rectified in due course. We have listed separately those who have purchased 20 year and 10 year memberships in advance. We owe all of these persons our thanks for their past and continued support. We owe Neville Williamson a thank you for having made the Honour’s Board and Rod Allin for his efforts in working out which name goes where.
Thank you all. Now please join me in the chairman’s round.
Richard Quinn
1 June 2017