Communication: This is the eighth edition of my annual report to keep you informed as completely as possible of the club’s present condition. Please contact me if you still have questions. Our web page continues to be our primary method of timely communication, with weekly updates of events and specials. Many of you are on our email list, which keeps you well advised of special events or changes at the club. Remember the Club’s Board described below has the primary job of communicating from members to management, and management to members. They represent specific areas of the club in the hopes of insuring this. There is also a brief message or two each month on the bottom of your statement.

Club Improvements: Discretionary funds are the primary source of Club revenues and those continue to make a very slow rebound from the 9-11 induced downturns in the industry. The Club Board helps identify the best use of funds available to produce the most good. For the second year in a row we had a massive invasion of grub worms on our greens. We had the additional problem of raccoons finding the worms and ripping the grass off the greens to get to them. The treatment we used failed as it came too late. It took three months to eradicate the worms, coons, and return the turf to a playable condition. In a typical year a few worms appear, get treated, and you would hardly notice they had been there. Next year we will begin a preventative spraying for the grubs in early April. On the course, over the year we continued to replace our old irrigation controllers with computerized ones. There are 41 of these and they are very expensive, so we do about one a month which for the last two years leaves us past the halfway point. We are holding off on major improvements as we wish to tie these to development of our excess land. This does not appear to be the best time to start any project; however, we are getting advice that maybe it is, so we are better prepared when the time is right. We are still looking for the right developer to accomplish this, but are prepared to do it ourselves if necessary.

Staffing: If memory serves me right, this may be the first year we had no changes in staffing at the department head level. To go over those positions, we have Patrick Kelliher in charge of the membership department. In addition he does almost all the teaching and merchandising of the golf shop. Patrick is a PGA member with extensive experience in all areas of golf operations. Patti White is office manager and does the multiple jobs of accounting, human resources, and member services as she is usually the first one to get a question or complaint. Gerald Tjon A joe is Director of Tennis, but also manages the pool and keeps an eye on the fitness room and can familiarize new users with that equipment. Julian Burnett and Donna Healey run the food and beverage and catering departments. Julian is Executive Chef and also books catered events. Donna works with Julian on catering and is the Service Director. Gary Reynard runs the golf operation to include the golf shop, golf events, and outside services (carts and range). Carl Suding is our superintendent, but also oversees a lot of the maintenance of clubhouse grounds and equipment. My title is Director of Golf and General Manager. I rely on the people above to perform their duties in their respective areas with minimal interference from me and I count on each of them to complete their jobs for the betterment of the club. Make no mistake they hear from me when it is necessary.

Business Philosophy: Our desire is to make the Club strictly private with access by others very restricted. Additional members are the key. You can help achieve that goal with asking your neighbors and friends to join the club. We need your help gaining new members. Former members will be contacted with a restructuring of our membership plans to attract them back. To be the “private” club we as a board, staff, and owner all desire that is a key goal. (More in Financial Below) However, 47% of our revenues come from non-members, which includes guests of member condos, weddings and social functions and/or meetings, or charity golf tournaments.

Financial: For the last five years I have relayed to you the state of the golf industry since 9-11. Discretionary money is really what drives the golf and resort industries; therefore, our club was affected. 9-11 also impacted the way people think. It caused golfers to re-evaluate what was important...half a day on the golf course or more time with family. I have no argument with that response, but the financial impact is there and our club is no exception. This problem got even worse this year with the economic woes not only in our nation; but in all the world. The last four months of the year we lose a lot of members, and usually replace about half, still giving us a net loss. This year we had more than the usual losses, and only one new military member sign up in the last four months of 2008. On the other end of the spectrum, five clubs similar to ours in the Ft. Myers-Naples area closed their doors in October 2008. We fare somewhat better, but we are concerned as this is an industry wide problem. We must find our own solution to this dilemma. We will be trying once again to build our membership numbers in 2009. It is in this section I usually announce a dues increase to match CPI increases. This is the third year in a row we will not do so. We will be trying diligently to grow membership numbers by expanding our offerings and pricing levels, working with our member condo and hotels to gain more rounds from them, and selling additional weddings and catered events, as well as weekday fund raising golf tournaments. We are still behind from six years of treading water waiting for the beach development to happen. The current picture on real estate development on the island is cloudy at best. At this time last year I had just completed a refinance and reappraisal that removed a separate parcel of over three acres from the note from excess club land. The SBA held a second lien and they too, have released the lien on that land. We now have some land free and clear that can be sold, developed, or leveraged. I mentioned last year we have 20 acres showing about 166 town home or garden home sites. Our plan is to develop them using front money to make improvements to the facilities and pay down debt, but more importantly increase dues for the future to each unit through deed restrictions. An additional 166 golf members would put us on easy street. The sign in the front yard for +/- 2-4 acres has continued to have some interest, but nothing to firm up at this time. Though not a part of the land plan, it would be handled similarly with facility improvements being done with the front money and a revenue stream for the club in the future. It is just a matter of time before someone shares our vision for this very special piece of property. Please tell us if you know anyone or a business that might be interested in the land. There are some options to improve the facilities and lock in revenue. In the short term, we need new members and customers.

Club Board of Directors: The club board meets every other month and receives business updates, provides feedback, makes committee reports, and plans for the future. They are responsible for the rules of usage for the club and each of its specific areas. This year John Wilson will serve as President, as well as Golf Committee Chair. Dr. Gregory Folsum will be committee chair for Pool & Tennis. Don Stewart is continuing as Membership Committee Chair, and Carol Albrecht is Club and Events Chair. Bob Jantz has completed his service on the board. This was a five year commitment, and I am grateful to him as well as all our Board, past and present, for their time, knowledge, interest, and desire to make the club a special place for everyone. I appreciate all they do and I ask you acknowledge the service they provide by giving your own ideas to them to share at the meetings.

Member Events: Again the Nite Lite, Holiday Scrambles, and the Club Championships, were our most popular events. The Member Appreciation events on Labor Day were blessed with a lot better weather, and we had over 300 for the special complimentary meal and events. The Member/Member or Member/Guest combination tournament was well attended in spite of the fact our greens were at the worst of conditions referred to above. Again this year we are asking you to return your email address authorization form below. This will be limited to use by club personnel. We would like to use this to keep you informed on a timely basis. The staff can keep you reminded of coming events, special closing of an area (golf course for a tournament, dining room for a wedding, pool for a party, etc.), and I could update you with Board Minutes and development progress as examples. If you are currently receiving the email blasts, do not resend the form.

Reminder: You know where I am and my door is always open, and there is no receptionist to get by. Drop in any time.