The Curious Account of How We Acquired the “Management Company”

Of all the country clubs in all the towns in all the world, HMS walked into ours.  How did that happen?  Why here, who wanted them, how were they selected, what procedures were followed when they and their closely connected Fore Front Construction Company arrived?  Finding answers isn’t easy, but the online minutes of the POA can help you to round up the usual suspects.

classifiedinfoThe tale begins with the record-breaking cold and rain in the winter of ’09 -’10.  The golf course greens were badly battered, and attempts to remedy the situation were largely unsuccessful.  By May the POA board had asked a USGA professional to come take a look.  Online minutes are partially missing for the rest of 2010, but some things are clear.

Course problems obviously continued because the board held back-to-back meetings in August to find solutions.  Some wanted immediate action, others hoped to fix both the immediate problem and long term recurring ones, but finally they appointed a committee to find out from professionals what to do both immediately and long term. “We are not out to do golf course design or change holes,” Kyger insisted.  The #1 problem was the greens, but they also wanted a professional to “assess the problems” of both golf courses.

Next thing you knew, Fore Front Construction Corporation was on the scene (misspelled Four Front in the minutes).  By October at latest they were finding drainage system lines, cleaning them out and installing blowout valves on both courses.  Online records don’t tell us how they were found or whether the competitive selection process was used to hire them, but Googling gives us a clue. 

Fore Front is the golf course construction company that built the course at Lake Arrowhead, GA, for Purcell Company, Inc., who are also Diamondhead’s developers.  Fore Front also works hand in glove with Haslam Management Services (HMS), and together, says HMS’s website, they have completed more than 35 development projects. 

In December there were more visiting professionals according to Marshall Kyger, then president.  The January, 2011 minutes name Morris Brown, a turf specialist whose recommendations were then adopted to help solve the greens problem, but the other visitors, referred to as “consultants,” remained nameless.   A member dared ask, however, if comments of “the management company” who visited on December 7, 2010 could be revealed.  Kyger stated that the visit was “just to get ideas and see how to improve,” but at the same time, strangely, this mystery company was also busy preparing a “proposal” and, Kyger assured everyone, members would have a say in the “processes.”

Consultant?  Management company?  Who might that be?  From January, 2011 till April in the minutes it apparently became The-Company-That-Shall-Not-Be-Named.   At the March, 2011 meeting Kyger finally offered some more information.  The board was considering contracting out some or all POA operations to the still-unnamed management company and expecting a proposal from them in a few days but it wasn’t a “done deal” — just due diligence and looking at all our options.   Of course.

Meanwhile, Kyger’s August claim that “we’re not out to do golf course design” had morphed into a $20k contract with golf course designer Ron Garl for a master plan for both courses that, at a rough estimate, would have cost $2.4 million.  Kyger explained that “when you go out for professional services, you basically look for qualification, capabilities and a conceptual approach on what they are going to do,”  and that he and the board only chose Garl after carefully comparing his bid with those of two other “very reputable design firms.”  

At April’s meeting, the mystery company finally got named.  The attorney, Kyger explained, was looking over a proposal for hiring HMS as an in-house management group — perhaps on a 90-day contract — and then we can “see what they can offer to do for us.”  Contract first — then see what they can offer to do for us.  Apparently the spiel about going out for professional services based on qualifications, capabilities, and a conceptual approach no longer applied.  Neither did the bid policy.

In May, the idea of a 90-day contract went south, and Kyger (and Don Crosby) approved a 3-year contract for HMS instead.  The company was now consultant to the board on renovating golf course and club house, constructing new facilities, marketing, hiring, training, accounting controls, food, beverage, etc.  Additionally it was manager, subject to board approval, of employees, their scheduling and compensation, marketing and advertising, contracts, repairs, financial records, budgets, and affairs, etc.

What reasons did the seven directors give for their approval of this contract?

Kyger:   We want to increase revenue, decrease costs, HMS brings a lot of experience to the table, it’s worth giving them a try. 

Hopes:   I called 16 out of 24 former clients of theirs who said it was a strong, stable company.

Peppenger:  We can’t push things down the road, we were elected to make decisions.

Crosby, Marshall, Palisi, & Yarbrough:  Yes.

What about that competitive bid policy Kyger, Crosby, et al. now claim is the sole proper procedure for contracts greater than $5000?  That’s what Director Mario Feola wanted to know, pointing out that the lack of three competitive bids violated the policy and procedures set up by the board. 

But in their stampede to approve a contract for a small Georgia management firm with ties to one particular Diamondhead property owner but no outstanding achievements or recommendations that the board offered as reasons for their vote, the seven directors couldn’t be bothered to find out if there might be a better deal out there. Nor could they (Kyger, Crosby, and Kelsey Johnson included) be bothered to use the competitive hiring procedure on at least two occasions to see if Fore Front’s was the best deal.  

And the present board?  Renewed the HMS contract last January without a bit of concern for their competitive bid procedure on a 6 – 5 vote by Crosby, Harvey, Johnson, Kyger, McCulley, and Montjoy. 

Events cited above are found in the POA minutes of May, August, and November, 2010; January, March, April, and May, 2011; January and November, 2013; and January, 2015.  All are available to members online at the POA website.

1 Comment on "The Curious Account of How We Acquired the “Management Company”"

  1. A very old quote: If it looks like a Duck, If it walks like a Duck, If it sounds like a Duck, It is in all probability a Duck. What is meant is, in the history of your knowledge, experience and witness to resolutions, what does this non-competitive issuance mean to you.

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