Time to Split

Editorial_IconOver a year ago I listened to the outrageous statements made by several candidates at the Diamondhead Community Association’s Candidates’ “Forum” held for the 2006 POA elections.  I realized from the start that this was nothing more than a staged play whereby the incumbent board members could propagandize and distribute misinformation so their choice of candidates could be elected. Any candidate could throw out whatever statement that suited his cause with no time allowed for rebuttal by other candidates running for the same office.

One of the most outrageous was the statement made by the unopposed candidate for POA treasurer.  In a shameless ploy to frighten the membership and garner votes for his ticket, he made it seem as if a proposal was on the table to plow under both golf courses and sew corn or some other cash crop.  He pontificated that the value of property in the community would plummet if the golf courses no loner existed.  Therefore golf operations should stay as they are.

The truth of the matter is that no candidate ever proposed such action. In over twenty years living here in “paradise” I have never heard anyone suggested that the two golf courses be ploughed under. The real question is whether the County Club and property owners association should remain as one. Consider the question now on the table.

 

In Name Only

The Diamondhead Country Club and Property Owners Association, Inc. is a country club in name only. Over the years it is quite apparent that the concept of a “private country club” is a pure canard. The public is free to walk in and pay whatever outrageous fee the POA board of directors has imposed to play two pedestrian golf courses with houses too close to the fairways and cart paths that are constantly in play.

There is no doubt that both the Pine and Cardinal courses, even with their sub standard design, add to the value of homes in the Diamondhead Community, especially those directly adjacent to the golf courses. The question remains: Are the courses worth the added expense passed on to all property owners?  These two mediocre and marginally maintained layouts were once profitable to the POA, but now due to competition from casino operated or affiliated courses, an ill conceived, covert plan to make it a “real country club” and dismal attempts to market the courses, the golf operations now require massive subsidies from the property owner’s dues.  These subsidies now approach $1,000,000 a year.  The large majority of Diamondhead property owners do not play golf. Yet their dues subsidize the dubious business practices of the POA’s past four boards of directors.   The majority of the members of these past and now present boards are made up of golfers.  Foxes and hen houses come to mind, but in this case the foxes are charging the farmer for their losses and continue to eat the prime egg layers.    Another faction, the working class golfer gets far less value for his POA dues and golf fees than his or her retired counterpart.

 

In the numbers

Over the last four years the once profitable golf operations have posted huge deficits, So large were these deficits, 2005 golf operations ran near one million dollars in the red, that badly needed road repairs and repaving go undone despite a “temporary assessment” earmarked for such projects

It is highly suspect that golf operations have made a profit in the last ten years   When they truly stopped being profitable is anybody’s guess.  Ever since Mississippi opened its doors to gambling, outside play has steadily dwindled.   The actual figures concerning the operations of the golf facilities have long been in question.  The practice of combining the salaries of the golf professional and his staff under administration salaries in the financial statement is clear ploy to cook the books to lessening the blow of golf operations loss to the general membership.

Another time honored technique is to divert the grounds maintenance staff of the POA to golf course projects with the non golfing property owners being none the wiser.   For years the practice of using roads and grounds maintenance personnel for golf course projects has clouded the books. Several employees have been bold enough to reveal their forced participation and promptly received their pink slip.  This practice of purposely manipulating actual costs of maintaining the two golf courses was done with the sole objective of keeping the majority of property owners in the dark about the actual cost involved in running a golf operation.  These accounting practices definitely would not be kosher in a publicly traded company and subject to criminal prosecution.

The real situation is pure racket, a con game; pyramid scheme 101. Here’s how it works: The Diamondhead Community consists of over seven thousand platted lots.  Less than half are sold.  Only 80% of these still pay dues to the POA.  Around 400 resident property owners take advantage of green fees that cannot be found anywhere in the world – $2.00 a day unlimited play on two 18 hole golf courses.  That leaves over 2500 members to fund the recreational activities of these privileged few.  And they get premium access in the way of tee times at below liquidation prices.

Very few understand the actual business model of running a golf course.  The main commodity of the golf business is time. Profits derived from the sale of golf equipment, balls, tees, gloves, clubs, practice range are all subordinate to time on the actual course. To put it simply, time is money and premium time should demand premium money.  This is not the case in Diamondhead.  In fact, quite the contrary is true. Premium tee times go to those who are allowed to purchase at far below market price.

Imagine you were a farmer with a road side fruit and vegetable stand.  You implement a pricing structure where you sell your best produce well below your cost to grow it.  You then take the less desirable fruit and vegetables and try to sell them at a premium.    You would be out of business the first season.

The standard response from the $2-a-day parasites is: “We don’t play golf every day.”  Granted, but at every other day the rate rises to a whopping $4.00 a day!  How about once a week?  That equates to a whopping $14.00 a day and usually Saturday and/or Sunday, the crème de la crème of the time commodity.  Please tell me where you can get premium tee times at a rate of $14.00 anywhere in the golfing world.  The entire practice is economically absurd.

 

In Competition

A harsh reality has set in over the last ten years; competition.  Casinos have built first rate golf facilities that cater to the once exclusive snowbird trade by which Diamondhead profited.  Their object is to keep these patrons close to if not entirely captive to their main operations that are designed solely for the purpose of separating their guests from their money. Not for profit community associations have little chance of competing with these professionals.

In Opposition – Real Value

Wouldn’t it be wise to follow the lead of English Turn on the West Bank of New Orleans? If two second-rate, badly maintained golf courses add to our property values, then wouldn’t two quality courses, superbly maintained be even more of an asset?  Add to that exclusivity of a truly private country club with dues and initiation fees indicative to the desired status and our property values could rise to heights never before seen in Mississippi.  Look at the example of English Turn in New Orleans.  Dues prohibitive to all but the wealthiest individuals and corporations make property values for home sites on what was once no more than swampland the highest in the metro New Orleans area.

As an entity independent of the POA, the country club could allow outside membership.  Initiation fees could fund the restructuring of the courses making them more conducive to a true test of golf instead of a road racing course for private golf carts.  Another benefit of outside membership would be the injection of much needed revenues at the country club and local area businesses.   If done correctly this plan would truly raise the property values in Diamondhead without the need to subsidize the golf courses from all property owners’ dues.  They would see their revenues skyrocket by rental of carts, sale of golf equipment and prime tee times.  Of course the 2 dollar-a-day golf cart jockeys and other beneficiaries of this perverted business practice will vehemently oppose this change. Unfortunately, the Diamondhead POA’s board is primarily populated by members of “cheap golf at the entire membership’s expense club”.   The simple fact is that if two heavily subsidized, mismanaged golf courses add values to our homes; imagine what two premiere golf layouts with a truly affluent membership would do to property values.

In All Fairness

Property owners who live outside of the community have long suffered the indignity of paying for a party they were never invited to attend.  The ridiculously low annual golf fees can only be enjoyed by resident golfers. Add to it the fact that virtually none stick around at the clubhouse for at least a round of drinks or dinner at the club.  Instead, most resident golf cart jockeys make a beeline back to the homestead where the wife has dinner waiting not to be seen again until the next morning when he jumps into his “Diamondhead Duesenberg” and demands his protected tee time at the rate of two dollars a day. No mention of road repair, recovery grants, properly patrolled streets or any hurricane flood protection program that would benefit all property owners.

Another benefit that would be realized is the quality of food and beverage service would escalate.  A premiere country club would necessitate a premiere restaurant and catering facilities.  As it is now, I’d rather eat at a funeral parlor.   Then again, if memory serves me correctly someone did have interment ceremonies at the facility.

 

In Catastrophe’s Wake

No city government would subsidize leisure time activity over their intrinsic duty to supply decent roads, proper drainage, disaster recovery and adequate security to their citizens.  Yet this is exactly what happens in Diamondhead.  After over seven hundred homes in Diamondhead were laid waste by hurricane Katrina, then POA president Ramirez, immediately upon his belated return from Lafayette, Louisiana where he waited out the storm in safety, asked when his tee time was.  Throughout the interminable meetings held at the Diamondhead fire station directly following the storm the General Manager of the Diamondhead Country Club and Property Owners Association seemed more concerned that Diamondhead’ golf courses be the first opened on the Mississippi coast then to the needs of the property owners.  Concerns about looting, the care of the elderly not to mention food and water seemed secondary to resuming golf operations for the benefit of only a few.   The truth is with operations such as golf and the yacht club out of business, the POA posted a profit.

 

Incorporation

It’s a simple win – win proposition; split the Diamondhead Country Club and Property Owners Associations, Inc, into the Diamondhead Country Club, Inc and The Diamondhead POA, Inc.   The POA gets higher property values and can lower its dues to levels of fairness.  The golfers and tennis players get their own private country club, unsubsidized by property owner dues.  Incorporation then could be pursued unfettered by an obvious conflict of interest.  Instead of the ridiculous concept of the POA maintaining the streets, the city would take responsibility for the roads and provide the proper entity for security:  a city police force that has jurisdiction over the many byways of Diamondhead.   Who knows, we may even get some streets paved.

 

 In Conflict

In playing golf for over forty years I learned that the game is based upon honor and fairness.  The same rules govern all who play.  The game also teaches values of the human existence.  Even if you hit the greatest shot of your life you may land in a divot.  Such is life.  As an old friend once told me, “It’s hard but it’s fair.”    But in the Diamondhead fashion, board members practice a reverse Robin Hood method that has created a system of injustice to the majority of property owners.  Without a doubt the greatest affront to any sense of fairness in the current scheme of things is the obvious and blatant conflict of interest the past and current board members have in deciding the rate structure for the golf courses.  A board member’s first responsibility is the fiduciary well being of the entire membership of the corporation.  No group of member’s interest should be taken above the others, especially their own.  No one should get $2.00 a-day golf at the expense of their neighbor’s security and property value.  With a board of directors made up of predominantly people who call themselves “golfers” with no sense of fair play and on the receiving end of such a sweetheart deal, don’t hold your breath.  In the  game’s truest form only honorable players are termed golfers.

About the Author

T. R. Alfonso
Editor and Publisher of the the Diamondhead News Online