AnnuAl RepoRt 2016

Sawgrass Country Club · Annual Report 2016 Page 1

TABLE OF CONTENTS

Board of Governors & Management Staff .............................................................................................................4

Committees ………………………………………………………………………………………….……………5

Annual Meeting Agenda ………………………………………………………………………………......…......6

President’s Report ………………………………………………………………………………………………..7

Compensation Committee Report ……………………………………………………………………………..…8

Finance & Audit Committee Report ………………………………………………………………………....…..9

Fitness & Recreation Committee Report …………………………………………………………….….….......11

Golf Committee Report …………………….………………………………………………………….……….13

Greens Committee Report…………………………………………………………………………….…………15

House Committee Report ………………………………………………………………………………………17

Leadership Development Committee Report ………………………………………………..…..…….……….18

Legal & Bylaws Committee Report ……………………………………………………………………………20

Membership Committee Report …………………………………………………………………………......…21

Property Committee Report ……………………………………………………………………………………24

Strategic Planning Committee Report ……………………………………………………………………..…..25

Tennis Committee Report ………………………………………………………………………………...……26

RSM Report …………………………………………………………………………………………..………..29

43 YearsBall, Judy DDixon, William WDunaway, GeraldMcIlrath, Betty DukePaul, PamelaPeek, Eugene GWalker, Billy J

42 YearsHammack, John AShields, John HVanGundy, Helen Garner

41 YearsClarke, Keith AverettWeed, Charles R

40 YearsBarton, Harold LBinns, JoyceButts, Fred HClarke, William FCope, Douglas EMeritt, Stephen MOssi, ClaireSilverman, Stephen JSoud, LindaWatters, TeresaWolchok, Eugene B

39 YearsEuringer, Holger EFlood, Ted CGaskin, M AnnGladora, Dennis AMcDougall, WillaSchlipf, Lawrence E

38 YearsCassidy, James PGodley, MaryLindsey, Joan Macfarlan

Olson, Kenneth RScott, JudySutton, CarolynTyner, DoniaWalchle, David L

37 YearsBrennan, Bernard FCrossen, Patricia ADobrick, Glenn WDroubie, KatherineGarvin, Mary KathleenHarkins, DorothyHarlow, PatriciaHeald, David EHeamon, Barbara SHetzel, William CHirsch, Robert DHoener, James HKlempf, LauraLynch, JackMcNeel, MorganSchur, LindaSelevan, Jack SSelevan, Russell MSerkin, Howard CSetzer, Alan MZimmerman, Charles B

36 YearsChandler, Howard CEber, Harvey RElliott, Virginia MEngel, JoanFord, Lynn FFrias, Jaime A Harbison, Earle HHerring, B CaseyHurwitz, ArthurLeonard, AlisonMcCarthy, DennisPalmer, Valfrid ESkinner, Halcyon E

Tarumianz, AliceWagner, Gary LWest, Art F

35 YearsCordell, James AHuber, Edwin EJacobsen, Diane DJohnson, Glenn EKey, Ann JNewton, William SO’Neill, BarbaraPray, William RQuina, RichardVentrella, Peter J

34 YearsBrown, David LDickinson, Walter DEndriss, Barbara FGluchoski-Beck, GloriaHulfeld, JamesJohnson, BettyKnowlton, HughLeek, LaurayneMiller, RobertaNeinstedt, DorotheaPortnoy, Jerry BRichards, Charles RRose, Howard NSlayden, Kay WSmith, Virginia KTickle, William RWestling, Dale GWilson, Jeanell G

33 YearsAbate, AndrewBeckerman, StuartBlanc, FranklinCalandra, FrankClaypoole, Robert EDolaghan, John

Dubin, Michael AElliott, SandraEly, William LFalke, PatriciaGarcia, Cesar AHendricks, Robert HHorne, Donis PIzak, JoJewett, Walter GJohnson, Don/DarleneKarol, Robert EKinz, Robert JKraemer, SylviaMay, Judith MRandall, Hugh LRogers, JudithRosin, Alexander PThornton, BarbaraWalton, Jo Ann & DaveWatson, John LWatson, Thomas EWezernak, C ThomasWiley, LindaWood, Thomas HZehmer, John H

32 YearsBates, Jacquelyn DBeard, Murray DBeaver Street FisheriesBerger, Gregory WBlonder, Scott & BeverlyBusbia, A MorrisCoward, Virginia AGregory, ElinorHightower, Shirley AKiley, SheilaKorb, Andrew DMcWilliams, John LO’Donnell, MichaelRyan, Mark ESchumann, RebeccaThompson, James G

Trabert, TonyWitten, Wendy

31 YearsBallenger, Joseph SButler, Jerry DCampbell, Mary SCervone, Frank JDavis, Irvin HEdwards, Thomas HJeffery, Patricia RKnecht, Joseph SKrupinski, Carol JaneLatshaw, John HLewis, Murray AMier, SallyMurphy, Carole AQuinn, JoanRobinson, HobartRowley, ChristianeRyan, MarilynSheesley, Devere LSmith, Thomas STomlin, Thomas AWernow, Sheldon F

30 YearsBabcock, James WCarnegie, Henry CClarkson, John TDavis, J StanleyGates, DavidGoetz, J WalterGoodwin, Paul RHayes, VeolaHiggins, Robert HJacoby, Robert EKlopf/John Tissue, LynneKoepplin, William JKopach, KathleenLeBlond, Richard KLiebre, Ernest ALisboa, Jose

Mason, LanaMcDougall, John JMeyer, KathleenMills, Willis NMoore, William FPappas, Peter SSchwinger, Bruce ASeney, Richard FSmith, Kenneth P

29 YearsAtkins, ElaineFlanigan, Thomas JForster, SusanHawk, Dale RJohnson, W DanielKelley, MichaelMarch, Perrin GShipley, Walter VSwinarton, Robert WVoss, James C

28 YearsAllsopp, LucileAtkinson, RichardBritt, PeggyBrown, D ChristopherCaldwell, William FCarter, Robert MCuneo, August RDavis, Robert BDelaney, David PDouty, RobertFajans, Robert GFiveash, RogerGalbraith, VictoriaGuion, JohnJohnson, Charles ELewis, RandaLiptak, Walter TMachin, Robert CMiller, Douglas C

Morgan, Michael DMoxley, DouglasPilcher, Jeanne/LisleTalton, Richard JTaylor, Joe TWallner, Jack & JaneWilliams, Hugh JZebouni, Nadeem G

27 YearsAlexander, Mark CArrowsmith, John ABenson, Doris EDavies, Fred JDeschler, PeterDiCarlo, Joseph BDobbs, Derek & LauraDurnan, William EFranc, Daphne AGottschalk, Ray FGreenhalgh, ElvaGriffith, Charles SHollenbeck, David WHuibregtsen, FrederikLesko, JoanneMonroe, Mark CMuldoon, Donald FMulhall, Roy EObi, John JSimon, RonaldStone, Joel AWerneburg, Kenneth RWyand, Stephen EZimmerman, Seeman H

26 YearsBerquist, Thomas HBrantley, John LDennis, DerrickGualano, Gerald MHam, JudithHanna, Robert CHofstetter, John J

Jones, Arthur WKolodinsky, BeverlyLazenby, MauriceLovett, Susan WMaxwell, MaryMcClave, James TReek, Donald ARussell, ScottStarkman, James JStewart, James HSullivan, John LTaranto, Monroe JVanZon, Adrian

25 YearsAken, Harold EAkre, CynthiaAmann, Sheng ChaoAshouri, FawazClews, John SCreekmore, Steve WDesMarais, JoannDevine, MichaelFadale, Garry JGaler, TraceyHarkleroad, Tom & SalinaJones, Hal LKetcham, RaymondKyle, LucilleMinton, Walter JRade, JackRogers, J RobertRouleau, MarilenaRuskin, ScottSlattery, William FTeegan, HenryViering, LindsayWadley, James PWolf, Carol LeeWylie, Gladys


BOARD OF GOVERNORS

Leedom Kettell, President Steve Frankiewicz, First Vice President Doug Miller, Second Vice President Fritz Skeen, Treasurer Edmond Collins, Secretary John Caden, Governor Bob Dale, Governor Kristen Ely, Governor James VanHorn, Governor Cathy Wichert, Governor Salina (Sam) Harkleroad, Ex Officio – 2016-2017

MANAGEMENT STAFF

Barry McDonald, General Manager, Chief Operating Officer Lisa Hoffman, Chief Financial Officer Perry Kenney, Clubhouse Manager Janet Collins, Director of Member Services Matt Durkee, Golf Course Maintenance Superintendent Greg Lecker, Director of Golf (up to September 30, 2016) Michael Broderick, Interim Director of Golf (October – December 2016) Patricia Rodriguez, Director of Human Resources Ken Veney, Director of Tennis Gary Winter, Director of Housekeeping & Maintenance Randy Woodrum, Director of Fitness & Recreation Peggy Grant, Executive Assistant

2016 COMMITTEES


COMPENSATION GREENS PROPERTY Fritz Skeen, Chair Steve Frankiewicz, Chair Bob Dale, Chair Steve Frankiewicz Thomas Stewart, Vice Chair Joseph Abbas Edmond Collins John Brantley Bart Barton Tom Browne Joe Downes Leedom Kettell, Ex-Officio Jim Dowdee Tom Kraft Chris Hunt James Petersen EXECUTIVE Michael Jay Bryan Rendzio Leedom Kettell, President Sherri Lubin John Richardson Steve Frankiewicz, 1st Vice President Pat O’Connell Doug Miller, 2nd Vice President Robert Steimke STRATEGIC PLANNING Fritz Skeen, Treasurer Doug Miller, Chair Edmond Collins, Secretary HOUSE Peter Davis Kristen Ely, Chair John Fawcett Salina Harkleroad, Ex-Officio (non-voting) Virginia (Ginny) BonDurant Jim Hoener Gary Lubin Phil Keefer FINANCE & AUDIT Frances (Frankie) Lyon Judy Kontny Fritz Skeen, Chair Mark McCall David Lea John D’Aquila, Vice Chair Kathie Meyer Mandy Morrow Dan Cavey Doug Moody Chuck Wodehouse Allan Cohen Constance Quinlan Diane Jay Ken Schulz TENNIS Jack Kinsella Robert Sleeker John Caden, Chair Quang Pham Kathryn Unger David Delaney, Vice Chair David Smith Lisa Dalziel, Secretary Brian Wiley Ryan Dunn LEGAL & BYLAWS Bonnie Edwards Edmond Collins, Chair Peggy Fawcett FITNESS & RECREATION Paul Bschorr Pete Holtermann John Caden, Chair Bill Murdock Luis (Lou) Pontigo Sean McHale, Vice Chair Charles Tanksley Charlie Romain Fran Serur, Secretary Jack Wallner Patricia Arnett Judi Darby MEMBERSHIP LEADERSHIP DEVELOPMENT Martin Gavaghan Cathy Wichert, Chair (Non-Standing Committee) Billy Smith Bob Fairley, V-Chair Dennis McCarthy, Chair Vicki Van Horn Gregg Deiboldt Mike Morgan, Vice Chair Becky Dykstra Delores Adams GOLF Donna Fiedorowicz Murray Beard James VanHorn, Chair Patricia Koizim Vickie Cavey Liz DeBlock, SWGA Mark Kontny Andy Dykstra Art Iannucci Barbara Nixon Bob Machin David Laird Ed Waller Bill Maletz Ana Leaird Brian Wright AJ Ruvane John Reed Salina Harkleroad, Ex-Officio Duncan Wall


ANNUAL MEETING OF COUNTRY CLUB MEMBERS

Wednesday, April 26, 2017 6:00 pm

AGENDA

Call to Order

Introductions

President’s Report

General Manager’s Report

Question and Answer Period

Announcement of Election Results

Adjournment

-OUR MISSION-

“Provide an exceptional ‘Sawgrass Experience’ by combining our oceanfront location with excellent facilities, programs and services for the enjoyment of our Members.”

-OUR VISION-

Enhance the ‘Sawgrass Experience’ by improving our amenities and service to achieve a high level of Member satisfaction.

We will make our golf, tennis, fitness and beach facilities the best in our area, and ensure that all our facilities are inviting, functional and well maintained. We will offer a variety of enjoyable dining alternatives, wonderful food, and maintain a level of service throughout the Club where

every Member and guest is treated as a preferred customer.

Our dedication to fiscal responsibility and appreciation of our staff will further assure the long-term success of our Club. Our commitment on enduring excellence will securely establish

Sawgrass Country Club as the first choice for those seeking the best private club experience in our area.


PRESIDENT'S REPORT LEEDOM KETTELL

Our Beach Club opened last spring as a continuation of the Master Facilities Plan created seven years ago. Since that opening we have had no new building projects. However, we have started work on plans for a new Member Clubhouse which will replace the current Golf Clubhouse; a Master Facilities Plan update which looks at the best way to keep our facilities current; and we have completed a Vision 2020 planning document. We are also working to complete a five-year plan for the best use of our Operating Capital funds. These monies are used for repair and needed projects like roof repairs, air conditioning, replacement equipment, new furniture and other maintenance challenges. Many of our facilities are more than forty years old and will need important repair and updating improvements. Our preliminary plans for a Member’s Clubhouse and Administrative Center are being created. When these plans are completed the next step will be to hold approximately 15 focus group meetings of members led by our consulting firm, Peacock and Lewis. This activity will give us the input to create the next generation of architectural plans reflecting member’s needs and desires. When these plans are completed we will hold additional membership meetings to review them and to seek approval before we proceed with construction drawings and detailed cost estimates. The financial report covering 2016, included in this document, reflects a loss of just under $200,000, which was caused by un-forecasted expenses related to the opening of the Beach Club. These expenses were one time in nature. I am happy to report that so far our financial performance for 2017 is showing positive numbers and we expect this favorable situation will continue for the remainder of this year. We have a very strong membership, and even a wait list, which is consistently at the capacity established by our Board. Most important, we have an excellent group of dedicated volunteer members serving on the Board of Governors and on our 12 committees. This past year we have worked hard to use their collective skills to examine and re-examine our focus for the future. We believe that this is the best use of our volunteers and it allows the professional staff to concentrate on the day-to-day operations. I want to thank all of you, the members and our staff, for making my first year as President both enjoyable and productive. Respectfully, Leedom Kettell


PRESIDENT'S REPORT LEEDOM KETTELL

Our Beach Club opened last spring as a continuation of the Master Facilities Plan created seven years ago. Since that opening we have had no new building projects. However, we have started work on plans for a new Member Clubhouse which will replace the current Golf Clubhouse; a Master Facilities Plan update which looks at the best way to keep our facilities current; and we have completed a Vision 2020 planning document. We are also working to complete a five-year plan for the best use of our Operating Capital funds. These monies are used for repair and needed projects like roof repairs, air conditioning, replacement equipment, new furniture and other maintenance challenges. Many of our facilities are more than forty years old and will need important repair and updating improvements. Our preliminary plans for a Member’s Clubhouse and Administrative Center are being created. When these plans are completed the next step will be to hold approximately 15 focus group meetings of members led by our consulting firm, Peacock and Lewis. This activity will give us the input to create the next generation of architectural plans reflecting member’s needs and desires. When these plans are completed we will hold additional membership meetings to review them and to seek approval before we proceed with construction drawings and detailed cost estimates. The financial report covering 2016, included in this document, reflects a loss of just under $200,000, which was caused by un-forecasted expenses related to the opening of the Beach Club. These expenses were one time in nature. I am happy to report that so far our financial performance for 2017 is showing positive numbers and we expect this favorable situation will continue for the remainder of this year. We have a very strong membership, and even a wait list, which is consistently at the capacity established by our Board. Most important, we have an excellent group of dedicated volunteer members serving on the Board of Governors and on our 12 committees. This past year we have worked hard to use their collective skills to examine and re-examine our focus for the future. We believe that this is the best use of our volunteers and it allows the professional staff to concentrate on the day-to-day operations. I want to thank all of you, the members and our staff, for making my first year as President both enjoyable and productive. Respectfully, Leedom Kettell


COMPENSATION COMMITTEE REPORT Fritz Skeen, Governor and Chairman

The role of the Compensation Committee is to advise Management, the Board of Governors and the Executive Committee on general matters of compensation for the Club’s employees, including compensation plans, policies and programs. The Club’s goal is to provide competitive, cost-effective compensation, including salaries and wages as well as benefits. It is understood that Management has principal responsibility for personnel decisions and administering the compensation and benefit plans of the Club. The Committee is responsible for:

Oversight of changes to key management positions, including new hires and promotions, and the compensation results of these changes.

Completing an annual review of market pricing data for key management positions to ensure the continued competitiveness of Sawgrass compensation offerings for these positions. Management gathers this data.

A periodic review of survey data to understand how peer group clubs are addressing changes for hourly wage employees.

Oversight of annual changes to benefit plans to track both the competitiveness and cost effectiveness of these plans.

Oversight of the management of bonus plans used to incent key management employees.

Periodic discussions of other HR-related matters, including training and compliance activities. The Committee has reviewed market pricing data for all employee positions and discussed these analyses with management. The Committee will continue to provide oversight of personnel matters on behalf of the Board and the Executive Committee and to be a resource to the General Manager. I would like to acknowledge the valuable work of the Committee – Ed Collins, Steve Frankiewicz, and Leedom Kettell (ex-officio). Respectfully submitted, Fritz Skeen


FINANCE & AUDIT COMMITTEE REPORT Fritz Skeen, Governor and Chairman

Highlights –2016 was the fourth year of long-term projects for SCC. In the last three years we have opened a new Fitness Center, renovated all three nines of the Golf Course and completed Beach Club renovations and enhancements. Operating Results – Membership numbers continued strong and were at the SCC membership cap level. The year-end operating loss was $199,041. Food and Beverage revenues and expenses varied from the plan, due to the Beach Club opening later than had been built into the budget plan. The opening of the Beach Club resulted in greater start-up costs than planned. Total payroll expenses and cost of sales were better than plan for the year. While club revenues were up for the year, many of those services came with increased expenses (Tennis Lessons, Golf Lessons, Fitness Trainer sessions etc.)

Summary of Revenues and Expenses

(Dollars in thousands) 2016 2015 2014 2013 Membership Dues $7,287 $7,061 $6,733 $6,336 Food & Beverage 3,769 3,443 3,572 3,287 Golf 2,337 1,977 1,769 1,848 Tennis 406 241 146 130 Aquatics, Fitness, & Recreation 376 337 298 152 Other 129 140 92 78 TOTAL REVENUES 14,304 13,199 12,610 11,831 Cost of Sales 2,079 1,910 1,859 1,791 Payroll and related expenses 6,607 6,384 6,115 5,605 Other expenses 5,817 4,896 4,533 4,241 TOTAL EXPENSES 14,503 13,190 12,507 11,637 OPERATING INCOME (LOSS) ($199) $9 $103 $194

Financial position – Despite this year’s operating loss, our club’s financial position remains strong. Retained Funds total $1,200,000. Retained funds are for coverage of significant unanticipated expenditures. The majority of this Fund represents funds for potential windstorm related losses not covered by insurance (principally hurricane deductibles). During the year, we sustained damage from Hurricane Matthew. We received $158,000 from our insurance coverage, for tree damage and business interruption. Hurricane damage to the Beach walkovers and stairs will be paid from our Retained Fund of $1.2 million. Over time, that expenditure will be repaid into the Retained Fund. Bank Borrowing – During 2013, we negotiated two unsecured bank credit arrangements with Wells Fargo Bank to fund our golf course renovation and our planned Beach Club enhancements. The agreements provide for a $3,500,000 loan at 2.47% fixed interest and a secondary borrowing of $1,000,000 at 3.6% fixed interest. The loans are repayable over six years with no prepayment penalties. We began to draw on the line of credit during 2014, with a total borrowing at year-end of $401,713. A further withdrawal was made in December 2015 of $525,000; throughout 2016 loan borrowings continued and at the conclusion of the Beach Club enhancements we borrowed $3,750,000. During the remainder of 2016 we made loan payments of $750,000 and have a remaining balance at the end of 2016 of $3,000,000. We will continue to make loan payments and expect to have the loan paid off by the end of 2018.

(Finance & Audit Committee Report continued from page 9)


Dues and Assessments – Effective January 1, 2017, Basic Dues rates increased due to increased operating costs. Operating Capital dues remained unchanged at $48 per month. The Facility Funding Charge, initiated in September 2013 of $60 per month remained constant. At January 1, 2017 the total monthly cost of membership (dues, operating capital fee and facility funding fee) increased about 3.46%. Facility Funding Capital – This category is used for major upgrades, improvements or replacements of facilities. It may also be used, subject to Board of Governors authorization, for the purchase of Founder Country Club Memberships and other Board authorized projects. The fund is replenished by membership sales proceeds, facility funding fees and future assessments as determined by the Board of Governors. Facility funding fees currently aggregate about $900,000 per year. The Fund began 2016 with a balance of $0. During 2016, the Beach Club renovation payments were $2,548,656. The balance at year-end was $1,439,124, which includes net loan borrowings of $2,073,287. Operating Capital Fund – Operating (Furniture and Fixtures) Capital Funds are for the replacement of depreciated, worn out or obsolete Club property such as furniture and fixtures, bathrooms, kitchen equipment, air conditioners, etc. The Fund is replenished by Operating Capital dues, which currently aggregate about $815,000 per year. During the year, we significantly upgraded the air conditioning system in the Beach Club, rebuilt tennis court bulkheads and stairs, replaced kitchen equipment, replaced fitness cardio equipment, driving range artificial turf and completed numerous other required maintenance projects. The Fund ended the year with a balance of $3,192. Independent Audit Results – Our independent auditors, RSM LLP, have completed their audit and have issued an unqualified opinion on our 2016 financial statements. 2017 Annual Financial Plan – In the fourth Quarter of 2016, the Board of Governors approved a Financial Plan for 2017 that addresses the key annual objectives derived from the Club’s Strategic Plan and contains plans for each of the aforementioned funds. It is intended to provide adequate resources for operating, staffing and maintaining Club facilities, including the golf course. The Board believes that the 2017 Financial Plan has enough “stretch” built into it to challenge the management team. The Board of Governors, the Finance and Audit Committee and other Board committees will be closely monitoring Management’s progress on achieving the Plan. Finance and Accounting Staff – I certainly appreciate and acknowledge the efforts and accomplishments of our CFO, Lisa Hoffman, and the entire finance and accounting staff in achieving the financial results during this challenging year. Operating staff in all areas of the Club contributed significantly to these results. Finance & Audit Committee – On behalf of the Board of Governors and the Club’s membership, I convey sincere thanks to the current Finance & Audit Committee members, Dan Cavey, Allan Cohen, Quang Pham, John D’Aquila, Jack Kinsella, Diane Jay, David Smith and Brian Wiley. Fritz Skeen Treasurer


FITNESS AND RECREATION COMMITTEE REPORT John Caden, Governor and Chairman

The Fitness and Recreation Committee advises the Board on policies pertaining to the Fitness Center, recreational, and aquatic activities. This Committee, along with the Fitness and Recreation staff are responsible for identifying, recommending and evaluating the calendar of events and the Fitness Center programs. The Fitness, Aquatics and Recreation department provides a variety of different activities, including Beach Activities, Aquatics Programs, Personal Training, Group Exercise, Personal Services, Youth Programs, Adult Recreation, and Off Campus Excursions. Here are some highlights of those activities: Although 2016 was a year filled with challenges, Fitness & Recreation continued to build on a program that is both successful and extensive. The most significant events in 2016 related to staffing. We appointed Randy Woodrum as the new Director of the Department. Randy has had a long association with Sawgrass as an independent trainer. This experience will help him to lead our efforts going forward. In addition to Randy, we welcomed Chelsea LaRue to head up our Recreation activities and Rip Tyde to oversee Aquatics. The Beach Club renovation was completed early in the year and our staff brought a new swimming pool online. Later in the year, Mother Nature reared her ugly head and Hurricane Matthew caused substantial damage to our beach front. We lost one of our two protective dunes, the beach walkway was heavily damaged, and a good portion of our rental equipment will need to be replaced. As the year ended, we were still planning restoration to our walkways, equipment and the beach itself. Beach Activities were back to normal, now that the Beach Club renovation was completed. Besides our assortment of rental items, we expanded our towel service for both the beach and Beach Club pools. As usual, we provided swimming lessons and swim team activities, as well as adult focused activities, such as Master’s Swim and Aquacise. A chiller was installed in the Fitness Center Pool to make the water more comfortable in the summer months. The Personal Training team provided over 8,200 training sessions in 2016, up 15% from the previous year. This year we initiated an Assessment Program to encourage more personal training visits. Revenue from Personal Training was $183,000. The Club provides over 60 Group Exercise classes, ranging from Yoga to outdoor boot camp. Classes are continually expanded to accommodate members who prefer different types of activities and schedules are adjusted to provide classes for members who work. 70% of our group classes are conducted by outside contractors, with our in-house staff covering the remaining 30%. Spinning continues to be extremely popular and necessitated the introduction of a reservation system for the bikes. In addition we brought in all new spin bikes this year, and will continue to do so on a 3-4 year rotation schedule. We also hope to add an additional 4 bikes in 2017. All of our cardio equipment was replaced in 2016.

(Fitness and Recreation Committee Report continued from page 11)


Our LIFE (Living in Fullness Every Day) program has flourished under the leadership of Dr. Khan. This Senior Wellness program focuses on physical, emotional and social well-being. Our typical turnout is 20-22 members per class. Our staff provided 813 massages in 2016 which produced revenue of $77,000. We are in the process of evaluating our physical therapy program. We feel that this is an important component of our wellness offerings, but need to re-structure the agreement with our provider. Youth Programs continue to grow with the increase in younger new members with children. Child care services continued to grow. Kids Night Out is a popular weekend activity and our themed nights are highly successful. This year, we will work with an outside vendor for our Summer Camp who will assist in staffing and planning. Adult outings, such as the trip to the Brew at the Zoo event and pub crawls are usually very well attended. The Fitness and Recreation Staff also coordinated a number of major club activities, including the July 4

th Celebration and Parade, the Easter Egg Hunt, The Easter KEG Hunt, and the Polar Bear Plunge. In 2017, the goal is to continue to provide a wide variety of programs in all areas of the Fitness, Aquatics and Recreation department. Thank you to Randy Woodrum and Chelsea LaRue along with their staff, for their continued dedication to the Sawgrass Country Club Membership. Special thanks to the Fitness, Aquatics and Recreation Committee for their hard work. Vicki Van Horn, Judi Darby, Trish Arnett, Sean McHale, Fran Serur, Marty Gavaghan, and Billy Smith. Respectfully submitted, John Caden


GOLF COMMITTEE REPORT James Van Horn, Governor and Chairman

The responsibilities of the Golf Committee include advising the Board of Governors on all matters related to golf operations including preparing the calendar of events, overseeing the Club’s rules of golf and monitoring the golf handicap program. We also oversee Member golf associations and the use of our course for outside events. The Men’s Tournament Committee is now in its sixth year. The Sawgrass Women’s Golf Association (SWGA) continues the tradition of successful women’s and couples’ events. With their leadership, our club had another outstanding year conducting and hosting golf events. More than 20 men's and mixed golf events were held for members with an additional 30 SWGA events and team play dates. Of those tournaments, 5 were member-guest events to go along with over 20 guest days, which helps showcase our club to potential new golf/all sports members. It was also nice to see the 2016 Men’s Member-Guest sold out in record time (Thank you Gregg Deiboldt for leading this effort). We also hosted several charity events including Friends of Jim Furyk, Patriot Day the True Blue Military Charity Outing, and the SWGA’s annual Cancer Tournament. I am proud of Sawgrass’s support of our local charities. We once again hosted the Hayt Collegiate Tournament and were thrilled to host the AJGA Junior Players event while the TPC course underwent renovations. These events help maintain our status as one of the top championship golf courses in Northeast Florida and will undoubtedly attract new golf members in the future." The Handicap Committee has been very active and provided much needed education to members on the handicap system. Sawgrass members are now entering over 87% (up from 67%) of their scores in the handicap system. By all measures, Sawgrass Golf had a very good 2016. We are playing on an exceptionally maintained golf course, our rounds played are up 17% over last year, and our Men’s, Women’s and Junior Golf associations are active and growing. That said, I think the most impressive 2016 accomplishment for Sawgrass Golf has been the success of our golf training efforts. Golf lessons increased an outstanding 59% in 2016. A 59% increase in lessons means more members are learning the game which will result in more members enjoying the game, which will result in more members playing the game. Thank you, Laura Baugh, Quinton Grey, and the entire teaching staff. You are doing a great job and who knows, maybe next year you can cure my shanks! While we have much to celebrate at Sawgrass Golf, I am concerned about members not following our club rules. Too many members are either displaying a lack of knowledge on what is acceptable, or a sense of entitlement by knowingly disregarding of our rules. Parking a golf cart next to the green is unacceptable and so is using cart paths for travel to and from your house when golfers are on the course. Unfortunately, these are everyday occurrences at Sawgrass Country Club. It does not make sense to spend more than $10 million renovating and upgrading a golf course and then to not take care of it. I fear if we do not start respecting our fellow-members, we will not be able to afford a first-rate golf facility. Mike Broderick, our Interim Director of Golf, leads a great golf staff and oversees all golf operations. We thank Mike and his full time staff that includes Hank Dettlaff, Aaron Russell, Gary Shankland, Chris Jaster, and Tony Scarpitti. Dave Gooden and Michael Hanifan, Randy Looney and Employee of the Year Austin Philo make things hum outside, while Larry Wright and Stewart Means take care of our locker facilities. Thanks to all of you.

(Golf Committee Report continued from page 13)


Lastly, I would like to thank our Golf Committee members for their time, help, service and dedication. They have given nothing but great advice and have done a yeoman’s job of pointing me in the right direction (no small task). Thank you, Liz DeBlock (SWGA Chair), Ana Leaird, Arthur Iannucci (Handicap Committee), John Reed (Men’s Tournament Committee), David Laird, and Duncan Wall. Respectfully submitted, James Van Horn


GREENS COMMITTEE REPORT Steve Frankiewicz, Governor and Chair; Tom Stewart, Co-Chair

Members included John Brantley, Tom Browne, Jim Dowdee, Chris Hunt, Mike Jay, Sherri Lubin, Pat O’Connell, Bob Steimke, and Leonard Thompson. Barry McDonald, Greg Lecker, Mike Broderick, Matt Durkee and Bill Schmit represented management.

A highlight of the year was the promotion of Matt Durkee to Director of Agronomy and Bill Schmit to Golf Course Superintendent. The condition of the Course is excellent, testament to the outstanding performance of Matt, Bill and the GC Maintenance staff.

Major issues addressed by the Committee during the period include: The $315,000 required to fix the West 9 bunkers will not fit in any Operating Capital budget in the fore-

seeable future. We requested plans for a multi-year renovation from MacCurrach Golf Construction. Mike Jay headed the effort to produce a brochure to inform members of expectations, rules and

procedures relating to taking care of the course and proper etiquette. Brochures were distributed at the Men’s Member Guest Tournament in November and in January.

The two 11-day shut-down periods for GC Maintenance (GCM) was extremely successful. Planned closures in 2017 are June 5 - 15 and July 31 - Aug 10.

Due to low water levels algae and grasses in the pond was exposed to more sun than usual and grew more aggressively in the summer and fall. The SGA owns the ponds and is responsible for maintaining them.

One attribute of G-angle sand that inhibits its escaping bunkers via wind or water also makes the granules stick together. This causes hard sand conditions and sand wedges “bottoming out”. To address this GCM employs a special tractor raking attachment and sand depth was increased from the original Billy Bunker specifications.

Matt installed 2000 ft. of drainage pipe in the West #5 fairway. GCM plans to address other areas to the east of the cart paths on #7 and #8 West during upcoming shut-downs.

GCM installed a wash rack, air compressors and pressure washers, significantly reducing toxic chemicals entering the water system.

The amount requested for the 2017 GCM budget was roughly $2.5 million, representing a small increase over 2016. Maintenance underspent its 2016 budget.

“Turf Hound” mats were installed on the practice range in late November. The mats, which are secured on tracks, can be replaced when worn out.

The Greens and Golf Committees began looking at changes to tee times that allow for more GCM. In February, Davey Tree replaced the tree lost in Hurricane Matthew on West #7 with two 20-foot pine

trees from its nursery. Davey will care for the trees, which have a 1 year warranty. At least until there is technical data available to assess the Vitalife treatment, SCC will not use the

product. Matt Durkee explained that our treatments are determined by twice-monthly chemical analysis. The pond banks are eroding. The estimated cost of fixing all eroding areas is $1.0 million. We will do a

little each year for the foreseeable future. $60,000 in 2017.


GREENS COMMITTEE REPORT Steve Frankiewicz, Governor and Chair; Tom Stewart, Co-Chair

Members included John Brantley, Tom Browne, Jim Dowdee, Chris Hunt, Mike Jay, Sherri Lubin, Pat O’Connell, Bob Steimke, and Leonard Thompson. Barry McDonald, Greg Lecker, Mike Broderick, Matt Durkee and Bill Schmit represented management.

A highlight of the year was the promotion of Matt Durkee to Director of Agronomy and Bill Schmit to Golf Course Superintendent. The condition of the Course is excellent, testament to the outstanding performance of Matt, Bill and the GC Maintenance staff.

Major issues addressed by the Committee during the period include: The $315,000 required to fix the West 9 bunkers will not fit in any Operating Capital budget in the fore-

seeable future. We requested plans for a multi-year renovation from MacCurrach Golf Construction. Mike Jay headed the effort to produce a brochure to inform members of expectations, rules and

procedures relating to taking care of the course and proper etiquette. Brochures were distributed at the Men’s Member Guest Tournament in November and in January.

The two 11-day shut-down periods for GC Maintenance (GCM) was extremely successful. Planned closures in 2017 are June 5 - 15 and July 31 - Aug 10.

Due to low water levels algae and grasses in the pond was exposed to more sun than usual and grew more aggressively in the summer and fall. The SGA owns the ponds and is responsible for maintaining them.

One attribute of G-angle sand that inhibits its escaping bunkers via wind or water also makes the granules stick together. This causes hard sand conditions and sand wedges “bottoming out”. To address this GCM employs a special tractor raking attachment and sand depth was increased from the original Billy Bunker specifications.

Matt installed 2000 ft. of drainage pipe in the West #5 fairway. GCM plans to address other areas to the east of the cart paths on #7 and #8 West during upcoming shut-downs.

GCM installed a wash rack, air compressors and pressure washers, significantly reducing toxic chemicals entering the water system.

The amount requested for the 2017 GCM budget was roughly $2.5 million, representing a small increase over 2016. Maintenance underspent its 2016 budget.

“Turf Hound” mats were installed on the practice range in late November. The mats, which are secured on tracks, can be replaced when worn out.

The Greens and Golf Committees began looking at changes to tee times that allow for more GCM. In February, Davey Tree replaced the tree lost in Hurricane Matthew on West #7 with two 20-foot pine

trees from its nursery. Davey will care for the trees, which have a 1 year warranty. At least until there is technical data available to assess the Vitalife treatment, SCC will not use the

product. Matt Durkee explained that our treatments are determined by twice-monthly chemical analysis. The pond banks are eroding. The estimated cost of fixing all eroding areas is $1.0 million. We will do a

little each year for the foreseeable future. $60,000 in 2017.

(Greens Committee Report continued from page 15)


The SGA and SCC are cooperating on the midge fly problem by sharing the costs of installing bubblers

and providing electricity. By constantly circulating water from the bottom to the top and back again reduces the midge fly larvae population.

Working with the County, GCM staff will erect fences in the area where one of the two dunes at the beach club was lost in the Hurricane.


HOUSE COMMITTEE REPORT

Kristen Ely, Governor and Chair The House Committee’s (HC) roles and responsibilities equate to facilitating the ability of Sawgrass Country Club Management to provide exemplary food and beverage (F and B) service in outstanding surroundings to its Members. Additionally, the HC reviews and makes recommendations to Management as to the appearance, décor, furnishings and cleanliness of the Golf Club House and the Beach Club, including all dining, associated areas and outdoor areas. The Members of the House Committee 2016 are: Virginia BonDurant, Frances Lyon, Kathleen Meyer, Constance Quinlan, Ken Schultz, Kathryn Unger, Robert Sleeker, Mark McCall, Douglas Moody, Gary Lubin, Kristen Ely, Chair as well as management representation of Barry McDonald, General Manager and Perry Kenney, Clubhouse Manager. The reopening of the Beach Club in April of 2016 gave the HC the opportunity to witness our very capable Management and Staff launch new F&B opportunities and offerings. An expanded pavilion dining and lounging area, along with controlled access to the pavilion resulted in less crowding and happier diners. Last year’s HC ‘s recommendations and Board approved dress code modifications for the Beach Club dining areas experienced a few weeks of confusion and occasional negative responses from Members. As the year has unfolded, the adoption of the relaxed dress code and the frequent reminders to Membership of the new Dress Code (collared shirts for men and boys after 6pm) has been embraced by most. Staff and Management are to be complimented on their ability to help Member’s adhere to the Upscale, Country Club atmosphere at the Beach Club. The HC recommends continued frequent communications to the general Membership regarding dress code in the effort to avoid conflict and embarrassment. HC members have been actively promoting the comment section of the Sawgrass website to other members. This has proved, along with the introduction of the Humm comment system, the most effective way for members to compliment operations, staff, and to make suggestions for improvements. The House Committee receives a Humm report monthly and is working on modifying the questions. An update from 2011 to the Catering Policy for the entire SCC was discussed and a recommendation made to the BOG. After several revisions it was approved. The policy will be available on the SCC website soon. Janet Collins, Membership and Marketing Director and Cathy Wichert, Membership Chair, gave the HC a presentation regarding the reciprocal usage and policy with Timuquana CC and about changes to Temporary Memberships. Efforts are underway, led by Perry Kenney Clubhouse Manager, to refresh, refurbish, replace furniture in the Golf Club House and Beach Club on a regular basis. The closure of the Beach Club on Mondays and Tuesday’s allows for deep cleaning without Member disruption. The Committee commends the efforts and success of the F&B Management and Staff and Executive Chef, Michael Ayres, for the successful rollout of the newly renovated Beach Club. Submitted by: Kristen Ely

_______________________________________________________________________________________ Sawgrass Country Club · Annual Report 2016

Page 18

LEADERSHIP DEVELOPMENT COMMITTEE Dennis McCarthy, Chairman Mike Morgan, Vice-Chairman

The Leadership Development Committee (LDC) which was established in November 2007 was based on a recommendation from the Governance sub-committee of the Strategic Planning Committee. The 2016-2017 LDC consisted of 9 members, plus the Ex-Officio who is a non-voting member. The key responsibilities of this committee are:

- Choosing the Nominees to fill open Board positions. - Maintaining a list of qualified Country Club Members who wish to volunteer to serve

on the Board or a Standing Committee - Proposing candidates to fill openings on the Club’s Standing Committees

Country Club Members or their spouses / designated domestic partners and Junior “Class A” members who have been Country Club Members for at least 2 years may serve on the LDC. The normal term is three years. The 2016-17 accomplishments included hosting a reception to acknowledge and honor those Club Members who had volunteered for the Board or Standing Committees during the past year, designing and implementing a series of e-mail blasts to the membership, especially in December, to encourage those members who are interested to apply for a Board nomination; and designing and implementing additional e-mail blasts in March and April to encourage members to apply for the approximately 30 openings on the Standing Committees. After receiving numerous applications from qualified members, the LDC reviewed the applications and conducted interviews of each candidate, before choosing by secret ballot a slate of 3 nominees to fill the open Board positions in 2017. Also, the LDC made recommendations to the Board of member volunteers to fill Standing Committee assignments for this year. The selection of a slate of highly qualified Board nominees and the recommendation of members to fill Standing Committee assignments indicate that the process is working as initially intended in the creation of the LDC. The LDC members appreciate that so many members of the club volunteer and we strongly encourage those of you who have not yet volunteered to do so. This being the tenth year of the Committee, we have worked to improve the electronic ways in which to inform Club members of the volunteer process as well as to maintain and continually update a list of outstanding candidates for future Board or Committee consideration. Further, we sent to the Board our annual “Situation Report” on the status of the Committee and its work. Although we are separate from the Board, we need their cooperation to achieve the goals set for this Committee. The Board has responded in a positive manner to many of our suggestions and we will continue to work with them as the need arises.

(Leadership Development Committee Report continued from page 18)


The LDC members this year are: Dennis McCarthy, Chair Mike Morgan, Vice Chair Delores Adams Murray Beard Vickie Cavey Andy Dykstra Bob Machin – (Past President) Bill Maletz A.J. Ruvane Sam Harkleroad (ex-officio) The Leadership Development Committee is a broad and diverse representation of our many different demographics that make up our Sawgrass Country Club community. Dennis McCarthy


Legal & Bylaws Committee

Edmond Collins, Governor and Chairman The Legal and Bylaws Committee is one of the Club’s Standing Committees. The Committee advises the Board of Governors (BOG) with respect to the publication and interpretation of the Bylaws and the “Membership Rules and Responsibilities” (both of which are available on the Club’s website), and generally with all matters of a legal nature pertaining to the Club, (see Section 6.41 of the Bylaws). However, the Committee does not give legal opinions or practice law. The members of the Committee were Paul Bschorr, Edmond Collins, Bill Murdock and Charles Tanksley. Staff Representatives were GM Barry McDonald and Janet Collins, Director of Membership Sales. Below is a list of the matters in which the Committee or the Chairman played an active role:

1 Led the Expedited Grievance Procedure relating to two Members involved in a physical altercation and verbal abuse of staff and other Members at the Beach Club, resulting in the suspension of one member for 12 months and the other member for six months.

2 Participated as a member of the Executive Committee in the discussions and decisions relating to the

dismissal of the Director of Fitness.

3 Participated as a member of the Executive Committee in the discussions and decisions relating to the termination of the Director of Golf.

4 Amended Sections 3.951 and 3.956 of the Bylaws so that a Member could qualify for Relocation

Status if the Member moved “outside the five-county area”, (i.e. St. Johns, Duval, Baker, Clay and Nassau counties). The former requirement was a move “more than 100 miles from Sawgrass”.

5 Discussed changing Section 6.11 of the Bylaws to allow a Governor who is in the last year of a three-

year term to be elected President. The analysis considered many factors including the Bylaw limitation that a Governor can serve only two three-year terms, the role of the Leadership Development Committee in nominating candidates for the Board, the latitude afforded by the Bylaws in determining the total number of Governors on the Board as well as the concept of achieving a “staggered“ Board.

6 Sponsored a successful motion for the Board to reestablish the Compensation Committee as a

standing committee of the Board.

7 Amended Section 3.0 of the Bylaws to raise the total number of Members from 1,450 to 1,475.

8 Discussed the expulsion of Members whose accounts remain delinquent even after a 30-day suspension for the delinquency.

9 Amended Sections 6.72 and 6.74 of the Bylaws regarding petition candidates for the Board of

Governors. Submitted by Edmond Collins, Chair


MEMBERSHIP COMMITTEE REPORT Cathy Wichert, Governor and Chairman

The Membership Committee’s responsibility is to advise the Board of Governors on matters pertaining to the Membership Department and to work in partnership with the Director of Membership. The key responsibilities of the Committee are:

Identify, develop, and recommend member retention and marketing programs to the Board that support achieving and maintaining the desired membership level.

Analyze and recommend to the Board policies, procedures and changes pertaining to the membership size, membership categories, dues and privileges associated with each membership category.

Advise the Board on general matters relating to external and internal communications of the Club that may affect membership.

Review the Rules and Responsibilities pertaining to membership programs and make recommended changes to the Board.

Plan and monitor membership welcoming and orientation programs to include the Ambassador Program. Review all applications for membership and recommend approval or declination to the Board. Review and recommend to the Board action on all Member dues upgrades or downgrades, or any change to

their Membership status. Review annually all Honorary Memberships and recommend appropriate changes to the Board.

Membership accomplishments in 2016:

Dues revenues in 2016 were higher than plan. Total membership cap of 1450 was maintained throughout 2016 with a waitlist in place. The conversion rates for Preview members in 2016 was 67% overall to a plan of 40%; All Sports member

conversions 60%; Tennis 70%; and Social 76%. 2016 Membership Initiatives - New programs are in bold:

Total membership cap of 1450 in effect including Associate cap of 300. 2016 Preview membership program. Preview members may join the club for a one-time, six (6) or twelve

(12) month trial period by paying a $1,500 non-refundable application fee and dues for their selected category. The twelve-month Preview program is only available in Country Club or Junior All Sports and Tennis categories. Country Club or Junior Social category is a six-month trial. At the end of trial period, the application fee may be applied toward any membership initiation fee to join.

In lieu of interest-free installment plans, the initiation fees for Country Club and Associate membership were increased if the member chooses to pay with an installment plan. The Country Club membership is $26,500 if paid in full or $30,000 if paid by installment plan. Associate membership is $12,500 if paid in full or $13,500 if paid by installment plan.

Associate upgrade offer in Spring 2016 yielded two (2) upgrades to Country Club membership. Timuquana CC reciprocal usage was reviewed and approved for 2017. Competitive review of Temporary Member benefits led to an increase in Temporary Member

fees for 2017. Membership Cap has been increased to 1475 total members including the Associate Member Cap

of 300.

(Membership Committee Report continued from page 21)


Marketing was extensive and included the following:

Community Open House Event Realtor Education luncheons Direct mailing to new Sawgrass CC move-ins and other nearby neighborhoods Print ads during TPC week, St. Johns Chamber map, and Beaches Annual guides Press releases on Beach Club renovations/Club tours for soft opening Expanded our Social Media presence with FaceBook, Twitter, Instagram, LinkedIn, Google,

Pinterest, and YouTube Special recognition to the Sawgrass Ambassador Program and the Membership staff. This popular and successful welcoming program for new members is an important part of the orientation process for new members. Over 68 member families volunteer to meet and invite new members to join them in recreational and social activities. It is a rewarding experience for all involved and adds to the quality of the Sawgrass experience for our new members. We are most fortunate at Sawgrass Country Club to have the services of many dedicated staff members. The work of this committee is due in large parts to Barry McDonald, Peggy Grant, Janet Collins, Karen Schoen-Kiewert, Mary McGarrigle and Kevin Ramsey. The Membership Committee includes Robert Fairley, Greg Deiboldt, Becky Dykstra, Donna Fiedorowicz, Patricia Koizim, Mark Kontny, Barbara Nixon, Ed Waller and Brian Wright. I extend my sincere thanks and admiration to all of you. In closing, I want to encourage our members to continue referring prospective members. Our members are our best resource. Please welcome our Preview and Temporary Members. Be on the lookout for prospective new members and don’t hesitate to call Janet Collins and her staff. There is not a private club in our area with the resources of Sawgrass Country Club.

(Membership Committee Report continued from page 22)


The following is a recap of the Membership by category as of January 1, 2017:

Country Club January 2017 January 2016 Social 378 380 All Sports Individual 283 279 All Sports Family 225 229 Total All Sports CC 508 508 Tennis 54 41 Total CC Members

940 929

SENIOR Social 77 68 All Sports Individual 18 20 All Sports Family 2 5 Total All Sports CC 20 25 Tennis 3 4 Total Senior Members 100 97 JUNIOR Social 30 32 All Sports Individual 25 16 All Sports Family 8 10 Total All Sports CC 33 26 Tennis 10 13 Total Junior Members 73 71 NON-EQUITY

Social 40 42 All Sports Individual 7 7 All Sports Family 0 1 Total All Sports CC 7 8 Tennis 3 3 Total Non-Equity Members

50 53

ASSOCIATE MEMBERS Social 250 255 Tennis 50 45 Total Associate Members 300 300 Total All Members

1463 1450

Total All Sports Members

568 567

Total Tennis Members 120 104

Total Social Members 775 779


PROPERTY COMMITTEE REPORT Robert B. Dale, Governor and Chairman

Committee Members: Joseph Abbas, Bart Barton, Joe Downes, Tom Kraft, James Petersen and Bryan Rendzio. The Property Committee advises the Sawgrass Country Club Board of Governors and the Club’s General Manager on significant construction, repair, renovation and general maintenance issues. The Committee’s oversight is related to the numerous structures and grounds within the Sawgrass Country Club’s property excepting the golf course. A capital budget is developed by the General Manager and is shared with the Property Committee each year. The Reserve Study has been updated in 2016 to reflect a current assessment of our facilities and recognition of new/replacement equipment. Management has laid out a projected spending plan for the coming year by quarter. Projects in Process: Technology – Brandon Ferrell has been hired to lead our technology efforts. Facility Dude – A management software program to improve the overall responsiveness to our maintenance operations has been implemented. Management will continue to seek additional opportunities to maximize the capability of this software. General Housekeeping – Gary Winters, Director of Maintenance, has brought the majority of the maintenance team in house. This decision has proven to be a more effective solution for consistent oversight of the maintenance program. Monica Sibbald has been hired to lead our building services program. Gary Winters and Monica have provided guidelines for facility service. This plan will be useful in achieving maintenance facility standards. Property Actions: Beach Club – modernization completed Tennis Facility – court, seating and surrounding steps updated Dune Walkovers – project has been approved and is in process Thank you to all who have served this year and contributed ideas, energy and desire to improve the Sawgrass Experience. Respectfully submitted, Robert B. Dale


STRATEGIC PLANNING COMMITTEE REPORT Doug Miller, Governor and Chairman

The role of the Strategic Planning Committee (SPC) is to:

Provide the Board regular analysis of issues and trends that affect the Club, and advise on the long- term strategic plan for the Board. The Board, the Strategic Planning Committee, and Management create the strategic plan with input from the Members on a recurring basis, presently every 5th year, usually with assistance from professional consultants. The Committee also conducts appropriate research and evaluations to recommend updates to the Plan in the years between plan renewal years.

Conduct, analyze, and report results of the annual Member Satisfaction Survey. Conduct other projects as may be required by the Board. Assist in the creation of the Master Facilities Plans, usually with assistance from professional

consultants specializing in this area, and assist in updating the Plan as required. Mission, Vision, Strategic Plan, Objectives During 2016 the Strategic Planning Committee (SPC) focused on the following.

Temporary membership usage discussions. Review and feedback on Master Facility Plan update prepared by McMahon Group. Prepared Member Satisfaction Survey. Survey will be held in first quarter of 2017.

SPC Committee Members 2016 was another active year for the Strategic Planning Committee. Committee Members include:

Doug Miller, Chair Janet Collins, Membership Director Barry McDonald, General Manager Chuck Wodehouse David Lea Jim Hoener John Fawcett Judy Kontny Mandy Morrow Peter Davis Phil Keefer

All of the Strategic Planning Committee members contributed their time and meaningful expertise to the benefit of Sawgrass Country Club. Respectfully submitted, Doug Miller, SPC Chair


TENNIS COMMITTEE REPORT John Caden, Governor and Chairman

The Tennis Committee advises the Board on general matters pertaining to the tennis operations and facilities. This committee will assist in the development of the calendar of tennis events, will draft the Club’s rules for tennis activities, and promote intra-club and inter-club competition. The first full calendar year of the Ken Veney era saw the tennis program grow in every area. The timing of Ken’s arrival with the addition of more younger members has seen the participation level of tennis grow substantially. For probably the first time in its history, tennis court availability at Sawgrass Country Club is sometimes a challenge. The combination of league tennis-especially on the ladies’ side; an active men’s group; a junior program that is getting better each week; well-attended clinics and private lessons fills up our thirteen courts pretty quickly. Being the victims of our own success will challenge the staff to manage this growth, while continuing to provide first class service to our members. At the beginning of the year, we had planned to replace the deteriorating stairways between the tennis courts. However, the Board realized that the condition of the bleachers was also becoming intolerable and elected to completely renovate the bulk heading surrounding the courts. This nine month project was completed by year’s end. We still face additional challenges that are expected with aging buildings and it is refreshing to know that these will be addressed as we develop our ongoing Master Facilities Plan. Moving forward, we need to address the growing evening and nighttime demand for court availability that is a by-product of attracting younger members to our club. Meeting this objective will require providing more lighted courts. As one of the premier tennis facilities in Northeast Florida, Sawgrass again was the host for several prestigious outside tournaments, including the SenioRitas, and the Jacksonville Clay Court Championships. Membership and Program Growth Active tennis players have grown from 363 to 407. Sawgrass is fielding 17 teams in Country Club, First Coast, Beaches, USTA and Junior Team Tennis. The Junior Program has 80 participants, up from 70 last year. Events USTA Clay Court Championships Designated Tournament had over 100 players SenioRITA Ladies Tournament in its 17th year had 288 players and raised over $100,000 USTA Junior Grand Prix hosted over 90 players Sawgrass Pro Am featured 50 players in a fundraiser for UNF tennis Breakfast at Wimbledon – 50 players Margarita Mixers – 40 players Family Parent Child – 52 players Turkey Shoots – 60 players End of year party – 60 people

(Tennis Committee Report continued from page 26)


Programming Mens drill night has continued to grow. Mens play night is seeing up to 5 lighted courts being used. Special thanks go to Ken Veney, Magnus Berglund, Brian and the entire staff for their tireless efforts to deliver the Sawgrass Experience to the Tennis Members. Thank you to the Tennis Committee: Dave Delaney, Lisa Dalziel, Bonnie Edwards, Peggy Fawcett, Charlie Romain, Lou Pontigo, Ryan Dunn, Pete Holtermann, and Jack Wallner. Respectfully, John Caden

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Sawgrass Country Club, Inc.Financial ReportYears Ended December 31, 2016 and 2015

1

Independent Auditor’s Report

The Board of Governors Sawgrass Country Club, Inc. Ponte Vedra Beach, Florida

Report on the Financial Statements We have audited the accompanying financial statements of Sawgrass Country Club, Inc. (the Club) which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements (collectively, the financial statements).

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Club’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Club’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sawgrass Country Club, Inc. as of December 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Fort Lauderdale, Florida March 16, 2016

1


The Board of Governors Sawgrass Country Club, Inc. Ponte Vedra Beach, Florida

Report on the Financial Statements We have audited the accompanying financial statements of Sawgrass Country Club, Inc. (the Club) which comprise the statements of financial position as of December 31, 2015 and 2014, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements (collectively, the financial statements).

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Club’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Club’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.


OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sawgrass Country Club, Inc. as of December 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Fort Lauderdale, Florida March 16, 2016

THE POWER OF BEING UNDERSTOODAUDIT | TAX | CONSULTING

Contents

Independent auditor’s report 1

Financial statements

Statements of financial position 2

Statements of activities 3

Statements of cash flows 4

Notes to financial statements 5-12

1


The Board of Governors Sawgrass Country Club, Inc.

Report on the Financial StatementsWe have audited the accompanying financial statements of Sawgrass Country Club, Inc. which comprise the statements of financial position as of December 31, 2016 and 2015, the related statements of activities andcash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.


OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sawgrass Country Club, Inc. as of December 31, 2016 and 2015, and the changes in its net assetsand its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Fort Lauderdale, FloridaMarch 15, 2017

2

Sawgrass Country Club, Inc.

Statements of Financial PositionDecember 31, 2016 and 2015

2016 2015Assets

Current assets: Cash 2,392,318 $ 2,546,410 $ Certificates of deposits (Note 2) 250,000 - Less designated funds (Note 2) 2,642,318 1,802,918

Operating cash - 743,492 Accounts receivable – net (Note 9) 997,587 821,382 Inventories 426,298 342,981 Prepaid expenses 204,069 171,910

Total current assets 1,627,954 2,079,765

Designated funds (Note 2) 2,642,318 1,802,918 Property and equipment, less accumulated depreciation (Note 3) 24,287,919 22,297,566

28,558,191 $ 26,180,249 $

Liabilities and Net Assets

Current liabilities: Current maturities of obligations under capital leases 1,519 $ 10,938 $ Current maturities of long-term debt (Note 4) 500,000 - Accounts payable, trade 508,586 570,987 Accounts payable, capital 103,818 606,530 Accrued expenses 392,947 407,110 Deferred dues, fees and charges 1,010,395 908,312

Total current liabilities 2,517,265 2,503,877

Long-term debt (Note 4) 2,500,000 926,713

Commitments (Note 8)

Unrestricted net assets 23,540,926 22,749,65928,558,191 $ 26,180,249 $

See notes to financial statements.

2


Statements of Financial PositionDecember 31, 2016 and 2015

2016 2015Assets

Current assets: Cash 2,392,318 $ 2,546,410 $ Certificates of deposits (Note 2) 250,000 - Less designated funds (Note 2) 2,642,318 1,802,918

Operating cash - 743,492 Accounts receivable – net (Note 9) 997,587 821,382 Inventories 426,298 342,981 Prepaid expenses 204,069 171,910

Total current assets 1,627,954 2,079,765

Designated funds (Note 2) 2,642,318 1,802,918 Property and equipment, less accumulated depreciation (Note 3) 24,287,919 22,297,566

28,558,191 $ 26,180,249 $

Liabilities and Net Assets

Current liabilities: Current maturities of obligations under capital leases 1,519 $ 10,938 $ Current maturities of long-term debt (Note 4) 500,000 - Accounts payable, trade 508,586 570,987 Accounts payable, capital 103,818 606,530 Accrued expenses 392,947 407,110 Deferred dues, fees and charges 1,010,395 908,312

Total current liabilities 2,517,265 2,503,877

Long-term debt (Note 4) 2,500,000 926,713

Commitments (Note 8)

Unrestricted net assets 23,540,926 22,749,65928,558,191 $ 26,180,249 $


3


Statements of ActivitiesYears Ended December 31, 2016 and 2015

2016 2015Operating revenues:

Membership dues, operating 7,287,213 $ 7,060,880 $Food and beverage sales 3,709,564 3,443,173Minimum spending requirements 59,893 43,461Greens and cart fees 1,244,587 1,066,618Golf pro shop sales and other fees 973,878 910,393Tennis pro shop sales and fees 406,021 241,647Fitness and recreation fees 376,534 336,671Business interruption insurance proceeds (Note 9) 8,074 -Other revenues 126,276 95,841

14,192,040 13,198,684Operating expenses (Note 10):

Cost of sales 2,078,755 1,910,060Payroll and related expenses 6,905,379 6,383,622Other operating expenses 5,399,624 4,896,198

14,383,758 13,189,880Operating income (loss) (191,718) 8,804

Other revenues (expenses):Membership dues, capital 815,453 715,779 Joining fees, associate members 456,714 356,494 Facility capital funding fee – associate and junior members (Note 6) 228,850 219,172 Other income (expense) 38,195 (83,870) Interest income 753 3,956 Water damage (86,628) (158,799) Interest expense, net of amount capitalized ($10,219 – 2016; $10,894 – 2015) (60,324) (3,554) Loss on disposal of property and equipment (Note 3) (166,930) (31,371) Membership sales expense (63,668) (71,976) Depreciation (1,697,792) (1,524,120) Hurricane Matthew expenses (Note 9) (117,773) -Hurricane Matthew insurance proceeds (Note 9) 150,000 -

(503,150) (578,289) Deficiency of revenues over expenses before

Country Club and Junior membership transactions (694,868) (569,485)

Country Club and Junior membership transactions:Sale of memberships, including installment payments 1,310,466 1,324,064Redemption of memberships (508,403) (479,355) Master plan assessment (Note 6) 684,072 682,850

1,486,135 1,527,559Increase in unrestricted net assets 791,267 958,074

Unrestricted net assets:Beginning 22,749,659 21,791,585

Ending 23,540,926 $ 22,749,659 $


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Statements of ActivitiesYears Ended December 31, 2016 and 2015

2016 2015Operating revenues:

Membership dues, operating 7,287,213 $ 7,060,880 $Food and beverage sales 3,709,564 3,443,173Minimum spending requirements 59,893 43,461Greens and cart fees 1,244,587 1,066,618Golf pro shop sales and other fees 973,878 910,393Tennis pro shop sales and fees 406,021 241,647Fitness and recreation fees 376,534 336,671Business interruption insurance proceeds (Note 9) 8,074 -Other revenues 126,276 95,841

14,192,040 13,198,684Operating expenses (Note 10):

Cost of sales 2,078,755 1,910,060Payroll and related expenses 6,905,379 6,383,622Other operating expenses 5,399,624 4,896,198

14,383,758 13,189,880Operating income (loss) (191,718) 8,804

Other revenues (expenses):Membership dues, capital 815,453 715,779 Joining fees, associate members 456,714 356,494 Facility capital funding fee – associate and junior members (Note 6) 228,850 219,172 Other income (expense) 38,195 (83,870) Interest income 753 3,956 Water damage (86,628) (158,799) Interest expense, net of amount capitalized ($10,219 – 2016; $10,894 – 2015) (60,324) (3,554) Loss on disposal of property and equipment (Note 3) (166,930) (31,371) Membership sales expense (63,668) (71,976) Depreciation (1,697,792) (1,524,120) Hurricane Matthew expenses (Note 9) (117,773) -Hurricane Matthew insurance proceeds (Note 9) 150,000 -

(503,150) (578,289) Deficiency of revenues over expenses before

Country Club and Junior membership transactions (694,868) (569,485)

Country Club and Junior membership transactions:Sale of memberships, including installment payments 1,310,466 1,324,064Redemption of memberships (508,403) (479,355) Master plan assessment (Note 6) 684,072 682,850

1,486,135 1,527,559Increase in unrestricted net assets 791,267 958,074

Unrestricted net assets:Beginning 22,749,659 21,791,585

Ending 23,540,926 $ 22,749,659 $


4


Statements of Cash FlowsYears Ended December 31, 2016 and 2015

2016 2015Cash flows from operating activities:

Increase in unrestricted net assets 791,267 $ 958,074 $Adjustments to reconcile increase in unrestricted net assets to

cash provided by operating activities:Depreciation 1,697,792 1,524,120Country Club and Junior membership transactions (1,486,135) (1,527,559) Loss on disposal of property and equipment 166,930 31,371Changes in assets and liabilities:

(Increase) decrease in:Accounts receivable (176,205) (128,597) Inventories (83,317) 23,071 Prepaid expenses (32,159) (44,627)

Increase (decrease) in:Accounts payable, trade (62,401) 161,138Accrued expenses (14,163) 148,935Deferred dues, fees and charges 102,083 (4,736)

Cash provided by operating activities 903,692 1,141,190

Cash flows from investing activities:Capital expenditures (4,364,987) (3,125,438) Proceeds from sale of property and equipment 7,200 -Purchase of certificate of deposit (250,000) -Sales of certificates of deposit - 500,000

Cash used in investing activities (4,607,787) (2,625,438)

Cash flows from financing activities:Proceeds from long-term debt 2,823,287 525,000Principal payments on long-term debt (750,000) -Principal payments on capital lease obligations (9,419) (49,838) Sale of memberships, including installment payments 1,310,466 1,324,064Redemption of memberships (508,403) (479,355) Master Plan assessment 684,072 682,850

Cash provided by financing activities 3,550,003 2,002,721

Increase (decrease) in cash (154,092) 518,473

Cash, including Designated Funds:Beginning 2,546,410 2,027,937

Ending 2,392,318 $ 2,546,410 $

Supplemental disclosure of noncash investing activities: Property and equipment acquired through accounts payable, capital 103,818 $ 606,530 $


4


Statements of Cash FlowsYears Ended December 31, 2016 and 2015

2016 2015Cash flows from operating activities:

Increase in unrestricted net assets 791,267 $ 958,074 $Adjustments to reconcile increase in unrestricted net assets to

cash provided by operating activities:Depreciation 1,697,792 1,524,120Country Club and Junior membership transactions (1,486,135) (1,527,559) Loss on disposal of property and equipment 166,930 31,371Changes in assets and liabilities:

(Increase) decrease in:Accounts receivable (176,205) (128,597) Inventories (83,317) 23,071 Prepaid expenses (32,159) (44,627)

Increase (decrease) in:Accounts payable, trade (62,401) 161,138Accrued expenses (14,163) 148,935Deferred dues, fees and charges 102,083 (4,736)

Cash provided by operating activities 903,692 1,141,190

Cash flows from investing activities:Capital expenditures (4,364,987) (3,125,438) Proceeds from sale of property and equipment 7,200 -Purchase of certificate of deposit (250,000) -Sales of certificates of deposit - 500,000

Cash used in investing activities (4,607,787) (2,625,438)

Cash flows from financing activities:Proceeds from long-term debt 2,823,287 525,000Principal payments on long-term debt (750,000) -Principal payments on capital lease obligations (9,419) (49,838) Sale of memberships, including installment payments 1,310,466 1,324,064Redemption of memberships (508,403) (479,355) Master Plan assessment 684,072 682,850

Cash provided by financing activities 3,550,003 2,002,721

Increase (decrease) in cash (154,092) 518,473

Cash, including Designated Funds:Beginning 2,546,410 2,027,937

Ending 2,392,318 $ 2,546,410 $

Supplemental disclosure of noncash investing activities: Property and equipment acquired through accounts payable, capital 103,818 $ 606,530 $



Notes to Financial Statements

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Note 1. Nature of Organization and Significant Accounting Policies

Nature of organization: Sawgrass Country Club, Inc. (the Club) was incorporated in 1987 as “a corporation not-for-profit” under the laws of the State of Florida. The purpose of the Club is to own and operate a private country club for the recreation, pleasure and benefit of its members and their guests.There is a single type of equity voting membership described as the “Country Club Membership” (see Note 5). Each year a Country Club Member has the right to select membership privileges in one of the following categories: all sports, tennis or social. The Club has restricted the total number of all sportsmembers to 750.

A summary of the Club’s significant accounting policies follows:

Accounting estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and concentration of credit risk: For purposes of reporting cash flows, the Club includesdesignated funds in cash. The Club maintains its cash in accounts at one financial institution, which at times, may exceed federally-insured limits. The Federal Deposit Insurance Corporation (the FDIC) provides for deposits at FDIC insured institutions to be insured up to $250,000. The Club has notexperienced any losses in such accounts.

Certificates of deposit and concentration risk: Certificates of deposit are recorded at cost. Interest income is recorded in the statements of activities as it is earned. The Club’s certificate of deposit is held in FDIC insured institutions, with a balance under the insured limit.

Accounts receivable: Accounts receivable are carried at original charge amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as revenue when received. A late fee is charged on balances unpaid after the 25th of the month, and is recognized as revenue when charged. Accounts receivable are net of an allowance for doubtful accounts of $16,263 and $40,597 as of December 31, 2016 and 2015, respectively.

Inventories: Food and beverage inventories are valued at the lower of cost (first-in, first-out method) or market; golf and tennis inventories are valued at the lower of cost (average cost) or market.

Property and equipment: Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of depreciable assets as follows:

Years

Land improvements 10-20Buildings 10-20Building improvements 5-20Furniture, fixtures and equipment 3-10

The depreciation expense on assets acquired under capital leases is included with depreciation expense on owned assets.



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Note 1. Nature of Organization and Significant Accounting Policies (Continued)

Founder Country Club Membership purchase obligation (see Note 5): The Club is obligated to redeem a resigned Founder Country Club Membership when an applicant, acceptable to the Club, has paid the required joining fee for a Country Club Membership. When an applicant meets these requirements, the amount required to redeem the resigned membership is reclassified as a liability –Founder Country Club Membership Purchase Obligation. Prior to that time, the obligation is conditional and Memberships held by resigned members are classified as Unrestricted Net Assets.

Founder Country Club Memberships held by resigned members electing to accept a Membership purchase offer are considered mandatorily redeemable and, accordingly, the amount payable by the Club to purchase the Memberships is classified as a liability – Founder Country Club Membership Purchase Obligation.

Income taxes: The Internal Revenue Service, by a letter dated April 20, 1999, has exempted the Club from federal income taxes under Section 501(c) (7) of the Internal Revenue Code. The Tax Reform Act of 1969 imposed a corporate income tax on the unrelated business taxable income of an otherwise tax-exempt club. A provision for applicable federal and state income taxes has been made in the accompanying statements of activities.

Revenue recognition: Membership dues are billed in advance and are recognized as revenues in the month covered by the billing. Food, beverage and sports related sales are recognized at the time realized.

Operating income (loss) measurement: The Club considers operating income (loss) on the accompanying statements of activities as a performance measurement for financial management and internal reporting purposes.

Membership transactions: Membership sales, assessments and facility capital funding fees are recognized in the period due. Country Club and Associate memberships may be sold on the installment basis under the terms of the installment purchase agreements. The agreements provide for receipts of aninitial payment and additional periodic payments for up to five years. Junior memberships are also sold on an installment basis. The agreements provide for an initial payment and periodic payments without interest to age 45. Amounts due from the sale of memberships on the installment basis, and other deferred payment arrangements, are recognized in the period received.

Recent accounting pronouncements: In May 2014, the Financial Accounting Standards Board (FASB)issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers(Topic 606). This standard outlines a single comprehensive model for which the Club will be required to use in accounting for revenue from contracts with its members and supersedes the most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that revenue is recognized when a member obtains control of a good or service. A member obtains control when it has the ability to direct the use and obtains benefits from the good or service. Transfer of control is not the same as transfer of risk and rewards, as it is considered in the current guidance. The Club will also need to apply new guidance to determine whether revenue should be recognized over time or at a point in time. ASU No. 2014-09, as deferred by ASU No. 2015-14, will be effective for annual reporting periods beginning after December 15, 2018, using either of two methods: (a) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU No. 2014-09; or (b) retrospective with cumulative effect of initially applying ASU No. 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined in ASU No. 2014-09. The Club has not yet selected a transition method and is currently evaluating the effect that the standard will have on the financial statements.



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Note 1. Nature of Organization and Significant Accounting Policies (Continued)

In February 2016, the FASB issued its new lease accounting guidance in ASU No. 2016-02, Leases (Topic 842), which supersedes Topic 840, Leases. Under the new guidance, lessees will be required to recognize at the commencement date for all leases (with the exception of lease terms of 12 months or less for which there is not an option to purchase the underlying asset): (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This standard will be effective for fiscal years beginning after December 15, 2019, with early application permitted. Lessees (for capital and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees may not apply a full retrospective transition approach. The Club is currently evaluating the effect that the updated standard will have on the financial statements.

In August 2016, the FASB issued ASU No. 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities. ASU No. 2016-14 amends the requirements for financial statements and notes in Topic 958 to require a not-for-profit entity (NFP) to present on the face of the statement of financial position amounts for two classes of net assets at the end of the period rather than the three classes currently required, and on the face of the statement of activities the amount of the change in each of the two classes of net assets. An NFP will now report amounts for net assets with donor restrictions and net assets without donor restrictions. In addition, an NFP will be required to present the amounts of expenses by both their natural classification and their functional classification. Additional qualitative and quantitative disclosure information on the NFP’s liquidity and availability of the NFP’s financial assets will be required, as well as the elimination of the requirement to present or disclose the indirect method (reconciliation) if the NFP uses the direct method for the presentation of the statement of cash flows. ASU No. 2016-14 is effective for annual financial statements issued for fiscal years beginning after December 15, 2017, and for interim periods within fiscal years beginning after December 15, 2018, with early application permitted, applied on a retrospective basis in the year adopted. The Club is currently evaluating the effect the adoption of this standard will have on its financial statements.

Subsequent events: Management has assessed subsequent events through March 15, 2017, the date on which the financial statements were available to be issued.

Note 2. Designated Funds

The Board designates certain funds collected principally from membership sales, assessments, operating capital dues, facility capital funding fees and interest income to be used for capital expenditures, debt service, purchase of Founder Country Club Memberships (see Note 5) and other Board authorized projects. Designated Funds include a certificate of deposit of $250,000 as of December 31, 2016. The certificate of deposit bears interest at .70% and matures on July 27, 2017.

Retained Funds are intended to provide for uninsured losses, such as those associated with insurance deductibles and policy limits within property and casualty insurance policies. Retained Funds may also be used to meet any unplanned operating liquidity needs.

Operating Capital Funds are accumulated to meet the Club’s regular replacement or refurbishment of capital items such as furniture, fixtures and equipment.



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Note 2. Designated Funds (Continued)

Activity in the funds for 2016 and 2015, is as follows:Operating

Retained Facility Capital

Total Funds Funds Funds

Balance as of December 31, 2014 2,197,268 $ 1,200,002 $ 751,218 $ 246,048 $

Assessments and facility capital funding fee 902,022 - 902,022 -

Membership dues, capital 715,779 - - 715,779

Membership sales, net of redemptions 844,709 - 844,709 -

Joining fees, associate members 356,494 - 356,494 -

Interest income 3,956 - - 3,956

Guana proceeds 30,000 - 30,000 -

Other expense (83,870) - (83,870) -

Long-term debt proceeds 525,000 - 525,000 -

Capital expenditures (3,731,968) - (3,369,101) (362,867)

Membership sales expense (71,976) - (71,976) -

Transfer of funds 115,504 - 115,504 -

Balance as of December 31, 2015 1,802,918 1,200,002 - 602,916

Assessments and facility capital funding fee 912,922 - 912,922 -

Membership dues, capital 815,453 - - 815,453

Partial insurance proceeds 32,000 - - 32,000

Membership sales, net of redemptions 802,063 - 802,063 -

Joining fees, associate members 456,714 - 456,714 -

Interest income 758 - 758 -

Guana proceeds 30,000 - 30,000 -

Other income 38,195 - 38,195 -

Interest expense on long-term debt (60,324) - (60,324) -

Long-term debt proceeds 2,823,287 - 2,823,287 -

Payments on long-term debt (750,000) - (750,000) -

Capital expenditures (3,862,275) - (2,415,098) (1,447,177)

Membership sales expense (63,668) - (63,668) -

Transfer of funds (335,725) - (335,725) -

Balance as of December 31, 2016 2,642,318 $ 1,200,002 $ 1,439,124 $ 3,192 $

Operating cash totaled $0 and $743,492 as of December 31, 2016 and 2015, respectively.

As of December 31, 2016, there are installments expected to be collected in future years of approximately$1,823,600 from sales of Country Club, Junior and Associate memberships. This amount will be included in Facility Funds as the installments are collected.



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Note 3. Property and Equipment

Property and equipment as of December 31, 2016 and 2015, are summarized as follows:

2016 2015

Land 8,327,344 $ 8,327,344 $Land improvements 9,926,250 9,897,967 Buildings 12,042,383 12,916,515 Building improvements 6,561,204 2,302,067 Furniture, fixtures and equipment 4,825,461 3,938,771

41,682,642 37,382,664 Less accumulated depreciation 17,477,996 17,312,985

24,204,646 20,069,679 Construction in process 83,273 2,227,887

24,287,919 $ 22,297,566 $

During 2016, the Club wrote-off and disposed of various items, with total cost and accumulated depreciation of $1,704,788 and $1,530,658, respectively. The Club received proceeds of $7,200 and recorded a loss on disposal of property and equipment of $166,930 on the statement of activities for the year ended December 31, 2016.

During 2015, the Club wrote-off and disposed of various items, with total cost and accumulated depreciation of $776,212 and $744,841, respectively. The Club recognized a loss on disposal of property and equipment of $31,371 on the statement of activities for the year ended December 31, 2015.

Note 4. Long-Term Debt

Construction line of credit: In May 2013, the Club entered into a revolving line of credit agreement with available borrowings of up to $3,500,000 with a fixed interest rate of 2.47%. The agreement wassubsequently amended and the Club obtained an additional $1,000,000 line of credit with additional fundsbearing a fixed interest rate of 3.6%. The proceeds of the line of credit were used to finance the renovations of the Club’s golf course and other improvements to the Club as part of its Master Facilities Plan Phase II. The draw period expired on May 22, 2016. Upon the expiration of the draw period, the total principal outstanding balance under the agreement shall not exceed: (i) $4,000,000 as of May 22, 2016; (ii) $2,500,000 as of May 22, 2017; and (iii) $1,350,000 as of May 22, 2018. All remaining unpaid principal and accrued interest will be due on the agreement’s maturity date of May 22, 2019. The agreement contains various restrictive covenants including but not limited to a debt service coverage ratio of at least 1.25:1.0. As of December 31, 2016 and 2015, outstanding debt was $3,000,000 and $926,713,respectively.

Operating line of credit: In November 2016, the Club obtained a line of credit with a financial institution with a maximum amount available of $500,000. Interest rate is a variable rate of Prime (3.75% as of December 31, 2016), and matures on December 1, 2017. The line of credit is collateralized by the assignment of property as described in the lending agreement. There were no outstanding borrowings as of December 31, 2016.



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Note 4. Long-Term Debt (Continued)

Aggregate maturities required under long-term debt as of December 31, 2016, are as follows:

Years ending December 31: Amount

2017 500,000 $2018 1,150,000 2019 1,350,000

3,000,000 $

Cash payments for interest were $70,543 (including $10,219 capitalized) and $13,614 (including $10,894 capitalized) for the years ended December 31, 2016 and 2015, respectively.

Note 5. Country Club Memberships

Memberships are not redeemable or transferable except as specifically provided by the Bylaws and then only through the Club. Country Club Memberships issued prior to January 1, 2005 are described as the “Founder Country Club Memberships” and are partially refundable as stated in the Bylaws. Country Club Memberships originally issued subsequent to December 31, 2004, are not refundable.

Resigned Founder Country Club Memberships are placed on a waiting list to be redeemed by the Club on a first-resigned, first-redeemed basis. The Club is obligated to redeem a Founder Country Club Membership held by a former member when an applicant acceptable to the Club has paid the required joining fee for a Country Club Membership. A Founder Country Club Member may arrange through the Club for the redemption of his or her Membership (without it being placed on the waiting list) and the issuance of a Country Club Membership to the buyer of the Founder Country Club Member’s residence.As of December 31, 2016, there are 442 memberships on the waiting list, of which 151 were held by the Club.

The Club may offer to purchase Founder Country Club Memberships from resigned Members at purchase prices that are less than otherwise stated in the Bylaws. Memberships acquired by the Club through such offers remain in the same positions on the waiting list as the resigned Members accepting the offer.Memberships acquired from resigned Founder Country Club Members under offers extended throughJuly 1, 2003 are available for sale, subject to approval of the active Country Club Members. As of December 31, 2016, 150 of the acquired Memberships have not been approved for sale.

“Founder Senior Memberships” are designed to recognize those Founder Country Club Members who have supported the Club for many years. To be eligible, the Founder Country Club Member must have been a member for a minimum of 25 years and have reached his or her 75th birthday. Founder Senior Members pay social dues at a reduced rate and are provided other benefits, all of which are determined by the Board, and may be changed from time to time at its sole discretion. The maximum number of Founder Senior Members is 50. As of December 31, 2016, there were 50 Founder Senior Members.

Note 6. Assessments and Facility Capital Funding Fee

Master Plan assessment: In March 2013, the Board of Governors approved a master plan funding fee of $60 per month charged to Country Club and Founder Senior Members beginning September 2013.During the years ended December 31, 2016 and 2015, the Club collected $684,072 and $682,850,respectively, in monthly assessments.



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Note 6. Assessments and Facility Capital Funding Fee (Continued)

Facility capital funding fee: The Board of Governors approved a facility capital funding fee of $50 per month, payable by Associate Members, and $40 per month, payable by Junior Members. The fee will be placed in Discretionary Capital Funds and/or Operating Capital Funds at the discretion of the Board of Governors. During the years ended December 31, 2016 and 2015, the Club collected $228,850 and $219,172, respectively, in monthly fees.

Note 7. Retirement Plan

The Club sponsors a 401(k) employee savings and retirement plan for the benefit of its employees. All full-time employees over the age of 21 who have completed one year of service are eligible to participate in the plan. The Club contributes 100% of the employee’s contribution up to the first 3% and 50% of the next 2% up to a total contribution of 4% of his or her salary. The Club’s policy is to fund retirement costs as incurred. Retirement plan expense was $126,743 and $130,577 for the years ended December 31, 2016 and 2015, respectively.

Note 8. Operating Leases

The Club has entered into operating leases for golf carts, golf maintenance equipment and office equipment that expire at various dates through July 2020. Following are future minimum lease payment requirements as of December 31, 2016:

Years ending December 31: Amount

2017 315,912 $2018 190,822 2019 39,124 2020 9,196

555,054 $

Lease expense was $395,640 and $382,547 for the years ended December 31, 2016 and 2015,respectively.

Note 9. Hurricane Matthew

In October 2016, the Club’s facilities sustained damage related to Hurricane Matthew. In relation to the storm, the Club collected $8,074 in business interruption insurance proceeds in January 2017, which are included in both operating revenues in the statements of activities for the year ended December 31, 2016and within accounts receivable – net on the accompanying balance sheets as of December 31, 2016.

Additionally, Hurricane Matthew related expenses of $117,773 are included in the statement of activities for the year ended December 31, 2016. The Club received insurance proceeds of $150,000 related to thedamage in the year ended December 31, 2016. The unspent balance of $32,000 is to be used for capital expenditures in the year ending December 31, 2017 to repair damaged property. The following summarizes Hurricane Matthew damage activity for the year ended December 31, 2016:

Hurricane Matthew expenses (117,773) $Hurricane Matthew insurance proceeds 150,000 Unspent proceeds to be used in 2017 for capital expenditures 32,227 $



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Note 10. Expenses

Functional expenses for the years ended December 31, 2016 and 2015, are as follows:

2016 2015Cost of sales:

Food and beverage 1,483,092 $ 1,358,967 $Golf pro shop 541,769 501,936 Tennis pro shop 53,894 49,157

Payroll and related expenses:Food and beverage 2,415,892 2,074,616 Golf pro shop 627,716 661,725 Golf course maintenance 1,276,660 1,267,408 Tennis pro shop 277,786 192,089 Fitness and recreation 813,497 780,796 Undistributed expenses:

General and administrative 1,178,199 1,125,860 Facilities maintenance 245,467 218,064 Grounds maintenance 70,162 63,064

Other operating expenses:Food and beverage 898,031 753,954 Golf pro shop 423,441 381,412 Golf course maintenance 1,114,581 1,119,835 Tennis pro shop 325,398 228,747 Fitness and recreation 361,683 309,531 Undistributed expenses:

General and administrative 628,124 584,386 Facilities maintenance 340,252 286,759 Housekeeping 172,571 125,569 Grounds maintenance 87,247 88,410 Utilities 391,943 348,221 Association fees 97,808 94,974 Taxes 257,598 291,285 Insurance 300,947 283,115

14,383,758 $ 13,189,880 $

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Sawgrass Country Club10034 Golf Club Drive

Ponte Vedra Beach, Florida 32082904-273-3700 • Facsimile 904-273-3718

www.sawgrasscountryclub.com

AnnuAl RepoRt 2016 - Sawgrass Country Club

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