RedTail Golf Club 2014 / 2015 Business Plan

Executive Summary RedTail Golf Club is in position to take its place as the most versatile and enjoyable golf facility in McHenry County. The golf course has endured the recession by following strict financial controls, and deferred capital spending. The enclosed plan is the financial roadmap that the staff will follow to increase the levels of profitability for RedTail.

• The increased profitability will come from the strategies outlined in the plan to increase daily play.

• Revenue per round increases will also be achieved by the daily play strategies. • Increased profitability will allow the course to address the capital needs of the club which

will maximize the value of the asset for the Village of Lakewood. • The plan will also lay out the appropriate amount of retained earnings that the course

needs to have for potential unforeseen emergencies. The staff of RedTail Golf Club is committed to being a self funded operation. It is not the intention of the staff of RedTail, to have to ask the residents of the Village of Lakewood to help fund further operations. The probable value of RedTail, if it were sold today, would be between $1.2 and $1.8 million dollars. The golf industry has not yet fully rebounded from the great recession. Our challenge is to bring revenue and profitability to levels that will allow the course to address the capital needs of the facility, which will increase the value of RedTail as both a business, and an asset in the Village’s portfolio. Goals and Strategies for Increased Revenue

• GOAL: Drive rounds to underutilized areas of the tee sheet.

STRATEGY: One fixed “special” per day will be developed to entice players to play during the underutilized times each day as were identified in the facility usage study.

• GOAL: Grow by 5% the total 2014 revenue received via memberships and member play. STRATEGY: Implement programs to increase Senior Card and Associate Memberships using internet communications and direct mail.

• GOAL: Increase league participation by developing new leagues and increasing participation in current leagues. The desired number of players for each league 10 for the ladies league, 10 for the junior league, 44 for the men’s league, and 16 players for the couple’s league. The number of players wanted for the new leagues are 12 for the floating league, and 16 players for the team league.

STRATEGY: Communicate the availability of these leagues via listings on our website, email blasting, relationships with local community groups such as churches, and the chamber of commerce.

• GOAL: Increase outing play by two new weekday events per month for the months of May – September. The goal for these events is for an average of 30 players per event, and having these players spend an average of $30 for green fees and cart.

STRATEGY: Introduce a new type of outing at RedTail that will last for an entire day. Players who participate will pay a flat fee to the course and a cut of that fee will go back to the host organization. These events are being promoted to organizations that request a donation from RedTail, as well as from groups that have been identified via traditional brainstorming.

• GOAL: Enroll 500 players into the RedTail Discount ID Card Program. This program will promote loyalty among the golfers due to the financial component, as well as help RedTail track the spending habits of its most regular players.

STRATEGY: Clubhouse signage about the program, as will as email blasts, and promotion of program via local groups such as the chamber of commerce.

• GOAL: Increase junior golf lesson revenue by 15% in 2014. Increase the amount of family golf rounds sold on Saturday’s and Sunday’s by 30%.

STRATEGY: Lesson revenue will be increased by the expansion of the current programming as well as leveraging relationships forged via local school fundraisers. RedTail also will contact all juniors in its database to update them on current, available, programming. RedTail will also continue its relationship with the Crystal Lake Park District to promote RedTail Golf Club programming. Relationships are also being explored with other municipalities and local organizations such as the YMCA.

• GOAL: Sell 30 “player development” passes to players who play golf in the late evenings.

STRATEGY: Market the “player development” pass via the website, and through local organizational channels.

• GOAL: Engage 20 “new golfers” in lesson programs in 2014.

STRATEGY: Expand the offerings of programs for new and novice golfers via the Get Golf Ready programs of the PGA of America, and listing said programs on the ACTIVE network.

Company Description RedTail Golf Club is an 18-hole course covering approximately 235 acres within the Village of Lakewood, IL. Structures include a maintenance barn and club house / pro shop. The clubhouse consists of a series of portable commercial units housing the pro shop, snack bar with seating, and a small banquet hall that can accommodate outings for approximately 130 people. 2

The Village of Lakewood acquired the RedTail Golf Club as part of bankruptcy proceedings involving the original developers of Turnberry Country Club in 1991. The bank (Old Kent) was a creditor and mortgagee. The village purchased the golf course for the actual lien claims filed for the cost of the improvements to the land only (landscaping, irrigation system, excavating, sod, etc.). The land (220 acres valued at least at $10,000 an acre) was not included in the price and was given to the Village at no cost. The developers had created two 18-hole championship golf courses, completing the Turnberry course first. The RedTail course had been completed, but had not been opened for club play. Their intent was to have the 36 holes available for members. The Village Board at the time had a grave concern regarding the bank’s intent to dispose of the holdings. Members of Turnberry Country Club assumed the mortgage for their course and club house, but had no interest in the RedTail property. The bank had hinted that they would use the courts to pursue rezoning of RedTail for development. The Board sought ways to keep it as recreational open space and residential development, and put together a plan to buy the RedTail property. The bank offered the property to the Village for $3.575 million, the amount that the developers had invested in creating the course. The economy at the time was strong, the golf industry was highly profitable, and there was little trouble in acquiring financing. In fact, in the early years, RedTail had no problem in showing strong earnings based on high average greens fees and in meeting the debt payments. Since the course was a municipal holding, it was free from property taxes, which added to the allure. In 1998, the remaining debt of approximately $3.75 million was refinanced to take advantage of lower interest rates. The term of the new note was ten years, and again RedTail had little problem in meeting the initial payments. In 2005, prior to the downturn, RedTail had been appraised by an outside agency at a value of $4.5 million. As the economy sank in 2007 and 2008, earnings for the course could not meet the required annual bond payments, requiring that the residents meet the payments through addition to their property taxes. The probable value of RedTail if sold today would be approximately between $1.2 million to $1.8 million. The golf industry has not yet fully rebounded from the Great Recession. RedTail has always maintained its volume of play between 29,000 and 30,000 annual rounds, but the revenue per round has dropped significantly since 2008. Our challenge is to bring revenue and profitability to levels that increase the value of Red Tail both as a business, as well as an asset to the Village’s portfolio. Market Analysis According to the National Golf Foundation (NGF), the number of golfers remained essentially steady in 2012 at 25.3 million. This number is down from 30 million golfers in 2005. The golf industry experienced a tremendous period of growth in courses from the late 1990’s until the mid 2000’s. This led to an oversupply of golf courses compared to the amount of available golfers. Golf course closings have outpaced openings for the past 4 years which has led to a slight market correction. However, with the current supply and demand imbalance, it’s still a golfer’s market. Golf courses are battling for business with creative methods of attracting golfers, and operators are working diligently to generate some margin on current revenues. 3

In 2013, unfavorable weather across most of the country in early spring had a major impact on rounds played. PGA PerformanceTrak reported a 6.7% decrease in national playable days through September 2013. In fact, the number of playable golf days during this nine month period was the lowest in the history of PerformanceTrak.” The Chicago Metropolitan Statistical Area has a population of 9,546,613. The number of public golf holes is 4,221 which equates to a population of 2,262 per hole. That ranks the Chicago area 269th out of the 362 areas measured in golf-hole supply per person. By contrast, Myrtle Beach ranks first with 258 persons per hole.

• Core golfers defined as golfers who play 6 or more rounds per year. They are 83% male and 17% female.

• Occasional golfers are defined as golfers who play between 1 and 6 rounds per year. They are 77% male and 23% female.

• Beginning golfers are 68% male and 32% female. • 68% of all golf rounds were played by golfers over 40. • 57% of all rounds were played in households where income was over $75,000. • 90% of golfers today use the internet.

McHenry County had a population of 308,760 split evenly between men and women as of the 2010 census. 50% of the population was between 35 and 75 years of age. Approximately 9.6% of the total population plays golf. That would mean that there are approximately 7,400 male golfers between the ages of 35 and 75 in the county. Because the cost of maintaining a golf course remains fairly constant regardless of customer participation, a decline in the number of individuals attending golf courses or paying club fees caused most establishments to suffer decreasing revenues. These declining revenues have been the prime generator in the market correction. Stagnant golfing participation and the emergence of alternative recreational activities have also hindered industry growth. While adverse conditions have plagued the industry recently, golf courses still provide a popular activity for customers, outside of financial barriers, interest in golf continues to grow. Golf is a sport of precision in a calm setting, rather than a fast-paced game of athleticism; therefore, it attracts older rather than younger players. An aging population means there will be more retirees. According to the NGF, baby boomers will lift golf because of their sheer size. The older the golfer, the higher their rounds played. This trend hasn’t changed much over the last 20 years. As boomers move into retirement age, they will almost certainly play more golf. However, most boomer golfers believe they’ll have to work longer and live more frugally in retirement than they planned. The impact that the baby boomers will not be as big as once hoped, but the NGF still believes that they will “lift” the overall business. The good news is the “lapsed golfers,” golfers who have left the game in the last 2 years, 67% of them were not really golfers. This 67% never played 10 rounds in their lives. Once a golfer is committed, the chances of keeping them are very good. 67% of these lapsed golfers were not having fun. Lack skill, not being comfortable on course, frustration, and difficulty of the game, were the reasons cited for leaving. Improving retention will help golf’s participation problem tremendously. Making golfers feel more comfortable on the course is paramount to retention, as is helping beginners feel good enough about their skills to lessen frustration and eliminate 4

embarrassment. All of this will contribute to making golf more fun and build a larger base of “committed players.” At the local level, golf courses will still need to find innovative ways to attract golfers to their courses. A continued emphasis on new player development will help the golf economy, as will increasing golf’s fun factor and value proposition among current players. According to IBISWorld research, the industry is projected to benefit from sustained demand over the next five years, enabling revenue to rise. The industry is also expected to break the drought in profit growth, as increased participation yields wider margins. After a tough few years, the golf course industry will return to growth due to a stronger business environment, rising disposable income, and increased consumer sentiment. The success of a golf course is dependent on its ability to attract new members, retain existing members, and maintain or increase levels of club usage by members and guests. In addition, sophisticated golf courses will implement more industry-specific software systems to help them deliver better service. This information allows businesses to determine the aspects of their operations that customers like or dislike, ultimately increasing customers for their business. This factor could help increase participation, and reduce attrition rates. Golfers’ financial situations have an influence as well and, fortunately, economic indicators continued to move in a positive direction in 2013. National measurements of consumer confidence and spending have been consistently edging upwards since the Great Recession. In 2013, consumer confidence reached a five-year high and, although this may have not been enough to offset the bad weather, it still bodes will for the future. Competitive Analysis There are 30 golf courses in the general vicinity of RedTail. Most are in McHenry County, with a few residing in Northern Kane. However, not all of the courses are direct competitors as many of the courses are Private Clubs which do not attract the same golfing clientele as a public course like RedTail. The closest public golf courses that would be the most direct competition to RedTail would be Crystal Woods Golf Club in the Village of Lakewood, Pinecrest Golf Course in Huntley, Golf Club of Illinois in Algonquin, Prairie Isle Golf Course in Prairie Grove, Whisper Creek in Huntley, Foxford Hills Golf Course in Cary, and Randall Oaks Golf Club in Dundee. Competitors Crystal Woods – Owned and operated by the Craig family, Crystal Woods is an 18-hole facility that is conveniently located on the busy corner of Route 47 and Route 176. The course has a permanent clubhouse facility that can be used to host banquets and after golf meals. Crystal Woods has a medium size member base of players who play the golf course exclusively. The course does host a variety of league play throughout the season. The course is of average length with bent grass greens and blue grass tees and fairways. Pinecrest – Pinecrest Golf Club is owned and operated by the Huntley Park District. The Park District purchased the course in the early 2000’s, and recently added a 4.7 million dollar clubhouse. The 5

course is located on busy Route 62 in Huntley. The 18-hole course is of medium length featuring blue grass tees and fairways, with bent grass greens. Pinecrest does have a driving range that has both grass tees and artificial turf mats. Pinecrest is a busy golf course that hosts a variety of golf leagues and events. The Del Webb community of Huntley lies in the Park District boundaries, and the residents receive reduced rates at the golf course. On average, Pinecrest plays over 34,000 rounds per season. The Park District originally was leasing the banquet facility, but it brought the operation back in house in the 2013 calendar year. Golf Club of Illinois – Golf Club of Illinois is located in Algonquin on Hansen Road. The facility is privately owned and features an 18-hole championship style golf course. Bent grass tees, fairways, and greens. Golf Club of Illinois hosts approximately 29,000 rounds per season. The clubhouse has a small bar and banquet facility which can host parties of approximately 100 people. The course has a small driving range which must use limited flight golf balls due to space restrictions. Prairie Isle Golf Course – Prairie Isle is located on Route 176 in Prairie Grove. It is a privately owned 18-hole golf course that hosts approximately 23,000 rounds per season. The golf course has a permanent clubhouse facility that plays host to after golf food and drinks. Prairie Isle does not have a driving range, but it does feature bent grass tees, greens, and fairways. Whisper Creek – Whisper Creek is owned and operated by Billy Casper Golf. The course is located in the Del Webb community in Huntley. It was originally planned as a course that featured green fees over $100 for 18 holes with high end amenities for all players. The course now features a high volume play philosophy and hosts approximately 34,000 rounds per season. The clubhouse facility at Whisper Creek features a bar and grill which is owned by the community, and leased to an outside operator. There is also a ball room which can be used for outside events. The course is designed as a championship layout featuring bent grass tees, greens, and fairways. The course also has a driving range and putting green. Foxford Hills Golf Club – Foxford Hills is owned by the Cary Park District. The course was built in the late 1990’s by a homebuilder. It was then sold to the community when the homes were completed. The course is an 18-hole championship layout which features bent grass tees, greens, and fairways. The course plays host to approximately 28,000 rounds per season. The clubhouse has a bar area which also doubles as a banquet room which has seating for approximately 100 people. The driving range at Foxford Hills has a medium size teeing area, and it features lights. Randall Oaks Golf Club – Randall Oaks is located on Randall Road in West Dundee. Randall Oaks has a large clubhouse which can seat as many as 225 people for weddings or post golf events. The front nine of the course was renovated in 2003, which also created a new driving range and a 3-hole short course which is used for player development and golf camps. Randall Oaks continues to invest in renovations to the course, currently working on a fairway and tee project on the back nine. The course is a high volume club which hosts 35,000 rounds or more per season.

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Organizational Structure RedTail Golf Club is owned and operated by the Village of Lakewood. The operations of RedTail are funded by an Enterprise Fund. Enterprise funds are funded by user fees, and excess fees are to be considered “retained earnings,” which shall be earmarked for expenditures relating to the fund. One of the main goals of the business plan is to provide a roadmap on how to allocate the retained earnings of the fund, and what is an appropriate earnings balance that should remain in the fund. The organizational structure of RedTail Golf Club can be characterized by the following:

Village Board of Trustees (Elected Officials) | | Village Manager (Catherine Peterson) | ________________|___________________ | | General Manager of Clubhouse Golf Course Superintendent Operations (Chris Neuhart) (Pat McDonagh) ______ | _____ | | | | Teaching Seasonal Assistant Superintendent Professional Staff (Leigh Thornton) (Curt Peterson) | Seasonal Laborers The day to day operations of the Village of Lakewood are the responsibility of Village Manager Catherine Peterson. She is under the direction of the Village President, and Board of Trustees, which are elected positions. The General Manager of Clubhouse Operations and the Golf Course Superintendent directly report to the Village Manager. RedTail Golf Club enjoys the advantage of having two well respected and experienced department heads. Chris Neuhart has been a member of the PGA of America since 2003, and he has been the General Manager of Clubhouse Operations since 2005. Chris has been working as a golf professional since 1996. His entire career professional career has been spent in the local market, and all but 18 months have been spent at Municipal Facilities. Pat McDonagh has been a member of the Golf Course Superintendents Association of America since 1989. He has been the Golf Course Superintendent at RedTail Golf Club for the past 16 years. He has an intricate knowledge of the turfgrass and infrastructure of RedTail Golf Club. Curt Peterson has been a member of the PGA of America since 1997. Curt has been teaching golf exclusively since 2003. Being an experienced teacher, Curt provides player development

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programming and opportunities for all ages and skill levels. The programming brings people to RedTail to enjoy and learn the game. Service RedTail Golf Club is as a high quality, challenging golf experience, with an unpretentious atmosphere and unmatched value. The versatility of the club can be seen by the 6 sets of tees. RedTail is a place where the novice golfer and championship player alike can come out and enjoy their time in the great outdoors. Over 75% of the revenue that is produced by the golf course comes in the form of fees generated from daily golf play. Each day of the week and time of the day are somewhat unique and present challenges and opportunities for revenue generation. Monday- Monday is one of the busier mornings at the golf course. At 7:30 AM, the Senior Swatter golf league tees off with a shotgun start. Before the league, the first tee is open from approximately 6:30 AM until the league tees off. The Senior Swatter league generally has 44 – 48 players who play 18 holes, and they keep the first tee busy until 10 AM. Facility usage after the league is generally strong, but after 11:30 the play is somewhat sporadic. There are no organized leagues in the afternoon. Tuesday- The golf course will host the Monday league on Tuesday, if there was an event or a Holiday on the Monday of that week. Facility use is busiest on Tuesday’s between the hours of 7 AM to 11 AM. There are organized small groups of Senior’s from the area that will rotate from golf course to golf course, and this time slot is where they generally fall. The other time periods on Tuesday hover in the 25% - 35% facility use. On Tuesday between 3 PM and 4 PM, there is a ladies 9-hole golf league that plays each week from May – September. Wednesday- Before 7 AM on Wednesday, the course usage is at its low point. The usage numbers the rest of the day are very good. The Wednesday Night Men’s league plays 9 holes starting at 4 PM. There are 36 – 40 players in the league. The league starts in late April, and plays until late August. Wednesday also plays host to our 9-hole Junior League. The 8 - 16 juniors tee off at 2 PM and play from Mid June until Mid August. Thursday- Facility usage on Thursday is greatest from 7 AM until 1 PM. Thursday is also a day where the organized groups of Senior’s from the area rotate from course to course and play different facilities. An 8 – 14 player, 9-hole, corporate golf league plays at RedTail on Thursday at 4:30 PM. The league starts in April, and goes until September. There is also a 9-hole couples league that tees off at 5:30 PM. The couple’s league starts in late May and runs until Mid August. Friday- Facility use on Friday is very steady until 10 AM. From 10 AM until 12 PM the facility usage dips, then after the 12 PM hour the facility usage is strong again. Most weekday shotgun outings are held on Friday’s. The surge in play after 12 PM comes from the players who take a half day on Friday to make it a long weekend. There are no organized golf leagues on Friday. 8

Saturday- On Saturday, the golf course has 8 permanent tee times. The last of these times tees off at 7:36 AM. The rest of the day the facility usage is pretty strong with a mix of daily play, and small outings. The outing rounds are a mix of company groups, rotating leagues, or just players who have a golf event every season. Saturday play starts off slowly in the beginning of the season, but in late June, the amount of rounds that are played on Saturday’s picks up due to the ending of the parental commitments of Spring / Summer Season sports. Sunday- On Sunday, the golf course has 9 permanent tee times, the last of which tees off at 8 AM. Daily play on Sunday is stronger throughout the early part of the Season than on Saturday. Sunday also is host to golf outings of various numbers of players. The amount of play on Sunday between the hours of 10 AM to 3 PM slows down somewhat in September after once the NFL season starts. Golf Outings- The weekday shotgun outing is the most common golf event that happens throughout the season. These events are typically fundraisers for local organizations ranging from booster clubs, cancer research, to youth baseball. RedTail is a fantastic property for these types of events. The front of the property has plenty of space for groups to set up anything that they need to run their event smoothly. The golf course itself is memorable and playable for all types of golfers. The clubhouse facility is the only limiting factor for these events. Seating at RedTail is limited to around 130 players. There are some events that need minimum seating of 144. Weekend golf outings typically are a first tee only format. These events typically are not bigger than 48 players, and range from not needing anything post golf, to having a catered sit down dinner after golfing. Golf Leagues- As referenced by the daily play descriptions, RedTail is host to many golf leagues. The Senior Swatters are an 18-hole league that plays on Monday morning. The RedTail ladies 9-hole league plays Tuesday afternoons. On Wednesday, RedTail is host to a 9-hole men’s league, and a junior league once school is no longer in session. On Thursday, RedTail hosts a 9-hole couple’s league, as well as a corporate league. Regular league play is always a good opportunity for the golf course. The afternoon league golfer tends to be a habitual golfer who looks forward to the opportunity of playing golf each week. Lessons- RedTail has two PGA professionals on staff qualified to give golf instruction. The addition of the second PGA professional in 2013 allowed the course to expand its offerings in the way of junior golf programming. The 2013 junior program had over 150 participants. Private lessons for adults and juniors are made via with the golf professional staff. The professional staff also taught programs for the Crystal Lake Park District in 2013. This relationship is expected to expand in the future. 9

Merchandise- RedTail Golf Club carries a full line of golf merchandise in its pro shop. A selection of shoes, caps, gloves, balls, and clubs are on hand. The majority of golf shop sales come from gloves, hats, and balls. These are the “at once” items that players realize that they need before it is their time to tee off. Clothing with the RedTail logo is always stocked in the golf shop. Golf clubs are offered for sale, but due to limitations in size of the golf shop, and cost of goods, not all club manufacturers are carried on the shop floor. RedTail does have open accounts with all of the manufacturers, and is happy to special order any clubs that its customers may want. Demo clubs from the manufacturers that are stocked are on hand, as is the industry standard. Gross Revenue from merchandise sales are approximately $80,000 per season. The profit margin from golf shop revenue generally is 23%. On average the revenue per round generated from the golf shop is $2.75. According to PGA Performance Trak, the average gross revenue per round for the Chicago Metro Area for Municipal Golf Courses was $2.02 in 2013. Driving Range- The driving range at RedTail has space for 20 hitting stations. The range is an all grass teeing area, and is open during the season when the golf course is available. Range balls are sold in large and small baskets only. A range membership is available for golfers who typically want to use RedTail as their exclusive practicing area. The range members are allowed to purchase balls at half price. The range has 8 different target flags for aiming purposes. The driving range generates $35,000 - $40,000 per year in revenue. Food and Beverage- The food and beverage operation at RedTail offers a limited menu. The menu has fresh deli sandwiches, Panini sandwiches, hot dogs, and brats. Chicken fingers, mozzarella sticks, onion rings, and French fries can also be prepared via our hot air fryer. The fried faire traditionally served at golf courses are not offered due to the space and electricity limitations of the current clubhouse facility. A full range of snack food is also available for the golfer served from the bar area. RedTail offers a full assortment of alcoholic beverages, as well as soft drinks, for purchase at the golf course. A beverage cart is available on course Wednesday – Sunday, from Memorial Day – Labor Day. The beverage cart is also on course during events and most weekends during the “shoulder” season. There is room for 16 seats at the bar in the clubhouse. There are also 4 high top tables and 3 low tables, with 4 seats each, available for seating in the food and beverage area. RedTail also features a banquet room with seating for approximately 120 people. The food served at large events is offered by RedTail from local caterers who specialize in events. The room at RedTail is offered for rent to outside events for $100. The room renters are allowed to bring in their own food for the event, but they must purchase any beverages for the event from RedTail. Gross revenue from the food and beverage operation generally is $170,000 - $185,000 per year. The cost of goods for the food and beverage department ranges from 40 to 43 percent. The total department net revenue is $55,000 to $65,000 per season. The average gross revenue per round for food and beverage at RedTail is approximately $6.00. According to PGA Performance Trak, the average gross revenue per round for the Chicago Metro Area Municipal Golf Courses in food and beverage was $6.68 in 2013. 10

HOW ARE WE GOING TO GROW REVENUE Since the majority of the revenue that is generated at the course is in the form of green fees, the strategies for revenue growth are going to focus on increased play, and maximizing revenue for the rounds played. The expenses for the golf course are relatively fixed. It costs about the same amount of money to maintain the course for 26,000 rounds as it does for 32,000 rounds. In essence, net profit increases with each round played because the expenses remain fixed. Net profit also increases when the revenue per round increases and the amount of rounds remain fixed. The goal of the marketing plan is to develop strategies that will increase the net profit from both an increase in rounds played, and an increase in revenue per round. Drive Rounds to Under Utilized Areas of the Tee Sheet. RedTail has recently completed a comprehensive facility usage study. The study looked at the past four seasons of tee time usage and has broken down the amount of play by month, day of the week, and hour of the day. This study has identified areas each day where the golf course is underutilized. Tee time inventory is perishable, and once the time of the day has passed, you can’t get that inventory back. Specials will be created each day to attempt to drive rounds to these specific, underutilized areas of the sheet. The usage and “dynamic” pricing of the tee time inventory will be monitored each day using the model created by the facility usage study. Increase the Total Number of Members Membership Total # Rounds Revenue Green Fee Rev/Rnd Senior 40 1,029 $29,661.50 $28.82 Associate 7 186 $ 6,519.00 $35.05 Member w/Cart 5 542 $ 9,999.00 $18.45 Member 8 381 $15,585.00 $40.91 Total 60 2,138 $61,764.50 $28.89 We have two types of membership categories at RedTail. The first category is a pay for play model, which would be a model that the players can pay a nominal fee up front, in exchange for a set “reduced fee” structure for the golf season. These memberships were sold as Senior Card Memberships and Associate Memberships. There were 40 Senior Card Memberships Sold in 2013, and 7 Associate Memberships Sold. There were 1,029 18 hole Senior Card Rounds Played in 2013. Total revenue from those rounds if you factor in the cost of the senior card was $29,661.50. Or on average $28.82 per round. There were 186 Associate member rounds played in 2013. The total revenue from those rounds if you factor in the cost of the Associate Membership was $6,519. Or on average $35.05 per round. The other membership type offered at RedTail is the traditional season pass type membership. The upfront fee of the membership includes all of your green fees for the time period that the membership includes. For an additional fee, the memberships can include your cart fees as well. In 2013, there were 5 memberships (6 total players) sold that included the cart fee. Total

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revenue received from these members was $9,999. These members played 542 rounds in 2013. Green fee revenue per round generated from these members was $18.45. There were 8 other memberships (9 total players) sold in the traditional category which generated $15,585 in membership and cart fees. These members played 381 rounds in 2013. Green fee revenue per round generated from these members was $40.91. The total amount of revenue from membership play in 2013 was $61,764.50. Increasing the amount of members will positively affect the bottom line from the increased rounds and revenue generated by those rounds. Members make a commitment to their club, and they will play a majority of the course. The focus on membership growth will be in the Senior Card and Associate Member Categories. These categories offer the smallest initial investment, which makes them attractive options to players who do not want to make a large initial investment. The Senior Card Member Fees have been increased slightly in 2014, as well as the set fees associated with the Membership. The Member with cart fees increased for 2014 in an effort to increase the green fee revenue per round that these memberships produce. Membership sales are a focus of Spring advertising via the current email database, local chamber of commerce listings, and targeted direct mail pieces. Growing by 5% the total revenue received via memberships and member play is the goal for 2014. Grow Current and Develop New Golf Leagues Current Leagues RedTail currently has golf leagues on Monday through Thursday. These leagues range from 18-hole morning leagues to 9-hole afternoon leagues. On Monday morning, the Senior Swatter golf league currently has 50 members who play 18 holes. The swatters league has been constant with the amount of players that it has, and RedTail will continue to monitor the size and help promote growth if needed in any way that it can. This league is not a hot target for growth, because having more players will make this league too difficult to perform the maintenance that is needed on the golf course on Monday mornings. On Tuesday afternoon, the RedTail Ladies League plays 9 holes at 3:45 PM. This particular league has 10 ladies that regularly play, but the league only averages 6 players per week. This league should be bigger, and RedTail is going to promote the league via email blasts, communication with the local community via churches and social groups, and communication with the chamber of commerce. The golf course is also going to encourage the ladies to play the family set of tee markers on certain holes, making the course more player-friendly, and more fun. The goal for the 2014 ladies league is to average 10 golfers per week. On Wednesday afternoon, RedTail hosts two golf leagues. The first league is the junior league with plays 9 holes once school is out at 2 P.M. The junior league is a player development opportunity as well as an area for growth on a 9-hole time of the tee sheet due to the later men’s league starting on both the front and back 9. Promotion and growth of the junior league will be achieved through personal contact with the local schools, as well as through contact with our database of junior golf program participants. The goal for the 2014 junior league is to average 10 golfers per week.

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Also on Wednesday afternoon, RedTail operates the 9-hole men’s league. This league tees off at 4:15 P.M. from both the first and 10th tee. This league has 40 players who play competitive matches each week against other players in the league. We will continue to promote this league via club email, communication with the local community, and social media promotion. Growing the men’s league to 44 players is the goal for 2014. On Thursday evenings, RedTail holds a couples league for 9 holes at 5:45 P.M. This league was new in 2013, and enjoyed moderate success. This league is a big target for growth. RedTail will try and achieve that growth by heavy promotion in the geographic area near the golf course. We will try to identify social media opportunities such as the Facebook pages of the area neighborhoods. RedTail will also try to communicate about this league through the local property owners associations. Averaging 16 players per week is the goal for the couples league in 2014. New Leagues for 2014 RedTail has started a 9-hole floating league for 2014. This league is targeted to the player who loves to golf, but can’t commit to playing at the same time every week. In this league, the players just have to complete one 9 hole round during the week and turn in their scorecard. RedTail will do the rest. RedTail will recruit for this league via our email database, as well as local area promotion via traditional mail to local targeted areas and businesses. The goal for the floating league is to have 12 players in 2014. RedTail is also going to start a team golf league on Tuesday night. This league will consist of two player teams playing as partners against another two player team in the league. Current league players have expressed an interest in playing in a team league. The team league allows a little bit more flexibility for golfers who can’t free their schedule up each week. RedTail plans to promote this league via email database, social media, and contact with the local community residents and businesses. The goal for the team league is to have 16 players in 2014. Golf Outing Growth The number of shot gun golf outing’s hosted at RedTail has remained fairly consistent throughout the past few years. However, the amount of weekday tee time events has fallen industry wide. RedTail has come up with a program that is targeted at the weekday outing. We are going to host events that will last for an entire day, and players who want to participate will pay a flat fee to the course. The course will then donate a certain amount of the fee back to the event host. The hosts will have the opportunity to promote their organization on the course that day, as well as hold contests if they like. The organizers of these events will be responsible for recruiting players accessing their databases to try and raise money. The nice feature for the organizers is that it will be less work for them than the traditional golf outing, and they have the chance to make money with a smaller amount of effort. It is a win for the course, because we are attracting players to the course in a very non traditional way. RedTail gets donation requests on an almost daily basis, and we will use these contacts to pitch holding these events. RedTail has also brainstormed with staff and developed many leads for these events. This program will be evolving in 2014, and revisited at the end of the golf season in an effort to see what can be

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improved. The goal is to add 2 of these new events per month for the months of May – September. We are targeting an average of 30 players per event and having these players spend an average of $30 for green fees and carts. RedTail Discount ID Card Program RedTail is offering a discount ID Card for all golfers who play at the course. The amount of discount that is available will vary for each time. The cost of the card is $25. Discount ID Cards will promote loyalty from the purchasers of the cards due to the fact that they have a financial investment in the course. This loyalty, as well as the data that can be gathered from the use of the cards, will be valuable information from a financial standpoint, as well as from the tracking of spending of RedTail Golf Club’s regular players. The goal is to sell 500 discount ID Cards in the 2014 calendar season. Expansion of Junior Golf and Adult Player Development Player development programs are a focus of all organizations in the game of golf, and creating and retaining more golfers is paramount to the health of the golf industry. In 2013, RedTail expanded its junior golf program by providing a larger variety of classes designed at both the true beginner, and also the more serious junior player. In 2014, RedTail is going to expand participation even further with additional Spring programming. RedTail is developing a network of contacts via local schools using PTA fundraisers as a method to introduce players to the game as well as gain data on potential program participants. RedTail has also expanded family golf to Saturday evenings. RedTail has contact data on all juniors that have participated in junior programs for the last 4 seasons, and contact will be made to these participants via email updating them on programming available to them in 2014. RedTail will continue working with the Crystal Lake Park District in an effort to increase the amount of programming that they offer to their residents. Other strategic partnerships will be explored with local organizations such as the YMCA. The goal is to increase junior golf lesson revenue by 15% in 2014. Also increase the amount of family golf rounds sold on Saturday’s and Sunday’s by 30%. RedTail will offer players the opportunity to play the golf course after 6:30 PM for $1.25 per hole seven days per week, if they purchase a RedTail Golf Club player development pass for $10. You must have this card for the rate to be valid. This program is aimed directly at the golfers who feel that golf is too expensive, and new players who give up the game because they are uncomfortable on the golf course. By playing in this time slot, the new golfers get the on course experience they need, at a time when the facility is not busy. This program allows the course to track the playing and spending habits of the beginning golfers. This data will be used to develop future programming. The player development pass will be marketed via local channels like the chamber of commerce as well as traditional mail. The goal for 2014 is to have 30 player development pass holders, and to gather data on their spending habits at the course. To promote skill development in beginning golfers, RedTail will continue to offer private golf lessons, as well as customized group lessons. RedTail will also try to expand its beginner skill development programs by offering a small sampling of “Get Golf Ready Programs,” which are promoted by the PGA of America and listed on the Active Network. Outreach will also be made

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to local businesses in an effort to conduct lesson programs for employees endorsed by the business. Engaging 20 “new golfers” in lesson programs is the goal for 2014. Retained Earnings The other main goal of the business plan is developing a strategy as it pertains to the appropriate level of retained earnings that should be held in the RedTail Golf Club fund each year, and how to appropriately allocate the excess retained earnings. As of the start of fiscal year 2014-2015 (FY 14-15), there will be approximately $245,000 of retained earnings in the golf course fund. This level of funding has been achieved through tight fiscal controls and deferment of capital spending. It is the recommendation of the business plan that the golf course fund has retained earnings of $210,000 at the beginning of each fiscal year. This amount of funding comfortably covers the golf course during what is typically considered the non revenue generating part of the golf season (November – March). However, this recommendation can be revisited on a regular basis and adjusted with the current market conditions. RedTail Golf Club enjoys the reputation as being a great golf layout, with friendly staff, and competitive pricing. In order to compete in the highly competitive marketplace, RedTail Golf Club must reinvest in the golf course. It is important to the golfers of a course to see the ownership making improvements to the club on a consistent basis. It also is important that the course has an equipment replacement program that will allow for the club to receive the best maintenance possible. In the initial time period that the plan covers, the capital spending plan will focus on bunker renovations, irrigation system upgrades, and equipment replacement. In the FY 14 – 15 budget the following new capital expenditures have been addressed:

• Renovation to the fairway bunker closest to the green on hole number 5. The renovation of fairway bunkers on holes 15 and 16, and the renovation of the greenside bunkers on hole number 9. Cost $40,000

RedTail’s bunkers have sand, but they have become contaminated with soil and rocks as a result don’t drain well. Many of the bunkers are large, making the course much more difficult to the average golfer and contributing to slow play. The initial step in improving the bunkers is to address the ones that are in the worst condition, which have been addressed this fiscal year. The bunkers have been continually singled out by the golfers of the course via survey as the one major physical area that the course needs to improve upon. The current stock of bunkers will either have the drainage replaced, the bunker reshaped, or the bunker will be completely removed. The total estimated cost to renovate all of the bunkers at RedTail is $400,000. The timeframe to complete the bunker renovation will depend on the resources available, but every bunker that is addressed will make the golf course more playable, and in turn more valuable. The decisions on which projects to tackle will be laid out in the budget process each season. Since the project work will typically happen at the end of each calendar year (October – November), the scope of the projects can be visited during each year and revised as needed.

• Replacement of the sprinklers for the tee complexes on holes 10 – 18 which require 64 heads and will be completed by the maintenance staff. Cost $10,000

The irrigation system at RedTail is almost all original equipment from the 1988 installation. The system is comprised of the pump station, underground piping, sprinkler heads, field controllers,

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and central control computer. The initial step for the system upgrade is to start replacing the sprinkler heads which have become problematic and inefficient with age. With a total of 500 heads, total head replacement will cost approximately $78,000 over time. The other components of the irrigations system function well at this time, and barring any unforeseen circumstances will be able to provide the water necessary to maintain our turf.

• Replacement of three triplex mowers, 2 utility carts, and the installation of a hydraulic lift table in the maintenance building. Cost $20,500 per year for 5 years

The three triplex mowers are what are used to take care of the tee complexes, green collars, and green approaches. This equipment was purchased in 2003, and scheduled to be replaced in 2012. The utility carts that are scheduled for replacement are from 1999 and 2000. The hydraulic lift table will allow the equipment to be raised off of the floor for easier service. These items will be financed with a conditional sale contracts, meaning at the end of the agreement the Village owns the equipment. Equipment replacement has been deferred in recent years. The idea of the program is to add a lease of similar dollar values, at the conclusion of a lease, to minimize the financial impact to the overall budget. All of the items that have been included in the budget for capital spending are focused on making the “course” more playable and appealing to the golfers. Other capital items that have a lesser impact on “course” have been identified as needing attention.

• The parking lot • Tree Planting • Cart Path Repairs • Maintenance Building Improvements

The parking lot is the first impression that customers get when they arrive at RedTail. Although a parking lot does not aid in adding revenues or rounds to a golf course, it should be clean, well marked and safe. The lot RedTail has not been seal coated in 10 years. It has an area that is in need of repairs that has been damaged by years of truck traffic going to empty the garbage dumpster. RedTail has a rather large stock of Ash Trees, and monies will need to be spent to replace trees that will eventually fall victim to the emerald ash borer. Cart Path Repairs will be needed to paths that have been broken down over time The maintenance building needs to improve its floor with proper drainage and a replace the ceiling with one that has better insulation. Course Maintenance Standards Philosophy

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Golf Course conditions are the single most important factors in determining how the game is played. A well-maintained golf course allows golfers to play the game with few interfering and inconsistent factors. The Superintendent is directly responsible for the golf course conditions. The Superintendent, in conjunction with the Golf Professional, devise a philosophy of how the course should play, giving due consideration to the needs of the golfers. The Superintendent will strive to make the course the most equitable determinant in the sport. This must be done in every operation, be it routine daily practices, or major renovations that affect the physical nature of an entire hole. This does not imply that a well maintained golf course must be perfectly groomed. Tees, greens, and fairways receive intense grooming, while roughs, bunkers, and other hazards may be left naturally rugged. A golf course is in ideal condition when it presents a challenge and yet plays fair. The ultimate goal of the Superintendent is for the golf course to play at a high level of quality on a daily basis, where extraordinary measures are not needed to elevate the course to championship form. Staffing Golf Course Superintendent The Superintendent is a full-time, salaried, year-round employee with benefits, reporting to Catherine Peterson, Village Manager of the Village of Lakewood. All golf course maintenance operations and personnel are under the direction of the golf course superintendent, Pat McDonagh. The superintendent will be responsible to maintain, manage, and supervise, all aspects of golf course turf management and other related areas of landscape care as required. Assistant Golf Course Superintendent The assistant superintendent is a full-time, salaried, year-round employee with benefits. Under the direction of the superintendent, the assistant will perform all the work required to properly maintain or repair all golf course maintenance equipment. The assistant may serve in the superintendent’s capacity during his absence. Laborers All laborers are hourly, seasonal, employees under the direction of the superintendent and assistant. Laborers will perform all golf and landscape maintenance operations as directed. Laborer positions will begin in March and end in November. Nine laborers are budgeted for the peak operational season. Use of Integrated Pest Management The use of synthetic no phosphorous fertilizers and plant protectants is necessary for the economic success and enjoyment of RedTail Golf Club. The staff is dedicated to protecting our environment, natural resources and public health, while producing high quality course conditions. RedTail is committed to environmental protection maintenance practices known collectively as Integrated Pest Management (IPM). 17

IPM is the integration and implementation of pest control measures based on predicated economic, ecological, and sociological consequences. By combining the use of chemical, cultural, and biological maintenance measures, the impact of turfgrass pests on course conditions and environmental issues regarding pesticide usage are minimized. Use of IPM strategies may resolve the issues of maintaining high quality turfgrass and the environmental impact. Understanding the relationships involving the components of IPM and the environment is crucial. Sound management practices of the soils, irrigation, nutrients, and plant zone protectants, in an IPM strategy, will ensure proper placement of these materials in the root zone and plants. This will provide a measure of pest control while protecting our environment and public health. The Superintendent will determine the past assessment, control efficiencies, and monitoring measures while adhering to budget. Greens

• Mowing – A minimum of six days per week at a height between 0.125 and 0.185 inch • Cup location will be moved from the previous days placement and will be determined by

a cup placement rotation and performed on a daily basis during the peak season • Repair of ballmarks, divots, or any other damaged turf on or near the greens are repaired

daily • Aerification – Core aerification all greens a minimum of one time per year or as

conditions dictate • Topdress as needed to maintain a smooth putting surface and manage thatch. • Fertilization – Greens shall receive fertilizer at a rate which promotes consistent, healthy,

growth and recuperation • Pest Control – Greens shall be maintained virtually free of undesirable weedy plant types,

diseases, and insects. When necessary, greens will be treated with plant protectants to promote turfgrass health and vigor, in accordance with the IPM philosophy. All applications will be administered and recorded according to state laws.

• Speed of Greens – The green speed shall be maintained consistent throughout the course. Green speed may change during periods of stress, aerification, or for certain events.

Tees and Fairways

• Mowing – All tees and fairways shall be mowed at a height of 0.5 inch 2 times per week during the growing season

• Topdressing, divot-filling and seeding – All worn areas on tees shall be repaired by filling the divot with sand 2 times per week

• Set Up – Tee markers and tee equipment shall be maintained daily for proper teeing and control of turf wear

• Pest Control – All tees and fairways shall be maintained virtually free of undesirable, weedy, plant types, diseases, and insects. When necessary, tees will be treated with plant protectants to promote health and vigor

• Aerification – Core aerify all tees a minimum of once per growing season or as conditions dictate. Core and/or solid time aerification of all fairways a minimum of once per growing season or as conditions dictate

• Fertilization – All tees and fairways shall receive fertilizer at a rate which promotes healthy growth and recuperation

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Rough

• Mowing – All roughs shall be mowed when necessary to maintain a height between 2 and 3 inches

• Aerification – Core and solid tine aerification will be completed as conditions dictate • Fertilization – Roughs shall receive fertilizer when necessary to promote vigor • Pest Control – Undesirable plant types and insects will be monitored and assessed

regarding their affects on conditions. If deemed necessary by the superintendent they will be treated with plant protectants

Natural Growth Areas

• Natural growth areas are regions in which native or natural appearing vegetation is promoted without routine maintenance procedures. The areas are generally out of play areas, mounds, slopes, wetlands, and woodlands. Such areas are kept free of trash and are managed to control noxious weeds. These areas may be subject to periodic, controlled, burns in cooperation with the Lakewood Fire Department

Ornamental Beds

• All ornamental bedding shall be maintained free of trash, undesirable weeds, and trimmed appropriately. Efforts are made to use perennial plants in order to minimize the labor required for care

Trees

• All trees are pruned to provide protection from wind and pests, as well as for appearance and safety using established practices

• Dead trees are removed when time permits and efforts are made for replacement Irrigation

• Repair or replace any head, valve, controller, pump, wiring, computer, and pipe as needed to maintain the proper operating of the entire irrigation system on a continual basis

• The golf course shall be irrigated as necessary to support proper growth and health of the turfgrass areas and landscaping

• The course complies with any applicable restrictions relative to watering, as mandated by state or local authorities

Bunkers

• The 57 bunkers are mechanically raked by the maintenance staff a minimum of three times per week

• The 250 bunker rakes are placed strategically at each bunker to offer ease of use to the golfer

• They are replaced if broken and are stored over the Winter in the maintenance barn to prolong their use

• Large stones and debris are removed as necessary

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Maintenance of Turf Equipment • All turf care equipment will be properly maintained to ensure a safe operation and its’

longevity • All turf care equipment will be cleaned after each use and before being stored on a daily

basis • All turf care equipment will be repaired and serviced according to manufacturers

recommended schedules • All turf care equipment will be repaired with replacement parts of manufacturers quality

or better • All turf care equipment will be housed at the maintenance facility

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