Tulare County Golf Club Fighting Rumors of Mismanaged Funds… or Worse?

Photo via golfadvisor.com

Is this becoming common business practice in golf, or are there just lots of coincidences? We dive into what’s really going on at a local Golf Club.

(Tulare County) – If you take a trip back in time to the 80’s and early 90’s, you would find the whole US was going crazy over chasing a ritzy lifestyle, public perception, and this game that 90% of people were quite terrible at. GOLF. “If you had a golf membership, you were part of the elite” said a local Tulare County golfer.

Now, come back to present day. The golf industry has been in a steady decline since its hay-day and stories of embezzlement and golf course management taking advantage of elderly members is on the rise. Just this past month (August 2017) a financial advisor and owner of Atlas Valley Country Club in Michigan came under charges of embezzlement and fraud. How does this happen?

Perhaps, you need to understand how the industry really works first. In most instances, when a golf club is initially formed, in order to become a “prestigious member”, you would need to buy shares for $10,000-$100,000 or more depending on your area. Sounds like a lot to chase a ball around considering all of the under $50 games that can be bought now at online golf discount websites. That isn’t where it stops though, then you get the “opportunity” to be a member at $300-$1000/month, which is often coupled with restaurant minimum spending requirements, $100-$500/month.

Sounds like a lot, doesn’t it? Wait, should there be any up-keep or shortages in funds needed to be covered, the club then can assess your membership to cover its cost. These charges, depending on the needs, could be anywhere from $100 to $10,000 per member.

So, where does all of this money go?

Of course, there are plenty of plausible needs for up-keep, but every business that is run properly should be able to establish its cost of doing business and price its goods accordingly to thrive or at the very least survive.

In golf, you have many profit centers. Golf, Restaurant, and Merchandise are the main categories. Clubs are also selling advertising space on their scorecards, benches, and golf carts. Then there are special events you can go to and further unload your wallet, and the unique thing about golf is that it takes a minimum of 4 hours to play 18 holes. For most, that encompasses 2 meals and a few pints during and after.

With all of the income from membership fees and the other profit centers, why would they still need to assess. Where does all of the money go?

We gathered information on a particular golf club in Tulare County that has been entrenched in rumors for some time. In 2012, the accountant was let go and rumored to have embezzled funds but no charges were ever filed. There has been rumors of the course closing, rumors of takeover by the nearby Indian Reservation, and recently rumors of mismanaged funds.

We went to the golf club to ask some general questions. This golf club is considered semi-private, allowing non-members to pay per use; an 18-hole round cost $55 in the morning and they had an afternoon price of $35. However, a quick search online found deals as low as $18/round. Speaking with Connor, one of the club pro’s, he said “…about half of the golfers are non-members and we have almost 500 members.” At first glance, it sounds like this club is actually doing quite well.

We then spoke with a member in the parking lot, who wished to not be named in this article and will be referred to as John Smith. When asked how he felt the club was doing John responded, “I’ve been a member since the mid 90’s, the club has more people than ever playing golf, which is good but the rounds take a lot longer to play than before because of over-crowding and slow play.”

We then asked about membership and cost. “It seems every year I get assessed on top of all the money I pay monthly. At my age its getting pretty ridiculous to continue, but I am trapped because I can’t sell my membership. There’s no buyers” said John.

We asked how much Mr. Smith originally paid for his membership. “I paid $10,000 to become a member back in the 90’s and now it’s worth nothing because they are just giving away the golf. Some of these guys out here are paying less than $20 to play a round; they’re not going to buy my membership. I have probably payed close to a quarter million dollars since the 90’s between initial buy-in, dues, and assessments.”

When we told John Smith that we were writing this article because of rumors of mismanaged funds and asked where he thinks all the money goes, here is what he said. “I’m old fashioned, I know that things cost more than they did [years ago], but what I have found is that if you look at a person’s lifestyle and what they drive you’ll find out a lot about them. Some people are doing too good.”

John wouldn’t elaborate on these comments but clearly was alluding to something not adding up.

Through our research, we found that a husband and wife recently paid to walk away from their membership. The woman, whose husband is battling cancer, paid a year’s worth of membership fees plus an assessment of $1000 just to get out of the membership before traveling out of the country to get alternative treatment for her husband.

In speaking with several people at the golf club, you begin to get a sense of the frustration these elder members, who have floated the place for decades, feel. If there in fact is mismanagement of funds, who benefits from it? Another member we spoke with, who also asked to not use their name, as if fearing retaliation, described the situation like this. “The club will eventually have to sell because there won’t be enough of us old guys around anymore to fund it. When that happens, the person who’s still alive and holds the most shares wins the prize.” Why has controversy surrounded this club for years? Does management have a hidden agenda? Or, like many other non-profit agencies, are the administrators just making too much money.

We played the golf course and found it to be a really well manicured and challenging course, but unlike the members we spoke with, we paid only $18. With such an imbalance between what the younger patrons are paying to be at the golf course and what the older members are paying, at what point does this become elderly financial exploitation, entrapment, or at the very least a case of management taking advantage of a situation.

“One of the most common yet not well-known forms of elderly abuse is financial exploitation. The website of the Ausband & Dumont Law Firm says that although it is rampant, this type of abuse has not been well documented. There is reportedly an estimated 5 million cases of elderly financial abuse in the United States every year, but the sad news is that cases such as these are only reported 1 in every 25.” (“Elder Abuse”, 2015)

With situations like this occurring all over the nation, is the golf industry just slowly dying and club managers, out of desperation, are offering much better deals to the younger crowd? Or, are they exploiting the older generation by living off their dollars and charging the youth dimes all whilst padding their pockets? It’s time to start asking questions when the money doesn’t add up.

What do you think might be going on? Does this sound like your golf club? Post in the comments below. I am now on Twitter! Follow ME! @NguyenReports