Board Book 2023

A TLANTA A THLETIC C LUB Board of Directors Meeting May 25, 2023

AGENDA REGULAR MEETING OF THE BOARD OF DIRECTORS May 25, 2023

4:00 p.m.

MEETING CALLED TO ORDER

PAGE ONE OF TWO

*Indicates a Board Vote will be required I.

Call to Order – Kevin Costello

II.

Approval of Minutes – Kevin Costello

1. Minutes from meeting April 27, 2023

III.

Pre sident’s Report – Kevin Costello

1. Presentation by Davis Stewart & Richard Grice 2. Report on the Executive Committee Meeting 3. Georgia Golf Hall of Fame Dinner 4. Tee Time Intervals Discussion - Continued 5. Update from PGA Championship Visit 6. Board Retreat – Final Details- Book Flights

IV.

GM/COO Report – David Sheppard, CCM (enclosure) 1. Operational Review 2. KPI Update 3. GCM Standards Reports - April 4. Update on Capital Projects

5. Update on Action Items 6. Team Member Update 7. Member Interactions Summary 8. IT Update

V.

Treasurer’s Report – John Stakel

1. Financial Summary – CFO 2. Capital Requests* - CFO 3. Chair/Vice Chair Commentary

VI.

Membership Report – Milford McGuirt 1. Membership Approvals* 2. Membership Reports 3. Chair/Vice Chair Commentary

VII.

Athletics Committee – Kyle Esmonde 1. Chair/Vice Chair Commentary

VIII. Tennis Committee – Kevin Case

1. Chair/Vice Chair Commentary

IX.

Golf Committee – Jim Kiker

1. Chair/Vice Chair Commentary

X.

Grounds Committee – Andy Dunn

1. Chair/Vice Chair Commentary

XI.

House Committee – Laurie Ann Garrett 1. Chair/Vice Chair Commentary

XII. Heritage/Vision/Traditions Committee/ 125 th Committee – Tim Bentsen 1. Vision Committee Update 2. Chair/Vice Chair Commentary

XIII. Old Business/New Business

XIV.

Additional Enclosures: Tennis Committee minutes from May 10, 2023 Grounds Committee minutes from May 16, 2023 Membership Committee minutes from May 18, 2023 Finance Committee minutes from May 19, 2023 Email Feedback and NPS scores

XV.

Upcoming Important Dates:

1. East Lake vs. AAC at East Lake June 9-10, 2023 2. Thursday June 22, 2023 at 4 p.m. BOD Meeting in Hoylake 3. Thursday, July 27, 2023 at 4 p.m. BOD Meeting in Hoylake 4. Thursday, August 24, 2023 at 4 p.m. BOD Meeting in Hoylake 5. Board Retreat – August 29-31, 2023 at Baltusrol GC

PRESIDENT’S REPORT Kevin Costello

East Lake Cup at Atlanta Athletic Club

October 28-November 2, 2023

Event Summary for AAC Board of Directors

• The East Lake Cup is a collegiate golfing event sponsored and produced by The Golf Channel

- The top four collegiate teams in each of the men’s and women’s 2023 NCAA Championship are invited to play

- Stanford, USC, Wake Forest, and Texas A&M will be the women’s representative teams. The top four men’s teams will be determined this weekend

- 3- day event (excluding practice rounds and “Am - Am” fundraising event ); one round of stroke play and two rounds of match play

- Competed on Highlands; Highlands closed for 5 days; Riverside will remain open at all times

- Significant discussion on course selection

- Spectators strongly encouraged ; we’d like strong internal PR to drum up attendance; no ropes — like US Am

- All three days will be televised by TGC — 3:30 to 6:30 coverage

- AAC will have script input regarding history and promotional segments regarding the AAC

- Event normally held at East Lake Golf Club but ELGC will be undergoing renovations this fall commencing immediately after the TOUR Championship

- Event is also the principal fundraising event for the East Lake Foundation through a “Party on the Green” dinner event and a “Am - Am” event

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• Event Timeline — Halloween Weekend

- Monday, October 23 to Friday, October 27 — TGC/HNS arrive on-property and conducts site set-up (both courses remain open)

- Saturday, October 28-player arrival and practice day (Highlands closed)

- Saturday evening, October 28 — “Party on the Green” Jones Foundation Fundraising Event (outside contractual arrangements/run by Jones Foundation; no AAC obligations) - Sunday, October 29--Am-Am Tournament fundraising event sponsored by Jones Foundation; 40 Am teams with one college player per team; 2 waves — 8:30 and 1:30 (Highlands closed)

- (Also) Sunday, October 29 — One or two Junior Clinic(s) with collegiate players

- Monday, October 30--Cup play commences — Stroke-Play determines individual champion and team seeding (Highlands closed)

- (Also) Monday, October 30 — The Golf Channel Appreciation Reception — 6:30-8:30 — 1898 Pavilion

Invitees: The Golf Channel (including “ talent ” ) (15) AAC Board of Directors and Key Staff College Coaches

Core AAC Volunteers Jones Foundation Reps

East Lake GM and Clubhouse Manager Championship Committee representatives

- Tuesday, October 31--Cup play continues — Match Play (Highlands closed)

- Wednesday, November 1--Final round--Match Play and awards Wednesday (Highlands closed)

- November 2-4 — tear-down and departure (Highlands re-opens)

2

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•

Revenue and Expenses

-

TGC to pay Site Fee--$75,000

- Heritage Foundation donation--$25,000

-

Total revenue: $100,000

- Budgeted out-of-pocket expenses — (~-$40,000)

- Estimated lost revenue — (~ -$9990)

-

Net Revenue--~$50,010

-

Other Budget Highlights

° TGC pays all F&B at prix fixe banquet rates plus service fee

° No AAC obligations regarding Jones Foundation fundraising events

3

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•

Other Highlights

-

Mascots!

-

Halloween Decorations

1 st Class Player Services

-

° Personalized locker rooms ° Gifts ° Exclusive use of North range during play days ° Access to Fitness Center

•

Scripted AAC Publicity

- AAC to provide background material and script to TGC for use on-air regarding:

° AAC 125 th anniversary

° Connection with East Lake; Bobby Jones; Alexa Stirling

° AAC prior history in hosting national amateur events

° Hosting of upcoming USGA amateur events in 2025, 2030 and 2035 — in particular the 2030 US Am/100 th anniversary of Grand Slam

° AAC history in hosting major professional championships

° Riverside renovation

4

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Board of Directors Meeting Thursday, April 27, 2023

Thursday, April 27, 2023

Date:

Kevin Costello, Tim Bentsen, John Stakel, Kevin Case, Andrew Dunn, Jim Kiker, Laurie Ann Garrett, Milford McGuirt, Kyle Esmonde, Larry Delan, Randy Moore David Sheppard, GM/COO, Tony Kelley, CFO, Audra Lucas, Club Manager

Present:

SLT:

I. Call to Order/Approval of Minutes – Kevin Costello: President Costello called the meeting to order at 4:00 p.m. On a motion by Bentsen, second by Stakel, the minutes from the March 23, 2023 board meeting were approved. Presidents Report – Kevin Costello: Mr. Costello then introduced Audra Lucas who presented her department standards. She noted that she trains her team in Hospitality 101: To communicate in a positive way with proper verbiage and be accountable for upholding the Club’s standards and brand. She reviewed these standards. She then discussed the steps of service for each area that serves members. We hire for personality and we teach talent. She feels service is constrained due to the size of the Troon kitchen. She believes her team is appropriately compensated. She reminded the Board that the lounge was not set up as a dining room, but we are using it as such. She can control the reservations in the Troon, it is really the Interlachen orders that create the bottlenecks in service. There was a question about food service in the Ladies Locker Room. This needs to be considered as the men have it. She then showed how the Troon kitchen gets 75% of the dinner orders between 6:30 and 7:30 p.m. and the kitchen cannot keep pace with these very large numbers. She and Chef are working on a plan to change the menu and assign chefs to certain dishes to expedite service. She asked to give this time to work. The new menu will be ready May 23. They will also try to utilize the banquet kitchen for the Interlachen menu and small plates. Chef will also utilize the green egg on the Troon lawn with a special limited menu. We will add equipment and change the Merion equipment to accommodate the changes to the menus. There was more discussion about using Merion on weekdays and Sundays, and offering early bird specials. Twenty-five percent of the members take advantage of the buffets offered on Friday nights. We have had kitchen consultants advise us that we lack the proper kitchen space even after the renovation and we lack the culinary talent to execute. Mr. Costello thanked Audra for her service and said the Board will help her with any resources she needs to solve the service issues. Audra then left the meeting. II. There was more discussion about the service complaints we have compared to other clubs. David said that Cherokee subsidizes their food service by 15 to 16%. He will look at Club Benchmarking data. It is a solvable problem but she needs tools and Interlachen compounds the problem. The Merion price point is keeping members from utilizing this amenity more often. Mr. Costello then continued with the President’s report. He reviewed some of the member discipline issues in the past month. He stated that he would like to attend each of the committee meetings once this year. Kyle Es monde agreed to write the “Inside the Board Room” report.

Mr. Costello asked if there was interest in an overseas golf trip next year. He commented on the on-going talks with the PGA. Les Harper has been doing a great job with this. We are discussing hosting a 2026 KPMG Women’s PGA Championship and a 2032 PGA Championship. They would also like us to host a PGA Works Tournament. This is a 3-day tournament that requires 2 courses and a weekend. They are asking the local government to support the tournaments with a monetary donation. This may be a sticking point. We hope to have this wrapped up by the Fall. Please keep this information confidential. Mr. Costello then mentioned that Inwood Country Club is having their Centennial celebration this year. Bobby Jones won his first major there, the 1923 U.S. Open. The celebration is on July 15 and members of our Board have been invited to participate. Mr. Barfield is also organizing an interclub tournament with Inwood: one at Inwood in August and one here in October. Send Kevin and Bruce an email if you wish to participate. Mr. Costello will be going to Royal Ottawa Golf Club on June 21 to meet the family of Alexa Stirling. He asked if the Board meeting could be moved back to June 22. The board agreed to move the meeting back to June 22. He also reiterated that the Board present a unified front on decisions made and the response to the membership should be “the board has decided.” It is important that board discussions stay confidential, and once an outcome is decided, it becomes a board decision. Mr. Costello then brought up the topic of tee time intervals. There has been a lot of feedback from the membership about going to 10-minute intervals to improve access to the courses. Tony and Bud provided some data about members and rounds played. Basically, 29% of the membership plays 75% of the total rounds played. So thirty percent of the membership is driving the volume of play. Those who do not play a lot are able to get tee times if they enter the lottery. The Duffers and Past President groups favor the 10-minute tee times. Since COVID, the courses are getting a lot more play and it is showing with many divots. Lukus does not want more rounds. We are currently budgeted for 68,000 rounds. We may be able to go to 10-minute tee times in the summer when the grasses are growing, and then revert to 15-minute intervals when they are dormant to stay within the 68,000 round budget. It was decided that more analysis is needed. Cherokee has 10 minute intervals and Capital City has 12 minute intervals. III. GM/COO Report – David Sheppard: David Sheppard said that operations are doing well, but we need more culinary team members. We have many applicants, but they don’t show up for interviews. Chef hired three of the four that he recently interviewed. We are close to hiring a new CHRO. The Seafood Spectacular/Luau was a great event, but only 180 attended and we hoped for 250. Devlin Wilke-Page has been a good hire, but we are losing Natalie Connor and Daniela Herdle. Corners Outreach will help us find another restaurant manager. D’Andrei Coakley and Rachel Berry were our Team Members of the Quarter. Jonathan and Collin are getting the pool ready for opening and hiring lifeguards. David has narrowed the CFO search down to 2 candidates.

He then reviewed the KPI data trends compared to last year at this time. We had 51% of revenue

in banquets last year and this year so far it is 41%. Total labor costs have increased since Merion was not open last year. Our F&B NPS scores have gone down from 8.74 to 7.84. The Cost of Goods show liquor was a little off, but wine is doing very well, due to the proper pours. We have 87% utilization on Riverside and 77% on Highlands. We had 4500 rounds played in March and 1000 were guest rounds. The pace of play was 4:08 on Highlands and 4:07 on Riverside with carts on path. Carts are used by 43% of members. This will increase as the temperatures get warmer and carts are off path. GCM had more labor costs due to hiring more team members and covering greens in March. Fitness is having one of its best years. From 7 to 9 p.m. they average 10.5 member visits. The court usage at the Tennis center is 62% indoor and 16% outdoor. This month we billed the ambassador members, so the JME count is up to 1426. We are increasing our dues for Heisman members to 73% of Jones members and will work towards 75%. Our Heisman count went from 350 a year ago to 330 and we lost 1.5 net JME since last year. We may want to increase our Heisman count before the recession that is predicted this summer. We currently have 247.5 FTE and this will continue to grow with seasonal hiring. We have made good progress on capital projects. The Tennis Center is done and looks great. Randy Moore showed some photos of the project. The new door will be installed on Monday. The roof has been repaired. The outdoor lighting is mostly done as well. We have a few more trees to light up on the courses. There was mention of doing Aquatics and Athletics lighting next. The drainage project is complete on Highlands and has made a difference. We are able to mow now after it rains. In July we will hit the rough areas on the course. David asked for feedback on the GCM standards document. Michael Washington and Ansley Brackin have done an update of the AAC app and we have received many positive comments. Eric Portman has worked with Erica on the membership forms with Monday.com. We will be upgrading to Outlook 365 in the near future. This will be cloud based and will have some benefits. There is no cloud version of Jonas or club software. We are waiting on a part for the front gate. The site fee for the International Festival in Heisman Field is $7500 and will go to $10,000 next year. David and Jimmy have met with Kelly Harris regarding the design of the Men’s Locker Room. The estimate is $2.5M. This is the only area in the clubhouse not renovated and does not fit our brand. We will do the men’s grill later. Please keep this confidential.

Mr. Costello mentioned the Baltusrol Board trip and to please book your flights. Milford McGuirt will not be able to attend.

IV. Treasurer ’s Report – John Stakel/Tony Kelley: Tony Kelley gave an overview of where our cash is held. We have two checking accounts with $2.3M in each. We have $5M in treasuries: We have $2.5M in a 90-day fund making 4.55% and $2.5M in a 180-day fund making 4.83%. We have $1.5M in Synovus which has an overnight sweep that we can access easily. We have $585K CD with Piedmont Bank at 1.4% and it

matures in August. We also have our AAC Heritage Foundation account with Piedmont Bank. We have $1.5M in a strategic reserve account. The capital fund has $5M and this will fluctuate.

The audit with Frazier and Deeter will begin May 16 and they will present to the Board at the June meeting. We ended the fiscal year $596K ahead of budget and $3.77M in initiation fees. The JME was 1409.7 and the budget was 1410. Our operations showed a negative budget variance of $36K due to interest, gas and the search firm fees. The cash balance is at $9.4M. We increased our net assets by 7%. The loan balance per member is $5829 and the goal is under $6K. Accounts receivable shows 99% with current, 30 or 60 day balances and our accounts over 90 days continue to decrease.

We have one capital request for new flooring for the Spa at $31,569. On a motion by Dunn, second by Garrett, the Board approved the request for the Spa flooring.

V. Membership Committee – Milford McGuirt: Milford McGuirt reported that we have two new Associate Jones members to approve tonight and asked for approval of Mr. Chris Ellis and Mr. Nick Wenzel. He then reported that we had 8 resignations and 4 deaths. Our total member count decreased from 1939 to 1915 from one year ago. We now have 78 on the internal golf waitlist and 100 on the external waitlist. Erica did have 3 new candidates lock in their initiation fee this month. Of the 100 on the external waitlist, 30 are legacies; 49 of the 70 have locked in, so they are serious about joining. Erica is hosting some of the waitlisted candidates to a Par 3 mixer on June 16 to keep them engaged. The vision task force for membership has done a lot of work and have briefed the Executive Committee on their recommendations for changes to the indoctrination process. They also recommend we take in 10 Heisman candidates before a recession hits and while the pool is open. This would not affect the golf waitlist. Mr. Costello was in favor, but thought it should be run through the Membership Committee first. The membership is very stable with very little attrition. VI. Athletics Committee – Kyle Esmonde: Kyle Esmonde noted that one of the Athletic Committee dates was incorrect. The meeting will be on June 14 not June 7. Neil and Jonathan are prepping for the pool opening. Youth Activities needs five more camp counselors. This year, members will be able to order food from their chairs at the pool with on-line ordering. VII. Tennis Committee – Kevin Case: Kevin Case noted that their first meeting will be May 10. Kevin said that Jeff Chandley was having some health challenges and may be away from the Tennis Center for a while. He has a strong team in place and Carmen will be acting Director. Member Chuck McElroy passed away this week of a massive heart attack. He had a stroke a few months back at the Fitness Center, but was taken to the hospital and he recovered. On a motion by McGuirt, second by Moore, the two Associate Jones members were approved by the Board.

VIII. House Committee – Laurie Ann Garrett: Laurie Ann Garrett reported that the Nelly golf tournament is sold out. She asked if we could not charge the juniors for meals. There are 8 participating. The Board approved. Mrs. Garrett said that members do not like being told they are not dressed properly. We hand out the courtesy cards, and report them to the Traditions Committee. Managers can make a determination if the dress code violation is egregious enough to warrant denying service. The Team Member Assistance Fund changes are being reviewed by Richard Grice. She then announced the upcoming member events. We did tweak the app so that members could not cancel within 72 hours. If more members wish to sign up within 72 hours and we have the space a message will pop up to call the concierge to register. We did sell 14 extra seats for the Luau this way. Members are happy about the wings offered on Thursdays. The 125 th Soiree has 170+ attending. We are seeing fewer numbers at this price point. There was more discussion about children being on the Interlachen patio. We will put additional signage that the patio is considered part of the bar and is adults only. This will be communicated in the Club Connections as well. Abe Doctor who worked for Redlands and Stoney River will meet with Audra and share his ideas about restaurant efficiencies. IX. Golf Committee – Jim Kiker: Mr. Kiker said the Golf Committee met on Tuesday and discussed stewardship and care of the courses. Every Monday, Lukus has 6 to 8 team members fill divots. One idea discussed was having members responsible for a hole. Juniors who walk should be required to carry sand. The cart path only status makes this worse as members don’t bring sand out with them. They a lso discussed having a club trophy that was the same for all tournaments. X. Grounds Committee – Andy Dunn: Andy Dunn noted the drainage project has had significant effect on Highlands. The seams will heal in about two months. There will be boxes for broken tees on the tee boxes. Mr. Dunn, David Sheppard and Lukus toured the courses and reviewed the GCM standards document. Please give David your feedback. The goal is to have this in place by May 1 and then send an email to the membership. An education session on a Saturday will be offered to members who wish to understand the standards better. Mr. Dunn then explained why the Poa is so bad this year on Riverside and proposed that we spend $54K to have a team pull the Poa and clean it up. The Board approved the budget. There was more discussion about yardage markers on the tee boxes and the rough. Both of these are design features. Mr. Costello asked that we look into the yardage markers more. XI. Heritage, Vision, 125 th Committees – Tim Bentsen: Mr. Bentsen said that Ansley Brackin did a phenomenal job with the Nat Thornton nomination packet and his nomination is now in to the GA Sports Hall of Fame. The next person we will try to induct is Jim Huber into the GA Golf Hall of Fame. The Decades Project has been very successful and each member of the Heritage Committee researched one decade each. Leigh Jackson and her team got us started with the infographic concept and Ansley has taken it to the

next level.

The Vision Committee task forces continue to meet and great things are happening to modernize our member records and processes. The finance task force has developed a model for funding and the master site task force has met with Frank Vain on some initial design concepts.

The 125 th Sunset Soiree at East Lake is our first event of the year and some members from East Lake will participate. Chad Parker, the GM is excited to be cooking barbeque for the event.

XII. Old/New Business – Kevin Costello: Mr. Costello thanked the Board for the progress made and taking on some difficult topics. He announced that dinner would be in the Wicker Room and a cocktail will be enjoyed on the Veranda.

With no more business, Mr. Costello adjourned the meeting at 7:05 p.m. to have a brief Executive Session.

Respectfully submitted,

David A. Sheppard, CCM General Manager/COO

GENERAL MANAGER REPORT David Sheppard

General Manager/COO Report David Sheppard May, 2023

Clubhouse Operations: The kickoff to AAC’s 125 th Anniversary was a big hit, and all of the members and team members who attended the event at East Lake Golf Club had positive things to say about the experience and event. Chad Parker and his team did a wonderful job hosting us. In addition, May was a very busy month here at the Club. We had several large wedding receptions, followed by a successful Cigar and Bourbon Dinner and Mother Daughter Tea event. On Mother’s Day we served nearly 1000 members and guests, and the next day hosted the Northside Golf Outing with over 288 players and 100 volunteers. We also hosted the Annual Georgia Golf Hall of Fame Dinner on May 21 st , and we will end the month with the Memorial Day Weekend and official opening of the pool. The team did a great job, while being short staffed, and the managers really filled the gaps well to ensure everything ran smoothly. If you see Audra around the clubhouse, please take a moment to thank her and her team members for all their hard work executing these events in May. Chef DaRin has begun using the Kamato Joe Grill on Thursday and Friday evenings offering another dinner special that members can order. This has worked so far and is taking pressure off of the Troon Grill Kitchen on these busy nights. The Chef will also work on a new menu that will spread entrees across the cooking stations more equally based on recent items sales data. Also, beginning on Wednesday, May 24 th Audra and her team will begin serving lunch in the Ladies Locker Room, as we have been able to hire and train another team member to assist Geneva in the Ladies Locker Room. The beverage carts have now been repaired and we are using the two carts to roam 14 holes on each golf course, and utilizing a beverage station on hole #14 Highlands and #15 Riverside to serve golfers playing holes #12 – 16 on each course. The Halfway House will serve as the 2 nd stationary beverage option, so this plan should offer sufficient beverage coverage for our golfers. We continue to be busy in the Club’s dining rooms and expect the Aquatic Center to be busy this June as well if the weather cooperates. Culinary positions remain the most challenging positions to fill on a regular basis. Jimmy Cole continues to do a great job overseeing the transition of his role over to Kimberly Cole and Andy Bailey. We had the circuit board go out on the HVAC unit on Mother’s Day morning, which caused the motor to burn out. Andy Bailey came in and removed the bad motor and replaced it with a spare one we had in inventory and he had it running before the afternoon heat arrived.

Golf and Grounds: Lukus and his team have done a nice job getting the courses in better shape each month. A temporary team of workers came in to remove the Poa Annua on Riverside and parts of Highlands, where we could not use Spectacle to kill it this year, and it has really made a difference in the appearance of the courses. He and his team are also implementing the GCM Standards for the summer season now and it is evident of the work they are performing on the golf courses. What he needs now is warmer weather, where the high and the low temperatures add up to 150 degrees or more, and the grasses will really begin to grow in. There are several areas where sod has been laid on Riverside, by the Board meeting they will have laid three truckloads of sod and many areas are growing back in with the warmer weather. They will continue to lay more sod as they can get it from the sod farms. Bud Taylor and his team continue to do a great job handling the increase in play on our courses and at the practice facilities. The Sargent Member/Member was very successful tournament, and our guests play continues to be strong in May. The Golf Team did a wonderful job running the Camp Kudzu and the very large Northside Hospital Golf Outings, which was Northside Hospital’s 30 th year of hosting the Charity Tournament. Athletics: Jonathan Lee has been able to hire more lifeguards than the past two seasons, and Neil is confident we will have what we need to operate the pool this year. Neil also plans to have Craig Jolley spending some time at the Aquatics Center this summer to assist in overseeing the operation. Craig has a great attitude and he will be a positive influence on the team. The Spa continues to stay busy with treatments and services. Stefanie Arrington and her team did a great job providing crafts and entertainment for the Mother Daughter Tea and the Mother’s Day Buffet. The Summer Camps that Stefanie offers are filling up quickly again this year. T ennis : Jeff Chandley and the Tennis Team continue to stay busy with the ALTA play with several teams making to the playoffs. He continues to see increased junior tennis participation since the Patrick Aubone has taken over the program. Pickleball also continues to grow in popularity with our members, and Jeff is looking at what the cost will be to spruce up the stadium with new paint and other maintenance needs. Human Resources: We hired a new CHRO and CFO, with the assistance of Goodwin & Associates. Matt Simmons will be the Club’s new CFO, and he will start on June 5 th . The Club’s n ew CHRO will be Joel Myers and he will arrive on June 1 st . Please take a moment to welcome these two gentlemen to the AAC!

Membership: Membership continues to do well. We have 3 prospective member nominees for membership this month. Our internal waitlist currently is at 78 members, and the external wait list is now at 103.

Mar-22

Apr-22

Feb

Mar

Apr

Objectives

Department

Driver

Measurement

F/B F/B F/B F/B F/B F/B F/B F/B F/B

Revenue Revenue Margins Margins Margins Margins Margins Margins Experience

Sales Mix of Banquet vs Member Member Ticket DR Revenue Utlization of Payroll - Food Utlization of Payroll - Beverage

Total Banq Rev /Total Revenue - YTD 51% Total DR Food Rev / People served Total labor payroll / Food Rev (74-76%) Total labor payroll / Bev Rev (13-15%) Member Insight Score (45 responses) Cost of Goods related to food sales Cost of Goods related to liquor sales Cost of Goods related to beer & soda sales

51% TBD

36%

47%

41%

58% 8.60 70% 20% 8.61

TBD by Tues

10.72

10.14

70.91%

67.20%

78% 26% 7.89

84% 25% 7.84

7.26%

9.00%

Membership Experience

8.74

9.1

Food Cost

CM 40.3/ YTD 37.4/ Bud 42.6 CM 42.0/ YTD37.5/Bud 44.0 40.9% CM/38.4% YTD/41.1% BUD CM 26.4/YTD 30.1/ Bud 28.0 CM 30.4/ YTD30.4/Bud 29.0 25.2% CM/28.2% YTD/29.0% BUD CM 33.6/YTD 40.3/Bud 37.5 CM 44.3/ YTD44.3/ Bud 39.0 41.4% CM/37.2% YTD/ 39.0% BUD CM 59.6/YTD 51.8/Bud 40.0 CM 50.3/ YTD50.3/Bud 49.2 52.4% CM/44.8% YTD/48.5% BUD

43.8% CM/38.8% YTD/44.5% BUD 39.3% CM/28.9% YTD/29.0% BUD

39.22% CM/39.22% YTD/39.20% BUD 20.42% CM/20.42% YTD/29.0% BUD

Beverage Cost - Liquor

Beverage Cost - Beer & Soda

40.7% CM/37.5% YTD/ 39.0% BUD 33.31% CM/33.31% YTD/ 39.0% BUD

Beverage Cost - Wine

Cost of Goods related to wine sales

39.2% CM/44.4% YTD/48.5% BUD

40.65% CM/40.65% YTD/48.5% BUD

Tee Times

Tee Time Utilization

Riverside Highlands

N/A

N/A

89% 78% 3436

87% 77% 4570

88% 70% 5184

81%/3543

92%/4151

Golf Golf Golf Golf Golf Golf Golf

Rounds

Total Rounds Played

Highlands and Riverside

Rounds/Revenue Rounds Played

Guest Rounds

271 (H:138, R:133)

1,005 - H: 39%, R: 61%

841 (H-430, R-411)

Revenue Revenue Expense

Merchandise Sales per Round

Merch sales/Rounds Payroll/Total Rounds

$55.16 $25.06 92.00%

$54.63 $24.12 63.00%

$28.37 $29.95

$55.22 $27.61

$45.58 $26.04

Payroll Cost Per Round Merchandise COGS

COGS/Merch sales Budget 65/YTD 67%

65%

56%

65%

Experience

Pace of Play

Avg. Time to complete round

4:04

4:06

4:07-H/4:04-R 39%/38%/23%

H: 4:09, R: 4:08 43%/37%/20%

H-4:07, R-4:06 51%/30%/19%

Cart vs. Walkers Percentage of Carts/Trolleys/Walkers

Carts/ Trolley/Walkers

43%/36%/21%

49%/32%/19%

Golf Grounds

Cost

Headcount

Management (Down 2 Assist. Supers.)

9

9

12 33

12 36

12 51

FT PT

48

0

Golf Grounds Golf Grounds Golf Grounds Golf Grounds

Cost Cost Cost Cost

Utilization of payroll Utilization of payroll Maintenance Cost Impact of Weather

Total Labor Cost of total Dept Costs (

CM 66%/ YTD 58.6%

CM 44.7%/ YTD 44.7%

CM 82.5%/YTD 58.5%

CM 66.5%/YTD 59%

CM 56.5%/YTD 56.5%

Labor Cost per Acre

$500.29 $756.13

$542.90

$479.93 $718.21

$563.37 $846.22

$619.99

Cost of Maintained Acre Number of Weather Days

$1,214.61

$1,307.00

7

5

10

9

10

Athletics

Cost

Member utilization / Usage

Monday - Friday

5 to 7 a.m. (avg.) 7 to 10 a.m. (avg.)

33 91 53 45 26 11 79 82 49 23 23 51 54 27

30 92 51 46 55 11 59 87 43 20 23 39 38 22

40

34 89 52 44 48 10 83 88 48 24 31 55 70 34

35

109

101

Athletics Financial / Operational an Resources Cost Cost Spa Tennis Tennis usage Membership Revenue Team Members Contract Labor Total FTE FTE

10 a.m. to 1 p.m. (avg.)

61 52 67 11 86 64 24 43 59 64 25

56 51 52 12 76 83 48 18 30 44 46 20

1 to 4 p.m. (avg.)

4 p.m. to 7 p.m. (avg.)

7 p.m. to Close 7 to 10 a.m. (avg.)

Saturday

10 a.m. to 1 p.m. (avg.)

103

1 to 4 p.m. (avg.) 4 to 6 p.m. (avg.) 8 to 10 a.m. (avg.)

Sunday

10 a.m. to 1 p.m. (avg.)

1 to 4 p.m. (avg.) 4 to 6 p.m. (avg.)

Member utilization Member utilization

Labor Cost per Hrs. Open (-300 hr. unfilled)

$86.53/hr.

$86.31/hr

$95.67/hr

$95.14/hr

$95.46/hr.

Guest Play

Number of Guests Indoor / Outdoor

307

692

226

375

325

Court Usage

Member utilization

64%/19%

59%/21%

60%/8%

62%/24%

65%/15%

Jones Mbr Equiv. Jones Member Equivilant Number

Total Dues Revenue / Jones mhly Dues Heisman Membership Dues % of Full Net Turnover End of Year +4

1396.9 69.00%

1408.7 72.00%

1404.5 72.00%

1426.6 73.00%

1412

Understand Heisman Contribution

73.00%

Member TO Net Member Gain/Loss

47

-1

1.4

-7

-6

Total Full Time Equivilent - Club GCM Labor - Contract Labor

203

208.6

212.9

224.6

233.4

25

35.8

12.3

11.2

19.6

Golf Sevices - Contract Labor

2.4 2.4 4.3

3.2 3.1 5.9

5.2 5.1 0.9

7.1 3.8 0.8

6.5 3.4 1.7

Production & Kit. Stewards - Contract Labor

Banquet Service - Contract Labor

Total FTE

Club & Contract Team Members

Total FTE - All Labor

237.1

256.7

236.4

247.5

264.6

Human Resources

Board Meeting Action Items

Summary of Board Meeting Action Items with Other Action Items in Progress:

I.

Action Items – In Process a. David Sheppard to work with Lukus, Bud, and Andy Dunn to complete the GCM Standards and develop a summary communication for the membership informing them that this document has been created by the management team and committee. b. David Sheppard to meet with Davis Stewart finalize the budget for the East Lake Cup Tournament. c. Summary of OT Hours from SLT. d. David Sheppard, Audra and Kelsey to meet with the East Lake Foundation Team to begin planning the Party on the Green Event scheduled for the Saturday evening prior to the EL Cup. e. Erica Smith and Michael Washington to work with Eric Portman to select software to manage our membership records that have been digitalized. f. Review KPI metrics to see if ensure we stay focused on the right information to make the best decisions for the Club. g. Work with Team to ensure a successful launch for the AAC Heritage Foundation with the unveiling of the Robert Cox Trophy. h. David Sheppard and Tony Kelley begin researching cost to develop a business continuity plan for club operations utilizing external assistance. Present results at BOD meeting before December. i. Board consider member that wants to reinstate membership into the Club to have initiation fee fully paid. j. Launch Club wide technology review with Eric Portman, Michael Washington and SLT. k. Golf, Tennis, Fitness, Clubhouse to develop operating framework similar to the Grounds Department. l. Investigate portable pool ordering around pool deck allowing members and team members to place orders remotely. m. Work with Eric Portman and Management Team to implement programs that have been identified and developed to improve efficiencies and member/guest service levels. n. Study overseeding South Short Game Practice Area. o. Plan to have a watch party for the Walker Cup in September if David Ford makes the team. p. David Sheppard and Tony Kelley to sign Documents to begin transfer process of 401k plan to Aon and Voya. Approved by the Board. q. John Stakel and David Sheppard to meet and work with Goodwin & Associates Team on the next steps to search for the Club’s new CFO.

r. John Stakel and David Sheppard to work with Goodwin & Associates to find new CFO and CHRO for the Club. s. Finalize details for Board Retreat to Baltusrol Golf Club t. Bud Taylor to add guest rounds to his KPI monthly report. u. Tony Kelley to add the overtime report to the monthly KPI report. v. Book a trip to England, Holylake, Formby and Royal Lytham St. Annes for 2024. w. Bud to work on new Jr. Golf Rules with Michael, and team and prepare email to send to membership. x. Laurie Ann Garrett to work with Bud on Nelly Tournament similar to Toms and Bradley Tournaments. y. Vision Committee to create sub-committees to work on next steps for facilities master plan, membership structure, and financial modeling and forecasting for future initiatives and projects. a. Grounds to investigate adding boxes for broken tees as well as for sand on main tee boxes. b. Finalize information provided by MetricsFirst to ensure all KPIs are accurate. c. Committee continue to work on securing future Championships with the PGA. d. Complete and finalize drawings for the Men’s Locker Room design and renovation. e. 5-year capital plan review, which projects may change as we go through the vison process. f. Vision Committee Sub-committees to work on facilities master plan, membership structure, and financial modeling for how to fund future initiatives and projects. g. Tennis Committee to work with Interior Design Firm to create a plan to update the interiors of the Indoor Tennis Center. Also, look at how to better display history of the Club’s tennis program. h. Work with Lukus and Jimmy to improve the sidewalks and landscaping around the Tennis Center. i. Develop a plan to reinforce Stewardship at the club that includes all departments. j. Deliver a plan for Riverside Renovation (strive for best new renovation) and work to improve the Highlands Course rating in Golf Digest and Golf Week. k. Develop Plan and gain appropriate governmental approvals and permits for tunnel to connect to Heisman Field.

Past Action Items in Progress:

Other Actions Items

1. Consider “Mountaintop Family Album” for AAC. 2. AAC Tournament of Champions (The Bobby – Fall of 2024) progress and Status 3. Develop standing Board calendar with repeatable annual structure (related party review, audit review, pricing review, etc.) 4. Employee Assistance Fund – modifications on disbursements 5. Update Mission/Vision Statement to add/encourage more member responsibility. Frank Vain was to provide ideas. 6. Additional exclusivity Recommendations from the Golf/Championship Committee post Riverside Opening 7. Digital signage to include announcements and recognition of members at the Club.

TREASURER ’ S REPORT John Stakel

Finance Committee Minutes

May 19, 2023

Date:

Present: Vice-Chairman Randy Moore, Darcy Copeland (phone), John Dwyer, Mike Englert, Cres Ferrell, Les Harper (phone), Roddy McCrory (phone), Eric Portman, David Potts, and Thomas Rumph (phone) Chairman John Stakel, Mike Johnson, David Sheppard, GM/COO Tony Kelley, CFO, Audra Lucas, Club Manager, and Scott Sperry, Controller Call to Order Vice-Chairman Randy Moore called the Finance Committee meeting to order at 7:31 a.m. in the Hoylake Room. Approval of April 2023 Meeting Minutes On a motion by John Dwyer and seconded by Eric Portman, the committee unanimously approved the minutes of the April 21, 2023 Finance Committee meeting. Absent: Staff:

Opening Remarks Vice-Chairman Moore reported on the following:

Recent Club events including the East Lake Sunset Soiree, Easter buffet, wine dinner, Seafood Spectacular and Mother’s Day brunch were well-received and well-attended. We hosted the 30 th annual Northside golf outing on May 15. Some upcoming and recently-implemented food & beverage opportunities include outdoor cooking experiences, expanded Merion dining and the pool opening. We are modifying the beverage cart strategy (mix of stationary and roaming carts) to better serve members.

We have hired a new CFO, Matt Simmons (starting June 5) and a new CHRO, Joel Myers (starting June 1).

The tennis center facelift is complete and looks great.

April golf course utilization was down due to bad weather. We experienced winter damage to about 158,000 square feet of sod. Tripp Davis has been retained as a consulting golf course architect. We are seeking consideration for Riverside to be awarded golf course renovation of the year by Golf Digest. We have begun using autonomous mowers.

Interest in membership remains high.

Board & GM/COO Report – Audra Lucas/Eric Portman/David Potts Audra updated the committee on the following:

We had over one thousand covers for Mother’s Day brunch but some of the later times were not filled. We will recap the event and make adjustments to times for next year’s brunch.

We worked with the House Committee to make improvements to the pool dining spaces prior to the pool opening this coming weekend. We have hired 160 staff over the last month to provide service primarily at the pool but in other areas as needed. We still face challenges in hiring culinary staff. Eric Portman then updated the committee on technology utilization within the Club including an overview of current state (Jonas, Microsoft exchange, gate system, etc.) and a brief discussion on recently-implemented and potential improvements (mobile ordering system, digitizing member files, electronic membership application process, mobile app, Office 365, and evaluating other club software packages). We conducted a journey- mapping exercise to better understand the “golf experience” of members and guests and will assess how we can use technology to improve that experience. David Potts then updated the committee on activities of the Vision Committee and how we are preparing to analyze the committee’s recommendations and determine the impact of those recommendations on our financial resources and our membership. Membership numbers reflect continued strong interest in the joining the Club. YTD initiation fees on a straight-line basis exceeded budget by $66K. We are budgeted for approximately $3.2M in initiation fees for the year with the majority of those fees paid as part of existing installment payment plans. We continue to operate in a strong cash position ending the month with $9.9M in cash and short-term investments. We had a brief discussion relating to JME’s and how we can use JME’s as a percentage of to tal member count to drive membership objectives. We will check availability of comparable membership data to benchmark with peer clubs. We then reviewed the Projected Cash Flow focusing on the monthly Increase (Decrease) in Cash line with an emphasis on the seasonal nature of spending and the timing of capital projects throughout the year. Overall, the projection is a conservative approach with an underlying assumption of complete spending on all approved capital projects within the fiscal year. Some highlighted items on the Board’s Summary included the $14.7K negati ve variance in Food revenue (50/50 split between member and private party business) and the $19.2K negative variance in Beverage revenue (member revenue down $28K due to bad weather early in month and some events with lighter-than-expected attendance). Driver for $38K Golf revenue positive variance was tournament revenue which was offset by corresponding increase in tournament expense. Similarly, a key driver of the $62.5K positive variance in Other Revenue was Tennis lesson revenue which was offset by increased lessons pay. Other Revenue also included unrealized gains on treasury-bill investments as well as higher interest earned on cash and cash-equivalent holdings. Chief Financial Officer Presentation and Discussion – Tony Kelley Overall the month of April was a good month with a positive budget variance.

We had a brief discussion relating to the Payroll, Taxes and Benefits line of the Board’s Summary and the challenges surrounding inflationary pressures on labor costs. We will continue to monitor trends in this area and make sure we are managing to budget. Another item to monitor is member participation in club events as consumers are forced to make decisions regarding their discretionary spending. Some highlighted items on the Metrics Report included the Dues to Total Revenue ratio and the Full Time Head Count. We emphasized the fact that the Dues to Total Revenue goal of 55% is a long-term goal. Reaching the 55% goal will reduce our reliance on members’ discretionary spending. The year over- year increase in Full Time Head Count and FTE’s is a positiv e sign that hospitality workers are returning to the labor force.

New Business:

No new business items presented.

Finance Committee Action(s) Capital Request(s): The following capital requests were presented to the Finance Committee:

 Replacement of sod in winter-damaged areas at a cost of $83,621.53;  Replacement of greens covers at a cost of $77,381.65;  Purchase of TrackMan Launch Monitor at a cost of $26,114.88;  Replacement of vibration plate at Fitness Center at a cost of $12,063.69; and  Purchase of portable digital signage at a cost of $5,381.47.

Total cost of all projects presented was $204,563.22.

On a motion by David Potts and seconded by Eric Portman, the Finance Committee unanimously recommends the Board approve all five of the capital projects listed above.

There being no further business, the meeting was adjourned at 8:55 a.m. Next Finance Committee meeting scheduled for Friday, June 16 at 7:30 a.m.

Respectfully submitted,

Scott Sperry For the Finance Committee

Atlanta Athletic Club Flash Report April 2023

MEMBERSHIP :

Apr-23

Mar-23

Apr-22

TOTAL MEMBER COUNT

1912 1225

1915 1225

1938 1225

TOTAL GOLF

JONES MEMBER COUNT

842

841

837

GOLF WAIT LIST

77

77

79 76

EXTERNAL WAIT LIST

103

100

IN-PROCESS

3 6

2 6

4 4

PROPOSALS OUT

ACTUAL

BUDGET VARIANCE

Apr-23

Mar-23

YTD

YTD

YTD

INITIATION FEES

$331,657

$324,187

$331,657 $265,963

$

65,694

DUES

$1,269,349

$1,226,913

$1,269,349 $1,267,586

$

1,763

JME's

1412.0

1426.6

1412.0

1410.0

2.0

FINANCIAL RESULTS:

ACTUAL

BUDGET VARIANCE

Apr-23

Mar-23

YTD

YTD

YTD

NET INCOME/( EXPENSE)

($169,037)

($305,939)

($169,037) ($181,559)

$

12,522

%

Apr-23

BUDGET

VARIANCE VARIANCE

MTD TOTAL REVENUE MTD TOTAL EXPENSE YTD TOTAL REVENUE YTD TOTAL EXPENSE

$2,929,393 ($3,098,430) $2,929,393 ($3,098,429)

$2,861,048 ($3,042,607) $2,861,048 ($3,042,607)

$68,345 ($55,823) $68,345 ($55,823)

2.39% -1.83% 2.39% -1.83%

BALANCE SHEET:

Apr-23

Mar-23

Beg of FY

CASH BALANCE

$9,927,159 $36,569,633 $8,279,000

$9,384,537 $36,272,047 $8,317,000

$9,384,537 $36,272,047 $8,317,000

NET ASSETS

LOAN BALANCE

Per JME

$

5,863.49

$

5,829.77

$

5,921.51

ACCOUNTS RECEIVABLE AGING

Apr-23

%

Mar-23

%

CURRENT

3,202,280 $

91.1% 7.6% 0.5% 0.8%

3,546,378 $

95.6% 3.3% 0.3% 0.8%

30-60 60-90

$ $ $

266,048 19,314 28,611

$ $ $

122,903 12,299 28,698

90 +

TOTAL

3,516,253 $

3,710,277 $

FINCOMMRPT042023Info Flash Report

ATLANTA ATHLETIC CLUB FYE24 Projected Cash Flow

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

JAN

FEB

MAR

TOTAL

BEGINNING CASH BALANCE

9,384,537

9,927,159

9,046,962

9,097,576 9,586,660

9,103,506 9,092,930

9,955,230

9,588,602

8,594,284

9,845,656

9,878,970

9,384,537

SOURCES OF FUNDS: NET INCOME/(EXPENSE)-OPERATIONS

143,463

(381,872)

(18,284)

(281,608)

15,720

299,520

158,723

90,190

149,742

(145,501)

136,850

(9,593)

157,350

CASH FROM OPS AFTER ADJUSTMENTS

143,463

(381,872)

(18,284)

(281,608)

15,720

299,520

158,723

90,190

149,742

(145,501)

136,850

(9,593)

157,350

MEMBER CAPITAL DUES

134,967

136,000

151,500

136,000

136,000

151,500

136,000

136,000

152,000

141,000

141,000

156,325

1,708,292

INITIATION FEES

331,657

231,722

431,938

269,714

325,380

247,944

305,143

53,433

288,987

203,873

203,403

308,159

3,201,353

TOTAL CASH GENERATED

610,087

(14,150)

565,154

124,106

477,100

698,964

599,866

279,623

590,729

199,372

481,253

454,891

5,066,995

USES OF FUNDS: DEBT SERVICE - PRINCIPAL ONLY SYNOVUS

38,000

38,000

38,000

38,000

38,000

38,000

38,000

38,000

38,000

38,000

38,000

38,000

456,000

PREVIOUSLY APPROVED CAPITAL

349,784

203,790

200,000

200,000

200,000

184,218

108,231

0

0

0

0

0

1,446,023

APPROVED CAPITAL CURRENT YEAR

21,335

58,251

597,047

160,000

109,939

303,875

2,462,522

0

628,937

301,540

22,022

22,253

237,323

TOTAL CASH USED

387,784

870,727

539,540

260,022

260,253

459,541

167,566

96,251

635,047

198,000

147,939

341,875

4,364,545

INCREASE (DECREASE) IN CASH

222,303

(884,877)

25,614

(135,916)

216,847

239,423

432,300

183,372

(44,318)

1,372

333,314

113,016

702,450

TIMING DIFFERENCES - AR,AP, ETC.

320,320

4,680

25,000

625,000

(700,000)

(250,000)

430,000

(550,000)

(950,000)

1,250,000

(300,000)

195,000

100,000

ENDING CASH BALANCE

9,927,159

9,046,962

9,097,576

9,586,660 9,103,506

9,092,930 9,955,230

9,588,602

8,594,284

9,845,656

9,878,970 10,186,987

10,186,987

FINCOMMRPT042023Info Cash Flow FYE24