First loan to TMCC was in JULY

At the recent MCA Board meeting the Treasurer indicated the proposed loan was necessary due to the impacts of the 3 hurricanes and TMCC would have the cash to repay the loans in February to April 2025. We opined that this is a permanent cashflow problem that will just recur even if the loan was repaid.

We now know that the MCA Board advanced $46,200 to TMCC on July 30 2024 for 2 months.

According to information obtained through the MCA’s Records Inspection process by an MCA Homeowner, it shows that

• On July 1 MCA paid a regular quarterly Renaissance Access Plan payment of $46,200 for July-Sept. This is a normal quarterly payment of an annual net payment of $184,000 ($600,000 – property taxes – insurance).
• On July 30 MCA advanced the next quarterly payment of $46,200 for Oct-Dec to TMCC. This amount was not due until Oct 1, so it is a loan by any reasonable measure.

This loan was made prior to any hurricane damage (Debbie arrived a week later) so no unusual expenses would have been incurred or revenues lost at that time.

As noted in our previous posts, the TMCC Treasurer anticipated that TMCC may have cashflow problems in 2024. In the TMCC Treasurer’s Report in TMCC’s 2024 Annual Meeting, they stated:
“Notwithstanding the deficit at 12/31/23 and the small loss for the year, the Club has enough cash to begin 2024. Generally, the Club generates enough cash during the first and part of the second quarters of the year to cover the shortfalls in cash in the later months of the year. However, these shortfalls are generally offset by the program of members’ paying dues for the next succeeding year in the current year.”

The advance was likely expected to push the problem out until the early members dues were received. At the recent MCA Board meeting the MCA Treasurer noted that early membership dues payments are $100,000 below normal levels.

TMCC knew they would have cash flow problems this year. They first appeared in July. The hurricanes made it worse. And now they are also having a membership shortfall (at least in terms of early payments). The new proposed loan will only “kick the can” a few months farther out. None of these loans address the problem.

Recapping the last decade:

• From 2014 to 2018 TMCC was losing $1 million per year and was going bankrupt.
• In 2018 MCA paid off TMCC’s loans, purchased their assets, and then gave them back the MCA-owned assets for free.
• In 2019-2020, TMCC was again insolvent. MCA began paying $600,000 per year to TMCC for facilities access that cause TMCC almost no additional cost.
• In 2024 MCA starts providing additional increasing cash loans/advances to TMCC, and announces $3.6 million of maintenance will be required to the Clubhouse (all benefits will accrue to TMCC members).

Despite all the financial subsidization by MCA Homeowners, TMCC is not a viable business as a private club and has not been viable for more than a decade. The longer this goes on, the more it is going to cost MCA Homeowners in: subsidizing TMCC; missing potential public golfer revenues, and repairing the damage that under-maintenance will cost.

IT IS WAY PAST TIME FOR MCA TO DO THE SERIOUS WORK REQUIRED
TO IDENTIFY AND IMPLEMENT THE BEST WAY FOR
MCA TO UTILIZE ITS SPORTS COMPLEX ASSETS.

It is clearly inevitable that we are going to have to find a better way. They sooner we start, the sooner we will get there. Let’s get on with it.