Notes on Tues June 17 Special Board Meeting Agenda

At the recent MCA Board meeting the President noted that there would be a Special Board Meeting on Tuesday. The official notice has been posted on the MCA website, with the Zoom link.

The Action items are:

1. TROON/ICON Contract Resolution
2. Asset Transfer Resolution

The proposed resolutions can be found in the Board Packet that is posted in the Homeowner section of the website under Documents > Board Meeting Agenda, Packets & Minutes.

Although the terms of the Asset Transfer resolution are not provided, this is long overdue as the assets of TMCC on the premises on May 1 became the property of MCA without compensation under Clause 16 of the lease. Although this seems like it shouldn’t have taken 2 months to complete, we understand TMCC was uncooperative in performing their obligations. MCA leadership has made vague comments indicating the “asset transfer” will also transfer liabilities to the MCA. We are at a loss as to why taking on TMCC liabilities is in the MCA’s best interests (it would clearly be in TMCC’s best interest).

As these assets belong to the MCA and the residents under the lease terms, we fail to understand why this agreement is being withheld from the residents prior to approval by the Board.  Under Florida Statute §720.303(4)(a) HOA members are entitled to review contracts, as they are considered official records of the association.  Contracts, are not exempt, even if they are under negotiation or involve legal review.

Regarding the ICON contract, it is preferable that the MCA have a contract directly with ICON rather than just paying the fees/expenses to ICON of the TMCC contract (this was going to be necessary from May 1 until such a new contract was going to be in place to keep any level of operations going, including just maintaining the golf courses). The Transition Committee advocated for a “skinny” contract with ICON, designed to get MCA through the transition period. If the contract is structured to only make financial sense if the MCA operates the facilities, it is effectively obligating us to operate the facilities which would be at a HUGE financial cost to MCA Homeowners.

The resolution for the ICON contract also includes this as part of the motion: “WHEREAS, the path forward is to agree to the conditions set between MCA and Troon/Icon, which will allow various operations to resume within a reasonable time frame as deemed by the MCA President and Treasurer. Currently, this stands out as the best option for the long-term success of the Meadows community.“

“Currently, this stands out….” does not give any indication that an appropriate amount of analysis has been done to support any decision to re-open the golf courses or to keep them closed but maintained.

More than 3 weeks ago this analysis, done by some members of the disbanded Transition Subcommittee, was posted on Facebook and this website:

Some Board members and residents on Facebook say “we have to open the courses to generate revenues”. What the analysis clearly demonstrates is that the increase in expenses to operate the courses FAR outpace any revenues generated during the summer. The net cost the MCA is MUCH more to operate the courses vs just maintain them until the end of the slow seas.

After the analysis was posted on Facebook, a resident (not us) posted this excellent summary of the analysis (brevity is not always our strength):

Situation

MCA has $721K available to manage three golf courses after TMCC’s exit. They must choose how to proceed until a new operator takes over.

The 3 Options

Option 1: Operate Now

• Costs $420K/month
• Burns all funds in ~1.5 months
• Requires immediate member return and partner takeover
• High financial risk and no fallback

Option 2: Stay Ready

• Costs ~$300K/month
• Burns all funds in ~2.5 months
• Keeps staff and leases active, but no services or revenue
• Still high risk, no fallback

Option 3: Minimal Maintenance Only (Recommended)

• Costs ~$138K/month
• Lasts ~6 months
• Stops services but keeps the course alive
• Buys time to find the best partner with less risk

Key Insights

• No current members exist — all will need to rejoin voluntarily
• Operating now to retain members is a financially flawed assumption
• Rushing into contracts may cause long-term damage

Conclusion

Option 3 is the smartest path — it preserves cash, avoids pressure, and gives MCA time to find a strong long-term partner.

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Our Comments and Questions

The MCA Board needs independent expert golf industry advice to really understand our situation and make these decisions. No one on the Board has any golf course management experience. ICON is not independent and benefits significantly from Options #1 and #2. We and an overwhelming majority of residents have been saying this for many many months. We are at a loss as to why the Board refuses to do so (and may be taking on personal legal risk from that choice).

1. The portion of the ICON contract resolution that provides the President and Treasurer with making the decision on the immediate future of the courses has nothing to do with the contract. At a minimum it should be its own separate resolution. We recommend a motion to amend to remove this paragraph from the proposed resolution.
2. To re-open the courses vs just maintain decision is a VERY big decision with HUGE RISKS for the MCA. It will have major and pronounced short- and long-term financial implications on The Meadows.  The MCA Board needs a reasonable amount of financial information and analysis to support such a decision. They need independent golf industry expert advice. Making that decision (or delegating authority to do so) is not fulfilling their obligation to make INFORMED decisions. Be clear that delegating approval to open the courses is APPROVING opening the courses, with the timing to be determined by the delegates (who have no experience or expertise in operating golf operations).
   
   Under Florida Statutes §720.303(1) – Powers and Duties of the Board, if HOA directors fail to make decisions based on their duty of care, they may be in violation of their fiduciary duties, and potentially subject to personal liability in certain circumstances.  They also need to heed Florida Statutes §617.0830 which addresses negligent decisions, willful ignorance, and reckless behavior or gross negligence. HOAs, such as the MCA, are typically organized as not-for-profit corporations, so Chapter 617 also applies.  
   
3. We believe Option #3 (Minimal Maintenance) is in the best interests of the MCA at this time. It is critically important that the ICON contract allow the MCA to execute Option #3 (just course maintenance staff with some ICON oversight). If the contract is structured such that we can’t do that, we are committing to Options #1 and #2 (and #2 probably makes the least sense, but that has what we have been doing since May 1). If Option #3 is not possible under the proposed ICON contract, the Board is effectively choosing to open the courses just by approving the contract with all of the risks that the Board and the directors will inherit. (see point #2 above)