Levying Members

I won't bore you with the details, but basically I am moving clubs, from a privately owned club, to a more traditional members' club. I am just about to sign on the dotted line, along with my 3 golfing partners. But at the final hour we noticed there are plans at the club to refurb the clubhouse and wondered of they were allowing us to join, on the proviso that we contribute above our annual subs and joining fee to the refurb project! I have heard of clubs doing this type of 'levying' for big improvements but I thought it was a relic of pre recession golf. The course is excellent and the new clubhouse will be great, and to be honest I wouldn't mind supporting club functions and paying a levy over the bar, but to be expected to dip into my pocket, when the Commitee decides seems to catch in my throat a bit. I wondered if anyone had any experience of being levied and how much you contributed? I know and I fully intend to ask the secretary at the new club. But any thoughts gratefully recieved

Super65

sorry i am confussed- are you telling me they can just ask for money of you when ever they want?

Basically yes! I happens at a very well heeled golf club down the road from me, on a regular basis, a friend of mine is a member there! I was hoping it was just an urban myth at most clubs though hence my email, really!

never heard of that to be honest!

My club only allows green fees to go up by no more than 5% per year, but a few years ago, because funds were needed for the course, they held an extra general meeting of the members, and it was agreed that the green fees could go up by 12% for 3 years only to finance the extra work.

The result of the work done, was very successful, and this year my green fees went only by 5% (£609 for the year).

I know of one local golf club where this is allegedly done regularly. They have quite low annual subs and then levy members when they need something doing! Our club plans for the future and makes provisions in the accounts when they know big expenditure items are coming up, which I believe is the honest way to do it! IMHO.

It is quite a regular thing to happen at many private clubs.
I would check with the Secretary before signing.

At Muirfield they used to just divi up the year total and bill the members accordingly. Sometimes it was a pleasant surprise and sometimes a bit of a shock. [so I have been told!]

i suppose i am lucky to be at a club that makes money- however my fees are relativly high(so i suppose its one or the other!).. improvements are going on at present but that is paid for with its surpluses

I've heard of members being asked to stump up more money for various capital projects. Sometimes it's done with just a one off payment as part of the subs, other times it's wrapped up as a debenture.

It's a pretty unusual occurrence though. Even if you do have to pay towards the new clubhouse, I doubt you'll have a to pay for anything else for a long time.

You should be able to speak to a committee guy and express your concerns. Most clubs have a ceiling on subs payments (usually not more than a 4% increase) and they normally fund big projects from cash flow, rather than levies. So express your concerns, and see what he (or she) says.

If it is a true members club you will not only be a member but a part owner of the club. Everything that happens will be the responsibility of the members including funding of developments. Depending how successful the club is/has been that might involve calling for funds from members or using cash balances. Any decision would be subject to a vote of members at an AGM/EGM.
The whole thing should be positive but the Secretary/Manager should be able to give you some background and highlight planned issues, and you can and should check the club rules to see just how they have agreed to do things.
Increasingly clubs are asking members for loans to fund some developments, which has the possible advantage of not impacting everyone, and has some tax benefits for those that provide loans. On the other hand it can produce a perception of a 2 tier membership, though loans should not affect ownership and voting rights. Might simply be up the food chain in case of the club going bust.

Voluntary loans...

The club can't favour those members who lend money unless there's some sort of agreement or debenture put in place, which as Puligny said would require passing by the members of the club.

Voluntary loans are great way of helping the club with cash flow issues, although it's unlikely most clubs would be able to raise enough to build a new clubhouse for example. If the member lends the club (say) £1000, then the interest on that amount if the club had borrowed it from the bank might be about £80 per year. The club discounts the member's subscription by (say) £70. The member is getting a better deal than leaving money in the bank (and no tax), the club is getting a better interest rate than a bank loan.

It's a perfect solution, especially in clubs where there are lots of older people with loads of money sitting in bank accounts doing hardly anything.

We had a new clubhouse built 13 years ago and the money for this was raised as a bank loan with members contributing to the repayment as either an additional annual levy of a little over £100 for 10 years due with the subs or a one-off payment around £900 at the time.
Normal operating costs are budgeted out of annual subscriptions but if anything major were to occur it is possible that a levy would be proposed. The course drainage replacement was also done by a £50 levy many years ago if my memory is right.
I would imagine this isn't uncommon in private clubs but a refurb might have already been budgeted by the one you're looking at joining.

similar scenario in my club. we are paying 90 euro a year for 5 years (or 400 in a lump sum) for the rennovation of one of our 3 nines.
the motion went through the AGM- maybe this is a little fairer than being somewhat at the whim of the committee.

Thanks all, very interesting, I will check the T&Cs at the club, quiz the manager a bit, and most likely sign up. Have to say played yesterday at new course and it really lifted my spirits and level of golf.

Another way of raising the cash in our case for new changing rooms is to sell some(a limited number) long term memberships.Our owners are doing something along the lines of 5 years for £3500 and 10 years for £6000 which has proved attractive enough to pull the money in.Slight effect on future cash flow but nice clean way of raising the money from those who are commited and can afford it.