Special Membership Notice

September 15, 2008

Your Board of Directors, faced with the loss of many greens followed by diminished cash flow in our clubhouse, has unanimously embarked on an exciting visionary plan with multiple initiatives, which we are eager to share with you. Much progress has taken shape so quickly we have not been able to share details with you until now, but the excitement has already begun to permeate our membership, as some portions have already become known. First a historical perspective:

The Problem

For years our ability to both attract and hold onto new members has been compromised by golf course conditions that simply have failed to compare with others on Delmarva. Our greens were “pushed up” with whatever material was available when they were constructed, rather than being built pursuant to industry standards even at the time. As a result, our ability to water the areas around the greens was limited along with their tolerance for water; greens became immune to the effects of chemical and nutrient applications which seriously taxed our annual budgets; we were forced to close the course after even modest rains; mowers had to be raised to keep the grass on the greens which caused slow and inconsistent speeds; the terrain was soft and lumpy rather than true and firm; and, regrettably, greens were witnessing burn out each year in around August rendering truly competitive golf unavailable. The collateral result led to clubhouse budgetary losses and concerns annually, while we have severely taxed the patience of good men and women serving in past leadership of the club to wrestle annually with nagging symptoms, while all along faced with an inability to conquer the disease. One troubling result, which we must permanently overcome, is the annual need to struggle during the first quarter of each year to bring in new members only to cover the attrition from the year before and leave the leadership continuingly perplexed with problems too formidable for the budget available to address them. While a more thorough explanation of our historical problems could be listed, they are all symptoms of a central disease:&n bsp; poor sub-soils, which cannot support adequate and reliable putting surfaces.

It is also necessary to acknowledge the long list of assets inherent to SPCC. First and foremost among them is the character of our wonderful members who have and continue to serve and sustain the club while providing an enviable fellowship on and off the course as well as critical leadership and financial support at pivotal times like these. In addition to our wonderful members, while our putting surfaces have not measured up, our tract design is superior to the entire area and continues to serve as a source of pride and encouragement.

The Plan

A. Our goal defined: Many of you have read the report of the USGA Green Section Turf Advisory dated July 22, 2008, as a copy is on our members website. Widespread agreement affirms the diagnosis of “wet wilt”: low oxygen beneath the greens surfaces leading to even routine maintenance resulting in tremendous strain. Instead of oxygen and necessary nutrient effects supporting eight inches of healthy rooting, we have sour, foul, and compacted subsoils on too many greens choking out any chance for water flow and causing burn out each summer as the short unhealthy roots cannot stand up. Lumpy, soggy, cushiony, and slow putting conditions have resulted even on greens where we have struggled successfully each year to maintain some stand of green grass. These are 40- year old greens, which, like a septic system of similar vintage, are worn out, and have become too expensive to maintain even a substandard product, at best. Chemicals and nutrients designed to deliver fourteen days of benefit give us only three to four on these greens that have become immune to beneficial treatment. As the Report notes, only a commitment to correct drainage “in” the greens (as well as better topical drainage) will prevent annual turf loss and provide reliable true, and proper putting surfaces at necessary speeds, which are consistent.

Healthy putting surfaces are the central catalyst to pull the train up the hill to a plateau of financial stability and growth for SPCC. Without a comprehensive reconstruction of our greens, we simply cannot assure the multiple collateral benefits that are owed to our quality and dedicated membership who love our club. Among those benefits we must secure as a result include:

1. Retention of members with comparatively limited annual attrition;
2. Attraction for new members who seek top competitive golf conditions and who will bring discretionary and necessary spending resources;
3. Facilitating initiation and stock fees as a condition of membership while creating a viable capital account for the future;
4. To support the clubhouse with sufficient cash flow to increase sales and bring the quality of product provision to even higher levels;
5. To facilitate needed clubhouse repairs to attract greater banquet business from a refurbishing to render the Club a choice destination for our growing community;
6. To attract outside tournaments at sufficient financial levels to help keep membership dues low;
7. To encourage guests to be invited, serving as a membership recruitment tool.

B. Execution of a visionary plan with multiple components.

While your Board has certainly been faced with significant challenges, we are also now provided with a window of unique opportunity. It is the better part of wisdom and candor to acknowledge that no matter what we now do, there will simply be no competitive golf played a SPCC until April 2009. We are pleased to report that we have already implemented The Plan to take advantage of this fact to provide unimpeded access to greens and greenside bunkers for complete reconstruction to industry standards and consistency designed to put our annual challenges behind us for the lifetime of all reading this Special Notice.

Our commitment has been and remains to do it the right way; to do it comprehensively; and to rally membership support as we have already turned a new chapter in our history which ranks with our initial founding and the commitment to construct eighteen holes, from the original nine.

C. The Plan Component

We are excited to report that the restoration project is already underway, designed to restore the course to competitive play by early spring, hopefully, when The Masters is televised. We are humbled and proud to report that the consultant/architect of the particulars of The Plan is Chris Adkins, who built The Salt Pond and The Rookery, and who enjoys the finest reputation as an agronomist on the Eastern Seaboard, and is one of the best in the country. Working with Chris is Darin Bevard, of the USGA Greens Section, and both have already dictated the specifics of The Plan. Construction will be conducted under their expertise. Costen Shockley and Harry Wanner will locally oversee and supervise outside resources and consistent testing of materials designed to assure the finest results obtainable. Details include removal of sod, as well as 10-12” of old subsoils to be completely replaced with a network of perforated drainage pipes beneath a top quality sand/peat mix to insure premium growing and healthy conditions, all as preferred in the industry. The contour of greenside banks will be reshaped and sloped, while all greenside bunkers will be reconstructed with drainage and new, consistent sand. All greens and bunkers that are in trouble along with those that have a history of problems will be reconstructed. Slated for reconstruction are holes 1,2,4,6,10,11,14,15,16,18 and possibly 13. Work has already begun.

Not the least of exciting components is represented by County Bank’s recognition of the vision, and their commitment to additional funding to cover all costs of The Plan through an additional principal loan. In the package, we were successful in the renegotiating of our terms on the former loan which will witness a savings each year in interest payments of about $40,000, just on the former principle. Also approved were some “interest only” payments thus enhancing our cash flow. Other expense cutting measures are being taken in the clubhouse. Examples of cost cutting have included some staff reduction and fewer hours. W e are making every effort to provide service while trying to preserve our dedicated staff-some even volunteered to take pay cuts. We are looking into other reductions but they are not finalized yet. Further, responsible members of our club have also made gifts toward The Plan in sufficient dollars to create a matching fund for our entire membership to voluntarily contribute to at least cover the debt service on new monies borrowed for the first year. Each dollar donated by any member will be doubled up to at least the debt service on The Plan for 2009, and those gifts are already in hand – being deposited in a separate bank account for no other purpose. This means upon completion no membership dues for the year 2009 will go up one penny solely as a result of The Plan. The matching donor program – a self-assessment, if you will – will generate a published list of Honor Patrons, whose gifts will be doubled up to the amount to cover that first year’s debt service while we work to attract new members and keep the current ones for 2010. A gift of $1,000 becomes $2,000; $500 becomes $1,000 and even $100 becomes $200. To assure success, everyone is challenged to rally support for Sussex Pines. You can show support for this vision by making it a point to utilize the clubhouse more through dining and functions. Please dedicate yourselves to a renewed usage of the course. Let us all remember our Pro, Tim Mumford. Through this period, with play and other functions at a low point, he is taking a big hit. Although we are sincerely encouraging play here, we are also making progress with area golf clubs to render their tracts available to our members for just the cart or nominal fee until April 2009, while continuing to make temporary greens available for membership play while you watch the exciting construction developments unfold and take (DEEP) root on our challenging design.

Further particulars of the construction details will be released on our members website as the project unfolds. None of this would be possible without the initiatives and support of our greatest single asset – our wonderful members who continue to contribute time and treasure to our beloved SPCC experience. The difference now is that we have exciting traction to rally around which is designed to enhance all that is special about our Club and render us the premier destination in our region where you will be proud to bring guests and enjoy and enriched experience like never before. God bless you all and thank you for und erstanding and for your support.

Very Sincerely,

THE SUSSEX PINES BOARD