“Previous AV Blog Posting: Trumpets Survey Comments

Since there has been some confusion on what I submitted to the Trumpets Working Group and the Board last month, I am posting my basic comments for the convenience of the readers of this blog.

I sincerely appreciate the committee’s efforts, and I would like to encourage them to find more ways to invite more participation via the web sites and blogs. There are many SCA experienced residents (many are still working full time in the industry) who can provide valuable input, but can not take the time to become a committee member.

Bob Frank

—–beginning of my previous comments——–

Some examples of the restaurant survey items needing clarification include:

* “Private vs. Public access”? …to the restaurant and/or catering services. While that is part of the survey, it is not highlighted as the most important/key issue–as yet.

I believe the vast majority of homeowners will want to restrict all food services delivered on the premises to be for residents only. If true, the survey must focus getting that issue clearly stated so the costs-benefits are clearly understood and the replies are unambiguous.

Moreover, some financial projections must be included to reflect the costs-benefits of private vs. public access. It is clear that restricting customers in the restaurant and catering services to homeowners is likely to reduce the potential revenues/net returns to the association. But, as we saw in the past, ignoring the facility costs to allow public access can be a very serious impact to our bottom line. While requiring the operator to absorb the utilities and related operating expenses would be a vital improvement over the past, there are other cost issues such as maintaining/repair of the full complement of equipment and putting aside reserves to replace equipment and facilities at the exceptionally higher levels needed for providing public services–than if we had SCA-sponsored-only food services on our premises.

Also, some people may believe that restricting access to SCA-only would not be profitable in the restaurant, and that it could greatly reduce the profits from catering. I am not convinced of that, and I would need some facts from credible sources to make a board recommendation

With 7,144 rooftops, and up to 15,000 residents during the next few years, I believe a competent restaurant operator could win the customer loyalty of our community, and make a decent return on their/our investment in the process. And, I believe that a competent catering operator could serve the full Las Vegas valley with profitable catering services from our exceptionally well designed and equipped kitchen–without needing to deliver any non-resident food services ON our premises. Our approach should allow for options to have one or two operators for these internal vs. external (restaurant vs catering) food service functions. And, our committee needs to do some research to confirm or deny any assumptions in this important area.

* Self-managed vs. Lease? The survey does not provide financial information on the options, and gives no basic information on the cost-benefits of each. Asking residents to choose which option they prefer without warning them of the potential losses and dues impacts of another restaurant failure is deceptive. We know better, and our homeowners, sooner or later, will demand full disclosure on the estimated financial impacts and/or benefits of each option. While all of the details are not yet available, the expertise at UNLV should be able to provide industry data to use as benchmarks for homeowner consideration.

Another point is that there is a no chance this association could or would “hire employees” and truly run it. I say no chance because we would have to create a wage and salary administration and benefits system just for that purpose. SCA has no employees at this time. No Board could ever seriously consider implementing such an option, and I believe it would be wrong to include it in the survey as a possible choice.

The only viable option for “self-managed” would be through a contract, as we already do with RMI, and other contracts. In that scenario, the community would own and operate everything, dictate the restaurant style, the menus, and absorb all of the risks of running the restaurant. However, even if a decision was made to self-manage the restaurant, I doubt this community could allow the Board to also self-manage the large-scale catering kitchen that could serve the public.

* Costs to Re-open vs. Costs to Operate? Without some basic cost data on these vital factors, unit owners are unable to make coherent choices. The cost factors will vary widely depending on the type of contracts, and the included terms and conditions. Some cost factors must be estimated and included, or the survey will have marginal value. Totally ignoring cost factors is not respectful of our educated homeowners. After what has happened in the past, our homeowners will demand to know the numbers.

For example, what will it cost to bring the restaurant and catering facilities up to full operating status? Is it possible, or even likely, that over a million dollars will be required to repair, upgrade, and refurbish everything–including facility repairs to furnishings, floors, walls, painting, plumbing and electrical? And, would it be feasible to lease the facility out “as is” without spending that cash? Considering that most restaurants have to configure a bare box with upgrades and restaurant equipment, I am told that leasing our exceptionally well-equipped facility “as is” could be worth investigating.

In addition, here are some comments on the key survey questions/categories:

1. Should we have a restaurant in Anthem Center? ____yes ____no

I can not agree with the thrust of this question. The inescapable fact is that we own an extensive restaurant and massive kitchen facility. We have one of the largest and best equipped kitchen facilities in this area, and one of the best Strip Views of any restaurant facility in Las Vegas. The question should be, What should we do with the multi-million-dollar food service facilities we have? Included should be a list of the space, contents, and values of what we own and what potential revenues/ROI could be achieved–with the proper operator.

Also stated should be the fact of life that the community simply could not allow such extremely valuable resources to go unused, or to spend major funds to convert them into amenities that become yet additional operating costs leading to major increases in dues. In my opinion, we have no choice but to find the best way to use these resources to generate positive cash flows by providing the food services we need to at least support community activities and club operations.

2. Should the management of a restaurant be: (choose one)

The options under this questions seem ambiguous and somewhat deceptive. As previously mentioned, the first choice is not valid. And, the 2nd and 3rd options do not clearly state the risk-reward considerations. For example, no mention is made that SCA has already tried both options 2 (under Del Webb) and 3 (under S&D Cafe V), and lost a great deal of association money on both cases. Some information should be included to compare and contrast the 2nd and 3rd options, and indicate the pros and cons of each and explain why our association can expect to not lose money again.

3. Should the restaurant serve: (choose all that apply)

These choices do not include food service considerations for all three recreation centers and catering for clubs and village events, and they do not ask the resident to clearly state how often, and on what days and times, and if they would bring guests to patronize the SCA restaurant–if something to their liking was put in operation and continued to serve their needs. Even if such data was collected, it would not be easy to analyze, but not even asking is missing a major opportunity. Sure, we could always ask later, but the replies are needed in the beginning–to help sort out the strategic directions.

4. Indicate $$ amount you believe is appropriate to spend, per person, before beverages, tax & tip:

I believe this question will not give us sufficient data. We should ask them to give us a specific cost and service target to meet or exceed. And, the total cost of a meal should include the per-person walk away cost. For maximum benefits, we should ask them to also name from one to three local food service facilities they would like the SCA restaurant to equal or exceed in decor, quality, and pricing. This would give us valuable information.

5. Should the restaurant offer a Happy Hour? ____yes ____no Entertainment? ____yes ____no

To me, this seems like a minor question that takes up space that could be used for collecting more valuable data. Both answers are almost certain to be yes, so why ask? The issues will be resolved much later in the process.

6. Should the restaurant be public or private? ____public ____private

(Private means residents & their guests only & requires monthly minimum food purchase per house, e.g. $20-$40.)

Since the public and private terms are not clearly explained, and since the statement incorrectly suggests that if private they would automatically be required to pay for minimum purchases, I consider this to be deceptive and improper. I can see no basis for including the second line about minimum purchases. This question and statement alone could tend to distort the value of the whole survey.

7. Should the restaurant offer catering? ____yes ____no

This is a lost opportunity. With such plant and equipment in place, there is no viable option to not offer catering to at least the Activities Department and Club operations. Why is this question included as one of the most critical 10 questions to be surveyed?

8. Should we keep the name Trumpets? ____yes ____no

Suggested name if no is selected _________________________

Sorry, but I see this as yet another lost opportunity. I believe we should be asking different questions and using our survey space more wisely. Restaurant naming is a complex, marketing art form. Intellectual property and branding are vital matters for both SCA and our corporation. Other food service names used in the LV area have to be considered if we are to change the name. Actual experience by Del Webb suggests that the restaurant naming is something that comes much later in the process, and it is not normally decided through popular voting. While the name Trumpets may have a current stigma, it is not clear that permanent damage has been done. With the proper restaurant services and parallel marketing programs, the stigma can be overcome. However, it has to be a management decision that comes after the operating strategy is decided. A new lessee may prefer to keep the name, or replace it with one to fit its style, and that could be an important consideration.

9. Should the restaurant offer video poker in the bar? _____yes _____no

I believe this question is not properly stated. First of all, the consequences of installing video poker has just recently been considered in a community survey–and soundly rejected. However the circumstances about the rejection were clouded by other factors. Since there are no cost-benefits included, the question seems to be clearly structured to get a no comment.

However, what if the video poker machines were not located in the bar area? What other options are possible–in Rec. Ctr 2 or 3? What would be the profits achievable from a using a dedicated area, such as the Green Room, or the library/reading room area, the St. Rose office area, or a “sports bar-like area” in a room in Rec Ctr 3–in lieu of the restaurant bar area? Should these options be considered if the ROI is worth it? Many people would reject the idea of “ruining the Trumpets Bar area” but perhaps not object if such a service was installed in one of the other facilities. While I am not personally in favor of providing SCA video poker services, I think the question should be studied and evaluated before being totally rejected.

10. During a one month period, how frequently do you go out to eat?
Combine Breakfast, Lunch & Dinner: _________

As previously stated, I believe this question should be integrated with the former question in order to get better, consolidated, and more usable data.

——-end of my previous comments——-

Posted by: Bob Frank | November 01, 2007 at 09:07 AM

This entry was posted on November 1, 2007 at 11:58 and is filed under SCA Board, Community Affairs, News!, Other. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

8 Responses to “Trumpets Survey Comments”

1. Linda Krivec says:
November 1, 2007 at 17:23

Although I deeply respect the work the Trumpets Task Foce is doing, I also wonder about the wisdom of asking residents to respond to a survey that does not offer them any financial or contractual impact information from which to make a legitimate decision. Residents are being asked to state preferences in a vacuum. If they had more information, they might give a different response. I personally would have preferred some educational town halls first, then ask the residents their opinions after they have had a chance to carefully weigh all the pros and cons of each choice.

2. Bob Sansing says:
November 2, 2007 at 09:22

Dear Linda:
Thanks for the “truce”.
As a member of the Survey Group we started out by asking ourselves “what is the current sense of the community regarding the trumpets space?”. We each had are own ideas but none of us was sure, so we decided to create a one page survey to get a “sense of the community”. We hope that the results of the survey will tell us where we need to educate our residents regarding things like: future revenue opportunities; impact of public vs private; competitive analysis; etc. We don’t expect to learn everything from this survey but we do think we will learn where to start.
One of our biggest requirements to the Board when we were established was the assurance that our work product would be ours, not the Boards. I view the Trumpets Working Group very much like the Management Company Selection Committee that was established two years ago. Their charter was to find the top three choices for the Board to consider in choosing a new management company. That ad-hoc committee did a great job for the Board and saved us a great deal of time. We did not interfere with their work but instead waited until they presented their recommendations before questioning the process. It is not that we don’t appreciate Bob Frank’s suggestions, its that we already considered those things before deciding on how to approach the issue.

Regards,
Bob Sansing

3. Linda Krivec says:
November 3, 2007 at 08:57

Just in case anyone is wondering about the “truce”, I have noted my appreciation to Bob Sansing for assisting in the Task Force’s efforts in our petiton drive to the BLM. I also appreciate the efforts of eveyone on the Trumpets Committee, including his. But I still personally find it difficult to offer my opinion on the survey without a better understanding of all the ramifications. I hope we will all have a clearer picture of all the pros and cons before any final decisions are made.

4. Bob Sansing says:
November 3, 2007 at 14:18

Dear Linda:
Everyone will have that opportunity if they come to the open meeting on November 26th where the committee will present the Survey Results and will answer any and all questions from the audience.

Regards,
Bob

5. carl weinstein says:
November 3, 2007 at 18:03

I see nothing wrong with a general survey to get a “feel” for the community’s opinions. For example, if the majority want a medium priced restaurant that can also do catering, THEN the committee should investigate the financial ramifications of THAT PARTICULAR METHOD. This would include reviewing sample menus with prices and reviewing catering options and prices and also reviewing whether that option makes financial sense and meets the needs of the residents. No Board member should interfere with the work of this committee. They should submit their report freely!

6. bobfrank says:
November 3, 2007 at 23:01

B.Sansing said on VOICE: ..(we) waited until they presented their recommendations before questioning the process. It is not that we don’t appreciate Bob Frank’s suggestions, its that we already considered those things before deciding on how to approach the issue.”

B.Sansing said on VOICE: “Everyone will have that opportunity if they come to the open meeting on November 26th where the committee will present the Survey Results and will answer any and all questions from the audience.”

C.Weinstein said on VOICE: “No Board member should interfere with the work of this committee. They should submit their report freely!”

D.Berman said on his blog:
“The extent to which Bob wrote is impressive and thoughtful, but it is not the type of response we felt we needed at this time. Our Chairperson sent the survey form to the Board as a courtesy and with the expectation that any suggestions to modify the form would be minor and would involve just a little “tweaking” of the form. It is our belief that going into the level of detail that Bob suggests is needed for the first pass would simply confuse the issues we want to look at.

Beyond this, there is the question of the degree to which the Board should be involved during these stages of the process. Final decisions will be made by the Board, of course, hopefully based almost completely on our recommendations, which will be made only after a great deal of community input. But the community has told us in various ways that they want to minimize Board involvement and control while we do our work, and I think it is safe to say that most if not all of us would view Bob’s extensive comments as the exercise of a degree of control over our work which is inappopriate under these circumstances. We are led by a highly comepetent expert in restaurant and catering operations, and we need to respect the vast amount of knowledge and experience she brings to this.

To reiterate an important point: Bob Frank’s thoughts cannot be ignored, but I don’t seee them as critical at this time. I believe Bob and many others will see that we are addressing a number of these concerns as we move this challenging and exciting project forward.

My response:
A standard management principle is: “When you delegate a task, someone else does the work, but you are still responsible for the results.”

One would think that former board members such D.Berman and B.Sansing, as well as P&GC chair C.Weinstein, would know that current board members are required by statute to perform a fudiciary duty in the management of community resources. All board members are required to help committees be successful. Everyone knows that I have a long-standing interest in solving the restaurant problems, and as a board member, I am obligated to help as much as I can.

Board members can not, as some have suggested, ignore what is going on by the committee, and wait until the end to vote no against a flawed plan. Although some past board members have functioned that way, it has not served our community well in the past case of our restaurant management.

In spite of the comments above, what I submitted in response to the restaurant committee’s request for feedback on their survey could NOT be judged to be interfering with their work. The committee asked for board member feedback, and I promptly gave it to them.

By the way, I am still very upset by the suggestion on the survey that restricting services to members would force yet another increase in assessments of $240 to $480 a year! That would guarantee the operator from $143,000 to $286,000 a year, and not have to deliver anything if the member was not willing or able to demand service. That reminds me of some of the past poor business practices we had with this resturant. That kind of item in the survey motivates me to want to ask some tough questions of the committee; and perhaps they have some really good answers. If so, there is no point in the survey since the only real choice is to lease it out again. The majority of this community would never agree to increasing assessments by $240 to $480 a year to subsidize restaurant operations–on top of what they are already paying to support that space.

So, in spite of what was claimed in the above posting, there is NO evidence my comments were redundant or inappropriate. I am anticipating I will receive some courteous feedback on my well-intentioned comments from the committee chair.

7. Norman McCullough says:
November 4, 2007 at 09:31

Bob Frank has presented some very valid points to consider. What concerns me (and should concern every one), is some thing that Bob Sansing said.

Mr. Sansing said (Referring to the selection committee that recommended RMI to “serve us) “That ad-hoc committee did a great job for the board, and saved us a great deal of time.” Take a good - long hard look at RMI’s performance, and what we got “for our buck”. RMI has a record of ignoring NRS statutes, and ignoring the requests of residents for information they are entitled to by law. It continues today. The most recent action to charge residents $10 per hour to review documents is nothing more than retribution and is designed to infringe on our rights as citizens.

What other nearby community has such a requirement? They (RMI) were responsible for enforcing the terms of the lease with Trumpets, but failed to do so. Nuf said! They are responsible to oversee contracts and agreements to see that they conform with all NRS statutes and Nevada law. Need I mention “The Villa Agreement” that does not even have the sanction of our community attorney?

RMI was apparently chosen from the “top three” choices from the ad-hoc committee. Maybe it’s time we took a good look at the other two?

It has been pointed out by other people on this blog, that more information is needed for the residents to give a rational, intelligent response to the questionnaire that was mailed. Now it seems, we will not have that needed information before the open meeting on November 15th.

8. E.J. says:
November 4, 2007 at 21:37

To many of our residents, the numbers of $143,000 to $286,000 which Bob Frank has calculated (using the monthly ranges supplied by the TWG) seem very large.

I believe those numbers are, in fact, VERY LOW ESTIMATES. The realistic figures (undoubtedly,to be unveiled somewhat later) are more likely to be in the $60 per month per homeowner range. Using 7,144 residences at $60 per month, we can develop an additional cost of $514,368 (An additional dues assessment of $720 per residence per year.)

Let’s see…if I were an “insider”, and I could help a “friend” who was also an “insider” (who just happens to have previous restaurant management experience) by guaranteeing a half million dollars of cash flow when the friend suddenly announces that he will run the Trumpets restaurant…just what would I do?

Roll on SCA Runaway Train…Roll On! Clickety Clack..Clickety Clack! Oh wait! Is there a group of people taking the “bridge” out, up ahead??? Are those SCA residents who have been awakened from their slumber??? Gosh Darn….the intimidation and retribution haven’t worked!!!

——end of previous postings——

Next up was a doctor (Didn’t get the name), who extolled the virtues of breast implants, complete with “hands on” demonstrations of the actual devices. I’m getting old apparently because it didn’t seem to have any effect on me. Maybe some of our younger members were somewhat interested, but for me, it seemed like a waste of time.

I hope there will be equal time set aside for a penile implant specialist. That should be a “must watch” episode for many of our male residents in our retirement community, and also provide some insight for the ladies who may be interested in expanding their knowledge base on the subject.

We are all blessed to have this wonderful communication tool at our disposal. If only we could be this well informed about our reserves, and the “black hole” that is called our budget expenses (like Rec. center #3 greening), we might do a better job of “rejecting” the budget when given the opportunity at the annual membership meeting.

The bottom line is that this community is incapable of cost effective compitent self management. As a group we are too old and are not obligated to any paid for performance review. RMI appears to be a good operating company but the paint by number set senior citizen board & committees never really let them loose to manage. They all are volunteers and mean well, I do not doubt, but that needs to change. They need to take up a hobby or another cause and hands on community politics should not be an option.

We need a single community manager ala city manager type whom takes direction from a “senior citizen HOA board” but functions as a real community manager that oversees the money management of a good operating company. A seperation of powers from the current business model. If that comes to pass in my lifetime at this resort on the hill, I have some mining claims South of St Rose Parkway to sell. Till then I plan to stay around until the dues hit $1900; or death, whichever comes first.