The Rancho Santa Fe Association is considering discontinuing member charging privileges at The Inn at Rancho Santa Fe in an attempt to curb lost revenue and lost staff time. At the Dec. 15 board meeting, Association Controller Matthew Ditonto discussed the reasons behind the proposal.
“With the recent implementation of dues delinquencies and suspension policies, it caused the number of members suspended of charging privileges to increase dramatically,” Ditonto said. “This became an issue with our ability to manage suspended members charging at The Inn because our software systems don’t communicate with each other.”
The system between the two organizations is fairly archaic,he said, mostly by hand and paper — an updated suspension list is sent to Inn but there are no guarantees that members will be stopped if they try to run up a tab at The Inn.
Currently there are about 50 to 75 members that charge at The Inn each month to their Association account. The Association accounting staff spends about two full days a month invoicing, collecting and processing these payments, resulting in a lot of phone calls back and forth.
Board treasurer Janet Danola said that the Association has a small accounting staff and she doesn’t want them getting caught up with “miniscule accounting tasks” when they could be doing much more important things.
Ditonto said a similar method is used for the Osuna Ranch and there are no discrepancies but at The Inn they have constant discrepancies and losses due to unauthorized signing for bills, illegible member numbers and signatures, and unexplainable charges. Members disputing charges result in $100 to $200 of lost income to the Association a month, Ditonto said.
Ditonto recommended discontinuing the member charging privileges to the Finance Committee — the committee then voted 7-0 in favor of that recommendation at its Nov. 29 meeting.
“It all has to do with the work required by the accounting department and the losses incurred by the Association related to that service,” Danola said. “It wasn’t meant to bring any harm to anyone or any benefit to anyone.”
Jerome Strack, general manager at The Inn, said The Inn staff also spends two days a months on these bills. Strack said members charge about $10,000 to $15,000 a month at The Inn whether at the restaurant, at the spa, or booking rooms for friends or relatives.
During public comment, one member said he enjoys the speed and efficiency of the signing privilege with his business clients at The Inn.
“Yes (the accounting) is a hassle, but these are your members not ours. We are at the heart of the community of Rancho Santa Fe and this privilege is one of the things that we hear makes it so special,” Strack said. “At the end of the day, we take the short end. If there’s a dispute, if a member is not eligible to sign, we write it off, we take the hit.”
Strack said that hit is about $300 to $500 a month from uncollected Association charges.
“We feel it’s a very valid privilege for your members, The Inn was the first business in town and our ownership is adamant about this issue... it’s a privilege that sets us apart,” Strack said.
Board member Steve Dunn said he’s lived in Rancho Santa Fe for 22 years and he has never heard of this privilege before and it sounds like not many have. He said it seemed “insane” that The Inn loses up to $500 a month and the Association loses up to $200 a month for 50 to 100 members that are charging.
While the Association is at this time only considering suspending the charging privileges for guests, the board also believes a larger discussion needs to be had about the method used for billing Inn guests that use the Rancho Santa Fe Golf Club.
“I’m told by our accounting staff that it is factual that people play golf here, charge to The Inn, dispute the charges and we don’t get that money,” board member Allen Finkelson said. “I don’t understand why that should be our risk.”
Finkelson said that he’s not suggesting that the Association deny Inn guests the right to visit the club but the method of payment should change. Dunn said the golf club certainly appreciates having guests visit, as last year it brought in $50,000 in greens fees, not to mention money spent in the restaurant and pro shop.
“I just don’t know why it has to be so confusing,” Dunn said. “All of the great country clubs around use a credit card…I don’t understand why we go through all these machinations and potential losses when it could be so simple.”
Strack said that they sell golf as a package, built into the rate of the room. He said they do not ask guests to pay the golf club separately, “That’s not how it’s marketed,” he said.
Strack said one of the luxuries of being an Inn guest is that they don’t have to carry a credit card to go play golf — which guests do not only at the Rancho Santa Fe Golf Club but at the Farms and Del Mar Country Club. The Inn collects for the golf charges and expenditures when guests pay their bills. Danola said if The Inn is unable to recoup charges on the guest’s credit card, the Association suffers the loss. Strack, however, said that when The Inn receives the invoice from the club, they charge the credit card on file so he doesn’t see how the golf club is taking the hit.
Board member Mike Gallagher said he understands The Inn’s standpoint on billing from a marketing and business perspective but he said it seems like there could be solution that is in the best interest of both parties, to streamline the process.