Katz Answer Beakes at Delegate Assembly

Delegate Assembly meeting September, 2026

Katz answers to Beakes versus what the Troon agreement Supports

Summary of the Exchange

Paul Beakes raises two related issues. First, he asks whether Troon can place business with vendors and receive an undisclosed fee associated with those contracts. Second, he contrasts that arrangement with the existing Procurement Advisory Committee (PAC), which he understands historically obtained bids from qualified companies and sought lower-cost vendors. He specifically asks whether Troon's ability to receive an undisclosed fee creates a potential conflict of interest. 

Howard Katz responds “No, I do not” to the conflict-of-interest question. He explains that Troon has nationwide vendor accounts, obtains substantial volume discounts, and that local vendors would continue to be handled through PAC or separately by SLCC.

Katz further states that if Troon obtains a 20%, 30% or 40% discount, “they will share that discount with us,” with SLCC receiving a lower price and Troon receiving a premium. Later, he states, “we will get the benefit of the true discount,” while characterizing a management-company fee associated with national-vendor purchasing as something he believes is common in the industry. Katz then asked Mr. Mitchell if this was industry practice. Mr. Mitchell indicated there was no such standard practice and each management company was unique. However, this does create a situation where a substantial portion of Troon’s revenue stream from the Sun Lakes relationship will go completely unidentified or audited.

Finally, Katz says the Board intends to fully staff the procurement committee and use it “on many of our local purchases in the future” and that PAC is not being discontinued.

Key Differences from the Procurement Executive Summary

The most significant difference concerns what the agreement actually guarantees about discounts.

Katz states that Troon will share its volume discount with SLCC and that SLCC “will get the benefit of the true discount.” The Agreement is materially more qualified. The Agreement gives purchasing priority to Troon select vendors to take advantage of quantity discounts, but finds no express requirement in the available agreement requiring Troon to disclose the amount of rebates, commissions, administrative fees or other vendor compensation, periodically account for them, permits SLCC to audit those records, or credit compensation attributable to SLCC purchases back to SLCC. It also makes no mention of any rebate revenue sharing with Sun Lakes. This appears to be no more that speculation and wishful thinking.

Mr. Katz claim of Sun Lakes benefitting from Troon’s “20%, 30% or 40% discount cannot be substantiated in the Agreement and seems extremely optimistic to expect this level of discounting given the current economic environment we are in. It begs the question of just how big are a vendor’s margins in order to provide Troon with a 20-40% discount and still also pay Troon a rebate or kick-back?

Mr. Beakes then reminded him that the Morrison/CLL Agreement a claim that they would have advantaged purchasing pricing because of their large volume, but this never materialized. In fact, Morrison/CCL had a cost overrun of $700,000 in their first year of operation in 2025. Mr. Katz, stated he was not familiar with that because it was before he was on the Board and asked Carlie Beakes if she cared to comment.  Mr. Katz did not share that he had been provided with an analysis of the Morrison/CCL agreement in March, 2025 which clearly stated they would also get rebates and kick-backs, but that Sun Lakes would not be entitled to anything.

Essentially, Katz describes an expected economic outcome—SLCC receives the benefit of Troon's discount—while the Agreement identifies a contractual verification problem. The available agreement does not provide a clear mechanism allowing SLCC to determine the gross vendor price, actual Troon discount, Troon's retained compensation, and resulting net benefit to SLCC.

A second difference concerns how best price is established. Katz's explanation is essentially that Troon's national purchasing volume generates substantial discounts and therefore lower prices. The Agreement is void of any such statement. Rather, it finds that the Agreement does not establish a comprehensive procedure for proving that Troon's resulting price is actually the best available price or overall value. It identifies no general requirement for competitive bids, independent market benchmarking, documented selection criteria, or documentation demonstrating why the selected vendor represents best value.

That creates an important distinction:

“Troon obtained a large discount” is not necessarily the same proposition as “SLCC obtained the best available net price.”

A 30% discount from one vendor's price, for example, could still result in a higher net price than another qualified vendor. The Executive Summary therefore focuses on the absence of an independent verification mechanism rather than assuming that the size of a stated discount establishes best price.

The PAC Difference Is Particularly Significant

Katz describes what appears to be a two-track procurement system:

      1.            Troon national vendors → Troon purchasing network

      2.            Local vendors/purchases → PAC or SLCC

He states that Troon generally works with nationwide vendors and that local vendors would “still [be] handle[d] through our PAC or by ourselves.” He later says PAC will be fully staffed and used for “many of our local purchases.”

The Agreement identifies a different contractual picture. It finds no contractual requirement that PAC participate in Troon's procurement process and no contractual guaranteed of PAC participation in that workflow.

Those statements are not necessarily contradictory. Katz may be describing the Board's intended operating practice, whereas the Agreement describes what is contractually required.

The distinction matters considerably from a control perspective. If PAC reviews local purchases but does not independently review Troon national-vendor purchases, then the transactions where Troon has both purchasing influence and a potential economic interest could receive less independent procurement review than local transactions.

Concise Summary Statement

At the September, 2026 District Delegate meeting, Howard Katz described Troon's procurement role as primarily leveraging nationwide vendor contracts to obtain substantial volume discounts, with SLCC receiving the benefit of those discounts while Troon receives a fee or premium. He also indicated that PAC would remain active and would be used for many local purchases.

The Troon Procurement Agreement section identifies an important distinction between that description and the protections found in the available Agreement. Although the agreement requires Troon to pursue “best quality and price” and recognizes Troon's quantity discounts, the review identifies no express contractual mechanism requiring disclosure of the actual discount, Troon's vendor compensation, independent competitive bids or market benchmarking, or PAC review of Troon-directed procurement. Thus, Katz describes an anticipated purchasing practice and economic benefit, while the available contractual provisions do not appear to give SLCC a comprehensive means to independently verify that the full discount is being received or that a Troon-selected national vendor actually provides the best available net price.

Katz's description of PAC also appears narrower than a comprehensive procurement-oversight role: He says PAC will remain and be used for “many” local purchases, whereas the Executive Summary finds no contractual requirement that PAC review Troon procurement. The resulting governance question is therefore whether PAC—or another independent SLCC control—will review and benchmark Troon national-vendor purchases before SLCC becomes committed to them.