275: Government Updates and Club Governance with NCA's Joe Traeger

Speaker 1: 2:02

Hey everyone, welcome back to Private Club Radio. I'm your host, club Entertainer, Comedy Magician, denny Corby. if you need high quality club entertainment, then over to dennycorbycom. So shameless plug if you're interested. On this episode we wrap up NCA's yearly conference. Joe tells us his thoughts and in this episode we talk about what the current state of the federal government and how it impacts clubs and their governance, and we also talk about the Supreme Court decision on water SACIT versus the EPA and its implications for the Clean Water Act and EPA jurisdictions. We talk about everything from government updates and more. Please welcome. CEO of the NCA, Joe Traeger.

Speaker 2: 2:50

Excellent, good Now, everything's been good. You know we continue to plug over with getting new members and that kind of stuff. You know the feedback we got from the conference was fantastic and you know no complaints.

Speaker 1: 3:08

Yeah, it was my first year there. It was so much fun.

Speaker 2: 3:10

Absolutely. You can go better. Yeah, it's a good event And I'm you know I say this every year. This is my fourth or fifth conference now and it's still just amazes me the quality of production that NCA puts together for such a lean staff.

Speaker 1: 3:32

Your staff is unbelievable. They are amazing. When I put out the recap episode from the first day when I was there, I mentioned just how amazing the staff was to work with. They all put on such a great job and are so nice and friendly.

Speaker 2: 3:49

Yeah, absolutely Yeah. I'm very blessed to be part of a great team And I've always felt that way.

Speaker 1: 3:57

What were some of the highlights for you from the conference Being done? It's got to be so stressful.

Speaker 2: 4:07

It is And it is and it isn't. I mean it's a great, it's a great event And I enjoy being there too, because you know those are, whether it's the general managers or the board members of the clubs themselves. You know these are folks that all share a common love and interest in clubs And it's always just great to hang out together. So it's a lot of fun. But, yeah, it is, there are stressors to it. You know we try to put on a good show And you know, as you know, things don't always go to plan But you adapt and you make it work And generally, you know, just try to keep things moving. And but yeah, the highlights for me, i think, were really having a really diverse group of folks that were on the stage, you know, presenting to our group. You know we kick things off with David Walker and you know he's an individual that's been involved with the federal government and inside and outside of the government for many, many years and kind of known as a deficit hawk and budget hawk, and so it's great to get a feel for him just kind of the 30,000 foot level of where things stand with the government, with funding, with debt, you know, with deficits those types of things and the sort of dysfunction that we see at the governance you know level within the federal government. And then my idea was to take that kind of illustration of dysfunction within governance at the federal level and juxtapose that with an example of where a club has come in and completely changed their governance to the benefit and the growth of their club. So it was very a conscious decision on my part. I'm not sure how many people picked up, but that was my intent. So that was that was things kicked off And I thought you know I thought it was great.

Speaker 1: 6:20

Yeah, for sure, For sure. Anything else you want to add? about the, about the conference?

Speaker 2: 6:28

I, is that part of the? are we recording part of the interview? Oh yes, sorry, i was just kind of Oh yes.

Speaker 1: 6:35

No, no. So I found also, if I don't tell people it's usually a little bit more of like a natural conversation. So I was like Oh, i'll just like let it roll. But yeah, we, we've been recording. Yeah, you don't want me to use any of the stuff we've been talking about. Be more than happy to add No, no, no, that's, that's all good, that's all.

Speaker 2: 6:54

But yeah, so you know that juxtaposition was was important to me, i think, in setting the tone about how much control we all have in how we manage our clubs and and and how volunteer leadership plays an important role in all of that. And you know, so that kind of kicked things off in a nice way, i thought. And then, you know, having Jeff Morgan, the CEO of the Club Management Association of America, there and talking about how the two organizations are working more closely together and coordinating and collaborating in a strategic way, i thought was, you know it was important because we're, i think there's been over the years, you know, this sense of, you know, tension between the organizations And I'm not sure exactly why, but you know my perspective as a, as a former club president and a former board member. You know it's always been a part of my ethos that you know the managers and the volunteer club leaders really work together to make the club the best that it can be. And so I think that you know our clubs and our managers and our volunteer leaders deserve that from the two organizations that represent those two different you know entities, whether it's volunteer leadership or the club and the general manager. So you know that was important to me as a new CEO coming in, to offer that as of my perspective on how I want to view our relationship with the CMA and other organizations that we work with on a regular basis. So you know that was a highlight for me. You know, i think One of the things that we've always been a big part of in the DC association circles is obviously the government relations side. So we have made some changes with regard to how we actually engage in our advocacy efforts. For those who have followed NCA or been part of NCA for the last several years, You know I've been the vice president of government relations since 2019 and just moved up into the CEO role in the last year, and you know my background is really sort of on the hill and lobbying and government relations and that kind of stuff, in addition to my roles that I've played with in my own club and that kind of thing. But so it was important for me, as we look toward the future of the organization, to continue to have a role within government relations as the CEO, and I think there's an important message that sends to the hill that this is an important issue for clubs and it's important enough that the CEO him or herself is engaged in those efforts and engaging with policymakers on a regular basis. That was important. But we did change. As one might imagine, doing the government relations and being the CEO sort of adds up to a full plate. So what I've done is taken one of our former board members, rob Smith, who is with Platinum Advisors here in Washington DC. He's been a consultant in the past and kind of served in that role as an NCA board member, but now he's no longer on the board and we've actually hired him and his firm as a consulting you know, a consultant for us in the government relations space. So I view that as the next step for us. It is very much a force multiplier for us to reach a broader audience when it comes to government relations and help help me focus our efforts in a more concerted way, whether it's, you know, coordinating with other allied organizations or doing what we do on our own. So you know that that was a highlight for me And we had a great, a great session Rob and I did up on stage and talking about that and talking about what's happening in Washington or, at the time, not really happening, and yeah, it's good that we just started that June 1. And so there's been a lot of onboarding going on lately. But yeah, things are moving along.

Speaker 1: 11:24

Live in PGA.

Speaker 2: 11:32

Oh, you're good, You're good.

Speaker 1: 11:34

That's wild.

Speaker 2: 11:36

Yeah, i mean, the announcement this morning is, you know, i think it shocked a lot of people And, frankly, i think it shocked a lot of people that probably should have known that this was going on. And you know it's going to be an interesting road ahead. Obviously, i think you know Jay Monaghan is going to have some sort of explaining to do And my understanding is that he has a players meeting scheduled today at four o'clock and, you know, is going to brief folks on how things sort of played out. But yeah, i mean, i think very few people anticipated, you know, just given the rhetoric and the posturing that was going on over the last year, that this would happen. There are some folks that did, you know, predict that this would happen. But a very, very surprising turn of events this morning. And you know, from the National Club Association perspective, we don't really have a position on Live or the PGA tour or you know anything like that. But you know, i do think it presents some interesting issues when it comes to potential antitrust issues that the federal government can look into. You know they've announced that they're going to make this merger But you know, i think the federal government and the Federal Trade Commission might not view it quite as favorably as some others do. So, you know, i don't think that the final chapter of this has been written. Certainly they're working through some details, but there could be some action from the federal government in the coming weeks as well, i feel like you would kind of hope.

Speaker 1: 13:22

So I feel like you, i think anybody like no matter, like if it was golf or not, if your two major organizations came together, you kind of hope the government be like all right, hold on one second, like let's make sure nothing goes out there.

Speaker 2: 13:35

Yeah and it's not just two major organizations, it's actually three, because you got the European tour involved as well. So you know it is a very unique kind of situation And I'm you know. obviously we'll be paying attention, But I think there's also some potential for the federal government to get engaged on this as well.

Speaker 1: 13:58

You know we're talking about the government. We have the Supreme Court decision on waters.

Speaker 2: 14:08

Yeah, that was a couple of weeks ago. The Supreme Court issued their ruling in a case called Sacket versus the EPA And really you know without getting into a whole lot of detail about the particulars of the case you know it really was a a test case for what the depth and breadth of the federal government, specifically the EPA's jurisdiction and authority was to manage the waters of the United States lakes, rivers, streams, wetlands, that kind of thing And some of these definitions that the EPA's put forward have captured manmade bodies of water, ditches and ephemeral waters and those types of things that really raise some questions about whether the government is overstepping its grounds. So this case SACCET versus EPA there was a couple that wanted to build a house. They bought this property and there was wetlands on the property but it was separated from what was waters of the US by a road and they said that there was no significant nexus between the body of water and their property. But obviously the government disagreed and so this went through the court system and finally the Supreme Court basically said look, the sort of definitions and criteria that the EPA was using to establish a significant nexus between a body of water that is under jurisdiction of the Clean Water Act versus something that might be under the jurisdiction of the state government or the local government is overly broad. So the significant nexus test or doctrine if you want to call it, has basically just been completely blown up by the Supreme Court, and I think there's been a lot of hate made about the fact that it was a five and four decision, but it was actually a nine to nothing decision in terms of whether the significant nexus test was appropriate. Where things sort of broke out was there were various reasons for individual justices that had that believed that the significant nexus test was not appropriate. So the majority opinion was five and four. There was another opinion written by Justice Kavanaugh that offered some different reasons, but it basically ended up with the same result, and that was joined by Elena Kagan and Katanji Brown-Jackson, i believe. So it didn't break down really on sort of partisan basis, to the extent that you can have partisan decisions in the Supreme Court. So it's going to have an impact on how the waters of the United States ruled that the EPA, issued or finalized in January and went into effect in March, is going to be applied or implemented, and you know. So we're still sort of picking up the pieces and trying to figure out exactly what that means and how the government's going to respond. So it's a story that has yet to be written.

Speaker 1: 17:27

Yeah, i mean it's a lot of impact. I feel like that's like they're going to be the word of the episode, because with that I mean we also then now have the impact of the IRS auditors hiring, you know yeah, and I think that that's that's something that we've sort of seen coming.

Speaker 2: 17:46

You know the Inflation Reduction Acts are? you know? some people quibble about whether or not it should have been named the Inflation Reduction Act, even though it really didn't do much about inflation. but even that as it may, there was an additional $80 billion that was allocated to the Internal Revenue Service, and what they're in the process of doing right now Some of that money is is sort of impacted by the debt ceiling package that was just agreed to, but nothing significant. And but what the IRS is doing right now is they're going out and hiring and training auditors to bolster their enforcement efforts. and where that raises concerns for me, you know, from an organizational standpoint, is you know what potential exposure or impact could that have on the auditing of private clubs around the United States, and so we're keeping an eye on that as well. You know, i think one of the things that clubs can do to prepare themselves or, you know, get ready, is just kind of do an internal audit to make sure everything's. you know all the eyes are dotted, teeth are crossed and that kind of thing So and they're in compliance with all of the required regulations. and tactual surprises, No surprises, no surprises. So but we'll keep an eye on it and, and you know, we'll let folks know if we're picking up any chatter about increased audits and that kind of thing. But you know, there's We've seen an uptick in the number of inquiries being made about paycheck protection program loans, particularly in the state of Florida, pennsylvania and some others. And I do wonder if there's going to be any sort of Monday morning quarterbacking when it comes to the employee retention tax credit and how that was rolled out and that kind of stuff, because I do know a fair number of clubs availed themselves of that, which was the intention of the program to retain their employees. So we'll keep an eye on it and we'll let folks know what we hear.

Speaker 1: 19:55

Yeah, please keep us updated too. There we go. There was a lot of use. And then we have the labor secretary nomination policy impact.

Speaker 2: 20:06

Yeah, yeah, when it comes to the issue set for clubs, labor policy has really been kind of a key labor key policy area, and I think that really stems from the fact that, when you get right down to it, clubs, when you look at their budgets, roughly about 40 to 50% of their budgets annually are for labor, whether it's salaried or hourly employees, and as a result, there's a great interest in the labor policy and what's happening at state levels, but also our government. So right now we're in the process of we have a nominee for a new labor secretary. Julie Sue is her name. She headed up labor in the state of California, which is often a strike or two against you when it comes to getting a confirmation in the US Congress, and she's run into some issues, and not just among Republicans, but there's some Democrats in the Senate that are expressing some reservations about whether or not she should be confirmed as well. So she is actually in front of the House Education and Workforce Committee tomorrow And it's likely she's going to receive quite a few questions about the policy direction of the Department of Labor. Specifically, I think there's going to be a lot of attention paid upon the independent contractor issues and potentially a proposed rule that could come out at some point on updating the overtime threshold. But obviously when it comes to independent contractors, that's something that clubs care about a fair amount, given the employment or use of caddies at various facilities, and traditionally that's been an independent contractor type of role, though we have seen some movement and some shift towards a third party arrangement where the caddy is an employee of an agency that deploys their caddies to various courses, that kind of thing. But the tradition has been an independent contractor role and so we're obviously interested in how that's going to play out. The funny thing about all of this is that we're not likely to see anything move from the agency until she gets confirmed or she doesn't get confirmed. So we're sort of in the state of limbo right now. That's presenting some issues not only from just a risk management standpoint and a government relations standpoint, but just from a knowledge perspective. How far out, you just don't know what's going to happen?

Speaker 1: 22:54

How far out should I don't want to say should we be worried, but what's the timeline of all of that? What does that make sense? So what kind of play out?

Speaker 2: 23:09

Sure Well, the independent contractor. the final rule was really supposed to be finalized in May, so we're behind schedule, at least according to the unified regulatory calendar that the government puts out twice a year. On the overtime issue, it's a big question mark. I suspect that the agency's probably been doing quite a bit of work in the background, but they're not going to show their hand or push anything out until the labor secretary confront. It invites too much controversy or just open-ended questions for a nominee to have their nomination in consideration when major policy regulations are being put out. So yeah, it's a Anybody's guess how this is going to play out. Personally, if I were to handicap it, i think that Julie Sue's not going to be confirmed. And then that raises some questions about okay, well, does the agency then go forward and do these regulations or do they continue to hold their powder until they get a new nominee? But I just have no idea who that nominee would be. And that's, i think, where everybody else is Dog chasing its tail In terms of nominee. Yes, right, right, yeah, that's our government.

Speaker 1: 24:41

So any fun things on the horizon, anything that's got your interest, that you're looking forward to, that's got your concern, just looking out for the next couple of months.

Speaker 2: 24:52

Yeah, i mean we're obviously keeping an eye on Congress and the different opportunities there might be there. We obviously have been pushing for the passage of the Personal Health Investments Bay Act, which is something we've been working on with our allies for quite some time. The appropriations process now that we're past the debt ceiling we're just negotiating and package The appropriations process will start in earnest, and we have a number of areas that we're looking at there. Most specifically, and perhaps importantly for us, is H2B program, h2b visas for seasonal workers, and I'm happy to say that we're in a pretty good position right now, though we really need to kind of circle the wagons and defend our position. The chairman's mark of that particular funding bill includes a provision that would exempt returning workers from the H2B visa cap, which is something that we've been arguing and pushing for for quite some time, and it does have some opposition, and I know that there's been some sort of background conversations with members on the Appropriations Committee about taking that provision out, but it's always better to start with a provision in than it is to try to get something in later, and so we'll continue to talk to our friends and on the Appropriations Committee and authorizing committee to make sure that that stays in there. We do have bipartisan support to keep it in there, but these negotiations tend to go as they go And, as, as is often said, nothing's agreed to until everything's agreed to, and so we'll continue to push for that.

Speaker 1: 26:55

All right, joe. Thank you so much for coming on. We really appreciate all the all the updates and look forward to the next one Likewise. Thank you very much. Thank you, joe. Thank you listeners. Hope you enjoyed that and got some value, even if you're listening to it in the future. Always interesting to look back, listen back and hear what was going on at certain times during the world. So thank you, joe, for keeping us up to date and doing everything you can to move the club world forward in the best light possible. Please reach out if you're interested in joining the NCAA. They're a fantastic organization, really cool group of people over there. Whatever platform you are on, please like subscribe rate, share with somebody. We really appreciate your help and support Until next time.