Tuesday, November 30, 2010

MEMO - To All AYC Members

To: All AYC Members
From:  Your Board of Directors
Re:  Future Plans and Fiscal Considerations  


This is an informational letter from your Board explaining and hopefully clarifying our plans and our needs.

After initial discussion at the board level, Commodore Ed Kennedy appointed an ad hoc committee comprised of Phil Case, Dave Malsed and Mike Herbert to assess AYC's short and long term financial needs and to develop strategies to meet those needs. That committee then met with our flag officers to discuss their findings, resulting in a recommendation to the full board that dues be raised. The board reviewed this recommendation and agreed that an increase in dues is the most effective way to ensure AYC's long-term financial viability and growth. This letter will provide you with specifics regarding our process and that decision. 


As the Club has grown (when we built our Clubhouse in 1991 we had 121 members, we now have over 200) the necessity of an expansion of the Clubhouse becomes more urgent.  A chase boat is a pressing need, for safety and utility in order to run the race and youth programs (over 50 races a year, plus Lido fleet, Pirate Camp, Dinghy Week) Consideration of possible future capital expenses.

These all require monies. Our present fiscal situation (condensed version) is as follows:

1. Fixed annual expenses: taxes, utilities, cleaning, maintenance $39,000
2. Annual income from dues alone: $31,000
3. Annual income from activities: social, race, cruising programs $65,000
4. Annual expenses related to activities: $49,000
5. Income from initiation fees (variable): $8,000

Adding this up shows that we spend about $88,000 yearly, and take in about $96,000 plus $8,000 in initiation fees. Therefore, we generate approximately $16,000 yearly in excess revenue over expenses. Presently we have reserves on hand of $35,000.

We’ve been in existence since 1891, built a clubhouse in 1991, and have never incurred long term debt. At this juncture we have no way of knowing exactly what is required, but expect these future capital expenses to be in the range of $150,000 to $200,000 over the next 2 to 4 years. Thus, to fulfill our needs, we must build reserves.

The only viable way we can see to do this is by raising dues. Our last raise was in 2002. We’re implementing a raise in 2011 to $240/yr or $20/month for preferred members. Associate and junior members will stay the same for now. This still leaves AYC as one of the least expensive yacht clubs on the Salish Sea. We anticipate this increase will generate $20,000 annual income, in addition to the approximately $16,000/yr now. Thus, within 3 to 4 years we should have increased our reserves to enable us to proceed with a staged expansion, as well as an increased operating reserve/contingency fund.

We realize that raising dues is never popular, but we also realize that if we’re going to continue to provide the high quality of facilities and the range of activities that we want and expect, we have to pay for it. Please feel free to contact any board member with questions that you may have.

Sincerely, Ed Kennedy, Phil Case, Mac Madenwald, Bonnie Gilmore, Charles Webb, Vince Sellen, Kevin Welch, Spencer Swain, Jerry VanderVeen, Warren Walz and Andy Schwenk

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