kyc - long term financial planing - town hall 2014-03-26
TRANSCRIPT
Long Term Financial Planning
Status Update & Long Term PlanningMarch 26th , 2014
1896-1996: a vision towards 2046
Strategic plan review Harbour project Remediation review Harbour status Fee proposal review Survey results Moving forward
Questions & Feedback
Agenda
Quick review Why did we start looking at expanding
the harbour as our first big project?
Why are harbour/infrastructure remediation's NOW being talked about?
March 2011, Town Hall Meeting ….
Strategic Plan Review
Protect our investmentGive the Board Direction
We need to plan over a longer time cycle than typical board cycles
Repair our aging infrastructureLeave the club better they we found it
Ensure the legacy of KYC
Why do we need a plan?March 2011
Membership size
Harbour
Club House
Facilities and Services
Main areas of concernMarch 2011
A phased approach:
1. Ongoing Membership Growth and Retention2. Dock at Jemmett’s Landing (2012)
3. Fuel Dock (2012)
4. Expand and enhance our Harbour (Spring 201?)
5. Harbour Remediation (future)
6. Saint’s Rest Renovation (future)
7. Clubhouse Renovation (future)
Phased ApproachMarch 2011
Will provide an immediate growth in high value members
Make the club more competitive and a viable alternative to new members
Provide significantly improved facilities for existing members
Based on a self-sustaining financial model
Resulting membership growth facilitates subsequent phases in plan
Harbour Project
Existing Conditions Report Professional evaluation of conditions
Allow for properly engineered solution optionsDetermine costs for necessary alterationRequired for loan application
Board requested it be done for the complete harbour, not just for areas affected by harbour project.
Harbour Project
Remediation
Which aspects relate to Harbour Redevelopment?
Center Pier (Reach D)
East End of Breakwater (portions of Reach A & B)
yyy
Condition: East Breakwall
yyy
East Breakwall
yyy
Sheet Pile (South Club Foundation
Centre Pier
From the engineer:
“Overall, the centre pier is in very poor condition. Sections of the crib have collapsed and a loss of stone fill was observed. Portions of the concrete cap along the lakeside edges are no longer supported on the stone fill or timber crib”
“Overall, the steel sheet pile wall is in poor condition”
“The timber crib that extends along the north sides of the clubhouse is in very poor condition. Portions of the crib have collapsed resulting in loss of stone fill”
“Overall the north wall is in very poor condition”
Remediation Summary
Remaining (as of January)
Loan application (submitted February) Geotechnical analysis Completed works appraisal Finalize remediation design & engineering Finalize electrical design Prepare & issue RFP (harbour & remediation) Work with membership to establish sustainable fee
structure
Harbour Redevelopment Status
Loan application prepared for harbour & initial remediation Budgets Financial Information Business Model
Lender Response Club needs to contribute significantly more capital than
available Club ability to service debt not sufficient under their terms Completed works assessment possibly not sufficient
Harbour Redevelopment Status
Current Status
Loan application (rejected) Geotechnical analysis (on hold) Completed works appraisal (in progress) Finalize remediation design & engineering (on hold) Finalize electrical design (on hold) Prepare & issue RFP (harbour & remediation) (on hold) Work with membership to establish sustainable
fee structure (tonight!)
Harbour Redevelopment Status
Current Activities
Evaluation of financial models with respect to fee changes, membership growth that would enable harbour project, remediation and remaining capital projects in the future Using borrowing parameters from our preferred lender
Initial Result Remediation & harbour could begin in 2 years based on the
proposed fee changes taking effect asap.
Harbour Redevelopment Status
Fee Proposal
Increase membership fees 25% for 2015 cost of living after that (~2.5%)
Capital assessment of 16% of membership fees per
year
Grow membership Next 5 years:
Associates by 10% per year Other categories by 2% per
year
Proposed Fees
TypeFees 2015(2014 + 2.5%)
Fees 2015(Required)
Capital Assessment
(2015)
Family 831 1,000 160
Single 613 738 118
Corporate 1701 2,047 328
Associate 335 404 65
Assoc Nominee
125 151 24
Non Resident
202 243 0
Junior 85 102 0
What should fees look like in 2015?
Gauge membership response to Fee proposal
Try to engage as many members as possible
Calling campaign to target Associate members to respond and participate
Help board develop proposals and make informed decisions
Survey
155 Responses (42% response rate)Continuing to collect data
Survey Results
Junior Non-Resident Associate Single Family Life0
20
40
60
80
100
120
140
160
180
Total
Answered
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Survey Results (cont.)
Initiation FeesClub Membership Fees
(Family & Nominee) Initiation Fees Percentage
PEYC $463.00 $1,200.00 259.18%
NSC $466.00 $200.00 42.92%
Cobourg YC $533.00
Brockville YC** $567.00 $500.00 88.18%
BQYC $585.00 $100.00 17.09%
EYC $605.00 $2,200.00 363.64%
BHYC $695.00 $750.00 107.91%
Clayton YC $700.00
OYS $710.00 $500.00 70.42%
KYC $810.00
Beaconsfield YC $820.00 $1,140.00 139.02%
Trident YC $944.00 $2,000.00 211.86%
Britannia YC $974.00
RHYC $1,120.00 $500.00 44.64%
MCC $1,256.00 $4,000.00 318.47%
ABYC $1,260.00 $1,500.00 119.05%
BCC $1,325.00 $3,000.00 226.42%
National YC $1,725.00 $2,500.00 144.93%
QCYC $1,855.00 $3,600.00 194.07%
PCYC $2,014.16 $2,500.00 124.12%
RCYC $3,986.94 $11,000.00 275.90%
IYC $4,553.00
80% of Lake Ontario Club have Initiation Fees.
Average: 157% of fees
Survey Results (cont.)
Survey Results (cont.)
0102030
18-3031-5051-7071+
Q16 The proposed fee increases will significantly deter members from joining
(by Age)
Survey Results (cont.)
Survey Results (cont.)
No Unsure Yes0
5
10
15
20
25
30
35
AssociateFamilySingle
Survey Results (cont.)
Q18 If fees are raised as suggested, would you resign your membership at KYC (by Membership category)
Associates equally divided
Associates are under-represented at meetings and in survey
Support for being proactive in capital planning Support for distributing cost across all members
Proposed Fee? Evenly split on whether good value for money Price point may be too high or too risky Possible loss of members Associates more affected than Family or Single members
No clear mandate from survey results
Conclusion?
We are already behind on past due capital investment (~$4 Million, $8 Million if you include harbour and clubhouse)
Current finances will not allow us to address harbour project, current and future maintenance requirements
We will hit a crisis point in the near future where the club viability will be on the line
What is the choice?
Membership Growth
Membership growth is crucial Distribute the costs over larger membership
base Increased activity drives other revenue
Retention Ensure we are offering good value
Recruiting
What Happens Next?
Problem: Without an plan to increase our revenue, we will be unable to tackle current and future infrastructure and capital requirements, and we will not be able to move ahead with the Harbour project.
We need feedback from the membership.
Survey to solicit feedback. 2nd Town Hall Meeting: Present feedback and
gather more input Survey Results Report & Financial Report for members 3rd Town Hall Meeting: Round table format?
Goal: Membership approval for financial solution to maintain the long term viability of the club and to be able to move forward with the harbour project
Ongoing Feedback Options• Survey to be made available shortly.• E-mail: [email protected]• Web: www.kingstonyachtclub.ca/newharbour
Getting your input