KYC - Special General Meeting - 2014-09-28

Special General MeetingLong Term Financial Planning

September 28th , 2014

1896-1996: a vision towards 2046

Adoption of the Agenda Reading of Minutes from last AGM

(if requested) Introduction Motions

Motion #1 (Discussion/Voting) Motion #2 (Discussion/Voting)

Concluding Remarks Adjournment

Agenda

On August 20th, 2014, the board unanimously approved two motions to be brought to the membership at a SGM

The Topics for discussion are a change in the membership fees and the enactment of an Entrance Fee.

Notice of Meeting

Questions & Discussion taken from the central microphone

Voting

Procedural Notes

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 Strategic Plan? March 2011

Strategic Plan: Review

A phased plan:

1. Dock at Jemmett’s Landing (2012)

2. Fuel Dock (2012)

3. Expand and enhance our Harbour (2017?)

4. Harbour Remediation (2017 and beyond)

5. Saint’s Rest Renovation (future)

6. Clubhouse Renovation (future)

Harbour Project Grow membership, establish bigger base for future capital

projects Remediation Assessment indicated more work needed that

anticipated.

Required Remediation work put overall budget in excess of our borrowing capabilities

Requirements from our Preferred Lender: Sufficient “as built” appraisal to support the requested loan Ability to sustain the payments. Sufficient initial capital

Harbour Project

The scope of Capital requirements (short and long term) and now better understood Clubhouse & foundation Harbour structures

BreakwallCenter pierSheet pileNorth basinGas dock

Saints Rest Fleet maintenance and renewal etc.

Capital Needs

Annual financial statement look good, but don’t tell the whole story.

Do not into account the state of our infrastructure Capital reserve fund no longer growing due to

operational demands Well established lifespans for docks, sheet pile, and other

structures, require long term planning for replacement

Infrastructure maintenance in the past has generally been reactive and patchwork

Financial Capacity

We have been falling behind for years

It’s time to catch up and get back on track

Financial Capacity

• For calculation purposes, the annual membership fee is composed of two components; a Base Membership amount, and a Capital Improvement amount.

• For the 2015-2016 membership year, the Base Membership amount for Family and Single membership will be calculated at 24% over the 2014-2015 membership fees.

• The Base Membership amount for other categories will be calculated at 4% over the 2014-2015 membership fees.

• The Capital Improvement amount will be calculated as a percentage of the Base Membership amount on an annual ongoing basis. For the 2015-2016 membership year, the percentage would be as follows:

• Family & Single: 17%• All other Membership categories: 10%

Current Proposal

Current Proposal (cont.)

CategoryMembership Fee 2014

Base Membership amount

Capital Improvem

ent amount

Total proposed

Membership Fee 2015

% Increa

se

Family$

810$ 1,004

$ 171

$ 1,175

45%

Single$

599$

743$

126$

86945%

Associate$

327$

340$

34$

37414%

with Nominee

$ 450

$ 468

$ 47

$ 514

14%

Non-Resident$

197$

205$

20$

22514%

Junior$

83$

86$

9$

9413%

Temporary$

140$

146$

15$

16014%

Corporate$ 1,660

$ 1,726

$ 173

$ 1,899

14%

Entrance Fees

Only applies to joining or upgrading

Equivalent to a percentage of membership fees Approximately 150% of fees

Payment plan to distribute over a few years Possibly 3- years

Propose implementing in 2016 Why 2016?

Marketing: we would have one year to externally market: “Join now before the new entrance fee begins”

Incentive to upgrade membership before 2016 to avoid initiation fees It would also provide disincentive for current members to leave as they would

be subject to the new entrance fee if/when the rejoin.

Current Proposal (cont.)

Other Targets

Membership Growth Associates: 10%/year for 5 years Other categories: 2%/year for 5 years Modest growth or stable Membership after that Other sources of funding (Trillium)

Increase Value for Members Continue F&B expansion Continue to Improve Facilities

Tents, furniture, etc. New Initiatives

Swim Raft, Paddleboard Club 420 Fleet? more

Category

Difference over

Projected (Monthly)

Family $ 27Single $ 20Associate $ 3 With Nominee $ 4

What Will is Cost You?

What will is cost?

For boat owners who keep their boat at the club (30’), it would represent a less than 10% increase on what they would spend at the club

Parameters: Parameters as noted above (growth, fees, capital

improvement fund, etc.)

Where does that get us (financially)? Harbour expansion & remediation: completed in

spring 2017 Next Phase of remediation: 2027?

Projections

Projections (cont.)

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Capital Assessment

Membership Fees

Harbour Fees

Dock Deposit

Capital Improvement &Replacement Fund

Capital Expenditures

Re

me

dia

tio

n #

2

Capital Improvement &Replacement Fund

Har

bou

r &

Rem

edia

tion

#1

Status Quo

Facilities remain substandard and uncompetitive and continue to degrade

Docks, electrical, clubhouse, etc.

Risk of major failure continues to increase

Get back on Course

Plan to address known infrastructure issues

Reduce the risk of major failure

Provide competitive facilities

What Are Our Choices?

Capital Improvement Fund

Looking Forward

Motions

• Be it resolved that the following changes to membership fees be approved:

• For calculation purposes, the annual membership fee is composed of two components; a Base Membership amount, and a Capital Improvement amount.

• For the 2015-2016 membership year, the Base Membership amount for Family and Single membership will be calculated at 24% over the 2014-2015 membership fees.

• The Base Membership amount for other categories will be calculated at 4% over the 2014-2015 membership fees.

• The Capital Improvement amount will be calculated as a percentage of the Base Membership amount on an annual ongoing basis. For the 2015-2016 membership year, the percentage would be as follows:

• Family & Single: 17%• All other Membership categories: 10%

Motion #1

• The following table represents the proposed fees for the 2015-2016 membership year:

Motion #1 (cont.)

CategoryMembership Fee 2014

Base Membership amount

Capital Improvem

ent amount

Total proposed

Membership Fee 2015

% Increa

se

Family $ 810

$ 1,004

$ 171

$ 1,175 45%

Single $ 599

$ 743

$ 126

$ 869 45%

Associate $ 327

$ 340

$ 34

$ 374 14%

with Nominee

$ 450

$ 468

$ 47

$ 514 14%

Non-Resident

$ 197

$ 205

$ 20

$ 225 14%

Junior $ 83

$ 86

$ 9

$ 94 13%

Temporary $ 140

$ 146

$ 15

$ 160 14%

Corporate $ 1,660

$ 1,726

$ 173

$ 1,899 14%

Explanatory Notes (not part of motion):

• The Base Membership amount would be subject to annual cost of living increases in subsequent years.

• The Capital Improvement amount percentages could be subject to change in future years and would be brought, by the board, to each future AGM for approval, but is intended to remain relatively constant.

• The lesser changes to the categories other than Family and Single may be brought into alignment in future years.

• Future cost of living increases would be calculated approximately at CPI + 2%, applied to the Base Membership amount, and would be brought, by the board, to each future AGM for approval.

Motion #1 (notes)

Be it resolved that, beginning in the 2016-2017 membership year, an Entrance Fee be enacted at a rate of 150% of the Base Membership amount as provided for in Article 3 (i) of the KYC By-Laws

Motion #2

Category Fees 2015Example Entrance

Fee*

Family $ 1,175 $ 1,507

Single $ 869 $ 1,114

Associate $ 374 $ 510

With Nominee $ 514 $ 702

Non-Resident $ 225 $ 307

Junior $ 94 $ 129

Temporary $ 160 $ 218

Corporate $ 1,899 $ 2,590

*Note: this would not apply for the 2015-2016 membership year, and thus is presented only an example.

Explanatory Notes (not part of motion):

• The table above is only an example of what the Entrance Fee would look like if they were enacted this year. The actual fees for 2016-2017 membership year would be presented at the AGM in 2015 and would be a based on the calculation proposed above.

• The board intends to enact policy such that Entrance Fees could be paid in installments over a period of a few years in order to minimize the financial impact to new members.

• Existing members would not be subject to Entrance Fees, but any member may be subject to an Entrance Fee differential upon upgrading to higher level membership

Motion #2 (notes)

Adjournment