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: harbourquestions@kingstonyachtclub.ca• Web: www.kingstonyachtclub.ca/newharbour

Getting your input