1. Long Term Financial Planning
Town Hall Meeting
June 16th , 2014
1896-1996: a vision towards 2046

2. Introduction
Initial Proposal
Survey Results
Modified Proposal
Projections
Other Options
What’s Next?
Questions & Feedback?
Agenda

3. Protect our investment
Give the Board Direction
 We need to plan over a longer time cycle than
typical board cycles
Repair our aging infrastructure
Leave the club better they we found it
 Ensure the legacy of KYC
Introduction : Why do we need a
Strategic Plan? March 2011

4.  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
Introduction (cont.)

5. Generation of New Capital
Fee Changes:
 2015
All Categories, one time: ~24%
 2016 – 2019
All Categories: (CPI+~1.5%)/year
Capital Assessment Rates:
 All Categories: ~17%/year
 Begin this year (2014), ongoing
Initial Proposal
March 26th, 2014

6. 166 Responses (44% response rate)
Survey Results
0
20
40
60
80
100
120
140
160
180
Junior Non-Resident Associate Single Family Life
Total
Answered

7. 0
5
10
15
20
25
30
35
No Unsure Yes
Associate
Family
Single
Survey Results (cont.)
Q18 If fees are raised as suggested, would you resign
your membership at KYC
(by Membership category)
Associates equally divided

8. 90% Support investing in the renewal &
maintenance of existing facilities
86% Shared among all member
62% Feel support raising membership fees to raise
capital
Survey Result (cont.)

9. Summary
 Associates more likely to resigning membership
Associates not a strongly tied to the Club
Now enough value to justify new fees
 Strong support for taking action
 Good support for initial proposal
Survey Result (cont.)

10.  Adjusted to have a reduced impact on Associate (non-voting)
members
 Value proposition not yet strong enough, risk losing too many
Associates
 Would bring Associate fees back in line in the future
 General Assumptions
 Fees (Harbour, Membership, etc.) increase at (CPI + ~1.5%)/year
 Growth Targets
 Associates: 10%/year for 5 years
 Other categories: 2%/year for 5 years
 Modest growth or stable Membership after that
Current Proposal

11. Fee Changes:
 2015
Family & Single: ~24%
All others: CPI+~1.5%
 2016 & beyond
All Categories: (CPI+~1.5%)/year
Capital Assessment Rates:
 Family & Single: 17%/year
 Associate & Nominee: 10%/year
 Begin this year (2014)
 Ongoing
Current Proposal (cont.)

12.  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?
 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.)

13. 2015 Fees
Type
Fees 2015
Projected
(2014 + ~3.5%)
Fees 2015
Proposed
Capital
Assessment
(2014)
Capital
Assessment
(2015)
Total Fees
(% over projected)
Family $838 $1,000 $137 $171 $1171 (42%)
Single $620 $743 $101 $126 $869 (42%)
Associate $338 $338 $32 $34 $372 (10%)
Assoc Nominee $127 $127 $12 $13 $140 (10%)
Non Resident $204 $204 $0 $0 $204 (0%)
Junior $86 $86 $0 $0 $86 (0%)
What would fees look like in 2015?
* HST not included

14. Parameters:
 Parameters as noted above (growth, fees, capital
assessment, etc.)
Where does that get us (financially)?
 Harbour expansion & remediation: completed in spring 2017
 Next Phase of remediation: 2027?
Projections

15. Projections (cont.)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Capital Assessment
Membership Fees
Harbour Fees
Dock
Deposit
Capital Improvement &
Replacement Fund
Capital Expenditures
Remediation#2
Capital Improvement &
Replacement Fund
Harbour&Remediation#1

16. Risk Considerations
 Membership resignations not accounted for
 Are membership growth goals achievable?
Projections (cont.)

17. We have had discussions with our current bank and a
number of other lenders
 A 5-year fixed rate is as long as we would get from any bank
 An amortization is unlikely to exceed 15 years
Our preferred lender
 Requires more Club equity in the project
 More cash flow in order to support the loan payments
 Sufficient security against the “as built” value of the property
Other Options: Banks

18.  Required to be paid back, so would only be an “add on” to current fee
initiative
 Member debentures could provide a way to finance smaller Club
projects
 may not be suitable to assist with the harbour remediation and
expansion.
 Our preferred lender requires the Club’s investment be in the form of
equity, not borrowings.
 Once the Harbour Project financing is in place the Club could consider
borrowing from members (debentures) for other projects,
 Club’s cash flow at that time would need to support the additional
borrowing.
Other Options : Member Debentures

19. Member Donor/Giving structure is being considered
How much could we raise from members?
 from outside sources?
Also would be an “add on” to the current proposal, but
would serve to accelerate progress on projects
Other Options : Gifts & Donations
from Members & Benefactors

20. Solicit final feedback
Seek Membership Approval
 Motions
#1 Membership & Capital Fees
#2 Entrance Fees
Schedule
 Special General Meeting in July – Aug timeframe
What’s Next?

21. Ongoing Feedback Options
• Survey to be made available shortly.
• E-mail: harbourquestions@kingstonyachtclub.ca
• Web: www.kingstonyachtclub.ca/newharbour
Getting your input