- This topic has 28 replies, 20 voices, and was last updated 4 years, 7 months ago by
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Let’s round it up to $400.00….
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At the risk of sounding like a dissenting opinion I have a few questions here.
$400 a year represents an almost 50% increase in dues for most people whose livelihoods and wages are impacted by a pandemic.
As an instructor here I have worked very hard to earn the credits for my dues because I know the combination of graduate school and the reality of life in 2020 might make discretionary spending an untenable luxury.
I know of many members who just joined this year, some of whom I train. They feel that some of the maintenance problems we’ve experienced have caused too many aircraft to be unavailable. Paying $900 for broken aircraft every year has made many rethink the wisdom of joining this club, and a financial burden of this size would likely push them further in this direction away from us.
For your first move as a new board to be demanding an increase in dues by almost 50% sets a strong precedent that I’m not sure you fully understand the implications of.
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Tim wrote: $400 a year represents an almost 50% increase in dues for most people whose livelihoods and wages are impacted by a pandemic.
Tim, this is a one-time assessment for 2021. It does not extend into any following years.
As an instructor here I have worked very hard to earn the credits for my dues because I know the combination of graduate school and the reality of life in 2020 might make discretionary spending an untenable luxury.
Tim, thank you for your instructional work at the club, it is truly appreciated. Our Policy and Procedures manual stipulates in; “1.9.6 Yearly Junior Membership – no application fee or buy in required (over 13 and under 21) or enrolled in school.”
If you are enrolled in school, you would fall under a Junior membership. Your yearly dues would drop to $250. With your instructor credits your dues would be $0.00. That means you would contribute only the $397.85 to the engine fund. That comes to $33.15 per month.
I know of many members who just joined this year, some of whom I train. They feel that some of the maintenance problems we’ve experienced have caused too many aircraft to be unavailable. Paying $900 for broken aircraft every year has made many rethink the wisdom of joining this club, and a financial burden of this size would likely push them further in this direction away from us.
Our club ships flew 726 flights totaling over 293 flight hours as of October. That’s a lot of up time. Yes, there were times that one or two ships were down for mx for brief periods however, there were always aircraft available to fly. No one has approached me as Mx Chair about broken aircraft other than to report items that needed repair or attention.
For your first move as a new board to be demanding an increase in dues by almost 50% sets a strong precedent that I’m not sure you fully understand the implications of.
The board of directors has a fiduciary responsibility to the membership and to keep this club viable. It doesn’t matter that this is a new board of directors. We still have to make the tough decisions. One of those decisions is funding the engine rebuild or nobody will be flying.
Sincerely,
Don
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OK with me. Unfortunately for me, I was unable to make it to the field at all this summer. I travel a lot, so I followed the COVID protocols and did not expose others during the 14-day quarantine period after each trip. With the frequency
of travel, I had a few 3-day periods and one 2-day period outside of the 14-day protocol. With many members in our club over 65, I would not take the risk of exposing them.Jeff Moran, CFA, CPA
Senior Managing Director & Portfolio Manager, Public Equites
E: jeff.moran@ppmamerica.com |
P: 847-413-3257 | M: 847-769-6622PPM America, Inc.
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ppmamerica.comFrom: Sky Soaring <webmaster@skysoaring.com>
Sent: Sunday, November 22, 2020 9:29 AM
To: jjm17@cornell.edu
Subject: [Sky Soaring] New topic: Engine Rebuild FundWARNING – EXTERNAL EMAIL
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I’ve no problem with that Don. It’s fair and well planned. I can Zelle a payment to Steve for a quarterly or year contribution.
Incidentally; is the club gonna have that engine shipped to an overhaul repair station or rebuild it in house?-
Frank Smith wrote: “Incidentally; is the club gonna have that engine shipped to an overhaul repair station or rebuild it in house?”
Frank, the ideal way would be for us to fly the Pawnee to Poplar Grove airport which is only about 20 miles northwest of Sky Soaring and have Poplar Grove Airmotive rebuild the engine for us. They are a very reputable engine rebuild company. In the event that we are not able to fly it there, we would have to remove the Pawnee engine ourselves and take it Poplar Grove for rebuild. When complete, we would pick it up and re-install it.
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It’s a well known fact to aviators both new and old that airplanes are expensive to maintain.
The work need not always be extravagant but it is indeed always very necessary and must be very thorough -
I agree that the engine overhaul fund is a problem and needs to be addressed. I would like to see our new board consider an “all of the above” strategy to raise funds that could include goals for increased flight activity including day member flights, increased membership, and perhaps a smaller “special assessment.” Given the current economic climate, I would have difficulty in covering an additional $400 in dues next season.
Mark
Sent from my iPhone
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Hello:
This year I had 46 glider flights. Two of them were winch launches. My glider pilot skills increased and I had fun. No complaints. My annual dues plus tow fees and some instructor costs possibly make me a gold level financial contributor to the club. My other choice this year was to purchase a plane and fly around by myself but that would be very expensive. I have no problem with a one time $400 special assessment (does that bring me to a Platinum level contributor?).
I do have empathy for those that an extra $400 may cause them to rethink their hobby. Not everyone is lucky enough to have stable employment or investments that did well this year. Sometimes things are out of personal control. This year was a damaging year to many due to COVID 19 shutting down jobs. Is there a way to reduce the costs to those that may have a hardship? I saw that Don found a loophole for Tim to utilize to keep his costs lower. Are there any other ideas out there to help those that could use it?
We have a pretty good club. We do need tow plane with a good engine as that is an important part of a glider club. We also have an excellent winch that was underutilized this season. Perhaps we can have scheduled days where our assets are used to their full potential and therefore bring in more club revenue. If instructors are available that can get credits then their share of belonging to the club is reduced. We can find ways to make this work. This should not be a glider club for millionaires only. Thanks for bringing up this topic.
Regards,
Rich
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I agree, we need to have funds available to overhaul the engine. At one time the engine escrow account had over $20K. Unfortunately, the Cessna 150/180 tow plane had a number of serious problems during the flying season and the fund was used to pay for repairs to that plane. Since then the Club has struggled to build up that fund, which today stands at about $12K. We certainly do not want to repeat the experience we had with the Cessna 150/180 as it shut down the Club for weeks at a time and seriously impacted our financial situation.John O
On Sunday, November 22, 2020, 09:28:51 AM CST, Sky Soaring <webmaster@skysoaring.com> wrote:
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As with any decision of this magnitude, the board should
consider the current economic client and the effect/unintended consequences
it could have on membership.If enough decide that $400 is more than they can afford and
go inactive for a year, it may not produce the desired amount for the rebuild fund and
also negatively impact flight revenue in 2021…My two cents…
– John
John Baker
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I would like to reply to the posters that are expressing concern about hardship paying an additional $397.85 for the 2021 year. I speak only for myself and not the board.
I understand that we may have a few members that will find it difficult to come up with the shared payment. I am not trying to be a hard ass however, as I stated in my first message, “If you can’t afford $397.85 over the course of a year, you probably can’t afford to be a member of the club.” I’m sure the board would look at hardship cases. I don’t think they want to lose any members just like I don’t.
On to a little harsher subject. We may have some members that feel if they go on inactive status they will not have to pay the one-time special assessment. This is true however, the Constitution and Bylaws addresses this in Article IV Section 7. “An inactive member who is reinstated as a Regular member shall pay a reinstatement fee as determined by the Board of Directors.”
In my opinion, our engine fund needs to be shared by all. I think it would be pretty lousy for a member to go on inactive status just to get out of paying his fair share. Let’s all chip in and get this done. In the end, every member will benefit from this and we will have a tow plane with an engine that will last for years and years.
Respectfully Submitted,
Don
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good reply—–we took the birddog to belvidere many times for fixup—-I tried to sway the powers that be to take it there rather than lake in the hills—–
next thing I knew it was dismantled at finefields and later parceled off to FL for peanuts——the old guys then at poplar grove (belvidere) werealways pretty good———jim
—–Original Message—–
From: Sky Soaring <webmaster@skysoaring.com>
To: skogjim@aol.com
Sent: Mon, Nov 23, 2020 10:22 am
Subject: [Sky Soaring] Reply To: Engine Rebuild Fund -
I totally agree with Don Grillo and Jim Skog about having the overhaul done at Poplar Grove.
I had my Piper Comanche there for a few years and had all maintenance done there, plus a complete engine overhaul. It is a first class operation.
Drive or fly over there and arrange a tour of the overhaul area. I think you will be impressed.
Dick Bell
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On a similar note, how will this effect prospective members? Knowing that the proposed special assessment is only in effect for 2021, they may decide to postpone applying for membership until the following year or simply decide it is too much and look at other options in the region.
Mark
Sent from my iPhone
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Marked wrote: On a similar note, how will this effect prospective members?
Thanks for that good question Mark. I would propose to the board that new members pay the special one-time assessment on a prorated bases of $1.09 per day based on remaining days of the year. For example; If a new member joins on July 1, 2021, their are 183 days left in the year. $1.09 X 183= $199.47. The new member would have $199.47 added to his prorated membership dues for the year 2021.
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Tow plane thoughts…
We have had the continuing challenge of having a viable tow plane through all the years that Sky Soaring has existed. We became spoiled by having the Bird Dog for 30+ years. It did thousands of tows and always came back to life when we gave it the TLC it desired. That included at least two major overhauls that I can recall. Following the Bird Dog era we had some difficult time with tow planes that were not a durable or reliable. Our flying suffered. It seems that in the Pawnee we have a good reliable tow plane. It will be nice to return to those earlier times.
About 15 years ago and at the encouragement of our treasurer at the time we began squirreling away money from each tow for the eventual overhaul. That worked well. Our philosophy was that our dues paid for the field and the gliders. Those were relatively stable expenses. Our tow fees paid for the tow plane which was a variable expense… more tows, more maintenance. That philosophy worked well.
On the subject of a special assessment… One of pluses of being a member of Sky Soaring as compared to other flying clubs is that in their entire history – about 48 years – they have never had a special assessment. To potential member as well as current members, that is an important point. We survived on the income from our performance and participation. It would be a shame to ruin that record.
Will having a first special assessment chase some members away or discourage others from joining Sky Soaring? I suspect that, as some have suggested, it will be a factor. Not all who wish to fly can afford to have an unexpected assessment. In the past we have worked to provide good flying at reasonable prices.
A special assessment of $400 would effectively increase the cost for a member who does 20 tows a year by $20 per tow. Ouch. It would also increase the first year dues for a new member by $400.
On the subject of borrowing from members for the cost of a major for the Pawnee, we have done that many times. I have loaned money to Sky Soaring a number of times and have always been paid back. Up until we wanted to bring the mortgage in house, the loans were always done interest free by members that appreciated being a member of the club. More recently loans for the mortgage, the winch, and the tow plane purchase, we have offer a modest interest. Yet we have a record of members stepping up interest free to support our operation.
Through the years being a member of Sky Soaring has been a pleasure. It has always been a gathering of friends. We tried to be sensitive to each other and each did our part to keep us flying. We were never short on having members pitch in whether financially or by sweat labor. We took pride in being a part of the soaring happening. It has happily not been a business, but our board accepted the responsibility of managing our financial responsibilities. Hopefully the future financial challenges can be met with the grace of our former boards. As a group of flying friends we will continue to support our club. I hope the hangar continues to be a clubhouse where friends meet.
Larry
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Well said Don.
Moreover; isn’t this a temporary measure anyway? -
I wanted to second Larry’s comments. I’ve been a member of two flying clubs and both had the same philosophy. Dues cover fixed costs such as the hangar, property taxes, utilities etc. All members pay those equally. Incremental costs related to the operations (gas, maintenance, engine overhaul fund), are covered by the rental rates, or in our case tow fees. It is done this way exactly because it is fair.
I believe that a special assessment to cover an incremental operation cost is far from fair. It is unfair to the members who are less active for whatever reason. At $30k for a 2000 hr recurring item, this should be costing members maybe $3 per tow. If this assessment had been in 2020, it would have been a $200 premium on each of my two tows (ouch indeed).
Now some may have strong opinions about less active members, but the fact is we are all different. Some live close to the field, some live far away. Some are students or are retired, some are toiling mid-career. Some have reason to take extreme Covid precautions, some are more relaxed about the virus. However, all are contributing much needed membership dues, and those who are unable to participate actively for whatever reason are probably those most on the fence about continuing to mail in those checks, so an assessment that unfairly impacts that group seems questionable.
Beyond less active members, this proposal actually unfairly treats all current members. Essentially by proposing an assessment rather than a loan, we would be asking all current members to overpay now, so that future members can underpay. I saw the proposal for 2021 joiners, but what about 2022, 2023 etc.
A special assessment of any kind is always problematic. It sends a signal to the current and potential future members that the cost of membership is unpredictable. Real estate people will always talk up the condo boards who have never had a special assessment. It shows consistent good management and makes prospective buyers more comfortable buying in. The parallels are obvious. There are some things in life where “zero times” is the only really acceptable answer (how many lifetime DUIs are okay for your kids’ school bus driver?).
Special assessments are typically only used in cases of dire need. If people have been willing to loan the club money, then this is an unnecessary special assessment. Possibly the main reason this is being proposed is that some people are naturally debt averse. However, particularly for a club like ours debt is actually beneficial in helping to offset assets. The club has assets such as the field and aircraft, and various loan liabilities. The assets minus the liabilities are our net assets. It can actually be problematic for an organization like ours if the net assets increase too much:
1. If net assets are high, the club is a more attractive target for lawsuits (day member accident?).
2. When net assets get too high there can be pressure to break up the club. When the net assets per member gets high, people start to question whether it would be better to cash out that equity. We surely have some protections against that in our bylaws, but all that stuff can change in the future. Nobody ever thinks it can happen until it does. A strong defense is to keep net assets low.
3. If net assets are growing, that means the current membership are overpaying (compared to stable low net assets). The result may be a debt free future, which sounds good from a personal finance perspective, but for an organization such as ours this just means that current members overpay so future members can pay less. Not exactly equitable.
In our case overhauling the engine increases the value of the plane (not 1:1 for sure), but a special assessment of $20k would unnecessarily increase the net assets of the club. A more balanced financial approach would be to offset the increase in value of the plane with a loan to cover the cost of the overhaul.
I apologize for the overly long email. I get that it is only $400, but it strikes me that this proposal is not a good direction for the club, and people should clearly understand the downside.
I do agree with Don’s point about there being many members of the club who end up making little to no financial contribution after instruction/tow credits. Maybe the credits program is too generous and should be looked at again? Obviously the instructors and tow pilots are critical to the success of the club, so radical changes are probably counterproductive. Perhaps credits should be capped at some agreeable percentage of dues (50% say). I can’t imagine anyone would instruct/tow until they reach their credit cap, then stop doing so. Arguably instructors and tow pilots are still individual members of the club, so should also pay their share of the fixed club costs. Instructing or towing is still flying for free, which is a pretty big benefit in itself. I wonder how do the other glider clubs approach this?
Aaron
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All great comments. Larry Krengel posted a good history of the club and how things have been handled in the past. Aaron M. makes good points as well however I disagree with some of his points. I belong to a flying club which uses assessments all the time. Almost every quarter their is an assessment for something that needed repair or some other expense. For example; if their is not enough money in the mx fund to cover the annual inspection, all members of the club split the remaining cost. When the annual insurance premium is due, all members split the cost evenly to pay the insurance. No member loans of any kind.
Let’s take a look at the 2020 Sky Soaring engine fund starting from the beginning of January 2020. The year started off at $10,000 in the fund. Since my club dues for 2020 was $0.00, I personally donated $350.00 to the engine fund. The fund stood at $10,350 until I made a motion to the board in the September/October time frame to transfer $2000 from the general fund into the engine fund. That brought the engine fund to where it is today at $12,350.
If the club was only able to input $2000 over the coarse of the year, with all the flying that went on this year, the year of covid, it will take 10 years to pay off a loan for the engine rebuild.
I speak for myself as a club member, not for the board. I believe a special one-time assessment is the best for the club. It evenly distributes the fund to ALL members, not just the ones who fly most and pay full dues.
With that said, it will be up to the board to bring this to the membership. If it passes the board, the C&B states that any assessment must be voted on by eligible voting members and pass by three-forths vote. In the end, it will be the Regular, Patron and Honorary members that decides whether we do a special one-time assessment or go with the old traditional way of taking a member loan. If you are an Associate member, you may want to become a Patron member now so that you can vote on this important measure. Talk to Steve Synder to become a Patron member.
Respectfully Submitted,
Don -
While I am a new member and am fortunate that the $400 will not impact me one way or another, I whole heartedly agree with Aaron’s spot-on analysis. We may want to review how we budget our costs. Predictable operating expenses such as engine rebuilds should come from operating revenue tows/launches. Fixed costs should come from dues. Special assessments should be reserved for an emergency or a special capital project. While I realize that not having enough money for an engine rebuild is an emergency, it should not be. Finally, as Aaron points out a uniform assessment means that those who fly a few flights subsidize those that fly many. My two cents.
John
From: Sky Soaring
Sent: Wednesday, November 25, 2020 12:13 AM
To: Johndudlak@sbcglobal.net
Subject: [Sky Soaring] Reply To: Engine Rebuild Fund -
Good morning, fellow pilots –
It is good to have this discussion about the nature of our club. I do have a longer view of Sky Soaring than most and I realize that we as a group have changed. I offer my thoughts not contending we should go back to the good old days, but hoping the perspective will tune today’s decisions.
At one time we held club meetings in the front room of the hanger. We have outgrown that. In the pre-internet days it was just taken for granted that members would show up on Saturdays and Sunday afternoons. No commitment needed and if the necessary personnel were there we went flying. Almost always there was. We were not very business-like. We were just a group of flying buddies enjoying a mutual adventure.
For the first 25 years of our existence no one was paid for any service. We pitched in with no expectation of remuneration. When we found we were short of tow pilots that could fly with a tailwheel, we began offering a token credit for doing tows. Even as we began doing that, many of the tow pilots were commercial pilots whose employers frowned on them working an outside flying job so they refused the credit, but still towed.
Instructors, too, volunteered their time and talent. I don’t recall when we started giving a credit for instructors, but for a time that expense was not passed along to the student.
I suspect that both tow pilots and instructors at Sky Soaring would be volunteering even if they did not receive a dues credit.
As for the assessment, I fear a one-time assessment could become a way of life. I was in a small flying club at one time and when we wanted a new radio, we all pitched in. That is different from using the assessment for a predictable expense such as an overhaul.
I don’t know how the board is handling it at the moment, but during my time as president we stashed away some from each tow toward maintenance of the tow plane. Is that done now? I don’t know. Maybe is should be.
I also like Aaron’s comment about not having Sky Soaring assets become too great. The dangers he mentions are real. We need to have a sufficient fund to keep our club afloat and even improve our situation, but excess is likely unwise.
I would suggest that if we set aside some from each tow fee in 2021 we would be on our way to addressing the coming overhaul. I expect many member would, as they have in the past, step forward to provide a loan to cover the remaining expense. I know from personal experience that Sky Soaring is good for it.
Just one thought from a patron member.
Larry
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For about 50 years the BOD has made the financial decisions of SSI. It has dealt with many expenses such as a lawsuit, overhauls, glider and tow plane purchases. These expenses were much larger than the one being discussed. During the lawsuit, we had to come up with over $200,000. All of these BODs used good financial management to pay the bills without a special assessment. Our dues and flight fees were always reasonable.
Our club is very successful. We have assets of over $400,000 and that number is increasing month by month.
This situation reminds me of a rich uncle that wants you to help pay for his new Porsche because he prefers not to take out a car loan.
Special assessments are a gamble. It can actually lose money. For every new member that decides not to join, we lose $1000. The higher cost per member may actually be a loser for the club.
For the last year, I have had a continuing offer to the BOD to loan SSI $10,000 if our cash balance got too low. The emails of the previous week have shown a strong support of the club. I have no worry that the club can’t get the money for an overhaul when needed. The interest for a loan of the same amount comes to $20/member/year.
Using a loan for the overhaul = no assessment, no dues increase, no members quit, new members join. Our current prices allow paying of all expenses over several years.
Let’s be smart.
Larry Kase -
Here’s my point: I agree with Don. The engine repair will cost some money and we have to take those money somewhere. An extra $ 400 is not something that would ruin anyone. ($ 33 per month). Yes, if someone can’t afford to pay $ 33 extra a month, he probably can’t afford to be a club member. Our sport is beautiful, but unfortunately also financially demanding. That can’t be skipped. Also we can’t take a pandemic as a hostage and say I can’t contribute in engine repairs. I don’t believe that someone who has their own business or is an employee would be on the verge of bankruptcy because of the extra $400. And young, new students? When I started, I went to work part-time overnight, during the week to earn membership fees. Maybe that’s not a bad idea for US teenagers. Or have parents who pay for them. So maybe I have an idea how to get more, extra money. When I was in Europe, Poland two months ago, we were in Gdansk at a local aero club, where I had a sightseeing flight. It seemed that this aero club was focused mainly on this commercial activity – sightseeing flights for the public. Of course – they still had members who flew for pleasure, students, ran a school. But I had to wait two hours for my flight because there were too many customers in front of me. How about placing an advertisement, for example, on social media networks, among acquaintances saying we provide (also) flights for public visitors. There is a big truck stop near us. Post some posters … (can we, is it legal? I don’t know) we have many members who are commercial pilots flying out of Chicago. Maybe they could promote the club among their coworkers. Bring for example 5 day members for Saturday. And another 5 for Sunday. That’s $ 1,300 for the weekend. Let’s say we have 20 flyable weekends a season. That’s $ 26,000. I know, it’s an only theory and probably none of us want us to be focused mainly on day members. But as a partial solution to the financial situation…?
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This topic has generated a lot of interest. I was originally in favor of Don’s proposal and I think it is certainly one avenue we must consider. I also want to thank Don for bringing it up and proposing his solution. We need this discussion. That said I think we should also consider all the other possible methods of generating the funds.
Interest rates are low right now and look to stay that way for a while. A loan makes sense. I’m retired and look at loans as a bad thing, but when I was younger they were a tool to get and hold the assets I needed and or wanted at the time. The club is NOT in the retirement stage of existence so we most definitely should consider using borrowed funds.
The Pawnee also isn’t at TBO yet. It looks like we should get in one more season before we get there. As far as I know it has been running good so far this year. I plan to work with Larry and Gary to check the compression to try to ascertain (to the extent we can) the health of the engine. If it checks out OK I believe we can expect to get one more season out of it before the overhaul. And if that’s the case we could add a fee to the cost of tows next year that is specifically for the overhaul fund. This is also entirely fair in my opinion because the pilots towing behind the Pawnee are the ones contributing to the overhaul fund. Based on the number of tows given this year the add on would be around $26.00 per tow to cover the entire short fall as of now. Obviously we wouldn’t add that much on so while it wouldn’t cover the entire cost it will get us closer to the number needed. (As a separate issue (but definitely tied to this issue) is weather or not we wish to overhaul this winter or not. We did 95% of our flying this year behind the Pawnee. If it goes down we will be extremely limited. Something to think about.)
Also our old method, asking one or more members to loan the club the cash, is also a viable way to cover the short fall we have right now. I know of a couple members right now who are willing to do just this.
Finally there may be other ways to finance the overhaul that I haven’t considered or know about.
Sincerely,
John Lincoln
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