976 price

[Steve Gordon]

There seems to be one hole.  If a member leaves and is entitled to some
refund, where would the refund money come from?  Over time the club may
build savings, but if a member leaves too soon the club would have
insufficient funds to pay back the member.  If more than one member decides
to leave, that would only exacerbate the cash flow problem.  Such an event
may leave us with little choice but to make a special one-time assessment to
cover the loss of membership.  I would not want to be surprised with a $500
- $1,000 fee accompanied by an increase in monthly dues.

-Steve

-----Original Message-----
From: eefc-core-bounces at workingcode.com
[mailto:eefc-core-bounces at workingcode.com] On Behalf Of James Carlson
Sent: Wednesday, April 15, 2009 11:51 AM
To: Eagle East Flying Club Core Team
Subject: RE: 976 price

Steve Gordon writes:
> Assuming it were only the seven of us, that would mean about $4,750 down,
> $105/month, and $65/hr.  I would not be interested in that deal.

Depending on the exact terms, I think I'd be willing to go as high as
$5000.

"Reasonable" terms in my estimation would be that we pretend as if the
amount down was financed, and members are paying a monthly "note" out
of that amount, and are entitled to a return of the amount unused when
leaving.

For example, if we assume a 180 month note-like behavior, you put down
$5000 and then leave six months later, you get back 5000 * 174/180, or
$4833.33.

This essentially mimics (in a simple way) what would happen if the
club financed this balance with a bank, but with zero interest: if we
borrowed it, members would pay principal plus interest each month, and
would get nothing back if they leave before the club is dissolved.

Options for subsequent members joining would include either prorating
the investment, or sticking with some fixed value that we can then use
as capital for either upgrades or new aircraft.

-- 
James Carlson         42.703N 71.076W         <carlsonj at workingcode.com>
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