976 price

[James Carlson]

Steve Gordon writes:
> The "finding another member" option would likely have to be the
> responsibility of the member who is leaving or else we probably would not be
> able to use the new member's joining fee directly toward the old member's
> refund.  I would not want to be responsible for finding a new member to
> replace me if I wished to leave.

We have options available besides finding another member, so I think
that's just a "nice to have" item, and not something we can or should
necessarily demand out of anyone.

> I think we have established that we do not have the ability to borrow money
> without a personal guarantee.

Yes.

> That leaves the special assessment.  Personally I don't like surprise fees,
> especially if they are accompanied by an increase in regular dues.  I
> wouldn't feel comfortable knowing that I could be responsible for a special
> assessment fee and a monthly fee increase at any time if any member decides
> to leave.

Well, it's not a surprise if you know about it and plan for it in
advance.  ;-}

The monthly fee increase is inevitable, no matter _how_ we structure
things.  If members leave, and aren't replaced, the yearly costs of
maintaining the plane need to be amortized over fewer people.  There's
nothing we can do about that.

The extra assessment is simply due to the fact that we can't borrow
effectively.  If you look at the cash flow in detail, what's really
happening is that we're all "acting as the bank" for the club, and
we're paying part of our monthly assessment out of the lien we hold
against the club.

Avoiding that would likely mean having two kinds of members:
lien-holder members and non-holder members.  It's slightly more
complex, but it ends up with the lien-holder ones paying less monthly,
and the others (with little or no up-front cost or assessment) paying
more monthly plus interest.

It's just arithmetic ... and a matter of how complicated we want to
make things in order to accomodate each member's finances and
tolerance for risk.

> Selling the plane and shutting down would be extremely unfortunate.
> However, it could be a real possibility under the right circumstances.  It
> only takes a few members leaving in a relatively short period of time to set
> us up for this.  I don't like being that vulnerable.

That's just the nature of a club financing the purchase of a single
plane, isn't it?  At some point, you get down to a too-small set of
members.  In the extreme, you've just got one guy buying a plane for
cash and calling it a "club of one."

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