Special Meeting Announcement
The Board of Directors needs your help! We have called for a special meeting of the membership on Wednesday, January 18, 2012 at 7:30 pm. The meeting will be held at the pool in the clubhouse and is being called for the purpose of changing the bylaws.
Introduction
Kenmont has always been and continues to be in a strong financial condition. Kenmont has also always been carefully managed, ensuring that we can keep our annual dues low and making it more affordable than many other clubs in our area. The board takes its responsibility to keep costs low very seriously and annually reviews our expenses and projected income to keep dues low. In reviewing our finances for 2012, the Board of Directors has identified a bylaws change that could save the club between $10,000 and $20,000 per year in expenses.
Explanation
For the first time in Kenmont’s history, our membership rolls are completely full and we expect to have a waiting list again this summer. In fact, we currently have approximately 25 families waiting to join as soon as space becomes available. This is great news!
However, this also means that a never-before-used provision of our bylaws will go into effect in 2012 unless the membership votes to change it. Under that provision, members who resign can tender their membership to the board and we are required to buy it back. While new members will still be required to pay a $400 initiation fee, that money will not go to support the ongoing operations of the pool, but will be paid out to the resigning members.
What Change is Being Suggested?
The rules of membership in our club are set forth in our bylaws. Article IV of those bylaws covers the price of membership and dues assessments. Sub-section 3 of that Article includes the statement that reads as follows:
Whenever the membership has reached its maximum, a Class A member can tender his membership back to the pool for a payment of the share price (Class A membership fee) in effect at the time for purchase by a prospective Class A Member who is on the waiting list.
Similarly, Article VI of our bylaws covering member resignation state that when a member resigns:
If the Association has a waiting list of applicants, it will repurchase the membership at the then-current Class A membership initiation fee.
The board recommends a bylaws amendment to eliminate the requirement that the board buy back memberships
Why it matters?
Historically, Kenmont has added between 20 and 40 new members per year and collected $10,000 to $20,000 per year in initiation fees. Now that the membership is full, we can only add as many new members as we have members who resign. With potential for all new initiation fees going to buy back resigned memberships, this could mean no net revenue from initiation fees for 2012 or any year in which our membership rolls are full. While Kenmont has always collected more revenue than it spends in expenses, we rely on the surplus to make repairs each year and save for future renovations.
Why the board supports this action?
While the ability to “sell back” membership may have been important to attract members at one time, we believe that members now are attracted by our well managed and maintained facilities, our family atmosphere and the affordable annual dues. In fact, based on informal conversations with many of our members, we believe that very few were even aware that their membership could be bought back by the club and did not factor that into their decision to become members. Because annual initiation fees from new members have been an important source of revenue for the club, our inability to collect those fees from new members starting in 2012 will require the board to both cut costs and make up for the lost revenue from other sources, such as dues increases. To avoid cost cutting that could undermine the quality of our club and that we have the resources to make necessary investments in the long-term health of the club, the board is asking the membership to approve the recommendation to amend the bylaws.
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