November 9, 2022
Dear PIYC Members:
With select services resumed at the Club this past week, we are slowly beginning to enjoy, once again, the camaraderie and connection with friends at our Club, a part of our DNA. Our Club Staff is updating the Calendar and Club status regularly, and I encourage Members who are in town to check our website for updates.
I am personally looking forward to getting back to PIYC for a low-key Welcome Week, November 13th-19th and hope to see many of you at our traditional Evening Colors Ceremony on Wednesday, November 16th. While your Club Staff has been working diligently to resume services and offerings, your Board of Directors and Committees have also been working on the additional recovery tasks associated with damage done by Hurricane Ian.
INSURANCE
Some have asked me about our insurance coverage given the unprecedented storm. As background, we negotiate our insurance renewal annually in March. We have a subcommittee of PIYC Members whose professional experience is in insurance. They advise our Staff, Finance Committee, and our broker to find the best coverage for a reasonable cost. After Hurricane Irma, insurance coverage became extremely limited, particularly for storm surge and rising water events.
Because the source of most of our loss is flooding or storm surge, the key operational insurance for the Clubhouse is Federal Flood Insurance through FEMA. This insurance is very limited in what it covers and onerous in terms of what must be provided to finalize the claim. The deductible is reasonable, however the coverage is only a combined $1M for building and contents, with only specific FEMA-designated items covered. One of the key components of this coverage is that items and structures below the "Base Flood Elevation" or "First Elevated Level" are unlikely to be covered unless they are on the coverage list; we are working with our adjuster to maximize inclusion of our items as much as possible on that list. When excess flood coverage is available, it does not cover damage that is not covered under the FEMA policy. While we expect to have some coverage, it will not cover all of our losses on the lower level.
Our claims through the Docks and Wharves (Marina) Insurance are significant. The insurance adjusters and the manufacturer of our docks both considered the docks to be a complete loss. An evaluation of the fixed wooden docks will be completed soon. We were able to secure $5M in coverage at our last insurance renewal; however, the limit for rising water or storm surge is $3.2M. All requested information has been provided and we are waiting on a decision from the adjuster.
Additional policies under which we have opened claims include insurance on our van, insurance on our watercraft, and property insurance which excludes flood damage. We also filed under our package coverage to exhaust any additional claims on items outside the building. Unfortunately, most of these exclude flood damage. This claim has already been denied due to the extent of flooding on our property. All of our other noted claims have been submitted and are in various stages of review.
Our broker is working diligently on our behalf to ensure we are exploring all coverage options, but we expect several more months before we are able to quantify what our covered and uncovered losses are. We have kept detailed accounting of our losses and our costs to recover. We will then be able to understand what this means to our Equity Social and Equity Yacht Club Members.
BANKING/LOANS
Over the last few weeks, we also have been engaging in conversations with our banking partners that have expressed interest in a lending relationship with PIYC. We have been diligent for the past few years in strengthening our balance sheet (reserves) and the overall value of our Club. Together these make PIYC an attractive loan partner, and we are pleased with the preliminary feedback. We have had initial meetings to tell these banks about damages to the Club, expected costs to replace our docks, and rough estimates for other damages that we have incurred. We have since provided the financial information that they have requested from their loan underwriters.
We are now waiting for their responses that will address how much they are willing to lend to the Club, the interest rate they will charge, and how long of an amortization period the loan will have. We are awaiting their responses and then will evaluate our next steps.
This is a complex situation with many unknowns: total cost to rebuild, the amount of insurance that will be covered, and decisions to be made on borrowings versus assessment.
MARINA STATUS and PLANNED REPAIRS
Our Marina Committee and Marina Committee Chair have been working tirelessly to fully understand the project at hand when it comes to repairing and rebuilding our Marina - in terms of both scope and cost. This is a vast undertaking with many components. Our Marina has nearly 200 slips in a number of configurations and a variety of systems that tie together and are in various conditions. This would be a considerable task to evaluate and plan in the best of times, but particularly so in the wake of widespread Marina damage throughout our area and a heightened sense of urgency to get our Members back to safe boating soon.
We will continue to make information available as we receive it, and our Equity Yacht and boating Members should mark their calendars for a Marina Town Hall on December 8th, at 3pm. We anticipate having a number of proposals back by this time and look forward to a dialogue with our Equity Yacht Members.
I hesitated to address you on the above topics without concrete answers. However, transparency rules, and explaining what is needed to get to a well-reasoned, data-based decision. In the meantime, come to our Club. Enjoy your friends. We will move forward confidently.
Thanks to the many gifted Members and Staff Leaders who are committed to helping us navigate through this unprecedented disaster. Please thank them when you see them.
Fair winds and following seas,