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Our projected income is similar to that of the past two years, and is composed of membership fees, boat storage fees, and beach events & activities. The Board has convened a committee, led by Erin Harley, whose scope includes looking at increasing facilities rental income (clubhouse, pavilion.) I would like to also note that since 2018, the cumulative effect of inflation totals 16.5% (https://www.usinflationcalculator.com) which means that our real purchasing power has decreased by that amount. It is my strong opinion that it is going to be necessary to raise dues and boat slip fees next year to account for this change.
On the expense side, our G&A costs of just over $53,000 include summer staffing such as lifeguards, our IT and communications overhead, utilities, professional fees (legal, accounting), interest payments on our loan, etc. You’ll notice that events and activities – while a major cost as a percentage of budget – are also revenue neutral as the costs are nearly 100% borne by participants of those events (as reflected in budget.) The sizable repairs/maintenance and beach and beautification budgets (approximately $40k each) reflect a number of critical projects including finishing the “Greenway” modification between pavilion and playground, installation of new grills and updating of surround w/ additional donor bricks, and overdue maintenance to the train station. The clubhouse budget ($12k) includes a number of final punchout items (gutter installation and interior outfitting) as well as ongoing maintenance.
In addition, the budget reflects some changes to our cash situation. With nearly $150k in cash on hand at the end of the year, the Board recommended (and you, the membership, approved) making an additional $25k in principal payment to our outstanding clubhouse loan (that interest is currently 4%). That will roughly half our outstanding loan balance by end of year. We will also invest up to $50,000 of cash on hand in CD’s (certificates of deposit) on 3 month rolling maturity, to take advantage of current interest rates (3-4%.) The Board feels (and membership agreed) that this approach represents a good tradeoff between keeping a reasonable accessible amount of dry powder on hand, versus (for example) paying off 100% of the mortgage.
Finally, the bottom line reflects that we will spend approximately $10k more than we bring in this year. Note that from a cash flow perspective, the paydown of principal (regular and extra payments) leads to a total net cash flow of nearly -$50,000. It’s important that members understand that nearly $40k of that net outflow is not spending, but paydown of loan principal.
Next year, I feel strongly that we should return to our recent historical trend of running small annual surpluses or at least a balanced budget. I would propose that we accomplish this in 2024 by completing current legacy special beach projects and scaling back “special project” funding slightly, and by raising dues to adjust for inflation (as discussed above).
Thank you to treasurer Arnold Turner and to the whole Board for their work in producing this budget. As always, please feel free to contact me with questions.
Brian Jamieson
president@ospia.net
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