Yep... Your membership fees have gone up.

[turboplanner]

John & Maj - it is doable, but go back to Andy's post and you'll see you need some accountant expertise to set up the recording procedure. It can still be done manually - electronics just speeds it up, so if it was tried again, the success is all in who sets it up and trains the office staff. I would certainly set it up electronically.

 

FV, I was trying to make it simple, just pulling the most direct figures from the Annual Reports.

 

The Key personnel figures can be kept separate and are easy to analyse, although, not unreasonably several people are lumped together. Whether salaries should be known by members is another question.

 

The problem is when you go back through the years what's called "Employee Benefits" in 2012 has had various names and when you go back appears to include expenses other than salaries.

 

When you pull back and look at the whole report there are quite a few Income and Expense areas where it's not possible to match one with the other or identify what made something change and by how much.

 

And it has changed again from the period we were talking about.

 

We discussed Office/Employee/Staff Expenses increasing from $651,410.00 $868,396.00 in 2010

 

In 2011 the figure was a more stable $ 840,690.00, but other office related items appeared in the 2011 Report, such as Computer Expenses $16,169.00, Office Expenses $51,610.00, Board Expenses $32,409.00, Professional Fees $93,912.00, Postage & PO Box $48,403.00, Scholarships and Donations $33,107.00 and so on , just the ones here totalling an extra $275,610.00

 

In the 2012 Report, "Employee Benefits" had ballooned up to $1,075,708.00 - 28% above the 2011 figure and there was a similar extras list of Computer Expenses $9,843.00,

 

Office Expenses $63,950.00, Board Expenses $63,382, Professional Fees $30,777.00, Postage & PO Box $58,475.00, Scholarships and Donations $33,677.00, a total of $260,104.00

 

Now I'm not saying these increases were not justified, because there's no way to tell, and some of the increases will be due to accident claims and related to the CASA audit.

 

What I am saying is just going from what the Association has provided to the ACT Department of Justice, taking a very rough analysis, since the figures are not broken down, Employee/Office expenses appear to have increased from $651,410.00 at June 30, 2009 to around $1,335,812.00 at June 2012 - which would be an increase of 205% in just three years.

 

I'm not drawing any conclusions from this except to say that the accounts could do with some detailed analysis.

 

 

[Powerin]

Yes we have some money in the bank but it would be unwise to leave our organisation without a contingency fund.I hope to see us return to profit in the next 24 months. Possibly even this financial year (but that is less likely).

A price rise is inevitable, as you have to cover your costs. But I am little concerned with the mentality that a large fund needs to be kept in "contingency" and also that the term "profit" is used in a supposedly non-profit organisation. Of course the possible future needs for this contingency fund are hard to predict, but there was a strong opinion expressed by the Board at the EGM in Canberra that this needs to be kept to fund legal costs and adverse legal judgements. Isn't this what insurance is for? The amount kept in contingency by the RAAus could never hope to be enough to cover any serious legal action. Even the most basic of public liability insurance is around $20 million these days.

There is always the temptation for non-profits to squirrel away money for a rainy day and resist spending, to the detriment of the organisation. At some stage you need to say there is enough money in the kitty and spend "profits" on making things better for members. Hopefully the RAAus is not such an organisation.

 

I tend to agree with the sentiment that it's raining at RAAus...

 

 

[Aerochute Kev]

A price rise is inevitable, as you have to cover your costs. But I am little concerned with the mentality that a large fund needs to be kept in "contingency" and also that the term "profit" is used in a supposedly non-profit organisation. Of course the possible future needs for this contingency fund are hard to predict, but there was a strong opinion expressed by the Board at the EGM in Canberra that this needs to be kept to fund legal costs and adverse legal judgements. Isn't this what insurance is for? The amount kept in contingency by the RAAus could never hope to be enough to cover any serious legal action. Even the most basic of public liability insurance is around $20 million these days.There is always the temptation for non-profits to squirrel away money for a rainy day and resist spending, to the detriment of the organisation. At some stage you need to say there is enough money in the kitty and spend "profits" on making things better for members. Hopefully the RAAus is not such an organisation.

 

I tend to agree with the sentiment that it's raining at RAAus...

I have been wondering how long until someone mentioned the "contingency" being a legal action. It seems we may be saving money to give to someone else, instead of saving our own organisation. I did notice Jim still did not say for what purpose we are hoarding money or for what reasons it would be suitable to use it. Perhaps our Board can stop beating around the bush and tell us exactly what it is for and under what circumstances it can be used. We may well be on the wrong side of the balance sheet this year but that alone is not reason enough to raise the membership fees. Once this mess is sorted we will still be making an extra $200,000 a year so wont take long to rebuild reserves. Will the fees go back down next year when we start making a profit again Jim? I doubt it. We then may well be making a profit of $400,000 a year.It seems like from previous financials, if we don't make a profit of $200,00 the fees go up.

A price rise is not the first response in any business that has a temporary financial situation, competition will not allow it. Sometimes you have to use your own reserves to get through, knowing it will be recouped at a later time. Price rises with no apparent benefit will lose customers. Of course, when you run a monopoly like RAAus your customers have little or no choice, pay up or don't fly, so you really don't need to keep costs at a minimum. We are sounding more like a public utility than a member owned, non profit organisation!

 

Anyone know if HGFA are willing to step up and grow their organisation? - Kev

 

 

[Guest Andys@coffs]

Kev

 

I think i know the answer with regards what the funds will be used for short term but your question to me is a valid question to ask the board as to what their longer term strategy is and at what quantum will the contingency funds start accruing as just a plain surplus, contingency requirements fully met.

 

If you want a real answer to this question, and i personally think its worth asking why don't you write to the GM asking that it be put as a question on notice for the next General Meeting. In asking this way your question(s) can be multipart and well thought out and the board can have time to provide you with a considered answer rather than an on the fly response.

 

I hope you do put it on notice

 

Andy

 

 

[Powerin]

I have been wondering how long until someone mentioned the "contingency" being a legal action. It seems we may be saving money to give to someone else, instead of saving our own organisation.

Exactly. Liquid assets are low hanging fruit for, and I guess a temptation to launch, any legal action.