Board Meeting Minutes – February 26, 2013
Bayport Marina Association
Board of Directors Meeting Minutes
Marina Clubhouse
February 26, 2013
Board present:
Brad Baune
Morgan Fudge
Sandor Csallany
Marcus Gernes
Michelle Lemanski
Jim Mondry
Steve Paquette
Absent:
Val Fuller
Meeting called to order at 6:30 pm by Commodore Marcus Gernes.
1. Meeting Minutes –January 16, 2013
Motion by Steve to approve the Minutes, seconded by Morgan. Unanimous approval.
2. Financials
Audit
Steve presented a summation of the 2012 Audit by Mike Mullen CPA. The report gave BMA a “Clean Opinion” which does not denote good financial performance or stability, only that Bayport Marina is using good accounting practices for financial control. Mullen did comment he thought 2012 was a very good year for BMA with a $40k net profit ($135k taking out the depreciation expense). He is going to change the format on the final Audit and create 3 distinct funds for: 1) Operating Fund 2) Building and Equipment Fund and 3) Dock Replacement Fund.
Brad stated going forward the Board needs to educate members that assessments need to increase for capital improvements.
Marcus informed during the meeting with Mullen he commended the current Board on how well they handle and manage the Association. Mullen further stated he works with 1,000+ condo and non-profits and sees many Boards who do not know what’s going on. Brad suggested Mullen write a letter substantiating his opinion and use the letter as support for the upcoming discussions with Members.
Marcus met with a former Board Member of Sunnyside Marina who offered to get-together with BMA Board if there was an interest to discuss their journey regarding capital improvement assessments.
January Financials
Balance Sheet – $20k was taken from M&I for operating expenses, gas was purchased for inventory at special pricing, and the Ship Store apparel came in earlier than previous years (does not have to be paid until June).
P&L – Income $6k under Budget and $9.5k under January 2012. This is due primarily to the decrease in Marine Max sales i.e. zero commissions to BMA. Expenses were $1k over budget and $27k over last year. Primary reasons for increased expenses were: 3 payrolls in January ($12k over budget) and Insurance $3.5k over budget. Capital improvement was $15k under budget. Net Loss for the month was $59k ($51.5k w/o depreciation). A loss of $52k was the budgeted amount.
3. General Manager Report
· Cliff informed the Service Dept is finishing two big jobs and two more will be going in the shop. He further stated the crew has been busy with outside work and snowplowing.
· Jeff from St. Croix Marina, Joe from Windmill, Rick from Sunnyside and Cliff met recently and discussed jointly purchasing Dredge equipment. The group are starting to research pricing and plan to look at a dredge in New Richmond, Wisconsin. More details will be given as available.
· Brad inquired if Cliff felt the current crew had the expertise and talent to be performing the work on the dock refurbishing. Cliff stated the crew are doing a great job, that they are very conscientious, and he has complete confidence in the quality of the work performed by staff.
· BMA closed on the purchase of two slips from private parties – B13 and C21. Mullen’s office confirmed booking the slips as an investment. Morgan stated the rental income will provide a 5-6% return which is substantially higher than any CD available. The consensus of the Board was to hold the investment (slips) until market rises and then sell slips for cash flow.
4. Committee Updates
Val not present to update on June 1 party.
5. Gas Discount Policy
Marcus informed he had been contacted by a member regarding the policy of only offering discounts during the week. The member further stated he felt BMA was losing fuel sales due to the policy. Following discussion of this feedback, a motion was made by Brad to reinstate 10% discount for Members seven days/week beginning in the 2013 boating season. Motion seconded by Michelle. Unanimous approval.
Brad also made a recommendation to have credit cards on file at the Gas Dock so members can charge to their account without presenting a card at each purchase. Kathy informed she has a secure method to keep credit card numbers on file through Heartland Connect. She will inform Members of the new processing method.
Cliff informed he has switched from 91 octane fuel to 89. He stated he researched all motor manufacturers and was informed there is no difference in performance from 91 to 89. The fuel will remain ethanol-free and Valvtect will be added as in the past. The change allows BMA to be competitive with area marinas. Cliff noted Windmill currently sells 87 octane.
6. Gas Dock Update
Marcus informed he and Cliff met with Freeway Electric regarding the electrical upgrade/replacement on the docks. Marcus stated Freeway is a good partner with BMA for this project. As an example, Terry of Freeway Electric made the suggestion to have BMA staff pull wires (not hook anything up) saving one-third of the labor cost of the electrical. Cliff distributed copies of the proposal and design by Freeway Electric. Sandor inquired if any other companies had been contacted for bids. Both Collins Electric and Medina Electric were contacted. Collins bid came back at $1.5 million and Medina never responded to BMA with an estimate.
More discussion on the dock revitalization project was diverted to the end of the Board Meeting.
7. Board of Directors Membership
Marcus informed Chris Ridgway has agreed to re-up his position on the Board of Directors for another three years. Steve has not announced his intent at this time. Nominations for the vacancy of Marcus’s seat and possibly Steve’s will need to be sent to the Members next month. Discussion regarding continuity on the Board ensued. The consensus of the Board was the incoming Commodore should have two years left on his term i.e. after position of Commodore has been served, he/she would remain on the Board for at least one more year. Motion by Morgan to change the By-Laws requiring the Commodore-elect have one year remaining in his/her term after the completion of Commodore office to ensure continuity. Steve seconded. Unanimous approval. Kathy will include this By-Law change along with the previous motion on limiting slip ownership to seven slips per entity when sending out the Annual Meeting packet to the Members.
8. Cost Review of DRP
Question was presented of what the estimated total labor costs would be using BMA staff. Cliff stated he padded for extra labor costs i.e. instead of laying off two staff during the winter, he has them working full-time.
Brad asked if inflationary costs over the four years of the project were billed into Freeway Electric’s estimate. Marcus and Cliff responded it wasn’t. Brad suggested each year should have a 3% or 4% increase rather than using today’s costs.
Marcus stated discussion on how to fund the project should start by breaking out the costs to owners, BMA, and covered vs. non-covered. It is estimated the project will cost $2.4 million from start to finish allowing for the inflationary factors. Recommendation was to keep assessment by per linear slip foot vs. square foot as it is an easier concept to grasp since billing in the past has always been by linear slip foot. Cliff read the article of the By-Laws which specifies costs are to be divided by linear slip ft.
Brad’s recommendation was to prepare a $1.8 million budget with $300k in reserves plus the Line of Credit. Sandor recommended not focusing on the total assessment i.e. the large number as members will feel defeated to achieve. Rather it should be divided by an annual cost. Marcus provided there should be options given to members – pay in one lump sum with cash discount or pay over 4 years and have the bank finance. In his discussion with First State Bank of Bayport, they are willing to set up individual financing for members providing a payment plan to the Marina.
A simple calculation made for the project:
$2.4 mil minus $500k cash out of operating fund over 5 years equals $1.9 mil.
$1.9 mil divided by 119 owned slips equals $16,000 per slip
Steve’s recommendation would be to split the cost between a special assessment and an increase in annual assessments. He presented a spreadsheet outlining how assessments would generate the necessary revenue over a 4-5 year period including the asphalt repaving.
Kathy was requested to provide Marcus and Steve with the total lineal feet owned to derive a price per foot for calculating individual assessments.
Marcus informed his next communication to Members will be a soft communication giving rough numbers. Within 60 days of the Annual Meeting, he will give real numbers to Members. Brad recommended Marcus create a project timeline regarding communication to Members.
Marcus commended the input of the Board Members in the project discussion. Morgan and Brad also thanked Steve for his work on the spreadsheet which was instrumental in displaying various funding options.
9. New Business
Sandor made a request to change the name of Bayport Marina to “Bayport Marina and Yacht Club”. He cited the reasons for the change:
a) Would enhance the image of Bayport Marina
b) Many or most members would welcome such a change
c) The Bayport Marina and Yacht Club name would recruit more renters to the Marina
d) If more renters are obtained through the change of name, this would result in more revenue for the Marina.
Marcus thanked Sandor for his suggestion. He will check with the BMA attorney about changing name. The recommendation was tabled until the next meeting when further conversation can be made. Kathy was instructed to include the name change request on the March Agenda.
Sandor presented a hand carved dolphin he acquired traveling in the Pitcairn Islands as a gift to Bayport Marina. Marcus thanked Sandor for the gift which will be displayed in the Clubhouse.
Next month’s meeting will be held on the regular schedule – Wednesday, March 20. Marcus stated he should have final numbers to present at the next meeting.
Motion by Steve to adjourn the meeting, seconded by Jim. Unanimous approval. Meeting adjourned at 9:24pm.
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