DSROA Board Meeting Minutes

Jodi Ackers,
Treasurer,
DSROA, Board of Directors

This is a formal request for you to present to the Board of Directors for review in the December 2011 Meeting.

My request is that the Board consider holding the line on increasing the dues for the 2012 budget year. FYI, I have already paid my dues at the 2012 rate and my request isn't based on my inability to pay the requested amount. My request is based upon creating a more efficient organization. I know that the approval to raise the budget wasn't approved by all of the Board Members. And this is not a condemnation to the Board members who did approve the increase in dues. I just feel that there was no consideration given to alternative forms of revenue generation. And to be frank I know that it will appear that this proposal isn't "Member Friendly!" It is, in my humble opinion, member friendly to the majority of members.

I have a somewhat unique understanding of how DSR operates and what is required daily and annually. I have lived out here full-time for almost 10 years. I have been the onsite manager as well as an almost full-time, unpaid, employee at times. I also served 18 months on the Board of Directors.

While my ideas will resonate with some there will be others who will balk at some of the suggestions. So be it.

I have looked carefully at the numbers provided in the recent newsletter and also requested some generic information you provided. Therefore I base most of my arguments around these numbers. I am also taking a page out of the arguments going on in Washington DC right now on how to control the deficit. We need to find new revenue sources and find places to cut expenses. If you notice I did not refer to the process as and/or. The course seems simple. The Board seeminly cut the budget to the bare bones and there doesn't seem to be any additional places to cut. If that isn't true then the Board needs to re-sharpen their pencils and go to work. I remind you and the other Board Members that the Association Dues are a Tax! So you can also consider this a recommendation for Tax Reform. But it isn't a recommendation for a wholesale sell off of Ranch assets nor a recommendation that we open our system to outsiders. That said I will start. I need to warn you ahead of time that it isn't just hard numbers. There are also questions as to why and narrative solutions to the problems.

Cabins: I have never used the cabins. However I like knowing they are available and therefore don't mind paying my share to keep them operational. I am a little confused why we (The Association) have turned the cabins into a social program in which the minority is enjoying the benefits provided by the majority. (Numbers provided below.) I have taken the time to calculate what the standby expense for the cabins. The 2012 Budget shows $7,500.00 budgeted for propane. I have calculated that our standby propane expense is $2,500.00. I base this on the following facts. (And remember these are numbers that are rounded off and somewhat under projected.) Each cabin has a propane fridge. Most of them now have a newer and more efficient fridge. However the propane fridge requires between 5 and 7 gallons of propane per month to operate given the ambient temperature. (I used 7 gallons as they are operational during the summer months.) In addition each cabin has a minimum of 4 pilot lights. (Three on the stoves and one in the water heater.) Each consuming 1 gallon of propane per month. And because we use regular 40 gallon propane water heaters they are cycling to keep that water warm. That process consumes at least an additional 1 gallon of propane per month. I will not break it down further even though a couple of cabins have two water heaters. So the standby propane expense is about $30.00 per cabin per month. (12 gallons of propane at $2.50 per gallon = $30.00) With 10 cabins that means the monthly standby rate to be $300.00 (10x$30.00=$300.00) With all the cabins open an average of 6 months out of the year that is $1,800.00. (6x$300.00=$1,800.00) I have further calculated that the HQ uses approximately $700.00 worth of propane for the Ranch House, Store, and Comfort Station. The Ranch house no longer has a propane fridge so they use propane for heating water and cooking. Paul and Nancy do not use the propane heaters. The store has a propane fridge and the comfort station has a water heater. So the total expense for cabin standby and HQ use is approximately $2,500.00.

$7,500.00 - $2,500.00 = $5,000.00

That $5,000.00 is the amount (in dollars) of propane consumed by those who stay in the cabins. I can further break down the numbers and prove the consumption based upon gallons of propane used in heating water and using stoves and heaters. But that isn't really germain to the argument here.

The budget also shows that there has been $9,000.00 budgeted for cabin maintenance. And the reservation fee is $2,500.00. The reservation fee is suppose to go to cabin maintenance. So we have a $6,500.00 ($9,000.00 - $2,500.00 = $6,500.00) defecit that is an expense I feel should be once again be carried by those who use the cabins.

The total amount is $11,500.00 when you add $5,000.00 and $6,500.00. My question to the Board is why is the non-cabin using members paying for these expenses? And doesn't that $11,500.00 constitute the bulk of the proposed increase? $43.00 x 276 = $11,868.00. And I have to question why we are only calculating 276 Lots paying dues. If you take the 300 member lots and take away 7 for the Board Members it comes to 293. If you further remove the Lots owned by DSROA we are down to 290. I have been on the Board and I understand that we don't get payment from everyone and this is a discussion for another time.

I believe it is time for the Board to consider two less than radical proposals. The first being that those members who consume things like propane, pumped water, toilet paper, paper towels, and create wear and tear pay their fair share of those expenses. The second being that it is time for the Board re-evaluate the fee procedures so the bulk of the membership isn't saddled with a social program that supports a minority. You may go ahead and dispute my numbers I don't really care. It isn't the numbers that are important. It is the concept of reform that is the basis for this request.

Numbers you provided showed that we had 168 reservation weeks make last year. I am not sure of how much was collected in reservation fees but simple math tells me that we should have collected $4,200.00. I realize that there might have been multiple weeks reserved under on reservation but my question is why? If we have someone reserve a cabin for multiple weeks it is my opinion that the reservation fee should be per week, or at worst two week block, and not just one reservation. Even if they don't use the cabin they have tied it up so it can't be used and the reservation fee isn't covering the standby fee. If we charged on a per week and/or per reservation we would further off set the cabin maintenance fee that is born by the membership at large. That is tax reform that needs to be seriously considered. In addition to that change you should also consider charging $1.00 per day for each day the cabin is reserved for whether it is occupied or not. (Further explanation on that is also spelled out below.)

The real point I am going to make here is how do we off set the expense of a 10% increase in dues without impacting the DSR experience. I propose the following based upon the cabin reservations and the reservation weeks. I took the numbers provided and then calculated that 85 Lot members utilized the cabins this last year. As there are over 200 members we have 40% of the membership taking advantage of the 60% who don't. It is my feeling that we should reform this and have those who play, will also pay. More simple math.

As we have $11,500.00 worth of direct cabin expense through 168 weeks of reservations it breaks down to a little over $68.00 per week in additional expense. I will use $70.00 to keep it simple. Or roughly $10.00 per day. While it doesn't seem like much to pay as you can see it adds up and could be used to help offset the cost of operating the cabins. Therefore offsetting the need for a tax increase. We can look at part of this money coming from collecting a per week reservation fee and/or we can charge a daily fee or a per person per day fee. Regardless we need to come up with at least a $1.00 per day per cabin to cover the expenses. But we also know while there is a reservation there might not be an occupant. If we had full occupancy every day then each cabin occupant pay, in addition to their weekly reservation fee, $7.00 for the week. But now we get into how to fairly distribute the expense. We have single people coming to the ranch and spending the week. They consume little and it just doesn't seem fair that they should pay the same amount that someone bringing groups of 20 would pay. A simple solution would be to have the occupants pay a per person per day fee. It would require a degree of honesty from the members but if we charged $1.00 per person per day. The single person would at the end of the week pay a total of $32.00. ($25.00 + $7.00 = $32.00) The group of 20 would pay $25.00 for each cabin or $50.00 for Cabin 1 or the Garden Cabin which will sleep that many. And $20.00 per day for their party. So it would total $190.00 for a weeks stay. ($50.00 + $140.00 = $190.00) It is my opinion that implementing a per person per day fee to cover the wear and tear as well as paying for the things they consume is one way to cover the expense of operating the cabins. Using this formula we should be able to offset the expense we incur that is above the standby operating expense. It might even provide us with enough money to start making needed improvements.

I haven't included in this discussion two other things that I will simply touch on here as expenses directly related to the cabins. The first is fish. When I first came to DSR we were charging for fish. It was done on an honor basis and I know we weren't collecting nearly as much as it was costing us. But we should consider charging a fee for fishing. If you wet a hook it will cost you $1.00 per day per line you do. Period, end of discussion. The other is electricity provided at the lower cabins. While I do not know if the practice is still in place we used to provide power to the guests at the lower cabins for 4 hours per night, three nights per week. Sometimes it is just part of pumping water. Other times it was just to provide electricity. The generator uses three gallons of red fuel per hour. It always has a load on it because of the step up and step down transformers if it is pumping or not. Three gallons of fuel per hour times 4 hours per night equals 12 gallons of fuel per night. Times three nights per week and you get a total use of around 36 gallons of fuel per week to provide electricity for those 12 hours. At $3.00+ per gallon that equates to about $100.00 per week in fuel expense. That doesn't take into account wear, tear, and routine maintenance. If you only calculate that over a 22 week season. (It could run year round if cabins 7 and/or 8 were occupied.) That is $2,200.00 fuel expense that is related to cabin usage. It wouldn't really be fair to try to come up with an amount for electricity consumed without putting meters on the cabins and charging for kilowatt hours used. And because we have to pump water anyway the best time to pump is in the evenings when there are guests in the cabins. But it is an expense that should be considered when looking to partially solarize cabins. There should be no generator running to simply provide electricty to the cabins. Unless the occupants want to pay for that electricity. $10.00 per hour seems fair. If we are crunching numbers remember that the devil is in the details.