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2011 Chris-Craft Antique Boat Club Financial Documentation

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Bill Basler
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2011 Chris-Craft Antique Boat Club Financial Documentation

Post by Bill Basler » Sat Dec 03, 2011 11:06 pm

All members:

If you have been attentive on Boat Buzz over the last several months, you know that we have been going through some tough times. The positive discussion turned into negative banter by just a few of our members. I cannot express how this has felt to be on the receiving end of these comments. I do think that those who have been most negative have been operating on assumptions and pure speculation. I do consider the comments made by some as 100% slanderous and/or libelous.

This new section in Boat Buzz is only visible to you, our members. The public cannot see this section, let alone what is posted within. I will be posting some financial documentation in the spirit of disclosure.

Our financial slide started with Brass Bells being late. And since our quarterly renewal system is tied to Brass Bell delivery, our income hit the skids as well. There has been a bit of talk about this approach with some questioning why we do it this way. Most importantly this method makes us accountable. If we are not delivering Brass Bells, our solution cannot be to send out a renewal notice to better our cash flow. While it is somewhat painful to handle our cash flow in this way, it does make us concentrate on the real solution, which is delivering Brass Bells in a timely manner.

Anyone has been in business will understand the difference between cash flow (or lack there of) and not having any money. Our current situation is a cash flow situation, plain and simple. Without Brass Bells mailed, it does not flow in our favor. As Brass Bells are mailed the cash flows once again. This will be the absolute focus of my efforts over the next 6 months.

Now, on to the disclosure portion of this message. I will start this out with a few general comments:

1. I recently moved my office and club headquarters to my home. The new space will work out just fine and I have space to operate this club without missing a beat. But, given this recent move, I have the typical post-move chaos. Boxes everywhere and, at times things are a bit hard to find.

2. It is the holiday season. I am very busy at a new job with many pressing deadline and travel commitments between now and the end of the year. I also have a wife, six kids, and it is the holidays. I will be as responsive as I can, but I need to take care of business on several fronts.

I will show a few financial exhibits here to help get this club more understood by all of you. First, a YTD P&L.

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This P&L best illustrates our current situation. While some have been inclined to use the "3,500 members x $35.00" income approach, it is just not applicable at this moment. That method is predicated on us having a full year of renewals in hand. Again, we do not send renewals until a Brass Bell for a specific quarter mails. We simply do not have a year's worth of income reported at this time.

I think we have to put ourselves in the position of any member who might receive a renewal mailing prior to receiving a Brass Bell. The first question I would be fielding, by phone, email, or private message, would be, "Where's my Brass Bell?"

On this P&L you will see income from Sponsorships, Display ads, and Trading Dock ads. Donations are tracked in a separate income category. The reason for this is that these donations have been matching grant donations in the case of two grants that we received from the Collectors Foundation. These donations are earmarked specifically for archive development.

See the donations detail here. Donations are entered as individual entries, and DOUBLE-ENTERED in our SQL-based payments database.

Image

Also, as income, you will see Membership Dues. Please see the following Income details:

First a Total Income Transactions roster. Please bear with me on this. While I can export these details directly our of Quickbooks as PDFs, it is difficult for me to edit them...for example, to blur out the names of those who are listed. For privacy, I have blurred out the names. This particular report was a 27 page PDF. I did not want to blur all of the names of 27 pages of data, then saving 27 jpgs. If any of you feel the need to see all 27 pages of transactions, I will do this.

Image

It should also be noted that, as checks come into headquarters, they are entered into Quickbooks as individual line item entries. In other words, we do not take 47 checks received in one day, and enter them into Quickbooks noted as "47 membership renewals." Each of these checks is a single line item entry, properly noted with the person's name, and sometimes cross-referenced to a wife's name or Trust custodian's name.

As well, each of these checks are DOUBLE-ENTERED into our SQL-based membership management system. When we enter these checks into our membership system we get a check and balance system that minimizes errors, and makes errors easy to chase down when they do occur. As well, this system is where we actually advance memberships forward one year, or more. This system is EXTREMELY important as it is where we manage all Brass Bell mailing lists, email blasts, etc.

Below you will find a couple of screen shots of this system.

Image

Image

Moving back to the P&L, I thought it would be helpful to see a few details of the major categories.

First, Income Transactions (above).

Next Cost of Goods sold (COGS) below. Generally speaking these are items that are directly related to making a product....your benefits, ie: our web presence, Brass Bells and so on.

Design & Programming-Web. This expense is for our next version of Boat Buzz which is darn close to being live when cash flow improves. The majority of this cost was for an outside php developer. In fact, so outside that this developer is from China. He was hired through a technology hiring site called oDesk.com. We can hire contractors for far less using this method. In this particular case, this developer logged 171.33 hours on the project. oDesks system tracks mouse movements, idle time, and screen captures the developers progress every 30 seconds. It all gets saved to a job diary. It is the ultimate in accountability.

The new Boat Buzz will go live when cash flow permits us to finish out the project. You can see work thus far at www.chris-craft.org/dev/discussion

Next, Design & Production-Brass Bell. Thus far the only expense logged is for gas reimbursement for a Lake Tahoe photo shoot.

Image

Next, is Renewal & Membership mailings. From 2006 through 2010, I printed these inside my design studio on our high speed color copier. I charged the club only consumables on this. No labor. Typically there are about 1,000+ units on a renewal mailing. With 1000 outgoing #10 window envelopes, 1000 #9 return envelopes printed with return address, and 1000 letters, this is 3000 total pieces printed. In late 2010 I made the decision to farm the printing of these mailings out. They were getting larger with each quarter. By the time the pieces were printed, stuffed, mailed, stamped, and delivered to the post office, a renewal mailing was taking three days. The only solution was to farm this out and deal with it through automation. again, we have had only two renewal mailings this year. We will send another within a week. This number will grow through the end of the year.

Next, Printing and Reproduction. This is Brass Bell printing for the most part. So far, for 2011, there have been two issues printed. There will soon be a third. Our Chris-Craft Antique Boat Club year ends after the Fall issue. I do not know whether we will get Fall included in 2011. I am going to try my best to get it done. This detail is a little more complicated to look at. If any of you need it, I am happy to provide it. But there is carry over from year to year, and it is a it harder to understand at a glance.

Now for the expense side. In addition to the COGS sold (above), we have ongoing expenses that are the cost of doing business.

Fuel and mileage. This is for two trips in my Suburban, traveling to a printer 75 miles away, to press check and pick up Brass Bell overs.

Boat Shows > Sponsorships & Donations. Below you will find a detail. There are two expenses for the Antique & Classic Boat Society, Inc. International show that were paid last week. These have nt been entered in Quickbooks yet. One was for our booth space, the other for sponsorship of two trophies. In the detail, you will see a Sunnyland sponsorship and a payment to Thomas Holmes for our sponsorship of a marque club meeting. This was for our portion of the food tab.

It should be noted that given tighter cash flow this year, travel and show sponsorships were very low. We have had other years where this expense was much higher. One year, for example, we were a major sponsor of the Sunnyland show.

Image

Under the Occupancy Expense category, you will see Phone, and Computer/Internet
This is fairly self explanatory, but I will offer this overview. Since 2006, our Chris-Craft Antique Boat Club phone was handled by a conventional wired landline, rolling over to a cell phone. We received the typical Qwest monthly phone bill, and the club's share of an AT&T cell bill. I rack up many hours on the phone. There is no way around it really, if we want to be a valued research resource.

The Computer/Inernet piece of this was just for internet connection. We had a primary connection (Keyon) and secondary connection (Mediacom) through two different ISPs. Our firewall had auto-failover in case one connection went down. Prior to June you will see separate charges for phone and internet. There is one larger payment to Keyon that was for three months service....a clean up before we discontinued with them. After June you will see just one larger invoice from Lightedge Solutions. This is the company that provides our T1 internet connection. As well, they provide our newer Voice Over IP phone service. There was a bit of money converting all of this over, but we are reaping the savings monthly. There are a couple of higher payments, due to two months being paid under one payment. Anything that is labeled Lightedge is phone and internet-related. In order to understand the savings you must look at the phone category and Computer/Internet category.

Image

The Moving expense is self-explanatory. Our collection of physical assets fill a good size room. Included are all of the historic items, and also back issues of all Brass Bells, among other things.

Commissions paid are monies paid directly to our two advertising sales person, Andrea Durren and David Dehorn. Their efforts have been exemplary. I am looking forward to getting Brass Bells back on track so they can be turned loose once again.

And finally, Other Income. Listed here are the nominal proceeds that we receive from a Bank of America Visa Card affinity program. The payment from Mark Setterholm is for reimbursement for hotel for a Bob Speltz Antique & Classic Boat Society, Inc. Winter workshop tour that I spoke at. Mark lead the charge in getting me up there, and promised the hotel would be picked up by his company. Upon checkout, they had charged the room to our Chris-Craft Antique Boat Club Mastercard. Mark reimbursed us for the room as promised.

Finally, I feel I should make a comment on the activities that happen at year end. First, there are many large and micro transactions that occur as a result of taking credit card and Paypal payment options. These transactions are not for the weak of heart. I simply do not have the time to log all of these payments every day of the year. There are thousands. Keep in mind, when a check comes in via the mail, it has to be manually entered into Quickbooks and our membership system. But when a new member or renewal payment comes is via credit card, it starts a series of processes. 1. The payment must clear. 2. If it does, it is automatically entered into our membership payment system and the membership is rolled forward. Then every so often, as the credit card charges are processed, they are dumped into the Chris-Craft Antique Boat Club's checking account. This would be easy if these were all $35.00 transactions. But they are not. They are all over the map, depending on what credit card the charge was processed on, etc. All cards have their own transaction fee, and it costs us additional monthly fees just to have a credit card gateway. Same is true for Paypal, although I manually transfer Paypal proceeds across. We simply do not net $35.00 of a membership. It is actually much less when you take into consideration all of the processing fees. See the screen capture from our club checking account below.

Image

This all has to be cleaned up at year end. As you can see from the above screen capture, these payments will get processed through in lumps. We have to check through every transaction and figure out whether it is a membership, a store charge, or a tradingdock ad. Sometimes the "lump" payment contains several transactions of all types. Our accountants assist in this process.

I am hoping that this windy rant gives you all a clearer understanding of where we are at as a club. I feel like I could go on, but I am tired, and I have other things I have to get to.

I will follow up when I can find time with prior year tax returns. These are in a box somewhere where I cannot find them now.

From there I will try to give you all a bit of history about where these grants come from and ow we have been successful in bring these to our club.

With warmest regards,

Bill
Last edited by Bill Basler on Mon Dec 05, 2011 12:47 am, edited 4 times in total.
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Hopatcong Buddy
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Post by Hopatcong Buddy » Sun Dec 04, 2011 7:55 am

Thank you Bill.
This message from Bill should give all an sample of what Bill does for this club on a daily basis. I have spoken with Bill over the years and this is really just a sample. There is a heck of a lot more involved than "just" maintaining Boat Buzz and the Brass Bell (the Bell alone is a 250 to 300 hr job once all content is in) For all of this Bill gets ZERO, plus it costs him real money as well. We as a club are fortunate for many reasons,one of which is Bill has a real passion for what he does for CCABC. You can hear it in voice when he talks about CCABC.If I can see any good out of all this, it is now everyone has a better idea of how much effort goes into CABC. It is to bad a very few had to get so nasty and disrespectful.

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Post by mfine » Sun Dec 04, 2011 8:16 am

Thank you for the disclosures and explanations.

The summary statements should be sufficient for club members in general. I would rather have a few "audit committee" members go through the 27 pages of detail rather than have you post all of it here, blurred or not. Form a board that can answer to the members and that should let you focus on the Bell and Buzz.

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Don Vogt
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Post by Don Vogt » Sun Dec 04, 2011 9:11 am

thanks,Bill, I question how realistic it is to expect one person to do all this and do the magazine and all the other things that are required to run the club. Surely you could benefit from help and a strong board of directors could be tasked with figuring out where that help could come from, such as hiring a bookkeeper, a dues processing service, etc.

I still am of the view that if the club is more than a magazine (which i believe it is), then the dues should be billed annually independent of magazine production. The current set up is either going to kill you or something. when a person joins a club, they get whatever benefits are produced by the club during the year. If a certain benefit doesnt happen, it doesnt happen. Tying cash flow to magazine production is not a formula for success. Again, putting collective minds together to figure this out surely would be beneficial for you, i would think, as well as the club as a whole.
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Bill Basler
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Post by Bill Basler » Sun Dec 04, 2011 9:21 am

Hopatcong Buddy, yes there is more. This is just the tip of the iceberg. Another example that I will show this morning, now that I have gotten a bit of sleep is the type of effort that goes into researching grants, building bridges to other organizations which offer such grants and then following through with the deliverables, so that all organizations have what they need.

Below you will find a link to a document that illustrates the efforts involved here.

https://baslerdesign.com:8001/_1EPSGWqIu38e5R

You'll note that I requested a five-year, $75,000 commitment from the Collectors Foundation. We were not awarded that amount as the Collectors Foundation steers clear of multi-year commitments. But I am grateful this effort yielded results which are working today.
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Bill Basler
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Post by Bill Basler » Sun Dec 04, 2011 9:52 am

I also mentioned a Bob Speltz Antique & Classic Boat Society, Inc. presentation above. I am posting a link to this presentation here, as it has a bit of information about our history, our growth, etc. There is also a specific example cited in this presentation about a question posed by a non member as she tried to locate her father's old boat. This question is typical of the many phone calls we get every day, including Saturdays and Sundays.

On average we get 50ish phone calls per day. Many of these come from members, "I can't remember my username or password." Most phone calls come from total strangers, many of whom become members at some point.

https://baslerdesign.com:8001/_p6PPDaowO3deMR
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Post by Matt Smith » Sun Dec 04, 2011 10:31 am

Dear God! I feel dirty after reading this.. It's like gynecology.. I want pin ups.. Bill, I can tell this was a painful situation for you.. You should be thanked by all 3000 members for staying the course in the wake of a very small.. fractional ignorant few that use this public forum to question stuff. It's time for a change for sure. Lets all look forward and fix this for all of us. When can I expect my renewal for 75 a year. I want to be the first to sign up!
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Post by farupp » Sun Dec 04, 2011 1:23 pm

Bill, thank you for taking the time to explain what is involved in running CCBC. I have also run a member organization (approx. 5000 members) and had five employees and we still didn't get everything done. I don't know how you do it and I thank you for your committment and dedication.

One question: is a registered user (when I signed on we had 4495) the same as a dues paying CCABC member?

Thank you again for everything you do for CCABC.

Frank
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Bill Basler
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Post by Bill Basler » Sun Dec 04, 2011 2:15 pm

Frank, thank you. A registered member here on Boat Buzz refers to paying members and some complimentary situations where we offer just Boat Buzz access. One such example is that we offer Boat Buzz access to a group of students at McPherson College who are part of a vintage motor vehicle restoration program.

Aside from that, there are several hundred persons who came into Boat Buzz in the first few months that we allowed more open access. Many of these persons are duplicate entries—as we later introduced our membership management system we encouraged these members to reenlist via the membership renewal form.

I need to find time to do a check and delete these users from the database. This will bring the "registered user" number more inline with membership Current membership is 3,528.

Bill
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Post by James » Sun Dec 04, 2011 5:32 pm

donj wrote:thanks,Bill, I question how realistic it is to expect one person to do all this and do the magazine and all the other things that are required to run the club. Surely you could benefit from help and a strong board of directors could be tasked with figuring out where that help could come from, such as hiring a bookkeeper, a dues processing service, etc. I still am of the view that if the club is more than a magazine (which i believe it is), then the dues should be billed annually independent of magazine production. The current set up is either going to kill you or something. when a person joins a club, they get whatever benefits are produced by the club during the year. If a certain benefit doesnt happen, it doesnt happen. Tying cash flow to magazine production is not a formula for success. Again, putting collective minds together to figure this out surely would be beneficial for you, i would think, as well as the club as a whole.
+ 1

We owe Bill our support, especially now; to get this club back on track. I hope this discussion can continue in a civilized way on this forum.
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Post by Rugger8 » Sun Dec 04, 2011 6:18 pm

Well, I think we can all agree that Bill is being transparent about these issues, so hopefully, this will put to bed some of the unwarranted claims.

Bill - thanks for all that you do, we all now have a better idea of how much time and effort you put into the club.

Thanks again,

Jeff

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Post by steve bunda » Sun Dec 04, 2011 8:38 pm

A big Thankyou to Bill Basler for the sacrifice and dedication to the club and hobby. I think we all owe him and his family, more that words can say ,,Bill, what can we do as members to help? steve and laurie

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Post by maritimeclassics » Mon Dec 05, 2011 11:10 am

Thank you Bill for your hard work, commitment and open honesty. You do a great job and it has to be out of definite love of the club and please let me know how I can help. Now we are getting somewhere!
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Post by gbraker » Mon Dec 05, 2011 8:56 pm

I really think its great that people are telling Bill what a great person he is.

Only Steve Bunda actually offered to help.

I think what needs to happen is Terry, Don, Brian & Bill and also Bill Basler need to form an Ad Hock Committee to study how the club should be structured.

This needs to be treated as an emergency.

If you just let it go it will be the same next year as it is now.

Terry, Don & Brian didn't resign for no reason. They didn't like the way things were going.

Lets let them form a committee to get us on the right track.

As it is right now Bill has stated that he doesn't have time to deal with anything but the Bell. That's fine, let the past leaders figure put how the club should be structured going forward.

We have many assets, we have Dave, we have the past leaders, and we have Bill.

What about the rest of you, do you want to help?

As far as officers, you can use various templates.

The Power Squadrons select a bridge each year and ask the members to vote yeh, or neh.

Usually the leaders start as Treasurer, then Secretary, then Admin Officer and then executive officer, then Commander. By the time you are the commander you know how things are done. From there you can go to district, and then to National positions.

I think ACBS is done in a similar way.


Lets get going on this, Lets not lose the opportunity. The time is now, take advantage, Many hands make the job light. This is way to big a job to expect one man to handle.

There are many Web sites that allow meetings, both video& Televideo. You don't have to sit in front of one another. Meetings can be conducted from anywhere. there is no reason we can't get the ball rolling. Lets get the leaders together and get the ship on course again.

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Post by mfine » Mon Dec 05, 2011 10:14 pm

We don't know why Terry, Brian and Don resigned yet, and in the case of Brian and Don, why it was done secretly and no announcement was made for months. I think we need to know more about what happened and why before we ask any of those individuals to do more for us than they already have. Unless they volunteer to come back, I think it is more appropriate to select a board of new leaders to pick up the ball from here.

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Post by gbraker » Mon Dec 05, 2011 10:28 pm

Well Matt, perhaps you are right. except that the previous leaders know more about the inner workings than others might know.

From what I know, they were unhappy with the lack of sharing and transparency.

I think the former leaders would get us up and running much faster than anyone else.

I think they are so well respected that no one could say they weren't acting in the clubs best interest.

They are above reproach in my opinion.

You could add in others like yourself or Frank, or Matt or anyone else that was well enough respected.

It just needs to be done NOW!!

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Post by Brian Robinson » Mon Dec 05, 2011 11:10 pm

I find this whole discussion completely ridiculous.

There has been no secrets, that is stupid. Terry wrote that letter within a week of when this transition was planned, it was meant for the Brass Bell, but that was late, so it got delayed. Period.

We each have our reasons for hanging up our hats, and I don't feel like airing our dirty laundry on Boat Buzz is at all appropriate. Boat Buzz is to talk about BOATS! Bottom line is that Terry, Don, and I volunteered our time on the Board for five years, and that was plenty of time. I help run two big boat shows, consult on several boat projects, and have a business to run - not to mention a wife! Terry hung on another six weeks to 'ease' the transition, he is one of the busiest guys I know - he runs the biggest classic boat show in the world (Tavares), helps organize the second biggest classic boat show (Tahoe), still works full time, has three kids, and a bunch of grandkids that demand his attention. Oh, and a boat under restoration in his garage. Don has gone to the dark side (i.e. Rivas) and has a more travel/hour demanding day job than about any I know of . There are other reasons, but it does not matter. I realize may not look transitional to those that did not know until now. My friends knew, anyone that asked me about the club knew. There were no secrets.

All this is, is a transitional period for the Club. As Matt Smith said, everything will be okay. Give Bill a break! He will appoint new officers or whatever he wants to do. Terry, Don, and I will be around to help. Leave the poor guy alone for a few weeks and give him time to think about the future. All of this banter will just burn him out, it sure as hell would me. Spring and Summer Brass Bell's will be in your mailbox soon, hopefully that will calm everyone down.

Don't get me wrong, any help is appreciated, I am sure. Some of you need to chill out and focus on something else. Pet your dog, talk to your wife, put a fresh coat of varnish on your boat...

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Post by DLKster » Tue Dec 06, 2011 10:49 am

Brian Robinson wrote:I find this whole discussion completely ridiculous. * * * Give Bill a break! He will appoint new officers or whatever he wants to do. (emphasis added) Terry, Don, and I will be around to help. Leave the poor guy alone for a few weeks and give him time to think about the future. * * * Some of you need to chill out and focus on something else. Pet your dog, talk to your wife, put a fresh coat of varnish on your boat...
In other words, "just pretend everything is okay."

So far, neither the articles of incorporation nor the IRS Form 990s (tax returns) have been posted, and as I understand it, the Club actually has no bylaws. We have no clue as to how Board members are chosen. The excerpts of "financial data" that have been posted are incomplete and essentially meaningless in the form presented. Moreover all this data is unaudited by an internal audit committee, much less an independent person or firm according to generally accepted accounting procedures. What has been posted contains insufficient information from which to draw any conclusions other than that Bill maintains some kind of accounting records. In a way, I find it even more disturbing that "sample data" is presented in this fashion in an effort to assuage the legitimate concerns of members that have taken the time to express themselves on the way their club is being operated, assuming it is "their club" in the first place. The word "disingenuous" comes to mind.

The IRS has strict rules against self-dealing for tax-exempt organizations. Among other things, no part of the organization's net earnings may inure to the benefit of private shareholders or individuals. To obtain or maintain its exemption, every organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. See, e.g., IRS Publication 557: http://www.irs.gov/publications/p557/ch03.html

Based on the data that has been presented so far, no one -- not Brian, not Matt, not anyone -- can say with certainty whether or not the Club is in compliance with these applicable rules, what money has been collected or where the money went. I am not accusing anyone of anything. I am simply pointing out the facts. What has been posted is essentially meaningless in terms of financial disclosure.

Each member will have to decide whether or not they want to vote with their feet or renew their membership when the time comes. Based on what I have seen so far, I am not comfortable to make that decision at this point in time. I reluctantly renewed my membership last year. I have one issue of the Brass Buzz to show for it. I find that troubling to say the least.

Yes, Bill deserves a lot of credit for the time and effort he has put in to the Club. It is all very much appreciated. Thank-you, Bill for all you have done.

But perhaps there is a reason that the entire burden of running the Club and publishing the magazine now falls entirely on him. I am wondering what it is. A couple of members have suggested that the entire Board of Directors didn't just resign en masse for no reason. Brian assures us that there was no reason. Then in the next sentence, he says "I don't feel like airing our dirty laundry on Boat Buzz is at all appropriate." I am wondering what dirty laundry is that and whether or not it is connected to the previous question.

These are questions each member should consider, but most importantly, these are questions Bill needs to answer for himself. So far, the general membership has no answers, only more questions for those who know how to read a financial report or have a sense of what is the meaning of the term "fiduciary duty."

I agree with Brian -- Bill should definitely be thinking about the future and perhaps also "the pasture." Of course, there is another option!

"Just pretend everything is okay."
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Post by DLKster » Tue Dec 06, 2011 4:58 pm

"I find this whole discussion completely ridiculous. * * *
As Matt Smith said, everything will be okay. Give Bill a break!
He will appoint new officers
or whatever he wants to do."
Brian Robinson

Further to my previous post, I am sure that as a former director of the Club, Brian Robinson is familiar with Florida Statutes, Title XXXVI, Chapter 617 (BUSINESS ORGANIZATIONS -- CORPORATIONS NOT FOR PROFIT) and specifically, Section 617.0832 ["Director conflicts of interest"].

It's my understanding that Bill's firm provided services to the Club, so assuming that is even accurate and keeping in mind the strict prohibition against self-dealing and private inurement in applicable Internal Revenue Code and regulations with respect to tax-exempt organizations, someone might be curious to know whether and how the Board of Directors ever approved the transactions between the Chris Craft Anrique Boat Club, Inc. and Bassler Design, Inc. (or whatever it is called) in accordance with this provision of Florida law that applies regardless of what is in the Articles of Incorporation and the non-existant Bylaws of the Club.

The statue on non-profit Corporate Director conflicts of interests referred to above provides as follows:
http://www.leg.state.fl.us/STATUTES/ind ... .0832.html

617.0832 Director conflicts of interest.—

(1) No contract or other transaction between a corporation and one or more of its directors or any other corporation, firm, association, or entity in which one or more of its directors are directors or officers or are financially interested shall be either void or voidable because of such relationship or interest, because such director or directors are present at the meeting of the board of directors or a committee thereof which authorizes, approves, or ratifies such contract or transaction, or because his or her or their votes are counted for such purpose, if:

(a) The fact of such relationship or interest is disclosed or known to the board of directors or committee which authorizes, approves, or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the votes or consents of such interested directors;

(b) The fact of such relationship or interest is disclosed or known to the members entitled to vote on such contract or transaction, if any, and they authorize, approve, or ratify it by vote or written consent; or

(c) The contract or transaction is fair and reasonable as to the corporation at the time it is authorized by the board, a committee, or the members.

(2) For purposes of paragraph (1)(a) only, a conflict-of-interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on the board of directors, or on the committee, who have no relationship or interest in the transaction described in subsection (1), but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no relationship or interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director having a relationship or interest in the transaction does not affect the validity of any action taken under paragraph (1)(a) if the transaction is otherwise authorized, approved, or ratified as provided in subsection (1), but such presence or vote of such a director may be counted for purposes of determining whether the transaction is approved under other sections of this chapter.

(3) For purposes of paragraph (1)(b), a conflict-of-interest transaction is authorized, approved, or ratified if it receives the vote of a majority in interest of the members entitled to vote under this subsection. A director who has a relationship or interest in the transaction described in subsection (1) may not vote to determine whether to authorize, approve, or ratify a conflict-of-interest transaction under paragraph (1)(b). However, the vote of that director is counted in determining whether the transaction is approved under other sections of this chapter. A majority in interest of the members entitled to vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section. As used in this subsection, the term “majority in interest” refers to a majority of the voting shares or other voting units allotted to the members.


What if someone asks whether or not the rest of the Board of Directors (excluding the interested Director) ever took an affirmative majority vote to approve these transactions in accordance with Florida Statutes Section 617.0832? What if someone demands to know the date of the Board vote(s), or ask where are the minutes for that meeting (or those meetings) where those votes were taken? What if there were no such votes or consents? What if someone asks whether or not that might have some any serious legal implications for the Club or any individuals that may have had fiduciary duties under Florida law to see that proper procedures were followed and there was compliance with applicable laws? What if that's the reason all the Board members except for Bill resigned within a few weeks of each other? In other words, what if Brian Robinson is wrong?

But, shucks, fellows! That is all just a lot of theoretical mumbo-jumbo, isn't it? I'm with those who just say "let's just pretend everything is okay!" I can't wait to get my Brass Bell. I'm sure it will be awesome, and I'm sure it is in the mail or will be soon, just like I am sure there's a good and logical reason why 11/12ths of the way through the fiscal year and only one issue of the magazine printed and mailed, there is not enough money left in the Club treasury and there's a cash flow problem. Nobody should jump to any unwarranted conclusions about where the money went, right?

We don't need no stinkin' bylaws, and we don't need no stinkin' oversight by no independent board members chosen by the members or in accordance with some transparent procedure as provided in the articles of incorporation. Let's just double or even triple the dues and everything will be okay!

And I don't have the time to worry about all this legal stuff, either. After all this is just a hobby.
We are supposed to be having fun with our boats!
Dave Konick
Washington, VA
1951 16' Riviera
1954 22' Sea Skiff

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Post by Rugger8 » Tue Dec 06, 2011 6:49 pm

Dave,

Get a life. Do you work for the IRS? Is it your objective to prove how smart you are? What reason do you have for the venom? What is your personal agenda? What proof do you have that Bill or the club has done something illegal? Do you honestly think the club will be better if Bill leaves? Are you trying to make the club better by your posts or are you trying to tear it down? Do you think you could do a better job? If so, please start another club and see how many people want to join. Count me out of that new club, by the way.

Bill, IMHO, this has gone on too long and is seriously deteriorating the spirit of the club. For what it is worth, my 2 cents would be to make a decision on dues etc. and then just go with it. If Dave or others want to leave, see ya, go start your own club. This is the downside of a democracy. Bill, I hope you stay, but who would want to volunteer when you have people like Dave trying to judge you on everything you do. ESPECIALLY WITH NO PROOF OF WRONGDOING. LAST I CHECKED, YOU ARE STILL INNOCENT UNTIL PROVEN GUILTY IN THIS COUNTRY.

Getting your $35 of fun Dave out of trying to bust the club up?

Jeff

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Post by mfine » Tue Dec 06, 2011 6:54 pm

Dave,

You are 100% spot on with your observations. If we as members sit back and do nothing the club may cease to exist. The current situation is certainly not acceptable. That said, given the time of year and out of respect for Bill and his family, I think we as members can give this a few weeks before we get out the pitchforks or involve law enforcement. Lets let this cool down until after the holidays and then Bill can let us know the path forward in selecting a new independent board and putting proper oversight in place.

One thing I have not publicly commented on yet is that when I heard the rest of the board resigned and then this thread was posted, the first thing I looked for in the P&L was an expense line for directors insurance. There was none. I think it is absolutely critical that any new board members are covered and are therefore able to serve without risk to their personal finances. Yes it is an additional expense but a necessary one for any org of our size with a budget as big as ours.

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Post by mfine » Tue Dec 06, 2011 6:56 pm

Jeff,

I think you need to educate yourself before attacking others. Opinions like yours are what leads to clubs like this failing.

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Post by Rugger8 » Tue Dec 06, 2011 7:05 pm

Matt,

Please educate me on where the evidence is that Bill did something illegal? The posts above seem more in the interest of a witch hunt rather than an effort to make the club better. I am all for making the club better and protected from legal issues, but that certainly does not appear to be the spirit of the posts above.

Jeff

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Post by Don Vogt » Tue Dec 06, 2011 7:22 pm

I think we are each trying to help in our own way. I did not read anything that dave konick wrote to suggest in any way that bill is doing something dishonest. I believe he is just pointing out that there are statutes that direct how non profit organizations are to carry out their business. It is not clear, at least to me, whether these requirements are currently being met. If Bill is the only director, it does raise questions about an approval process, if in fact he is compensated by the club for his efforts. As a fellow lawyer, I can understand that the first thing one would look at in a situation like this is what are the statutory requirements and are they being followed.

Let's try to avoid impuning others' motives here. There are lots of unanswered questions and i think bill has pledged to provide the information so that members can make the appropriate conclusions.
1938 Chris Craft 17' Deluxe Runabout "Jennifer II"

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Post by Rugger8 » Tue Dec 06, 2011 7:36 pm

Don,

This quote of Dave's (see below) implies that Bill did something wrong. Not a straight out accusation like Gary made, but the spirit is still there. I am not a lawyer and would prefer to be reading about how to rewire, replumb or anything about my boat rather than this stuff. And, for what its worth, I will not spend my time researching the legalese of non-profits, that's not why I joined. If you really see a issue, did anyone call or email Bill directly, that would be the professional way to handle it before posting for the world to see and argue about. My sincerest hope is that the club is better and stronger for this debate, but I have serious questions about that.

Jeff


It's my understanding that Bill's firm provided services to the Club, so assuming that is even accurate and keeping in mind the strict prohibition against self-dealing and private inurement in applicable Internal Revenue Code and regulations with respect to tax-exempt organizations, someone might be curious to know whether and how the Board of Directors ever approved the transactions between the Chris Craft Anrique Boat Club, Inc. and Bassler Design, Inc. (or whatever it is called) in accordance with this provision of Florida law that applies regardless of what is in the Articles of Incorporation and the non-existant Bylaws of the Club.

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Post by Rugger8 » Tue Dec 06, 2011 7:44 pm

Also, you indicate that I should not impune other peoples motives. I could not agree with you more. But I think we should hold everyone accountable to that same standard. IE Dave, MFine, and Gbraker have all impuned Bills motives in various posts. So, this all seems a lot like jumping on the bandwagon.

Jeff

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Post by Don Vogt » Tue Dec 06, 2011 8:02 pm

I guess each person can have his own take on this.

I think there are at least two conversations going on here. One is perhaps directed toward Bill, and there may be better ways to communicate to him, I agree. But the other conversation is among us members, to help us share perspectives on things and help us all understand that there are some potentially serious challenges with the way the club is organized and operates.

Perhaps the situation we find ourselves in now may to a certain degree be the result of those deficiencies. If that is true then it is up to us as members to figure out what kind of club we want. i think we all want bill to be successful on our behalf and are greatful for his efforts to date, but it seems to me that there are larger issues that are not solely bill's to resolve.
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Post by mfine » Tue Dec 06, 2011 8:05 pm

I have not in any way impugned Bill's motives, nor have I ever accused him of wrong doing.

Three of the four directors have resigned. That creates some problems for a club like this and it also a reason for concern. That does not mean it is Bill's fault they resigned, it does not mean Bill is stealing money or that he has done ANYTHING remotely wrong. It seems to me like Bill has given far more to this club than he could have possibly taken, but that is not relevant to following tax law or building a club with bylaws and a board that insures long term survival of the club.

If anything the fact that Bill has done so much even with three others on the board, should be a huge wakeup call that if Bill decides to walk we will have a huge void. No club can exist long term if it is so dependent on a single individual.

As I said, we need to show a little patience and not jump down Bill's throat right now. On the other hand we absolutely con not ignore the problem and let this club continue to run long term with a single director. There are way too many issues with doing so.

Sorry if you don't understand or don't like reality, but that is no excuse for jumping on the members who are trying to point out the problems and suggest what needs to be done to stay legal and sustainable.

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Post by Rugger8 » Tue Dec 06, 2011 8:33 pm

Mfine,

I agree with much of your last statement. There certainly are isues that need to be resolved and Bill can't do it all and we should not be so dependent on one person. I completely agree with that. But as others have outright said and others implied that there was wrongdoing at the very least. That is what has got me so riled up because in no instance, and I have read all the posts, has anyone posted anything concrete to indicate that was the case. In fact at least one former director has come out and said that was not the case. So, where is the benefit of the doubt for Bill. BTW, I have never met Bill or spoken with him, so this is all based on posts here and not personal experience. Anyhow, I agree that we need to at least give Bill the time to come up with a plan for how to proceed.

And we should certainly comply will all laws, period. But I have to wonder how advisable it is to post financials on the web where every amateur accountant or lawyer can comment on their interpretations of IRS code. Seems that increases the liability to the club. Theoretically, that is what the club is paying lawyers and accountants for.

Jeff

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Post by Rugger8 » Tue Dec 06, 2011 8:37 pm

Mfine,

Where you say you did not impugn Bills motives or indicate any wrongdoing on his part, please relook at what your wrote below. I take this to mean that he deserves some time, but the inference is he did something wrong and you are advocating involving law enforcement, unless I am reading this wrong. Please clarify.

Thanks,

Jeff



That said, given the time of year and out of respect for Bill and his family, I think we as members can give this a few weeks before we get out the pitchforks or involve law enforcement

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