At the annual budget meeting April 30th, the Treasurer released the Club’s income and expense reports. The Club spent $95,000 to remodel the kitchen, probably the largest single expenditure in the club’s history after building the Lodge and its addition. Our largest recurring cost is energy: on a three-year average, we spend $7,850 per year on gas and electric, or $650 per month. The email notice of the budget meeting sent by the Board on April 11 included the following item under the heading Capital Projects: “Patio to be built for the club. To include radiant heat and a fire pit. There is a forum on the website. We are taking input from members as to their thoughts on the patio.“ (There is no information about the project on the website forum.) At the meeting the Building Coordinator said that a contractor had submitted a bid of more than $20,000 for a patio, but did not provide copies of the bid. There was no mention of a second or third competitive bid (as most organizations require, and which the Club has traditionally done). There were no drawings, written descriptions, timeline or budget. The project was described as an improvement to access to the back door, but expanded to include extras. However, costs for those extras were not broken out separately, so that we could have a discussion about whether the members want, need or wish to pay to build a firepit, radiant heat or bbq grill. Neither was the operating cost of those luxuries included: when asked about the cost of radiant heating, the Coordinator replied “Five or six hundred…a month.” Do the members really want to pay nearly one-third the cost of our kitchen remodel for a patio? Do the members really want to commit us to paying $500-$600 a month every year to melt snow? At current rates, $600 a month is almost double what we are paying for all of our energy costs! And costs tend to rise: “Households in the lower 48 states spent 5 percent more on electricity and 10 percent more for gas on average this past winter… In New York City… the typical residential electric bill rose 22 percent to $118 in February from a year earlier.” Bloomberg. The U.S. Energy Information Administration “expects that the natural gas spot price, which averaged $3.73/MMBtu (million British thermal units) in 2013, will average $4.74/MMBtu in 2014.” eia.gov/forecasts/steo/report/ So if we average gas and electric increases, we can expect to pay 7.5% more for energy, in coming years. If the Club were to build a project that imposes additional operating costs such as those stated, it will cost us $1,350/mo next year, $1,450/mo in 2016, and so on. Unfortunately, the Board provided no written estimates of construction costs or fixed operating expenses for this proposal, so there is no way to accurately forecast what it will bind the members to paying. This proposal raises many more serious questions than the presentation at the budget meeting answered.
Posted on: Sat, 17 May 2014 15:54:06 +0000
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