Even Keels Cruising Club INC 9897603 ABN 37599776442
It is good to have a waiting list of members so that when someone wants to resign they can get their money back as soon as possible. Because the club owns the catamaran, members have no legal share of the catamaran to sell. This is important as it stops a member from selling to someone inappropriate. It allows the club and the members to control the membership. Effectively, the amount of money the resigning member gets back is equal to their share of the original capital cost of the vessel. How can this be, you say? Sounds too good to be true, I get all my money back? Well, not quite. In addition to the annual charge to cover operational costs of the catamaran, members pay an amount annually into a club depreciation fund. The purpose of this fund is to equitably share the depreciation of the catamaran over its life, amongst those who are, or have been, members of the club. This is much preferable to some clubs which don’t have a depreciation fund, and in consequence all the depreciation of the vessel is dumped on the people who happen to be members at the time the vessel is sold (either to wind up the club or to buy another catamaran). Thus the worth of the club at any time is roughly fixed at the original capital cost of the catamaran, comprising the sum of the falling value of the vessel and the rising amount of money in the depreciation fund. The depreciation fund is effectively maintaining the capital base of the club.
Getting back to a member resigning. When a new member joins, the money they pay into the club (the cost of a membership is fixed at the original capital cost of the catamaran divided by the number of memberships) is used to pay out the resigning member. There are rules to prevent the club from being forced to sell the catamaran to pay out members, should a group of members resign at the same time. This is to protect the ongoing viability of the club, and means that the resigning members may have to wait until suitable new members can be found before they get their money back. To balance this, there is a limit to the time that the club may hold on to resigning member’s money.
The club consists of 8 memberships, which we have chosen to call “EK Rights” since holding a membership gives a member the right to use the boat. Thus the club consists of 8 EK Rights. We will now use EK Right instead of membership because, as you will see, it makes it easier to understand how the club functions.
As already mentioned, an EK Right may be held by an individual or a family. Each EK Right gives the holder the right to 4 weeks exclusive use of the catamaran per year. A member (whether individual or family) may purchase either 1 or 2 EK Rights, depending on how much time they wish to spend on the catamaran. Thus, if two are held, the member is entitled to 8 weeks exclusive use of the catamaran per year. As a consequence, the actual number of people who are members of the club will vary depending on whether EK Rights are held by individuals or families, and how many EK Rights each member holds.
Since there are 8 EK Rights each with a 4 week exclusive access entitlement, this accounts for 32 weeks of the year. 4 weeks are set aside for maintenance, repairs & improvements. The remaining 16 weeks is club time. Any additional time required for maintenance, repairs, improvements and unforeseen events is taken out of club time.
The limit of 2 EK Rights per member has been imposed to ensure diversity and maintain a sense of sharing within the club.
If there is club time that is not being used, members can book additional exclusive time, subject to paying a daily usage charge which reflects the per day cost of a membership. This charge makes it fair for all members whether they use this facility or not. The aim is to set the usage charge low enough to encourage the catamaran to be used so that the club receives additional income, but high enough to prevent using daily hire as a de facto cheap membership. NEXT PAGE >>