April 29, 2015
I am submitting the material below for your consideration in advance of our May 12, 2015 AGM.
Under the Corporations Act (Ontario), your Board of Directors is charged with considering expenditures, reviewing these and reporting our findings to the membership. This fiduciary duty includes the review of carrying costs of Club assets, reviewing significant expenses and looking forward at future costs.
In this regard, your Board has had numerous and lengthy discussions over the course of the last 9 months on the topics as described below.
The Board has completed a financial review on the “Caretaker’s House and Boathouse/Workshop”. The house and septic system were built in the 70’s and there are imminent costs associated with its continuing operation. Of note, a new furnace has recently been installed. The septic system failed inspection in 2014 and a temporary repair has been made. Further repairs or an upgrade or replacement tank most probably will be required judging by poor performance this winter. There are issues with the roof. On the positive side of things, the Club has made its last payment to Robert Roi for the workshop and the workshop is now owned by the Club. The Board has discussed renting the house in order to cover ongoing costs. The above costs will be summarized in more detail at the AGM.
Municipal Tax Costs
These were reviewed in detail. We looked at the tax load incurred by the principal remaining sites open for lottery. We also examined the tax costs on Pig Island. The Board would like to hear the membership’s thoughts on possible down-zoning of Pig Island from residential (SR) to Natural State (NS) and incorporating the property into our Managed Forest Plan. This will reduce the tax from in excess of about $4,500 to a few hundred. Any change in Land Use requires a 2/3 membership approval and any such change should be approached slowly and cautiously. The membership should be provided ample time to discuss and deliberate on this topic. While the Board can ultimately suggest a course of action on this (it is not doing that right now), it is ultimately the membership that makes these types of big decisions.
This issue caused the membership some consternation the last time around. Before getting into the specifics, I would like to stress the following:
Robert Roi’s contract as Caretaker does not expire until February 2016.
Robert has served us for many, many years and the Club has benefitted from his service.
As President, I respect the duty of care that Robert has provided to us and I expect all members to be appreciative of Robert and to be sensitive to him and his family if there are to be discussions on this topic by the membership.
In 2005 the membership voted in favour of a 5 year contract for Robert which was initiated in February 2006. The membership at that time gave permission to the Board to renew the contract for a further five years. The membership further required that the Board could not refuse to renew Robert’s contract in 2011 for a further 5 years without membership approval. Your Board did renew that contract for five years.
With the above clearly in mind, it is now time for you, the members, to decide how you wish to proceed.
The Board is posing the following question before the membership at this AGM:
“Do you the Membership wish to issue a new contract (as described below) to Robert Roi or do you wish to have the matter tendered and accept tenders from qualified individuals including Robert Roi?”
Your Board believes that this issue requires some period of time for this discussion. We are proposing a vote by ballot at a meeting to be held in August at Go Home.
This is a Membership Decision and will not be a Board Decision.
Directors are free to and may choose to voice their individual thoughts on the matter, but they will be acting as individual members and not be reflecting any position of the Board.
As part of our responsibility as Directors, we have performed a financial review and sought information so that we could reliably assess what other communities are paying for site inspections. We did this. We further sought comparable pricing for performing all of the duties described in the present Caretaker contract. Whether one wishes it or not, it is our fiduciary responsibility to do such a review. Upon doing this background work, I as President entered into several discussions with Robert.
During these discussions, I informed Robert of our increasing costs relating to the house. Robert agreed during these discussions to transition from the Club’s Caretaker House to his property up the river over a period of 1-2 yrs. His offer to do this transition is conditional on a new contract at his present salary of $18,220 (plus yearly CPI increase), so as to provide him the assurance to make such improvements to his property and make this move. The above is a substantial concession by Robert.
Presented below is a summary of our due diligence with respect to the caretaker compensation and services. These are presented for thoughtful consideration and discussion by the membership.
Present Compensation: $18,222
Presently provided lodging - value: >$10,000
Present Approximate Contract value: >$28,000
Net Cost Reduction to Club through Robert moving: $7 - 10,000 (approx. house rent recovery, restricted to renting the house in summer months)
Hydro Costs presently incurred by Robert: $6,025 for 2014 (amt. as provided by Robert)
Quotations from two area contract service providers to provide services as detailed in present Caretaker contract: These are not official tenders.
Quote 1: $14,640 (based on 150 sites), $25 per site less per site than salary above
Quote 2: $12,200 (based on 150 sites), $40 less per site than salary above
Other Issues for Your Consideration
Caretaker communications - going forward – Directors’ discussions and suggestions
1. Cell-phone photos of any damages and emailing of same to the secretary or the owner (Cognashene and Honey Harbour site inspections have this in place)
2. Availability of cell-phone or email contact by members to contact the caretaker in emergency situations or when property damage has occurred.
In closing, I would ask that members accord themselves in a manner that respects other members’ views and is equally respectful and sensitive to our present Caretaker and his family. These are the founding principles of the Madawaska Club – where, for example, the founding members in their first years all lived under one roof, built their cottages through mutual co-operation and mutual toil and in general set a fine example for all of us to follow.