February 15, 2023

 

Greetings MFRSC Members:

What a wonderful winter season we’ve had thus far for great snowmobile activities!  As you may recall, an article entitled “Challenges Facing the Snowmobile Clubs and The MFRs,” written by Treasurer Steve Anderson, was posted on August 10, 2022. The article alerted our members to the future financial challenges facing the industry in terms of rapidly rising major equipment costs. Our club is and will not be an exception to this issue.

Your Club Equipment Committee (by the way these folks are invaluable) consisting of many qualified and experienced groomer operators did an analysis in April, 2022, of our major equipment needs, potential replacement dates and anticipated replacement costs. That projected cost over the next 10 years is $1,174,000. See attached:  2022 – 0922 – Depreciation & Replacement Schedule.  These are very large dollars for a non-profit entity to absorb, that thus far has had stable, but not significant revenue growth. This issue is the primary reason the Fund Raising Committee was established.

Financially, our operating budget cannot absorb all of the cash flow that will be required to meet these equipment acquisition costs, in the neighborhood of $95,000 per year. We will require other fund raising activities. We have had discussions informally among board members, some club members and people in the industry about this challenge. These discussions have been a healthy exercise to help us focus in on our need to do more planning to meet these challenges.

Essentially, we need to do Long Range Planning (LRP) so that we have a road map to guide us. LRP is not necessarily cast in stone, but designed to be flexible enough to adjust to changes in the industry, economic forces, finances, membership, etc. This process will involve identifying club priorities, future development needs, strength and weaknesses, risk factors, and critical questions to be answered to maintain a strong and vibrant club.

Your board of directors has begun engaging in this process. At our last board meeting we utilized time to identify club priorities. They included; Equipment Replacement and Funding; Membership Maintenance and Growth; Partnership Opportunities; Electronic Trail System/Maps GPS, etc.; and a Building.  This is not as complex as a large corporate LRP process, but none the less helpful and needed. It should also not take as long.

We are in the final quarter of our fiscal year, where a large amount of our operating expenses are incurred.  In April, we will determine how much surplus cash flow we have this year to either pay off our CURRENT GROOMER loan ($38,000) or add the surplus to our Reserve Account.

We are certainly interested in your feedback. Please contact Steve Anderson, Club Treasurer, with your thoughts that can be considered by the board in this LRP process. spindr48@gmail.com

Thank You!
Fund Raising Committee Members
Carrie Leinonen, John Ryan, Tom Teichmiller and Steve Anderson

 

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