Paul Tomblin wrote:


No, it means that your monthly fees include an upgrade reserve.

How much? We've an avionics upgrade fund, but even that wasn't easy to get
accepted (though there was such a fund in the past, I believe). And it's
rather small.


Consider a member that joins in 2000 and leaves in 2004. If, in 2005,
there's finally enough money for some planned upgrade, doesn't that mean
that the now-ex-member helped to fund an upgrade he or she will never use?

That member joined a club that had newish aircraft in 2000, bought with
the upgrade funds contributed by other members. They got the benefit of
other members upgrade reserve, just as future members get the benefit of
theirs.

The club started with 20 guys and a Cessna 120. Fifty years later, we've
got 48 members and 5 planes, and all along the way the fleet has been
upgraded as necessary to keep up with the needs of the members.

Growing the membership is one avenue open to a club using our
(share/equity-base) model. But I'm interested in how such a club can fund
upgrades independent of increasing membership.

Obviously, increasing equity is one approach. And it's what my club has
preferred over the years. But I'm interested in at least learning what the
other options are.

When we bought a new plane, for example, equity was increased. We did
this
over time, so in looks like a periodic payment. But a departing member
gets all his or her equity back.

Since our member only had to pay $795 to join, he doesn't have any equity
and doesn't get anything when he quits.

That's somewhat higher than the "throwaway cost" of joining our club. But
the equity (or "share" or "buy in") is $5000. Reminder: that's returned
when a member leaves.

The other local club at our field
does an equity thing, and it costs $32,000 to join. And when they
increased the fleet to 4 aircraft, every one of them got hit with an
additional assessment.

That's seems quite high. Do you know their member/aircraft ratio?

- Andrew