Fiscal Commentary 2010-2011
by Matthew KiddJuly 10, 2011 (revised July 11, 2011)
For the fiscal year which ended June 30, 2011 the unit lost about $4500 (annual report). The good news is that the unit still has considerable resources thanks to a generous donation of around $20,000 many years ago. The bad news is that $4,500 is a lot of money.
Last year in Budgeting 101, I tried to explain the basics of the unit budgeting which had been stable for many years. The previous fiscal year shattered those guidelines. The first guideline was that profit from the Memorial weekend sectional largely covers the loss from the holiday party. As La Jolla Unit holiday parties go, last year’s $1700 loss was not extreme. Even country clubs have been affected by the great recession. Use of the facilities and a brunch at the very nice La Jolla Country Club cost us $30.60 per head, a considerable discount.
Unfortunately, our Memorial weekend sectional lost almost $300 (financial recap). 163½ tables was the worst Memorial weekend table count in the six year history of the unit website and probably for much longer. Sunday Swiss teams were especially poorly attended. No one on the board is sure why attendance was so low. It could be a fluke, high gas prices, people making up for lost time outdoors from last year’s non-summer, poor advertising, hospitality issues, competition from the growing north county and inland units, or other things entirely. This year’s very successful San Diego regional makes it hard to simply blame the economy. I’m trying to do some data analysis that might prove informative. Still we would love to hear your theory (e-mail me at webmaster
lajollabridge.com) and we may poll some of you.
Losses from the holiday party and memorial weekend sectional combined with the cost of printing the unit directories ($400), an infrequent expense, account for about $2,400 of the net loss, slightly more than half of the total. This means we lost $2,100 on routine operations, i.e. unit games. This works out to nearly $90 per unit game despite increasing the card fee to $8 last August. Equivalently, this is about $1.10 per player per event. This shatters the second guideline from Budgeting 101 that unit games mostly break even.
Some unit game costs have increased and some costs are new. Rent has risen to $175 per game, up from $125. A couple of years ago, the Soledad Club started charging a separate $75 per day cleaning fee for a janitorial service, which works out to nearly $1 / player-event! Also, our lease with the Soledad Club required us to carry liability insurance, roughly equivalent to a landlord policy. The first policy, hastily approved by the board last year, was much more expensive than it should have been. The total cost combined with a insurance policy for the board of directors was $1600.
Some fiscal corrections have already been made. After consulting with San Diego unit we switched to the same insurance company that they are using for about $400 per year. This will save about $0.60 / player-event. Moreover, Michael Weber is retiring. His replacement, Paul Darin, will be about $0.25 / player-event cheaper because Mr. Darin is not as high ranking a director as Mr. Weber. These two changes leave us only $0.25 / player-event short.
We may be able to renegotiate the Soledad Lease.
Besides cost cutting measures, we can try to increase revenue. I think there is a strong consensus on the board not to raise card fees again so soon. Instead we will try to grow the game which has been nearly steady* at a 20 table average for two years. After allowing for sanction fees and director expenses, which both scale with the number of tables, each additional table adds $25 in revenue. An increase of four tables would make a big difference.
Can you help? Yes! One simple thing you can do is to split up a regular partnership once in a while to bring two players that do not normally attend the unit game. Second, you can encourage advancing pairs to give the unit games a try. Many players in the 500-2000 MP range should be stepping up their game by playing against better competition but are hiding in B/C/D. A nudge from a strong player may be what it takes for them to realize the difference between learning the game and merely accumulating masterpoints. We are also discussing some ideas, such as mentor-mentee or grandparent-grandkid pairing. Other than masterpoint averaging, now permitted by the ACBL for stratification, we can not change the stratification. However, we can offer enticements such as free plays to winning pairs in special categories.
Stay tuned.
*The average table count fell by almost exactly one person (¼ table) during the last twelve month period compared to the preceding twelve month period where it had averaged 19.98 tables.