A special meeting of the Board of Trustees was held in the Clubhouse on June 1, 2005. All Board Members and Flag Officers were present. Also present were Captains Bob Gunderson, Joe Benyon, Ken Klett and Ed Hedges.
CALL TO ORDER: A quorum being present, Chairman Elbon called the meeting to order at 1900 hours.
Chairman Elbon announced the purpose of the special meeting to give consideration to the proposal of Captain Mike Shannon to poll the membership for interest in refinancing the bonds, which were issued to finance the remodel of the Yacht Club. Captain Shannon had indicated that the 7% bonds issued were high when compared with current rates and that a number of members had indicated an interest in saving the Club substantial sums of debt service. A letter soliciting such interest from the membership was proposed.
Chairman Elbon opened the matter for discussion. All members of the Board and all member of the Bridge were given opportunity to voice their opinions. Among the concerns voiced were the feasibility of selling the reissued bonds when liquidity and inherent risk were considered, especially when the issues of widening Highway 520 and dock repair are now faced by the Yacht Club. Also discussed was the isuue of the morality of recalling the bonds of the existing bond holders who "stepped up" and provided the funding for the remodel when returns on investment were being experienced in the market far above the 7% return of the bonds. Also discussed was the cost and feasibility inherent in the necessity of raising the cash to fund the recall of the bonds prior to the actual issuance and receipt of the funds on a new issue of bonds. The cost of the legal services incident to the recall and reissuance which was estimated by Preston Gates & Ellis to be in the neighborhood of $20,000 was considered as well. Some felt that the proposal would create a substantial schism within the Club. Many speakers spoke in favor of savings to the Club by an approach of accelerating the debt reduction by accelerated repayment of the bonds.
After all members present had opportunity to speak, Past Commodore Jeff Ewell moved that the Board thank Captain Shannon for his efforts at stimulating discussion on the issue; that the Board elect not to send a letter to the members of the Yacht Club soliciting interest in refinancing the current bonded indebtedness; and that the Planning and Finance Committee be encouraged to find ways to accelerate the repayment of the bonded indebtedness.. The motion was seconded and passed by unanimous vote of the Board.
There being no further business to be considered the meeting was adjourned at 2050 hours.
David A. Richdale
Secretary