ACMOC - In Financial and Governance Trouble??

Hudson,what issue was the report in?I have not in the past taken notice to really taking a look at the money aspect of the club.Having models made can be a real crap shoot.The cost from start to finish can be staggering.I would like to hope that this ship can be righten.It has been a great club have meet some great people and made great friends.

Hello Again

It is two weeks since I last posted, and I have had no contact from the President, so I guess that I make a further post to put before members information that I analysed from the ACMOC Magazines back in June 2018. I think that there is a poker saying "ante up"! Listed below is an extract from my letter sent in to the President in June. This is a summary of a spreadsheet Appendix that was attached to my letter and included with the letter I sent the President analysing every Financial Report in the Magazine over the last 8 years.

Not only have the reported club assets halved in 7 years, the trading losses that have bought this situation about have continued and by my analysis must currently be running at close to USD9000 per month - since January 2018 that will be a (Year to Date) YTD loss of about USD70,000 and actual cash down to a total $35,000. In the past, the club has "rolled forward each year" with a "donation" and a large donation minimum USD50,000 - but ideally USD100k (or a loan from Dad in Peoria) looks like the only immediate saviour!! Lets hope that there is such a "lifeline", but as a business strategy it is a very poor one!!

BUT be warned that only puts off the day of reckoning - the underlying problems are still there and the Board and the President don't appear to have recognised that a problem exists. I wonder if they have heard of insolvent trading? I also wonder when they will confess to the position???

I will serialise my letter to the President over the next few weeks, along with some further analysis that I have been working on. Stay tuned.

Hudson
______________________________________________________________________________________________________________
Extract from June 2018 letter to President

3. Financial Performance And Position – (Appendix Attached)
It has taken me sometime to extract and analyse the Financial Performance of “ACMOC” from the bi-monthly magazines from 2010 - to date. I would suggest that had Financial Statements prepared to GAAP criteria and published annually to members then, I and others would have had a clearer picture, earlier of the true financial performance of the Club.

In summary, in the seven years since, 31 Dec 2010 the retained earnings of the Club have virtually halved from $796,643 to $412,048 at 31 Jan 2018. This has occurred through repeated trading losses, although a full analysis of the impact of decisions such share investments in Caterpillar, inventory loss and insurance claims, and other matters cannot be sufficiently undertaken with the information published to members in the Treasurer Reports

31 Dec 2010 Loss $78,150
31 Dec 2011 [color=#FF0000]Loss $57,360
[/color]31 Dec 2012 Profit $14,747
31 Dec 2013 (after donations $36240) Loss $55,549
31 Dec 2014 [color=#FF0000]Loss $88,476
[/color]31 Dec 2015 [color=#FF0000]Loss $127,106
[/color]31 Dec 2016 (after unrealised gains $61k and losses $10k) Profit $39,161
31 Dec 2017 (calculated – after donations $45254) [color=#FF0000]Loss $36,397
[/color]
The years 2013 and 2017 rely on donations to restrict operating losses. 2017 in particular requires further investigation. If there are no changes to the operating model, then a similar donation will be required if a significant loss is not to be reported. Such donations may involve 501c3 status see below.

Thanks for all the time you have put into this. I'm grateful that someone else is interested.

This has gone on so long, I'm not sure anyone has the will to do anything about it. It's clearly going to require purging the board of members who are not interested in resolving the issue and making this a priority. Weren't there officer term limits written into the bylaws? If there weren't that should be corrected.

Hopefully you have had a lot more private messages of support than you have of public ones on the bulletin board.

Sue Westwood, CPA

I've sounded the alarm on financials eons ago and was promptly " blown off". Sounds like a day of reckoning is about to occur. In the mean time I have let my payed membership lapse so I no longer have a dog in this fight.
Be interesting to see what response comes forward if any.

[quote="Old Magnet"]I've sounded the alarm on financials eons ago and was promptly " blown off". Sounds like a day of reckoning is about to occur. In the mean time I have let my payed membership lapse so I no longer have a dog in this fight.
Be interesting to see what response comes forward if any.[/quote]

Yes you have tried to raise this very problem more than once over the years and each time you, as we would say out here were "shouted down "

It's a shame about the financial situation and I feel a golden opportunity to change the fortunes of the club was missed when all those models were lost in a warehouse fire

But also like you OM I'm am no longer a financial member so it doesn't really have any effect on me either

Paul

Hudson
I do have to agree with you, you did send me an inquiry shortly before our June board meeting and I did not respond to you, again 2 weeks ago in the bulleting board you again posted, and still no reply. I to took the information from the magazines and looked at the decline in assets from December of 2010 until the last available numbers of May 31st 2018 and it does indeed show a decrease of $350,197. There is no argument in that.
We as the Board do realize that a change to the business model is needed, indeed, my opening letter to the Board at the June meeting stated just that;
[u]"While our models are well received, the continuation of the program rests solely on the success of the previous model to fund the production of the next. We have
expended funds on products that have been under development for over 5 years with no line of site to them being available. I feel we have lost our missions direction in the cause of trying to increase our appeal, we need to return to the basics, what do we need to fulfill our mission first, we need to control our expense, 2 employees’, 2 leased properties, inventory stored at the manufacturers warehouse, an advertising agency to manage our website and magazine, we must focus our attention on the important, while we pay attention to that which supports it.
What is our focus?[/u]"
Based upon that statement the Board has undertaken a study of what we do and how we do it, there are several items in the works currently that I will not go into on the bulletin board, as they are for members ears first. This evening Board meeting will begin the process of reshaping the club to what we all hope to be a sustainable future. Again, I will not go into them on the Bulletin Board, they are for members ears. The method of communication will most likely be through the magazine, in the next issue the members can expect to see at the least an outline of the action's.
In response to Sue, there are indeed term limits to the directors position, a maximum of 2 consecutive terms of 3 years maybe served, I am in the 5th year of 6. The request for members to join the board has largely been unsuccessful in the past as you will see that Neil was the only person willing to commit to election this year. Not to leave Hicrop out of the discussion, the model business is indeed a hard market to engage, downturns in the economy can have disastrous results in sales As I did say in the Presidents letter of issue 141membership dues only support a portion of the operating costs, the remainder is made up through sales of merchandise and yes, goodwill donations.

For those among you whom are members, you can expect to see further information forthcoming, it may wait until the next magazine due to costs, or we may post it on the members only section of the Bulletin Board.


Andy

Haberaj,first thanks for your response and your service to the club.I only responded to the post because like many others like and enjoy this club.I have met an awful lot of great peoples with the same interests,that is caterpillar tractors.I have not taken a more active roll in the club due to running a family construction company and most importantly some personal business that has consumed my life for the past 15 years.My hope is for the club to be more solvent in the future.I have made available to the club my collection of cat films that go back into the 20’s to be made into dvd for possible retail sales.I have some other thought on making the club more financial solvent.Thanks again to you and the board for all the work you do for the club.Mike Durkin

Well at least there is a cognizant response, thanks for that. Why all the secrecy? Response to payed members only? Seems like the same old behind the curtain routine. Ignores the fact that are good suggestions and solutions out beyond members only. I still would like to know what the cost of supporting the BB is and if it could be supported separately.

Quote "For those among you whom are members, you can expect to see further information forthcoming, it may wait until the next magazine due to costs, or we may post it on the members only section of the Bulletin Board."

I was never aware of this section on the Bulletin Board??