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<DIV style="FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">The spreadsheet is 90% there, and I'll send it out this evening. I've broken the expenses into three categories. Capitalized cost(the cost of the plane(note) itself), fixed cost, and then variable cost.</DIV>
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<DIV style="FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">I have two scenario's running...the first is where we "lease" 976 from eagle, and the second is where we go out and buy a plane from someone else. You can input # of members, # of flying hours per year per member, monthly note, etc., and it gives a good estimate of our monthly or yearly fixed costs per member and the variable costs associated with hobbs time. I'll provide more instruction in my email tonight...does everyone have microsoft excel?</DIV>
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<DIV style="FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: Arial">Mike<BR>----- Original Message -----<BR>From: "Bob Irving" <rhirving@verizon.net><BR>To: toddmbs@yahoo.com, eefc-core@workingcode.com, "Steve Gordon" <steve@media-phile.com><BR>Sent: Monday, April 6, 2009 12:38:15 PM GMT -05:00 US/Canada Eastern<BR>Subject: RE: Fixed vs. Operating Costs<BR><BR></DIV>
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<P class=MsoNormal><FONT face=Calibri color=#1f497d size=2><SPAN style="FONT-SIZE: 11pt; COLOR: #1f497d; FONT-FAMILY: 'Calibri','sans-serif'">Sounds like we need more conversation and specific definitions, estimates of the fixed costs and the operating costs. Accounting is not my strength so somebody needs to facilitate so we can all understand the numbers.</SPAN></FONT></P>
<P class=MsoNormal><FONT face=Calibri color=#1f497d size=2><SPAN style="FONT-SIZE: 11pt; COLOR: #1f497d; FONT-FAMILY: 'Calibri','sans-serif'">With respect to 979 – I have a call in to Tim (unfortunately he is out of town) and will try to meet with him to flesh out his proposal. In general, I agree that it would be “easier” to work with 976 but the aircraft is not up to a reasonable IFR standard. Let’s see what kind of a fix EE might be willing to apply here. Also, the question of what equity (if any) we would have in the aircraft is important. If we pay the note, the maintenance, upgrades, and upkeep for 5 yrs and then end up with nothing… I’m not sure this is a good deal. I also agree with opening membership to any private pilot… but individual members should need to go through an application process and member vote. We can talk about this when we discuss bylaws. In my personal opinion I think new members should be subject to a credit check – I think it is a reflection of a person’s character.</SPAN></FONT></P>
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<P class=MsoNormal><FONT face=Calibri color=#1f497d size=2><SPAN style="FONT-SIZE: 11pt; COLOR: #1f497d; FONT-FAMILY: 'Calibri','sans-serif'">Bob Irving</SPAN></FONT></P>
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<P class=MsoNormal><B><FONT face=Tahoma size=2><SPAN style="FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: 'Tahoma','sans-serif'">From:</SPAN></FONT></B><FONT face=Tahoma size=2><SPAN style="FONT-SIZE: 10pt; FONT-FAMILY: 'Tahoma','sans-serif'"> eefc-core-bounces@workingcode.com [mailto:eefc-core-bounces@workingcode.com] <B><SPAN style="FONT-WEIGHT: bold">On Behalf Of </SPAN></B>toddmbs@yahoo.com<BR><B><SPAN style="FONT-WEIGHT: bold">Sent:</SPAN></B> Monday, April 06, 2009 12:17 PM<BR><B><SPAN style="FONT-WEIGHT: bold">To:</SPAN></B> eefc-core@workingcode.com; Steve Gordon<BR><B><SPAN style="FONT-WEIGHT: bold">Subject:</SPAN></B> Re: Fixed vs. Operating Costs</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">I agree. </SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">This should be fairly easy to break out, and I don't think we'll have to reinvent the wheel. We will simply have to break out all the costs incurred with owning and operating the plane, and put each cost under the list of either Fixed Cost (which are incurred whether the plane flys or sits there) or Operating Cost (incurred when you turn the prop on) and figure each column accordingly. A couple will overlap, such as inspections, but that is only dependent on how many hours we fly it in a year.</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">As far the leaseback goes, I think it's clear that there is no need to think about a leaseback. I just had to hear Sean's take on it. With this many potential members, the cons outweigh the pros to do a leaseback. With even only 10 members, the fixed costs should cover fairly reasonably and I'm not concerned about meeting a minimum number of hours.</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">My only concern is in regards to the plane itself: the soon upcoming overhaul, the upgrade from a "trainer plane" to a viable club plane, what Tim's plan is with the ownership and how much we'll be overpaying if he keeps the plane after the note is paid off, etc. That being said, after some thought, I am thinking that this path is probably the easiest, least risky, and cheapest way to get started.</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">Also, I would vote to open the club up to any private pilot at LWM after we get established with the first group of Eagle pilots. Sure, why not?</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">Todd</SPAN></FONT></P></DIV>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt"><BR>--- On <B><SPAN style="FONT-WEIGHT: bold">Sun, 4/5/09, Steve Gordon <I><SPAN style="FONT-STYLE: italic"><steve@media-phile.com></SPAN></I></SPAN></B> wrote:</SPAN></FONT></P></DIV>
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<P class=MsoNormal style="MARGIN-BOTTOM: 12pt"><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt"><BR>From: Steve Gordon <steve@media-phile.com><BR>Subject: Fixed vs. Operating Costs<BR>To: eefc-core@workingcode.com<BR>Date: Sunday, April 5, 2009, 11:37 PM</SPAN></FONT></P>
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<P class=MsoNormal><FONT face="Times New Roman" size=3><SPAN style="FONT-SIZE: 12pt">Thank you James for setting up this mailing list so quickly, for the<BR>thorough minutes from today's meeting, and for the very detailed squawk list<BR>on 976. I am extremely excited to see the progress made already.<BR><BR><BR>First I have a question I would like to pose to the group. EAA chapter 106<BR>which is based at LWM has a roster of over 200 members (myself included).<BR>Some EAA members may be interested in joining a flying club (I spoke with<BR>one today who is actively looking for a club). Would anyone have an<BR>objection to announcing our forming club to the EAA folks? Perhaps we can<BR>pick up a few more members.<BR><BR><BR>Second point: During today's meeting I detected a bit of ambiguity regarding<BR>what should go in the fixed cost column and what should go in the operating<BR>costs. Here's an excerpt from AOPA's FAQ on flying club costs I want to<BR>throw out to the group for consideration:<BR><BR>" Problems frequently stem from the fact that some clubs try to recover a<BR>portion of their fixed costs along with the direct operating costs. This<BR>often forces the total hourly rate, which should equal the direct hourly<BR>operating cost, higher than necessary. It may also compel members to pay for<BR>a minimum number of hours per month whether or not they fly. The result is a<BR>vicious cycle with members flying less because the hourly rate is high<BR>which, in turn, pushes the hourly rate higher because members fly less. In<BR>some areas, a spate of poor weather may be all that it takes to reduce<BR>flying hours and begin the vicious cycle."<BR><BR>The above paragraph articulates a minor concern of mine. During today's<BR>meeting we entertained the idea of lease-back as a means of meeting an<BR>assumed minimum number of hours required to meet the basic costs to keep the<BR>aircraft airworthy. The idea of having to meet a minimum number of hours<BR>concerns me. In my humble opinion, if an aircraft needs to meet a minimum<BR>hour requirement to balance the budget, then something is in the wrong<BR>column. The club should be able to keep that aircraft airworthy whether or<BR>not it leaves the ground.<BR><BR>In order that we do not fall into the "vicious cycle", I submit that only<BR>those costs that are directly proportional to the number of hours flown<BR>should be included in the operating costs. These should be limited to<BR>fuel/oil, overhaul, and any other maintenance directly tied to hours flown<BR>(oil changes, tires, vacuum pump, magnetos, and routine avionics<BR>maintenance). All other costs, maintenance or otherwise, should be covered<BR>by monthly dues. Keeping fixed costs out of operating costs will produce a<BR>much more predictable budget and keep us from scrambling to meet some<BR>artificial minimum flight hours.<BR><BR>Thanks,<BR><BR>-Steve<BR><BR>_______________________________________________<BR>eefc-core mailing list<BR><A href="http://us.mc1113.mail.yahoo.com/mc/compose?to=eefc-core@workingcode.com" target=_blank>eefc-core@workingcode.com</A><BR><A href="https://www.workingcode.com/mailman/listinfo/eefc-core" target=_blank>https://www.workingcode.com/mailman/listinfo/eefc-core</A></SPAN></FONT></P></DIV></BLOCKQUOTE></DIV></TD></TR></TBODY></TABLE>
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