September 4, 2007
To All Members of EVRC:

Our pool facility was built as part of the Woodside Creek housing development. Evergreen Valley Recreation Club (EVRC) was incorporated as a non-profit mutual benefit corporation in 1962, and the developer of the Woodside Creek housing track deeded the property to EVRC in 1963. EVRC and the pool facility thus came to be owned and managed by the active members of the club in accordance with its corporate charter and by-laws.

In subsequent years EVRC operated with about 100 members and a significant waiting list. With no debt to service the club ran smoothly and members’ annual dues not only covered the operating expenses for the facility, the dues generated a surplus to cover both planned and unexpected maintenance and repairs. Things were good.

However, in 2003 things took a dramatic turn for the worse. EVRC was hit by an arson fire that burned down the building that housed the pool showers, restrooms and all the pool equipment among, other losses.  EVRC was then hit with a triple whammy.  First, it turns out the club was under insured and the insurance coverage was not nearly enough to replace what was lost in the fire. Second, EVRC hired a contractor who came in with the ‘lowest bid’ but who ultimately charged significantly more for the construction. Moreover, it also took nearly a season longer than planned to complete the job. Thirdly, EVRC had very few options other than to obtain a short-term high-interest construction-loan which put the club deep in debt.  

Compounding matters EVRC members lost two seasons of swimming, and EVRC lost two seasons of dues income. All operating, maintenance and etc. expenses had to be paid from the aforementioned loan. EVRC saw its debt grow and its membership shrink.

EVRC reopened in 2006 but under severe financial circumstances. The short-term high-interest loan was costly and required additional fees to renew, fees that only added to the debt burden. Since opening, EVRC membership has been less than half of what it was prior to the fire – not nearly enough to sustain the club at current dues levels, which required additional borrowing to meet operating expenses.

Presently, EVRC has about 57 members and owes $350K on a loan due in May 2008. Current operating expenses, including loan payments, run approximately $65,000 per year. EVRC has cash on hand to keep operating through this year and possibly next. But after that the club will again be broke and unable to pay its bills, and will need to refinance. We have not been able to reach the membership numbers needed to establish an income stream that would allow us to secure a long-term lower-interest loan. Furthermore, under the current circumstances, even with 100 members, we would need dues payments of at least $650/year just to cover our operating expenses. Things are not so good.

Although EVRC has been here and prospered for almost four decades we are facing an entirely different situation today. EVRC needs to reorganize or it needs to liquidate. This is a serious decision to make and one that all current EVRC members should participate in making. Therefore, the EVRC board is calling an all-members meeting for Friday, September 7th, at the 6:30 at the EVRC pool. At this meeting we will discuss at least three options for the pool club and how to bring this matter to a vote of the membership.   

Please make every effort to attend. The participation of the membership is vital as we will be deciding the fate of EVRC.

EVRC Board:
Jack Baker	Paula Traynor	Eva Lujan
Kris Anderson	Mary Kauzlarich	Brian Babcock