Rancho Santa Teresa
Swim and Racquet Club
286 Sorrento Way, San Jose 95119
As we only had approximately 12 members attending our fall membership meeting I’d like to recap some of the important topics which we discussed. We had a record year with 90 guest passes sold and achieved a phenomenal income from our swim lesson program. This will result in a higher contribution to our reserve fund this year. The higher contribution is also necessary as we have some catching up to do.
On the contrary side we were recently advised to change some of our income streams to comply with IRS regulations. As a 501c7 “Social and Recreational Club”we enjoy certain benefits like tax exemption, but we are also constrained as to how we can generate our income. For example, we cannot compete with businesses like swim schools and guests must be accompanied by members. This has the consequence that we had to cut approximately $54,000 out of our 2019 budged and reduce our 2019 service hours. Our current budget assumes that we will be opening on May 11 and closing after Labor Day. It will also force us to shut down the hot tub on November 1st in addition to the back pool. Furthermore, we will need to eliminate morning lap swim during the winter months as we will shut down the heaters overnight. Our year around swim team will be required to cover all heating costs during the winter months. Since the team is practicing until 8pm we will still have evening lap swim Monday, Wednesday and Friday from 8pm-9pm but please cover the pool afterwards.
The board is working right now with high priority on a proposed bylaw change which will legitimize approximately $45,000 as member income and add it to the bottom line. This change will move the guest pass program to an Associate Membership and is mandatory to comply with the latest IRS rules which require that the board needs to decide who will be using our facility. Currently, it is up to the members to decide and who they will sponsor. Obviously, there is much more to it which would extent the limit of this newsletter. We are currently working with our legal counsel on the exact wording of such changes and will update you in the coming months. However, it is important to know that we are not planning anything different than our neighboring cabana clubs, which already have associate membership programs.
We are confident that we can extend our operational hours back to normal if the change will be approved by the members. Our goal is to have the proposed change ready before Christmas and start communicating the details with the members early next year. A voting is planned for the spring membership meeting in early March. We will update you in the upcoming newsletters and also plan to have a town hall meeting.
Dirk Seidel, President