The Beach Club Concession Agreement gives City Council ultimate authority over the Club’s monthly dues and initiation fees. The decision before City Council on June 23rd involves balancing 3 competing goals.  First, as the failure of Measure PF has taught us, the City desperately needs more non-property tax revenue to supplement whatever size parcel tax the residents support.  Second, the Club needs adequate funding to cover its operating costs and make deferred capital repairs.  Third, as we consider a large increase to the parcel tax, more homeowners – particularly those with school-age children and high property taxes – deserve greater access to this public asset.  The current Beach Club proposal to spike initiation fees by 60% over a 2-year period fails on all three counts. We urge the Council to reject the initiation fee hike and instead focus on a market-informed increase to monthly dues in conjunction with increasing the membership cap.

New member initiation fees are completely excluded from the 10% Confession Fee that the City charges the Beach Club.  Conversely, the City receives 10% of every dollar received from all 670 Beach Club Member’s monthly dues.  From a fiscally responsible standpoint for the City, it’s a no-brainer that the City should increase the monthly dues rather than increase the initiation fee.  The closest local comparable to the Beach Club is South End’s Tier 3 membership, which gives families of four access to the lap swimming pool, kids pool, steam room, sauna, jacuzzi, and fitness facilities – all for approximately $460/month.  If we were to adjust the Beach Club’s dues to a conservative $350/month (which is still well below the market rate), we would automatically inject an additional $56,000 annually straight into the General Fund – every dollar counts. Surprisingly, while the Beach Club was comfortable increasing the new member initiation fee by 60% over 2 years, over the same period the Board only recommended increasing existing members’ monthly dues by 11% - OVER FIVE TIMES LESS.  

The Board's plan to raise initiation fees only nets a meager $60,000 a year for capital improvements. (i.e. 15 members x $6K Extra Revenue per new family).  While the collective gain to the Beach Club is minimal, the burden to each family on the waitlist is enormous.  According to Beach Club Director Chris Manos, the majority of residents coming off the waitlist are families with school-age children that have been budgeting for the initiation fee for almost 5 years. Spiking the initiation fee by $4,000 creates an artificial barrier to entry at minimal benefit to the Beach Club and virtually no benefit to the City.

Rather than placing a new large financial burden on new members at a small benefit to the Beach Club, let’s look at what a modest increase to the monthly dues can do for the Beach Club’s bottom line.  If we were to adjust the Beach Club’s dues to $350/month, the Beach Club would generate a massive $500,000 per year in reliable, recurring revenue.  

Council members, the math and the policy align perfectly. Raising initiation fees restricts resident access, starves the club of capital, and leaves City money on the table.  I ask the Council to protect our residents, our Club, and our General Fund while we explore a new parcel tax in the wake of Measure PF’s failure. Please reject the initiation fee hike, keep the front door open, and direct the Board to bring back a responsible fee proposal that truly serves the public interest. 

Thank you.