Thursday, December 17, 2009

Staff Salaries

There has been a lot of reaction (good and bad) over my report on the recent staff salaries increases.

To try and keep members better informed and to try and stop some confusion by the membership, and at the same time not divulge actual salaries, perhaps I could repeat a couple of statements I made to the board re the salaries, before going in camera to discuss the actual amounts. This information was available to any member who wished to be an observer at the meeting (and from memory there were 2 member observers present)

I made a statement to the effect that our staff are our greatest asset and virtually no individual thinks they are paid too much. But we are a non profit association, funded in the main by member subscriptions, and we must live within our means. I tried to explain that the large salary increases sought by the CEO were, in my opinion, excessive. (particularly after the increases just 12 months previously). I stated that from my experience in business employee cost blowouts can destroy a business, and more modest increases should be granted. There is a major problem with a business like ours that grants yearly salary increases. You get the issue of "The compounding of the wages bill" Anyone who understands "compounding" will know what I mean.

We do not pay salary's that one could get in private industry, or in some branches of Government. But all wages are relevant. A well paid person would think our wages are very low, while a lower paid person would think our wages are generous.

However, to try and generalize, I also made the following statement at the Board meeting. "That if you were a department head at one of our senior high schools, (I can only speak for Qld) or a senior university lecturer with 2 degrees and a masters degree and over 30 years service you would find it financially rewarding to come and work for us."

John McK

QUESTION : In the interest of transparency and openness, and to stop wild guessing games, should we publish the salaries of our CEO and managers like is done for all public companies?

I work for you, the South Queensland members. Can I get some feedback please.

Monday, November 23, 2009

RA-Aus AGM 2009

The RA-Aus AGM and a board meeting was held last weekend.

It is concerning to see such a poor turnout of members for the AGM, but I understand the issues of members getting to Canberra on a Friday. Perhaps it would be better to see the AGM held at Natfly. Comments please.

You can see an edited version of the Treasure's report as a previous post on this Blog site.

The Board members spent a very interesting and productive day at a workshop run by AeroSafe on Industry Risk Profile and Corporate Governance. The workshop was funded by CASA, and from my point of view, money well spent.

The Action Group's motion.

"That the RA-Aus Board, where it is practical, first communicate to members, matters which will have a significant and/or adverse affect on the privileges, financial, or operational obligations of the membership" became motion 2009/74. Moved by me, and seconded by Ed Smith from WA. - Passed.

One item of important note to me was the repeal of a previous motion on confidentially. Excessive secrecy is a real "thing" with me, and I have continuously refused to sign the form requiring secrecy of Board Meetings. Until this meeting where the the new Board Member from Victoria (Ian Baker) also refused to sign I was the only member not to sign. I have no issues with secrecy when "In Camera" But to keep secret other issues discussed at a Board meeting leads to all sorts of corruption and moral issues. I am of the view that everything is transparent to the general membership by default, and only the most contentious and "in progress" issues should be kept secret. "At this stage". Not forever.

This requirement, in my opinion, was also against the constitution. Every single member of the RA-Aus has a constitutional right to attend Board Meetings as an observer, and has a right to the the proceedings without secrecy being applied. Vigilance of the general membership is very important and I urge any member who is able to sit in and observe a Board Meeting to make every effort to do so.

John McKeown
RA-Aus Board Member Southern Queensland

Treasurer's Report 2009

Below is an edited version of my Treasurer's Report to the 2009 AGM.


RA-Aus Treasurer’s Report
AGM 2009




Revenue

For the first time our turnover exceeded two million dollars. Our adjusted revenue for F09 was $2,050,681, up from $1,880,088 in F08.

Our expenses for F09 were $1,619,780.

Some of this increase in revenue was due to extra Government funding, which was approx. $130K for last year. (Normally CASA provide us with a grant of $100K to self administer around 4000 aircraft and around 9000 pilots)

The RAA Shop is underperforming. (I have my own views here for the meeting) The shop is well down on budget (around 30%) and down over $22K on last years sales.

Overall we have had a very good year in difficult financial times.


Expenses


Employee expenses were $651,410, up $142,681 on last year. There will be more detailed discussion on this matter in the meeting. I have proposed a realistic increase in employee salaries, and budgeted to cover a Brisbane based Operations Area Manager should this be agreed on.

I would like to give our staff big pay increases, but I know from experience how this can rapidly get out of hand. Remember it is not just the salary increase but the add on costs as well. When comparing wages in other industries we must compare like with like. Many companies now talk of “packaged” salaries. I know from my business experience where a too rapid rate of wage increases (and hence increased add on costs) can, and will, cripple a business. It is the “rate” of increase, not the actual amount of increase that causes the problems.


Our insurance costs are $30K under budget due to our new insurer and new agreement which goes straight onto the bottom line.

One large distorting expense item was an $80K Magazine bill for F09 that actually went into the F10 period, which will distort our surplus above somewhat.
.

One issue which has not happened in the past is keeping a separate bank account for staff entitlements. Currently this is all lumped into our general bank accounts, but this is money that doesn’t belong to us. I have asked Maxine to open up a separate account for this purpose. Almost every week you hear of cases where a business has spent the employee entitlements money. Currently this figure is around $100K

Telephone and postage expenses are up significantly over last year and may need some consideration to keep the rate of increase under control. The Board telecard costs have always been included in the general office phone account. It is not right to put Board phone costs into the office phone expenses, so I have asked Maxine to take this expense out of office expenses and put it into Board expenses.

Balance Sheet

Our balance sheet shows the RAA with a total equity of $2,397,170. This includes our building now valued at $1,100,000.

Carried forward as a liability is our prepaid membership. I have asked Maxine to open up a separate account for this money as well. It is future money and must be allocated forward to the years where it belongs. It is not money to spend now.

(I do not like this 2 year membership thing, as it leads to real accounting issues in the office. This will become a nightmare when we start to get 2 year renewals coming through. There is also the real problem of a human tendency to spend money you have on hand that is not really yours to spend at this time. Many a good business or association has gone broke by going for prepaid money. Once you start to depend on next years receipts to pay this years expenses you are on the road to disaster. My recommendation is we seriously consider canceling this option.)

At this stage it is very hard to track our year on year renewals because of the two year distortion factor.

Holbrook Museum

There needs to be discussion on the Museum. (The museum have asked for a loan.) My personal view is we stay well away from the loan business. If we were to make a significant loan to the Museum, we must protect our members money with collateral. This becomes very messy, and a loan default lumbers us with the fallout.

I propose we offer the Museum a grant. Something like $10K to $15K would seem reasonable at this time.

GYFTS.

The youth are our future. I propose we offer a grant here also. Equal to the Museum grant.


Lee (our CEO) did a great job in sourcing a better bank deal. We changed from St George to Westpac. The CEO and office staff could not get the one dedicated person at St George to look after our accounts, and their fees were going through the roof, up nearly 300% in one year (from $3.5K in F08 to $8.3K in F09)

With Westpac we have a dedicated account manager, and absolutely no account keeping fees on any of our accounts. We are however charged certain transaction fees, and fees like Overdraw and dishonor fees. We are also paid interest on the above accounts of between 3.05% and 3.8%

Of general interest for those with shares in St George. The local branch lost around $1.5M in deposits from us and didn’t even bother to come around or even phone to find out why!!! (Perhaps they consider $1.5M pocket change or nuisance deposits)



Proposed Fiscal 2010 Budget

Enclosed is a draft of the F10 budget. I have budgeted for a surplus of $165K.

However we must also look at restraining the rate of expenses growth
The proposed F10 budget is a Draft only and has yet to be ratified by the board.

Finally I would like to offer thanks to Lee, Maxine (our finance officer), and our office staff for the efficient running of our finances.


John McKeown
RA-Aus Treasurer.






Treasurer’s Special Report to the members at the 2009 AGM

November 2009 special AGM


This is a special update report I would like to bring up to the membership.

I am concerned that the rate of increase in Employee Expenses is unsustainable.

Our mission statement says “Minimum Bureaucracy” yet in the last two years we have allowed a significant increase in bureaucracy to occur, without a similar corresponding increase in our membership. I must state here that some of this increase in bureaucracy has been forced on us by CASA, but the majority appears to be of our making.

In Fiscal 08 our employee expenses were $508,729. In Fiscal 09 these costs jumped to $651,410, and in Fiscal 10 they are estimated to reach $825,000. This is an increase in two years of over $361K. Or an increase of 62%. All this with our membership remaining fairly static.

Of real concern to me as Treasurer, was the large salary increases granted by the Board at the recent September meeting. When most Australians received little or no wage increases in 2009 due to the economic climate, the board, as a whole chose to approve increases of between 8% for junior office staff, and up to 25% for managers. On top of these increases we must now budget for all the “add on” costs. I am the first to agree that our staff are our greatest asset, but we are a non profit association, funded in the main by member fees. It is my personal belief that we must live within our means.

However it can also be argued that we need to pay the right money to gain and keep the right staff. I see it as my duty as your treasurer to bring this matter to your attention. What you choose to do with this information is entirely up to you. You are the membership. You are the association.

To bring this into perspective we really must look at the cost per individual member.

In previous years our employee cost per member was running at around $56 to $57 per member. This jumped to $68 per member in F09 and I now estimated this to hit $90 per member in F10. An increase of over 60% in just two years.

As treasurer I believe we must seriously address the rate of increase in our employee costs. If it can be shown that some of the increase is due to CASA requirements then I believe we need to seek some cost recovery from CASA. But we, as an association need to “own” this issue, and deal with it appropriately.




Graph of employee costs per individual member over time.



Finally, I won’t be seeking re-election as Treasurer, but I would urge the incoming treasurer to be very vigilant to prevent our costs getting out of proportion to our membership levels.

However, we are an association, and you people, our membership, may be quite comfortable with these increases. But I believe, as un popular as it may be for me, it is my duty as your Treasurer to bring this matter to the attention of the membership.



John McKeown
RAA Treasurer.

Nov 2009

Sunday, October 18, 2009

Gympie Aero Club Invitation


Subject: Dinner with John McCormick C.E.O CASA

Hi John
It was good to catch up with you today,as promised here are the details re the Gympie Aero Club hosting an evening that features as our keynote speaker John McCormick the C.E.O of CASA which will be held at the Australis Resort at Noosa Heads on Saturday the fifth of December.
A three course meal will be served starting with drinks at 5.30 pm.This will be a wonderful opportunity to not only hear about John's flying career in his speech but to find out what future plans CASA has instore for us over the next five years which will be of interest to both GA and RAA pilots.
The opening speaker for the evening will be Brad Smart the C.E.O.of the Smart Radio Group who is a pilot and ex television and radio journalist who has reported from many of the hotspots around the world plus interviewed celebrities from Australia and overseas.
Affordable accommodation has been arranged at the resort starting at $132 per night for a studio unit and our club will offer free transport to and from YGYM if required.
This will be an exciting evening with excellent speakers,good food and the ideal time to mix with fellow aviators,plus enjoy the delights of Noosa.
Tickets are limited so please do not hesitate to contact myself becky@airnoosa.com or Deb deb@frogshollow.net for further information and bookings.
The cost will be $75 per person and we shall look forward to seeing you on the night,and thank you for your offer of helping us to pass this info on to other RAA pilots and groups.
Regards
Jennifer Beck
President
Gympie Aero Club
0419784715

Friday, September 18, 2009

19 Cat. Aircraft and Built up Areas

There seems to be some confusion with 19 Category Aircraft flying over built up areas.

To clarify matters. 19 Category aircraft are forbidden from flying over any township or any built up area in the first instance.

There are exceptions, but it is on an individual case by case basis.

In the past the requirement was.

1. Your amateur built aircraft must be built from a recognized and approved kit.

2. It must have an "approved" engine and propeller.

3. You must get written permission from CASA or our Technical Manager.

4. Only after complying with the above requirements is it legally permissible to fly over a built up area. (above 1,000 feet AGL and high enough to glide clear in the case of engine failure)




Previously aircraft like the Terrier (above) or a Bushcaddy with a Subaru engine would not be approved. Subaru engines are not approved engines. Aircraft with a Herth engine like a Challanger would not get approval.

This was a negative impact on a number of our aircraft. Those members with affected aircraft can now get approval from the Technical Manager even if you have a non approved engine and propeller. Steve Bell has worked to rectify this problem of the past.

Those people with affected aircraft who have not received written approval, should do so now, and need to be aware of the legal ramifications of flying out of towns like Boonah, or Cabolture where in the process of taking off and landing you can't avoid flying over some built up areas.

Approval can be obtained by emailing the Technical Manager with the relevant data.

Sunday, April 19, 2009

ELB Compulsory Requirement

Hi All,

Please read the following and let the RA-Aus know your views ASAP

John McK




Dear Sport & Recreational Aviation Standards Sub-committee Members,

CASA is proposing to remove the formal exemption in the sport/recreational aviation CAOs relating to CAR 252A (carriage of ELTs) as part of its present CAO review. It is proposed that the general exemptions, and the exclusions built into CAR 252A, would continue to apply.

ELT prices continue to fall and the benefits of ELT carriage are gaining acceptance in the sport/recreational aviation community, CASA proposes to continue to monitor developments in this area whilst applying CAR 252A to the recreational aircraft sector without exclusions that go beyond those already beyond those already stated in the CAR.

This means that two seat aircraft operated under CAO 95.55 (RA-Aus aeroplanes), 95.32 (RA-Aus and HGFA trikes) and 95.12.1 (ASRA 2-seat gyroplanes) would be required to carry an ELT for all flights beyond 50 nm from takeoff.

Whilst CAR 252A excludes single-place aircraft, aircraft travelling within 50 nautical miles of their starting point and some other aircraft classes including balloons and gliders from being required to be equipped with an ELT, there have been exemptions extant for aeroplanes and gyroplanes under sport/recreational aviation CAOs.

Exemptions from ELT carriage have existed in sport/recreational CAOs since the time that such aircraft were confined to small areas either by aircraft capability or by restrictions inherent in CAOs as they existed at that time. Aircraft capabilities have increased over time and so have the freedoms allowed by more recent iterations of the CAOs. With these new freedoms comes a responsibility for people who wish to access the freedoms.

Increased cross country capability of sport/recreational aircraft, the breadth of general exemption available in the CAR and radically decreasing costs of ELTs/PLBs means that CASA now has difficulty justify exempting such aircraft from this requirement. Also considered are the risks to search and rescue personnel of conducting a rescue and the costs to society as a whole for a rescue.

CASA proposes the CAOs wording be future proofed by the requirement for an ELT or CASA approved alternative. This would allow CASA to broadly approve alternate technologies for operators of aircraft under an instrument or provide specific approvals to operators to use alternate equipment as circumstances dictate. It is proposed that operators of aircraft covered by this new requirement would have until 31 May 2010 to comply with the new requirements.

CASA has contacted the organisations whose members will be affected and now seeks wider aviation community feedback on this proposal.

The extract below is provided for the purpose of informing this discussion but the regulation should be read in its entirety for operational purposes and is available at this link www.casa.gov.au/wcmswr/_assets/main/download/act_regs/1988.pdf

252A Emergency locator transmitters
(1) The pilot in command of an
Australian aircraft that is not an exempted aircraft may begin a flight
only if the aircraft:
(a) is fitted with an approved ELT:
(i) that is in working order; and……………

(2) Subregulation (1) does not apply in relation to a flight by an Australian
aircraft if:
(a) the flight is to take place wholly within a radius of 50 miles from
the aerodrome reference point of the aerodrome from which the
flight is to begin; ……………

exempted aircraft means:

(e) a balloon; or
(f) an airship; or
(g) a glider;

single seat aircraft means an aircraft that is equipped to carry only one
person;

Please provide any comments by cob Friday 1st May by reply to this message or by email to (Removed by blog author)

Regards,


Greg Vaughan

Friday, April 17, 2009

Serious NTSB report on Zodiac CH-601XL

All owners of the CH-601 XL are advised to read this NTSB report released 2 days ago.

Note. 1. The fatalities do not include the 4 deaths from the two inflight incidents in Australia which are still before the Coroner.

2. There appears to be other than just canopy issues with the 601.


http://www.ntsb.gov/Pressrel/2009/090414a.html




Thursday, April 2, 2009

Famous Trumpet Player gets Drifter Training

Lighthearted Post



After learning that you will never, ever, really make it as an aviator unless you have Drifter training. Famous trumpet player, and accomplished aviator, James M, decided he needed some Drifter training to really make it as one of that select band of pilots with Drifter PIC time.

James came to Greg's school at Boonah to gain those special skills possessed only by Drifter trained pilots.

Ed Note. Australia's first and only, "Red Bull" pilot. Our fast jet military pilot who saw combat flying F18's over Iraq, got his initial flying skills from being Drifter trained.



CFI Greg, and James with the school Drifter. James is the intelligent looking person with the Trumpet.



Now Greg has the trumpet.

There is a very old Chinese proverb.

"Can teach Trumpet player fly Drifter. Not ever possible teach Boonah CFI play Trumpet"

Monday, January 19, 2009

Disgraceful Reporting

Late last year we had another GA aircraft crash which resulted death.


Now enter Paul Bibby from the Sydney Morning Herald. (See link below) He wrote the most disgracefull piece of rubbish about "US". Australian Recreational Aviators. Please remember this man's name, and watch out for more rubbish coming out of his head, and into the newspaper that employs him.


http://www.theage.com.au/national/light-plane-deaths-up-more-than-50-20081229-76ty.html


See below the reply by our CEO, Lee Ungermann.



Mr Paul Bibby,

RE: http://www.theage.com.au/national/light-plane-deaths-up-more-than-50-20081229-76ty.html

I do not believe you tried very hard to verify any of the facts presented in your article. This article was a deliberate attempt to link non-related aircraft deaths with our weight increase proposal and yet another example of non-truth made to fit a good story. Had you have bothered to verify the facts you presented in the article then you would have realised that your article was not only wrong in many respects but also extremely damaging to the SMH and the Ages credibility. Had you taken the time to contact the office, myself or our President on numbers readily available on the newsstand or on our website, we would have been more than happy to present facts for you to use in your article.

Recreational Aviation Australia Inc.(RA-Aus) has always tried to build credible relationships with the media, however when first principles of journalism are not adhered to, such as establishing fact, it is difficult for any organisation not to be reactionary.

Here are some facts you may wish to take note of:

1. Recreational Aviation Australia Inc. does not register Glider or Gryo Pilots.

2. The proposed weight increase does not include Gliders or Gyros.

3. Recreational Aviation does not administer Crop Dusters, CASA does.

4. There is not a significant number of Ultralight aircraft represented in the accident statistics.

5. In the past twelve months(2008) only one fatal accident occurred involving an aircraft on our register.

6. 2008 was one of the safest years in the last ten years, despite being the greatest growth area in General Aviation in Australia.

7. Aircraft weighing 600-2250kg are administered by CASA or other self administrating organisations, not Recreational Aviation Australia Inc.

8. The Recreational Aviation Training Syllabus is approved by CASA and is based on the Day VFR Syllabus.

9. A Lake Buccaneer is regulated by CASA and is not the responsibility of RA-Aus.

10. RA-Aus is a member based organisation that receives minimal funding from CASA to administer our aircraft and safety.

a. Our members financially support:

i. Our office structure.

ii. Safety Programs.

iii. Accident Investigation.

iv. Flying School Standards.

v. Our presence at Regulatory Development meetings (CASA)

b. Is a non-profit organisation conducting work on behalf of CASA.

11. Recreational Aviation Maintenance safety outcomes are proportional to General Aviation and no safety case exists that owner maintenance is a significant risk to person or public.

The point is Paul , that RA-Aus is administering the largest growth area of aviation in Australia and is doing it safely in comparison to many other areas of aviation in Australia. Your accident statistics demonstrate that there was an increase in fatalities, so I have no issue with your title or your motivation for the article, but to contact me and falsely claim that the article is about our proposed weight increase is not only deceitful but is a large impact on an area of aviation that is improving its safety record. To report otherwise, without fact, is doing a dies-service to yourself, your readers and also your employers.

The manner in which you sent this email at 8pm the night before(as the article went to print) is also not acceptable and the fact that no contact or indeed a genuine attempt was made with our organisation prior to the articles printing also demonstrates a disregard for the SMH code of ethics. http://www.smh.com.au/ethicscode/index.html . With this in mind, please respect the disclaimer at the bottom of this email.

Right now, 9,000 readers are unhappy with your portrayal of RA-Aus http://www.auf.asn.au/ , the Sydney Morning Herald and the Age. If you are interested in doing what is morally right, I am happy to discuss the facts with you, so that this kind of ambush editorial does not discredit you or your employers in the future.

If the SMH or The Age as your employers are interested in adhering to their code of ethics, I would be pleased to discuss this with them also.

Regards

Lee Ungermann

Chief Executive Officer

Recreational Aviation Australia Inc.

0428282870 / 02 62 804700