T2x

There are a lot of things on other threads.......... but, I think the purpose here is to deal with the facts in black and white according to the documentation available to the public and "other" APBA members.

Given the contractual language presented, what is the math and factual basis supporting this claim of a half million dollar "overcharge"? That seems like an awful lot of money given the relative size of the entire transaction, and, if true, why wasn't a recovery suit instituted by the LLC long before this?

T2x

Ron P

The LLC is claiming to have paid way more than the license fee. They paid $180,000 in fees plus $200,000 for insurance. So they claim to have paid far more than the $210,000 yearly fee.

Detroit says, the insurance money doesn't count toward the yearly fee. Hence the dispute over the amount to be paid.

It really appears that if someone wanted to work this out, they could have done so a long time ago. I think there is more to it that we will never know.

T2x

Not neccessarily........ The APBA has been pretty forthcoming with info...... and the LLC is at least stating a position. There is an interesting dynamic occurring with APBA Detroit members (myself included) asking for answers....... and supporters of a private company (the LLC) with APBA "membership" cards seeking resolution of their rights regarding the organization's name, UIM affiliation, ETC.

The stakes here are quite high as it appears that a group, including the LLC and Hydro Prop, made an attempt at controlling all of the "for profit" parts of APBA, and, as a byproduct, the overall organization as well. The big question is how much, if any, success did they have in this caper? This has far reaching implications in the other (non offshore/unlimited hydro) divisions as to governance and future planning, and that is why this site has suddenly found a number of inshore boat racers participating. These are people without an offshore ax to grind interested in the welfare of their parent organization.

APBA Detroit is not without blame here as they apparently were pretty naive' during the original negotiations.

Certainly, for the good of all concerned, a resolution must be reached.

T2x

ModMachine

Insurance for a two day event for outboards is $1944
Insurance for a two day even for offshore is $8944

APBA SANTCION FEES for 2003:

*OFFSHORE SANCTION FEES
(Outlaw Divl.)(APBA-$775/OS-$700)………. $1,475
(Outlaw Perf. Series)(APBA-$415/OS-$250)...$ 665
- OFFSHORE PRO SERIES EVENTS ($3,600 APBA Fee Only)
- Offshore Stand alone Kilo Speed Trials
- Offshore World Championships ($6,700 APBA Fee Only)

*BASIC SANCTION FEE FOR EVERYONE ELSE:
Stock/Mod/PRO/J/SLT/OPC/Outbd Drag/Inb/IE: $400


Offshore insurance fees:
OFFSHORE - PRO 1-day event N/A, 2-day $8,944, 3-day $12,399, 4-day 14,523 --- FIVE DAY!!!! $16,674

OFFSHORE - Divl. Kilo
1 day $3,008 - 2 day 4,514, 3 day 6,305 4 day 7,178 5-day $8,125

************************************
Now compare that to What APBA charges OUTBOARDS for Insurance:

Stock - Mod -PRO - J -SLT 1 day 1,259, 2-day $1,944, 3-day $2,650, 4- day 3,183, 5-day $3,664

OPC/O-Drag: 1 day $1,464, 2 day 2,292, 3 day 3,111, 4-day 3,646, 5-day $4,191

***********************************

Hydro Prop gets hacked too:
*SPECIAL EVENTS:
- PROP………………………………SANCTION FEE $1,250
*UNLIMITED (APBA fee only)……………… …….$4,635
- APBA Gold Cup - Sanction fee plus…………$5,150

C_Spray

iTrader: (2)

Wonder if anyone at LLC knew about this before the bills came in.... and what did the coverage actually cost APBA?

So (regardless):

Are offshore racers four times as likely to crash, or are their lives worth four times as much? I doubt it. Or have the claims historically really been four times as high? The cost per boat is no doubt higher, but it sounds like the outboard guys field a lot more entries.

Regardless of what may or may not be going on, it's incredibly bad timing on the (alleged) APBA's part to blow this whole thing up AFTER the season has started. I would be asking for answers, too.

BROWNIE

I was offshore v.p. of APBA 1967,8,9. In those days, we bought insurance, not sold it. What gives? Is APBA in the insurance business?

Ron P

From my understanding APBA gets a yearly blanket policy to cover all of their events. That policy costs X. Then APBA comes up with an amount to charge each event based on a formula. I think the offshore formula is something like Racer with thick wallets+large boats=ability to pay more so other divisions can pay less.

This year, the LLC got it's own insurance outside of APBA so they won't be helping to pay for part of the umbrella policy. Other divisions will need to carry their own weight plus what the LLC left behind.

BROWNIE

It looks like APBA took too much for granted with the LLC contract. I think that most of their agreements are less predatory. Shoulda known better.....

CigDaze

And, thus we have the situation we see today. You've seen the following before, how about a refresher:
--------------
The Licensees currently provide roughly 54% of the APBA's annual revenues - but receive little to nothing in the way of product or services in return. This was the primary reason for the restructuring of APBA, to provide for a fairer more balanced system of governance.

Offshore has exceeded its License Fee obligation - each of the past 3 years and in fact has been overcharged by APBA during this time, nearly $450,000.00.

Offshore does NOT owe APBA a single penny.

APBA violated the License by:

Improperly increasing its annual fees by more than the contract maximum of 3%.

APBA overcharged Offshore for memberships - The Offshore Participant Membership fees, as charged by APBA, were $54 more than any other category. There is no basis for the extra charge and in fact the old leaders claim the only basis for it is that the Offshore guys can pay it. In addition, Offshore assumed most of the accounting functions associated with all its memberships, yet only $56 of each membership went to Offshore. The rest went into the APBA Treasury. This was not a problem, however, until Strang, Hearn and the others declared that this money was theirs to spend on whatever they chose. To them, the Offshore members of APBA were not really members. In their minds Offshore's members were required to pay them money but were not entitled to receive anything other than a patch, plastic card, and some decals. The overcharges for memberships alone since 1999 were approximately $175,000.00.

APBA overcharged Offshore for sanctions - APBA charged only $300 for each sanction it issued to every other category of APBA while charging Offshore a 1000+% premium on its national events and nearly 400% on its divisional events. Yet the Association does not provide a single additional service or any additional value. Again, the old guard claims the only basis for the extra charges is the Offshore guys can pay it. The overcharges for sanctions alone since 1999 were approximately $140,000.00.

APBA overcharged Offshore for mailings - Overcharges for mailing fees since 1999 exceed $30,000.00.

APBA overcharged Offshore for insurance - Since 2000 Offshore has seen its risk management rates increase by 34% for national events and a whopping 62% for divisional events, while the Stock Outboard Category's insurance rates actually were reduced 11% over that same time period. Offshore, its members and race producers therefore, without their knowledge or consent were used to subsidize the old leadership's preferred categories. The overcharges for 2001 and 2002 amounted to approximately $70,000.00.

APBA has roughly 8 employees and a payroll expense of $227,000.00 annually even though it has revenues of less than $1,000,000 and most of its operations are now fully automated. When Offshore recently assumed control of the entire sanction, insurance and membership functions of the category it did so without hiring a single additional employee.

It also paid out $27,500 in hospitalization and disability insurance premiums for an already bloated staff.

$15,000 in pension expense.

$65,000 in additional insurance expense such as Director's and Officer's Liability coverage for a small company of less than $1,000,000 in annual revenues.

$28,000 to Steve Hearn for legal services many of which such as bylaw amendments and updates simply never were performed.

$25,000 for Board of Directors related expenses.

$60,000 net loss to produce the Propeller magazine.

C_Spray

iTrader: (2)

If I was in charge of APBA BoD (and I'm not), I certainly would NOT admit it at this point.....