Continued from part 1
Issue 5:
“… Jane also asserts that CAMS cannot afford to finance the excess on future insurance claims:
Yes, CAMS promise to absorb this $100,000 or multiples of these $100,000 incidents…
… To all promoters and clubs, talk to your accountant to evaluate CAMS’ balance sheet and consider the implications if CAMS failed to meet their promise to pay. Can you afford one or more $100,000 liabilities if CAMS failed?
WRONG!
THE FACTS ARE:
CAMS has the financial capacity to pay all excesses as they arise.
Financial analysis completed by AON Rick Services, based on past claims history projected for the future, have identified the average amount required for excesses each year. CAMS has undertaken its financial planning accordingly.
CAMS currently has half a million dollars of dedicated reserves which is more than sufficient to meet claims excesses for the foreseeable future. Appropriate additional amounts are budgeted for each year into the future.
CAMS has other cash reserves on which it can draw if required…”
Colin, after my experience with that 1995 claim, where CAMS would not accept responsibility to Calder Park, AIR and ANDRA, I do not trust CAMS.
I do not accept that after the 2003 balance sheet, not published yet, and the projected 2004 profit giving CAMS a balance sheet asset of $3.3 million being the best that CAMS can project. Take into account that CAMS property assets is not currently available as part of any guarantee. This fact has been stated previously in CAMS document.
According to the 2002 Annual Report, the Written Down Value is $2,581.624, which includes the buildings in East Malvern, Wanneroo and Parramatta. With these buildings being in the CAMS property holdings company, when balanced off against the Total Members Equity of $2,603,157 would leave only $21,533 which is less than 1 excess claim available for the $100,000 deductible.
So Colin, I say again, I absolutely do not see how CAMS will be able to meet the obligations of the $100,000 multiples in 2004 and beyond.
Colin, you suggest that, at best, the CAMS balance sheet in 2004 will show assets of $3.3 million of which $2,581,624 is currently quarantined from being included in any guarantee. This is ordinarily good business to protect CAMS’ properties but not very promising for people you ask to rely on your CAMS guarantees to cover the $100,000 of any claim you say you will cover.
Think about CAMS’ assets even at $3.3 million then look at the capital investment of most racetracks and then appreciate how CAMS fit into motor sport.
There is the question of if the 34 or $850,000 liability of claims up to June 31st 2003, where is the provision in CAMS balance sheet for that? Further, what is the provision from Jul 1st 2003 with 2 unfortunate deaths plus a number of injuries at Phillip Island and the WA Rally accident, as well as any others that have not been reported in the newspapers? Are these claims included or will they be included in CAMS’ 2003 balance sheet? Only time and the 2003 balance sheet will tell.
Issue 6:
“… The doubts about CAMS undertaking to absorb the $100,000 excess is offered as explanation as to why Calder Park does not hold CAMS events:
… Frankly, that is why Calder Park Raceway does not, and will not, rent our venue under a CAMS permit and Public Liability Insurance…
WRONG!
THE FACTS ARE:
Calder Park is unable to “rent their venue under a CAMS permit” as Calder Park Raceway does not have a current CAMS track licence.
The withdrawal of the track licence was as a result of default on payment due to CAMS in March 2003, when the Calder Park company holding the track licence went into liquidation.
CAMS is unable to issue permits for events at venues that are not licensed by CAMS…
Yes Colin, you are correct in what you say but what you do not say is that CAMS are unable to conduct their Observed Licence Testing at Calder Park Raceway for prospective competitors but do not worry Colin, AASA are filling that gap.
Calder Park Raceway was the racetrack that promoted the AGP from 1980 to 1984 at a cost of several million dollars. Calder Park Raceway was the first and only track to hold the World Touring Car event in 1989. It was also the first track to hold truck races and super bikes. It went from an approved FIA venue to being unsafe for CAMS clubs overnight because it did not have a CAMS permit, I did have an Auscar permit.
Issue 7:
“… in relation to the new track fee structure:
… Ask yourself why the new deal from CAMS involves you paying your huge track license fee and then charge all your track renters to pay for this huge increase…
WRONG!
THE FACTS ARE:
The ‘new deal’ referred to by Jane is a dramatically improved system of track licensing and permit fee structure.
This has been developed jointly by CAMS, members of the Circuit Operators Advisory Group and others.
The combined track licence and permit costs for 2004 are consistent with the same costs in 2003, with an adjustment approximating CPI.
This reform is one of the most significant advancements in a decade…
Colin, CAMS’ track license fee increased by 70% for the year 2003. This increase was called an ‘insurance levy’ to help pay for the July 1st 2003 insurance. You know, Colin, the insurance that costs no more. The insurance you quoted that went up 100% and then when quoted you argued that the increase was only 60%.
Now the new deal for 2004 for all CAMS licensed track formulated by CAMS and COAG.
The first thing CAMS talk about is the actual increase in track license fees intended for 2002 and taking into account the backlash from promoters, was delayed to 2003. You will see in paragraph 3 of CAMS’ letter from Adam Blythe, this has been removed for 2004 fees. It then goes on to say that insurance cost has been removed from the permit and added to track licence and as such, the track license fee has been increased.
Paragraph 4 tells how a promoter can sell on for more profit, as it will all be confidential between each promoter and CAMS. Colin, are you teaching promoters snide ways of charging clubs CAMS purport to represent.
Now I say, this is an annual package from January 1st to December 31st 2004 with CAMS’ no insurance for the first $100,000 of any incident that becomes a claim, valid until the end of June 2004. So what exactly happens to the deal come July 1st 2004? Dr Rob Nethercote has stated that CAMS have no insurance from July 1st 2004 and that CAMS are working on a self-insurance deal from that date.
In any case, the current CAMS insurance is self-insurance for the first $100,000 of any incident that becomes a claim. Promoters should look carefully at what this new deal does in changing your status. It is now the promoter who sells on CAMS insurance and becomes legally responsible for this what I believe is unsatisfactory insurance.
The promoter may become responsible for his racetrack and the conduct of his events – a transfer from CAMS to you in many aspects. Promoters become responsible for the health and safety laws relating to track safety and the conduct of all matters at your racetrack. These are all areas that need professional legal advice.
The following 3 pages will give you all a glimpse of what CAMS have in store for promoters for 2004.
(RaceNews Note: This attachment can be downloaded from:
http://www.racetime.com.au/racenews/...20release1.pdf
To all of you, I have given my opinion openly and honestly. I say again, all of you have accountants and auditors, check CAMS’ balance sheet. Please note that you cannot bank bull**** or black smoke and mirrors. You also cannot trust CAMS and its mega Gods of motor sport.
Sincerely,
Bob Jane
January 6th 2004