"The economy made us take a look at what we do as a business and reevaluate everything. Is the budget perfect? Probably not. Is it very good? Yes it is."
—DR. DAVID L. MCCRYSTLE,
CHAIR, AVMA EXECUTIVE BOARD
The AVMA Executive Board is sending the House of Delegates a balanced budget for fiscal 2010. Restricting new spending, reducing travel, and cutting costs in several AVMA divisions and programs resulted in a $28.6 million budget with a projected $90,049 surplus for 2010.
The budget approved by the board at its April 2-3 meeting projects $748,822 less in expenses than in the 2009 budget, which is now projected to run a $1.3 million deficit. Although investment income is down 9.4 percent so far in 2009 and ad revenue will be at least $500,000 less than expected this year, the Association has $21 million in reserves.
The board, in conjunction with AVMA staff, has tried softening the shortfall in a number of ways. Along with the latest round of cuts, this has included switching health insurance providers for staff and a decision to print the JAVMA and AJVR on lower-cost paper. These latter changes alone are expected to save $385,000 to $500,000 in 2009 and roughly $900,000 during 2010.
Expenditures on new projects in the April board agenda were limited to $32,400 from the 2009 contingency fund. Of that amount, $30,000 is designated for the creation of a DVD describing AVMA benefits and services to members and the veterinary profession. Most recommendations with financial considerations were cost-cutting measures that resulted in savings for the Association.
"I'm happy with this budget. It's going to be tough, but we'll make it," said AVMA Treasurer Bret D. Marsh.
Board Chair David L. McCrystle echoed those sentiments and credited Dr. Marsh, staff, and the board's Budget and Financial Review Committee with proposing cuts to AVMA activities that could be made without compromising the Association's work.
AVMA Executive Vice President and CEO W. Ron DeHaven, Executive Board Chair
David L. McCrystle, and Treasurer Bret D. Marsh during deliberations of the board's
Budget and Financial Review Committee on austerity measures proposed by each AVMA division.
"The economy made us take a look at what we do as a business and reevaluate everything. Is the budget perfect? Probably not. Is it very good? Yes it is," Dr. McCrystle said.
The AVMA has reduced spending in a number of areas. For instance, seven of the 11 AVMA divisions saw reductions in their budgets. Those that didn't received only moderate increases. Travel budgets for AVMA officers and Executive Board members were reduced 15 percent, resulting in a savings estimated at $85,000.
These travel changes mirrored recommendations from the Task Force on Future Roles and Expectations to promote efficiency by assessing how many AVMA representatives should attend various meetings. Dr. McCrystle said the economic downturn has forced Association leaders to think seriously about where it sends its human resources.
"We haven't done enough in the past to prioritize AVMA travel by our officers, Executive Board members, our staff," Dr. McCrystle said. "Now we have the policy in place of discussing beforehand what's the most value to AVMA and its members by sending officers and elected officials to these meetings. I think we'll do a much better job now."
The 2010 budget also accounts for a new income source—the annual Veterinary Leadership Conference. Beginning in 2010, all individuals attending the VLC will be charged a registration fee, which should result in $50,000 in additional income for the Association.
The Executive Board postponed until July a decision on a recommendation from AVMA CEO W. Ron DeHaven and the Member Outreach Task Force to authorize continued support of the AVMA Veterinary Leadership Experience at a cost of $75,000 per year for 2010-2013. Currently the Association is sponsoring the program at a level of $75,000 annually from 2006-2009. The VLE will undergo a planned evaluation at the end of this year's event, June 2-7, and continuation of the AVMA's sponsorship will be decided at the second meeting of the Executive Board in Seattle.
Several board members questioned the value of the AVMA VLE as a leadership-building program for veterinary students and wanted assurance that the Association is spending its money wisely. The board voted to postpone acting on the recommendation until it hears back from the AVMA vice president and staff attending the upcoming VLE.
According to Dr. Marsh, AVMA leaders are having to make difficult decisions in the short term, but he believes some of the resulting cuts could be revisited in a better economic climate. "We're in an evaluation year," he said. "There are some areas we may have to revisit, and we may need to refund those areas."
Efforts to responsibly manage AVMA finances and balance the budget do not preclude an eventual increase in membership dues. Dr. Gary C. Bullard, chair of the AVMA House Advisory Committee, believes the HOD will almost certainly have to approve a dues increase for 2011. Only the HOD, not the Executive Board, has the authority to enact a dues increase.
Dr. Marsh agreed, saying the HOD will have to "take a hard look at a dues increase for 2011."
Read the expanded board coverage in the May 15, 2009, JAVMA News.