September 01, 2009

 
HOUSE OF DELEGATES

 2010 budget: promises kept

Building the reserves has helped buffer the Association

 
posted August 15, 2009
 

Dr. Bret D. Marsh
AVMA Treasurer Bret D. Marsh reports to the House of
Delegates in July.

AVMA leaders have made good on two fiscal promises made to the membership in January at the Veterinary Leadership Conference, Treasurer Bret D. Marsh reported July 10 to the House of Delegates.

The treasurer said Executive Board members sat around the "kitchen table" at AVMA Headquarters in Schaumburg, Ill., and made the same tough financial decisions their colleagues are making at home and at work.

"They, along with the staff, rolled up their sleeves to fulfill the promises made to you in January: One, the budget would be balanced, and, two, the long-term reserves would be preserved," Dr. Marsh said. "Promises made; promises kept."

This budget is right for the times, he said. It required much compromise, as is often the case with budgets developed during difficult economic times.

"This 2010 budget provides a window to the very soul of the AVMA," Dr. Marsh said. It establishes funding priorities in line with the strategic plan, funds the core functions of the Association, and places a high priority on a quality staff. He said the budget also continues to honor the commitments long made to AVMA volunteer leaders, who "have provided dedicated, thoughtful leadership that has so effectively guided this Association for 146 years."

The treasurer put a figure of nearly $7 million on the AVMA's "significant downturn in income" during fiscal year 2008, which ended Dec. 31.

The projected fund balance at the end of 2009 is $20.3 million. Originally, the 2009 budget projected income over expenses at $95,978, but because of the persistent recessionary period, a loss of approximately $2.8 million is projected for fiscal year 2009, Dr. Marsh reported.

"While these year-end figures are certainly disheartening, the AVMA placed several millions of dollars in reserves over the last 10 years," he said. "These reserves were intended for challenging economic times, and to that end, the financial strategy of the AVMA has worked."

In addition to that buffer, the 2010 budget reflects deep cuts. Dr. Marsh said it would have been easier to ask for a dues increase—but it wouldn't have been right.

"It wouldn't have been right in the eyes of the Executive Board as they prepared this budget, because they looked out across this country and saw you, as well as the AVMA's other 78,000 members and their families, sitting at their kitchen tables looking over their personal finances," Dr. Marsh said.

"They also saw these same colleagues sitting in their offices making business decisions in the most difficult financial times in decades."

Board members are keenly aware of areas within the districts they represent that have been hard-hit by the recession—areas that are experiencing the highest unemployment figures in a quarter century, record home foreclosures, and the shuttering of businesses.

"They further recognized that just as our members have stayed with us during better financial times, we must stay with them when times are more difficult," the treasurer said.

The uphill battle to arrive at a balanced budget without asking for a dues increase in 2010 was met with mixed reaction from HOD members in Seattle as they reacted to the board's reduction in the travel reimbursement for HOD sessions (see page 495).

The AVMA's financial position as of May 31 lists investments of $22.8 million, cash and government funds of $3.8 million, receivables of $339,000, and prepaid expenses of $212,000. The investment portfolio comprises $12.8 million in certificates of deposit and $10 million in managed funds.

By far, the largest source of AVMA income is membership dues, at 57 percent. Dues income has continued to grow over the past decade, Dr. Marsh reported. This is a result of the continuing growth in AVMA membership coupled with dues increases in 2002 and 2004.

Salaries and benefits for AVMA staff members in Schaumburg and Washington, D.C., are the Association's largest expense, at 45 percent of the total. This expenditure represents an important investment in the future, Dr. Marsh said, adding that the AVMA has had success in hiring talented staff into mission-critical positions.

The treasurer said AVMA has had its share of other bright spots. As of May 31, dues income was $235,500 or 1.5 percent ahead of this time last year, and revenue from registration for the AVMA Annual Convention in Seattle was $905,000 or 72 percent ahead of last year.

Even the investment portfolio has seen an increase of 7.03 percent since the beginning of the year, according to the June 26 investment report.