Dr. Bret D. Marsh delivers the treasurer's report to the
House of Delegates.
"These are extraordinary times. The AVMA, as a member-driven organization, feels the impact of today's fiscal changes just as you do," Treasurer Bret D. Marsh told the House of Delegates, July 30 in Atlanta.
"In the span of four short years, we have experienced the largest year-end surplus in AVMA history—$2.7 million in 2004—and the largest deficit in AVMA history—$7 million in 2008," he said. "But through it all, it has always been about the members. And because of this truth, the AVMA will persevere, regardless of the challenges it faces."
The AVMA's financial position at the end of June included cash and government funds of $5.8 million, receivables of $1.35 million, prepaid expenses of $314,000, and investments of $22.3 million. The investment portfolio included $9.4 million in certificates of deposit, $1.5 million in government securities, and $11.4 million in managed funds. Those investments are down $500,000 from the amount Dr. Marsh reported to the HOD a year ago but up 2.2 percent since the first of this year.
Year-end projections are for the fund balance to be $23.5 million and the reserves to be approximately 80 percent of annual operating expenses. AVMA policy requires that its reserves be 50 percent to 150 percent of annual operating expenses. The reserves were at 88 percent at the end of 2009 and 108 percent at the close of 2007.
"Although fiscal year 2009 was expected to end in a deficit, a late-year rally in the stock market pulled us out of the anticipated red ink—2009 ended with a surplus of $1.4 million," the treasurer reported.
To avert a deficit year in 2010, Dr. Marsh noted that in January the Executive Board conducted an exhaustive review of the previously approved 2010 budget and authorized a business plan to end the year narrowly in the black. Despite that effort and because of continuing shortfalls in income and one-time program expenditures, a year-end deficit of $800,000 is now projected.
The treasurer turned his attention to the independent auditor's report, conducted by Legacy Professionals of Chicago. Dr. Marsh called it noteworthy that the report contains no significant findings, a benchmark he said is not easily attained. He credited staff led by the AVMA's chief financial officer, Kim Michael-Lee, director of the Finance and Business Services Division.
Looking to next year's budget, which was built using the upcoming new revenue from the $50 dues increase the HOD approved in January, Dr. Marsh said, "The 2011 budget, as approved by the Executive Board, projects income that surpasses the $30 million mark for the first time in AVMA history.
"The final product is an excellent example of a collaborative effort that advances the objectives of the profession through the AVMA's many activities while directing funds to reserves to begin the process of replenishing them." The projected amount committed to the reserves for 2011 is $1.7 million.
That budget includes $417,500 in financial support from the American Veterinary Medical Foundation for specific AVMA projects. The treasurer commended this new fiscal collaboration between the AVMA and the AVMF, saying, "This is a precedent-setting action that will have a long-term positive impact on both organizations."