Dr. James F. Peddie
Dr. James F. Peddie explained that many of the AVMA's long-term investments were in securities with fixed yields locked in prior to this downward movement in the general economy.
Treasurer Peddie predicted that in 2002, however, the Association may feel this downward trend much more strongly. Many of the AVMA's higher-yielding investments will mature and need to be reinvested. The rate of return is likely to be lower than the current rate. Meantime, the AVMA is researching other investment options to maximize interest income.
The other three major income areas—dues, publications, and convention—are on target, he said.
Shifting from discussion of income to expenses, Dr. Peddie explained why he supports this year's bylaws amendment to increase member dues.
"Two years ago I predicted that the rising level of expenses would, during this fiscal year, come close to equaling the anticipated level of income for this fiscal year," he said, "and that is, in fact, what is happening. The buffer of excess of income over expenses which we have enjoyed in the recent past is rapidly narrowing.
"Projections continue to show that, without the $25 dues increase, next year's income will fall short of AVMA's operating expenses."
His decision to ask for a $25 increase instead of $50 was based on financial issues and a philosophic point: how much of a reserve balance is enough? At this fiscal year-end the AVMA expects to have 86 percent of its 2001 budget held as liquid reserves, an amount that equals or exceeds the American Society of Administrative Executives' recommendation. The treasurer decided, therefore, that a dues increase needs to be sufficient to address only the AVMA's increased operating costs. In two to three years, however, he may ask the HOD to sanction another dues increase.
The AVMA's total assets—a combination of the fixed assets and the liquid or cash investments—are an estimated $28.5 million. This represents an increase of about a million dollars from the same period a year ago.
Dr. Peddie said that AVMA leaders are researching financial organizations and institutions to find an entity that will—under the Association's guidance and monitoring—offer a complete package of financial and investment services to the AVMA. The goal is to pay less than at present and increase the rate of investment return.
Consideration is also being given to purchasing a permanent location for the AVMA Governmental Relations Division in Washington. When the 10-year lease on the current office site expires in July 2002, a substantial increase in rent is anticipated.
In conclusion, the treasurer said, "I see your AVMA as being healthy, with its two fuel tanks—the people fuel tank and the money fuel tank—both being full, and ready to drive the AVMA into the future."