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September 15, 2000

 

 Treasurer Peddie: dues increase needed in 2002 for AVMA to continue progressively

Posted Sep. 1, 2000

In an extensive analysis of the AVMA's financial status, Dr. James F. Peddie, AVMA treasurer, reported July 20 to the House of Delegates that the Association's assets are doing well to support the 64,872-member organization for fiscal years 2000 and 2001.

Treasurer Peddie said his projections indicate that in 2002, however, the Association will go into deficit spending, necessitating an increase in dues. "Our income has been steadily increasing, but our expenses are increasing at an even faster rate."

In the weeks following the HOD session Dr. Peddie amplified on the dynamics that are leading to the first dues increase since 1995. The expenses are directly related to the cost of becoming increasingly proactive, in adding and expanding member services and advocacy.

income over expenses
AVMA expenses are increasing at a faster rate than income.
income, expenses, and net income
Income has exceeded expenses in the past, resulting in a new income, the sum of which has been transferred into the AVMA reserve fund at the end of each fiscal year. Predictions of AVMA finances for the future indicate that income will meet expenses, resulting in little or no net income.

The treasurer observed that most of this falls under two categories. "The AVMA has made some valuable technological advancements recently, and others are in progress, to better serve our members' needs. Just as vital are certain expansions of the role and duties of the AVMA, as directed by the membership via the House of Delegates or the Executive Board."

Examples of recent and ongoing areas of critical involvement on behalf of members can be found in the sidebar.

"The AVMA is on an increasingly progressive and proactive path, and that costs money," the treasurer said with unabashed candor and conviction.

He said that the amount of the proposed increase is yet to be determined but would probably be $25, which would increase the annual dues for an active member from $200 to $225.

At the July HOD session, Dr. Peddie told delegates, "Our dues income has grown annually at a 2.5 percent rate. This directly reflects our growth in membership." He added that the AVMA's average ratio of dues income to nondues income is 61.5 percent to 38.5 percent.

Nondues revenue (or income) comes primarily from classified advertising and display advertising in AVMA publications; the Annual Convention, including sponsorships and exhibitors; and investments. Dr. Peddie reported that the headquarters office building in Schaumburg, Ill, has income from tenants, whose offices occupy 50 percent of the building.

The AVMA has $25 million in total assets (real estate, value of equipment, and reserve funds). The reserve fund balance is approximately $16 million, and projections indicate this area will show no increase in 2001. "Outside of routine monthly bills, the AVMA has no outstanding debt," Dr. Peddie said.

"Looking at the past three years, our income has exceeded our expenses ... resulting in a net income, the sum of which has, at the end of each fiscal year, been transferred into the reserve fund," he said.

The treasurer offered another frank observation. "One of the principal reasons we have looked so good at the end of each of the last several fiscal years is because approved, budgeted staff positions go unfilled, because of a lack of suitable applicants and a highly competitive labor market. The money that was budgeted to fund those unfilled positions passes through to the bottom line. The result is that the bottom line looks great, but important, already approved, and badly needed staff positions go unfilled."

Despite the Association's ability to make ends meet each year, Dr. Peddie recently formed an ad hoc advisory committee to examine the AVMA's investment strategy and vehicles. Serving with him on the committee are Dr. James E. Nave (president), Dr. Joe M. Howell (immediate past board member, and candidate for president-elect), Dr. Joseph Kinnarney (vice president), and Dan Murawski (director of the AVMA Business Division).

Technologic advancements in member services and advocacy
  • Creating a Member Services Committee (effective July 2000) and soon, a telephone and Web-enabled Member Service Center
  • Designating the AVMA Network of Animal Health (NOAH) as a free member service (August 2000)
  • Enhancing the all-important AVMA database through advanced computer hardware and a comprehensive new software system (in progress)
  • Supporting development of the Systematized Nomenclature for Human and Veterinary Medicine (ongoing)
  • Expanding Web-based service

Expanded AVMA involvement
  • Co-sponsoring the KPMG LLP economic study and collaborating on the National Commission on Veterinary Economic Issues
  • Increasing the profession's role in the international veterinary arena by rejoining a revitalized World Veterinary Association and resuming site visits to foreign schools seeking AVMA approval (AVMA council and staff resources are used)
  • Preserving availability of antibiotics to practitioners by taking a proactive approach to antimicrobial resistance issues
  • Pursuing drugs for minor uses/minor species through the MUMS Coalition legislative initiative
  • Intensifying the profession's presence in Washington by initiating activities and joining alliances on key issues
  • Developing vaccine guidelines for practitioners
  • Financially supporting the Veterinary Medical Assistance Teams that respond to disasters
  • Enriching the scientific program at the AVMA Annual Meeting with wet labs and more diversity
  • Expanding support in the area of food safety
  • Accrediting additional, qualified veterinary technology schools (72 accredited in 1997, compared with 86 today, and more on the way)
  • Activating task forces and committees to deal with emerging issues such as feline sarcoma, alternative therapies, updated euthanasia recommendations, and foreign graduate licensure
  • Increasing diversity on AVMA entities (eg, Council on Education, Committee on Veterinary Technician Education and Activities, AVMA/NAVTA Liaison Committee) through additional representatives
  • Assisting constituent associations with legal fees in cases portentous for the profession
  • Expanding the annual Veterinary Leadership Conference
  • Holding an annual Informational Assembly of the House of Delegates

 

AVMA expenses are increasing at a faster rate than income is.

Income has been exceeding expenses, resulting in a net income, the sum of which has been transferred into the AVMA reserve fund at the end of each fiscal year. Predictions for AVMA finances in the future indicate that income will meet expenses, resulting in little or no net income.