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