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Finance Committee Report. Financial Condition. Solid reserve balance Consolidated reserves of $24.9 million 47.1% of annual expenses Revenues continue to be depressed Challenge of balancing annual budget Dealing with lower revenues Use portion of long-term investment earnings
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Financial Condition • Solid reserve balance • Consolidated reserves of $24.9 million • 47.1% of annual expenses • Revenues continue to be depressed • Challenge of balancing annual budget • Dealing with lower revenues • Use portion of long-term investment earnings • Foundation $1,050,000 annual contribution • Hold down expenses where feasible • Develop revenue sources for future • Economic recovery over time
Current Operating Results – Eight Months Ended May 31, 2012 • Anticipated some revenue recovery in budget • Recovery has not happened • Budget for fiscal year = -$976,000 • Year-to-date: • Actual -$2.5 million • Budget -$1.9 million • Revenue will not recover this year • Minimizing expenses for travel, meetings, labor and other
Budget Process Committees and staff evaluate their activities and propose budgets Then prepare initial budget requests, referring to 2011 actual and 2012 budget Senior staff leadership review initial program budgets and refine Program Committee reviews program requests and makes recommendations to the Finance Committee Staff compiles entire budget and senior staff leadership reviews and proposes modifications Finance Committee reviews full budget and proposes adjustments and submits to the board Board reviews and approves budget
Program Committee Program Committee briefed on financial status and outlook for revenues Began with $5,097,000 – 131.2% of 2012 budget Produced five reduction plans from 124.1% to 89.3% of the 2012 budget Recommend a $1,345,000 reduction to $3,752,000 – 96.6% of 2012 budget The Finance Committee agrees with the proposed expense reductions
Finance Committee Meeting Discussed economic conditions and the impact on ASCE Reviewed year-to-date financial condition and operations Reviewed Program Committee results Analyzed budget line-by-line Evaluated budget with SLT recommendations Analyzed need for a dues increase
Key Budget Points • Member dues increase from $210 to $225 • Increase Life Member fee: One-time $300 to $500; Annual $35 to $50 • Foundation funding -- $1,050,000 for programs • Executive Committee approved a 3.5% compensation and fringe increase • Add 3 and eliminated 3 FTEs • Use $700,000 of long-term investment earnings -- 2.9% of the long-term investment balance • Board previous reserve spending authorization of $364,000 • Budgeted use of reserves of $210,000
