2014 budget proposal seeks no dues increase
'Exceptional' year reinforces financial progress, member programs
While it adopted a preliminary budget proposal in June with a net deficit of $1,443,000, the Board has also informed delegates it will amend the budget proposal to cover the deficit when more definitive information on anticipated nondues revenue becomes available.
The draft 2014 budget projects expenditures of $124,237,000 million against $122,794,000 million in anticipated revenue. The dues recommendation is to remain the same as the current year at $522.
Dr. Ron Lemmo, ADA treasurer, says the financial picture is good for many reasons. "This is an exceptional year, and by that I mean 'different.' We are also benefitting from good management, from good decisions the Board and House made in 2012 and from good return on investment. But we need to remember that we can't expect to have these things happen every year, so our budget planning should reflect that."
Dr. Robert Faiella, ADA president, agreed, noting that while the Board is not seeking a dues increase this year, the fact remains that fixed costs increase each year. "We need to be mindful of the sustainability of our financial future, to be sure we are able to meet our obligations and rising expenses with modest but regular dues increases. We always strive to be less dependent on dues for our operating budget and to increase our nondues revenues while maintaining our integrity as a membership organization."
Dr. Charles Norman, ADA president-elect, believes the budget speaks for itself. "We were able to fully fund the strategic initiatives necessary to continue to deliver value to our members and support the next important strategic planning cycle," he said.
"We will not have the final figures until after the August Board meeting, but I am fully confident that we will be able to submit a balanced or surplus budget to the House without a dues increase," Dr. Norman said.
Dr. Lemmo, who is serving his first term as ADA treasurer, is energized when talking about the budget process and how the House is represented each step of the way through councils.
"We are becoming a more strategically driven organization, and the budget reflects that. About 60 percent or our resources are dedicated to member success, our strategic goal No 1. This is directly related to member value," he said.
The future demands that the Association emphasize long-term sustainability given the current situation of zero member growth, Dr. Lemmo added.
"We are not seeing growth in active members," Dr. Lemmo said, "and every year we budget to the previous year's decline. We are trying to bend that curve by investing in several different programs, through target marketing and tripartite alignment to stimulate growth in the active membership category. We are using the budget process to stimulate the conversation and our outreach efforts. We must be competitive in the marketplace and we must be best in class in all we offer members.
"We are financially stable and our reserves are at our target level of 50 percent," said Dr. Lemmo, who sends a quarterly report to the House as well as the Board. "We are managing the finances to enhance the services and programs for our members as we look to the future. We have new systems in place that allow for appropriate and timely financial information to the Board and House."
In short, being strategically driven means that "the Association can focus its finances on key member needs," said Dr. Norman, who will be installed as president before the House on Nov. 5. "Our job is to ensure that the ADA is the leading advocate for our members and our patients, and the improvements we continue to make to managing our finances support these efforts."