A decade of financial growth, stability and success
Peter B. King
APWA Executive Director
|Peter B. King|
In February, the APWA Board of Directors received, reviewed and accepted APWA's annual audit for the period ending June 30, 2006. Audit Committee Chair Jerry Fay, P.E., APWA Past President (1999-2000), summarized the audit report prepared by BKD, LLP, noting that APWA again received an "unqualified opinion" and is in solid financial shape. (Leading up to the report issued to the Board of Directors, the four-member Audit Committee met with the independent auditors in November and reviewed the BKD, LLP, report. As is customary, our year-end audit included an Independent Auditor's Report, which reflects a Statement of Financial Position, a Statement of Activities, and a Statement of Cash Flows.)
During the last fiscal year, APWA was again able to increase, expand and invest in development of member programs and services while at the same time adding to our "reserves." And while our annual audit is important, we also need to place APWA's finances in perspective. How is the organization's performance over the longer term? In a word or two—pretty damn good. Let's take a look at some of the indicators and see if you agree.
APWA National's total net assets continued to increase, reaching more than $3.925 million at June 30, 2006, up from $3.47 million at June 30, 2005. This continues the positive trend of the past several years. (Please note the information presented in all graphs, with one exception, includes APWA National information only. Chapter information is reported only in the bar chart titled "APWA National and Chapter Information for 2006.") For our 2006 operations and financial position at June 30, 2006, here are the highlights.
Combined revenues reach all-time high of nearly $18 million
APWA National revenues totaled $10.223 million with expenses at $9.715 million in 2006. For the same period, 65 active chapters reported total revenues of $7.576 million, and expenses of $6.769 million. Unrestricted net assets of chapters were $5.657 million and chapter temporarily restricted net assets were $150,103. And, for the first time ever, combined revenues of National and chapters surpassed the $17 million mark at $17.779 million.
Once again, thanks to the work of chapter treasurers, financial information was submitted by all 65 active chapters. Treasurers are owed a special debt of gratitude for their diligence in meeting all financial reporting deadlines. As part of our annual audit and completion of annual federal and several state tax returns, we are required to provide financial information from all activities—including all of our chapters—so we rely on and truly appreciate the work of chapter treasurers.
Net assets continue upward climb
For the past decade, APWA National has steadily increased net assets. Prior to 1996, there was a slight deficit, and total net assets hit $3.925 million at the end of 2006. For the trend line over time, please see the accompanying chart, "APWA National Statement of Financial Position 1994-2006." In a year-by-year comparison, our Statements of Activities over all reporting periods show revenues ahead of expenses for each year, as can be seen from the chart titled, "APWA National Statement of Activities 1994-2006."
Balanced revenues and expenses: category and activity
The APWA National revenues continued to be well-balanced. In 2006, membership service fees and sale of exhibit space were unchanged from the prior year at 30 percent and 22 percent, respectively, of total revenues; registration fees came in at 16 percent (up one percent from the prior year); advertising/sponsorships/other was 15 percent (up two percent from the prior year); federal grants and contracts are down three percent to 9 percent, and technical publication sales and support fees were constant at 8 percent of total revenues.
The allocation of resources by the Board of Directors remains typical of the association world. Management and general (including staff salaries and employee benefits, development and advocacy) constituted 32 percent of total expenses (up slightly from the prior year), federal grants and contracts were 10 percent, conferences and meetings were 23 percent, publications came in at 5 percent, communications totaled 10 percent, education and technical services constituted 9 percent, and chapters and membership expense remained the same at 11 percent.
The future of our reserves
Back in 1998, the Board of Directors adopted a specific goal to hold in reserve 35 percent of operating revenues (excluding grants and contracts). The reserve goal was met in 2004. Last year, the Finance Committee reviewed the status of our reserves and policies and recommended reserves be increased, over time, to ensure our continued financial stability. The Board of Directors took action to increase the goal to 70 percent of operating revenues (excluding grants and contracts) held in reserve and the Finance Committee will be focused on preparing a budget for the upcoming year that will set in motion a plan to set aside more in reserves while maintaining focus on our strategic plan and advancing the many initiatives we have going forward.
Delivering and investing in member services
All of the talk about finances and reserves is important, but the real "bottom line" is whether or not we are delivering on our mission of education, advocacy and fostering the exchange of knowledge. Are we positioning APWA to continue as the organization of choice for current and entering professionals in the field of public works? Without a doubt, I believe we are. Membership in APWA is at an all-time high with more than 28,500 members. More importantly, a growing number of members are active and participating in education, advocacy and networking events. Last year, chapters alone offered more than 750 events and opportunities for member education and interaction. We launched APWA WorkZone, a new employment service. Where else can members find 150 public works jobs with two clicks of a mouse? We have several members actively engaged with federal lawmakers and the executive branch in transportation, water infrastructure and homeland security/emergency management advocacy work.
Over the past year, we expanded both education and advocacy programs in a variety of ways. Member participation in all programs is growing, as evidenced by the number of agencies active in self-assessment and accreditation, a program celebrating its ten-year anniversary this year. We are investing heavily in new initiatives including individual certification programs, and witnessed the launch of the APWA Certified Public Fleet Professional program this year. Similar certification programs, like construction inspection and stormwater manager, are on the drawing board.
Looking long-term at our members' interests and needs and the potential for expansion into multiple certification programs, the Board of Directors established a task force to develop a "blueprint" for education and certification to guide us along this path. The report of the task force is due this fall and will guide the Board's deliberations in this area.
The strong financial foundation APWA enjoys did not happen by chance. Over the years, members of the Boards of Directors, Finance Committees, and (most recently) the Audit Committees have taken their fiduciary responsibilities seriously. Without their thoughtful guidance and prudence, we would not be where we are today. The membership owes them a debt of gratitude for their leadership.
As we have since our beginning in 1937, APWA sincerely appreciates our members' longstanding commitment to membership and to actively participate at the branch, chapter and national levels. With your support, the future of APWA is bright. If you have questions on our financial status or future, please feel free to contact me.
Peter King can be reached at (202) 408-9541 or at email@example.com.