2007 Audit: A strong financial foundation
Peter B. King
APWA Executive Director
|Peter B. King|
Once a year, it is my responsibility to formally report to the full membership on APWA's financial condition. I am pleased to convey that APWA continues to be in a solid financial condition and, I believe, well-positioned to continue to provide a high level of service that members deserve.
In February, the APWA Board of Directors received, reviewed and accepted APWA's annual audit for the period ending June 30, 2007. Audit Committee Chair Judy Mueller, APWA Past President (2000-01), summarized the audit report prepared by BKD, LLP, noting that APWA again received an "unqualified opinion" and is in solid financial shape.
As has been the case for the past several years, APWA was again able to increase and expand member services during fiscal year 2007. We also continued to invest in development of several programs, including certifications that are now in the first steps of implementation. At the same time, we have been mindful of the need to add to our "reserves," and did so again this past fiscal period.
APWA National's total net assets continued to increase, up nearly $1 million and reaching $4.963 million as of June 30, 2007. This continues the positive trend of the past several years. (Note that all graphs, with one exception, include APWA National information only. Chapter information is reported in the bar chart titled "APWA National and Chapter Information for 2007.")
Combined revenues over $19 million
APWA National revenues totaled $10.865 million with expenses at $9.883 million in 2007. For the same period, 63 of our 64 chapters reported total revenues of $8.432 million, and expenses of $7.652 million. Unrestricted net assets of chapters were $6.43 million. Combined revenues of National and chapters were just over $19 million at $19.279, up from $17.779 million in the prior year.
Chapter treasurers again stepped up and financial information was submitted in a timely manner. As part of our annual audit and completion of annual U.S. federal, several state tax returns, and Canadian 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 to increase
For the past decade, APWA National has steadily increased net assets. Prior to 1996, there was a slight deficit. Total net assets hit $4.963 million at the end of 2007. For the trend line over time, please see the accompanying chart, "APWA National Statement of Financial Position 1997-2007." In a year-by-year comparison, our Statements of Activities show revenues ahead of expenses for each year in the past ten, as can be seen from the chart titled, "APWA National Statement of Activities 1997-2007."
Revenues and expenses: A balancing act
National revenues continued to be well-balanced, and we are not over-reliant on one source of revenue. In 2007, membership service fees and sale of exhibit space were 29 percent and 20 percent respectively of total revenues; registration fees came in at 16 percent; advertising/sponsorships/other was 18 percent; federal grants and contracts were 9 percent; and technical publication sales and support fees were 8 percent of total revenues. All percentages were steady in comparison to the prior year, with the largest variance at three percent.
The allocation of resources by the Board of Directors continued to be fairly typical of the association world. Management and general (including staff salaries and employee benefits, development and advocacy) constituted 30 percent of total expenses, federal grants and contracts were 9 percent, conferences and meetings were 24 percent, publications came in at 5 percent, communications totaled 9 percent, education and technical services constituted 10 percent, and chapters and membership expense was up slightly to 13 percent.
Our reserve funds and the future
Exactly a decade ago, the Board of Directors adopted a goal to hold in reserve 35 percent of operating revenues (excluding grants and contracts). The reserve goal was met in 2004. Two years ago, after an analysis by the Finance Committee, the Board of Directors acted to increase the reserve goal to 70 percent of operating revenues (excluding grants and contracts). We continue to add to our reserve while maintaining focus on our strategic plan and advancing many new program initiatives.
As we enter 2008, it is apparent that the economy is slowing. Too often in an economic downturn, association membership and the ability of members to take advantage of training and education suffers. In addition, in 2009 our Washington, D.C. office space lease concludes and our cost of operations will hike significantly given the exceptionally strong real estate market in the nation's Capital. Our prudent planning and strong reserves will allow us to weather whatever storm lies ahead.
Delivering and investing in member services
We continue to deliver on our mission of education, advocacy and fostering the exchange of knowledge. Again this year, membership in APWA is at an all-time high, with more than 29,000 members. Our "Never Been a Member" campaign was a major success, with over 60 percent of new members continuing after the first year of discounted membership. More members are active and participating in national, chapter and branch education, advocacy, and networking events. In Washington, D.C., we have a growing number of public works leaders actively engaged with federal lawmakers and executive branch officials in transportation, water infrastructure, right-of-way, and homeland security/emergency management advocacy work.
Over the past year, we have continued to invest heavily in new initiatives including individual certification programs, with the APWA Certified Public Fleet Professional (CPFP) program underway, launch of the Certified Public Infrastructure Inspector (CPII) program, and a stormwater manager program in the midst of development. Last fall, the Board of Directors adopted a "blueprint" for education and certification programs that now guides us along this path of new services.
As I have pointed out in the past, APWA's strong financial position did not happen by chance. Over the past decade, members of the Boards of Directors, Finance Committees, Audit Committees and management have taken their fiduciary responsibilities seriously. Without volunteer leaders' thoughtful guidance and prudence, we would not be in the enviable position we are today.
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 continued support, the future of APWA is indeed bright.
Peter King can be reached at (202) 408-9541 or at email@example.com.