2. AACRAO Financials Leadership Conference December 6, 2014

3. Budget Development Process
Planning for FY 2015/2016 operating budget is underway.
The draft budget is developed as follows:
The review process:
Executive Director Reilly meets with department heads and accountants.
Proposed budget is drafted with FY 2013/2014 preliminary results and FY 2014/2015 budget projections.
Detailed review with Vice President of Finance.

4. Budget Development Process
Department heads have been asked to identify areas for expanded member services and growth potential for AACRAO. Budget for FY 2016 should remain similar to that of FY 2015 (current)
Proposed budget presented to AACRAO Board for approval.
Budget approved by membership at the Business Meeting in Baltimore.
Working budget is monitored by the ED and the Board.

5. FY 2013/2014 Pre-audit Totals FY 2013/14 REVENUE:
DUES (All dues areas) $2,570, %
NON-DUES $7,332,874
TOTAL REVENUE $9,902,936
TOTAL EXPENSES $9,548,534
EXCESS REVENUE $ 354,402

6. Dues and Non-dues Revenue Comparison FY 06/07 – FY 12/13 Actual and FY 13/14 Pre-audit – FY 14/15 Budgeted

7. Operating Revenue & Expenses FY 03/04 – FY 12/13 Actual & FY 13/14 Pre-audit – FY 14/15 Budgeted

8. Long-term Investments FY 2014 (as of Sept.30)
Fund Use
Allocation
Value
Infrastructure
Set Allocation
$1,000,000
Strategic
Endowment
Balance of Fund
$6,634,758
Total Fund Value
100%
$8,634,758

9. Bylaws Article II: Membership and Fees; Section 1: Voting Membership; c. Dues
c. Dues: The Board of Directors through a Board Resolution, may approve a membership dues increase of no greater rate than the previous twelve‐month period’s Consumer Price Index, rounded to the nearest dollar. The Board of Directors, through a Board Resolution, may recommend a membership dues increase that exceeds the previous twelve‐month period’s Consumer Price Index, with notice thirty (30) days in advance of voting, for approval by the membership at the annual meeting.

10. Dues Last increase for 2014-15 membership year
Board approved during November 2012 meeting to increase for and two consecutive years after ( and )
Dues were not increased from through
Membership Dues
Year Revenue % change
$2,477,852 (budgeted)
$2,455,572 (+1.1%)
$2,427,839 (+2.8%)
$2,363,561 (+1.7%)
$2,324,609 (0%)
$2,325,357 (-3.7%)

11. Current Dues 2014-2015: Increase from $206 to $209 (1.6%)
: Estimated increase from $209 to $213 (2% max, pending CPI release)

12. Dues Discussion FY 2017 and into the Future
AACRAO Budget With and
Without AACRAO IES and Consulting 
Revenue
Expenses
Net Revenue
AACRAO Budget
10,913,078
10,497,927
415,151
AACRAO Consulting Budget
2,100,000
1,717,338
382,662
AACRAO IES Budget
1,880,238
1,432,836
447,402
AACRAO Budget without IES and AC
6,932,840
7,347,753
-414,913

13. Dues Discussion FY 2017 and into the Future
Evaluation of current budget
Lines of service cover over $415,000 of budget expenses that are directly related to membership services
Philosophically, should other services cover membership services shortfalls?
What if service lines fall short of expected budgeted revenue?
What if service lines fail or are no longer valid?
How can we grow endowment if service lines are covering membership general operation costs?
How would we repay the strategic initiatives or infrastructure investment funds without revenues from service lines?

14. Dues Discussion FY 2017 and into the Future
How to make up the disparity:
Increase dues progressively over the CPI rate for several years to make up disparity
Requires full vote of membership
Provide enhanced member services using cost effective measures
Increase dues in one large increase
Not budgetarily favorable for most institutions
Other options? Open discussion from the floor

15. Dues Discussion FY 2017 and into the Future
Make up the cost by increasing the membership dues by a total of $34 from FY forward
(FY = 11,855 members)
FY CPI (1.6%) = $3 => $209 ($2,477,852)
FY CPI or 2% = $4 => $213 ($2,525,115)
FY CPI + $? = $10 => $223 ($2,643,665)
FY CPI + $? = $10 => $233 ($2,762,215)
FY CPI + $? = $10 => $243 ($2,880,765)
Continue regular CPI increases for FY forward

16. Comments or Questions? Stan DeMerritt Wayland Baptist University