AVMA portfolio in the red
Economy batters association’s investments; dues increase looms
February 24, 2009 (published)
The American Veterinary Medical Association’s (AVMA) finances are suffering with investment losses topping $4.8 million, representing what insiders say is the biggest slide in recent history for the membership organization.
Treasurer Dr. Bret Marsh explains that the group’s rainy day fund, once at $28 million, has dwindled along with the American economy. In keeping with good financial practices recommended for associations, AVMA typically carries a year’s worth of operating expenses in savings and investments.
The 2008 fiscal-year budget is expected to remain solvent despite overall expenses that are expected to exceed income by $6.8 million, Marsh says. Some of that total represents an AVMA escrow account that fell into arrears last year, with the group owing more than $1 million to cover paid time off for in-house employees. Officials blame the misstep on a “clerical error.”
A 2008 budget surplus of $118,400 originally was anticipated.
So with 2009’s budget at roughly $29 million, the fix could be in for an increase in annual membership dues, which have remained static since 2004, Marsh says. He predicts another deficit this year, even though officials have reined in expenditures by renegotiated office utility rates. Travel, printing and postage cuts also are up for debate along with employee health care costs.
Where staffing is concerned, Marsh says the group is filling only “mission critical positions," a status determined by AVMA CEO Dr. Ron DeHaven.
“We're doing all the things that could possibly be considered to control expenses and improve income,” Marsh says. “If this recessionary period should go on for a period of years, we want to make sure we’re prepared for it. We’re taking a hard look at everything.”
AVMA’s Budget and Finance Committee plans to meet next month at the group’s Schaumburg, Ill., headquarters to start work on a budget for fiscal year 2010, which will be presented to the Executive Board in April.
Marsh stresses that if a 2010 dues adjustment is recommended, it will not be established unless the House of Delegates votes to approve it during AVMA’s annual meeting in July.
“(The decision) goes right back to membership,” he says.
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