Operations Commission
March 1, 2008
Minutes
Jun David, Wendy VanBellingham, Steve Offord, S. Ramalingam, Mark Krotowski, George Dunn
Minutes
The minutes of 10/20/07 were reviewed and accepted.
Investment Report
The investment report submitted by Manning & Napier was accepted for information. The Commission will invite a representative to attend the fall meeting.
Calendar
The 2008 calendar has been updated and corrected and is posted on the web site.
Financial Report
The Commission agreed with the recommendation of the treasurer and staff to use the Quick Books Profit & Loss report and the Cash Flow report to present financial information to the Commission and the Board. Using reports from Quick Books will reduce errors that occur when data is transferred from Quick Books to a spreadsheet. Staff is working with the auditor to determine whether and how budget information can be added to either or both of these reports so we can track our performance during the year against the budget.
Wendy and Vito reported on their meeting with the auditor and Ken regarding the 2007 deficit and its implications for 2008. The deficit is primarily the result of a lower than anticipated revenues – especially non-dues revenues. There were several areas in which we exceeded budgeted expenses, the most significant were Winter Weekend, ALSO and cluster costs. We can address expenses in these programs and have already done so with a positive result in Winter Weekend. The 2007 WW lost money because we failed to secure a single grant and had higher expenses for faculty and students. We also had lower than budgeted income from registration fees. We expect to have a profit from the 2008 WW. We increased registration fees, reduced faculty costs and secured $12,000 in grants. We also had an increase in attendance and in the number of exhibitors.
Wendy, Vito and Ken have also developed a plan for closer monitoring of finances using the invoices and cash received logs that Bobbi maintains, the Quick Books reports and a monthly project of dues based on actual dues receipts for the past two years. This should allow us to identify cash flow issues earlier. This information will be shared with the executive committee each month which will allow us to take action as necessary to reduce expenses or to draw down reserves.
We do have some additional unbudgeted income for 2008. The Foundation has more than $125,000 in its accounts. Most of this money is available to the Academy and represents administrative fees owed to the Academy but not paid. We discussed accessing some of these funds if necessary during the year to ease any cash flow problems we may experience. We also discussed using funds from the Foundation to replenish our reserves, but decided the poor performance of the stock market made this option more risky than leaving the funds in the Foundation’s money market account. We also have a contract with the American Cancer Society which will reimburse us for actual expenses associated with our management of the colorectal cancer screening project and includes $35,000 for our supervision and housing of the project coordinator. This represents $35,000 in net additional revenue.
Staff will increase the registration fee for ALSO and will continue to look for grants or sponsorships to help support the program.
We discussed the complexity and time involved in applying for grants. Vito will explore the prospect of hiring a person to write grants and prepare pharmaceutical company grant applications on a commission basis.
We also discussed addressing the apparent need for additional revenue with a dues increase. There are 27 AAFP chapters that currently have higher dues than the $225 which we charge. A $50 increase would generate $116,400 in additional revenue. There was some discussion regarding the possibility that a dues increase would cause attrition in membership. Our active membership grew 2.7% between 2006 and 2007. Student membership has declined. Action regarding a dues increase was deferred until the summer meeting. The Commission requested an assessment of the 2008 budget after we have more actual experience to consider and can determine whether there is any need to adjust the budget. Wendy and Vito will prepare a report summarizing our performance against budget and making any recommendations regarding drawing down reserves and/or recommending a dues increase to the board. The report will include a preliminary 2009 budget proposal.
Ken has decided to retire by June. Vito will look for an experienced bookkeeper to replace him.
Ram said he felt we should make every effort to control costs and should be particularly vigilant with regard to new projects. Consideration of any new project should reflect discussion of finding new revenues to cover the cost or express approval of accessing reserves to pay for the project.
Clusters
The Commission discussed separation of commission meetings and board meetings to allow more time for development of commission recommendations for board action.
The Commission also discussed paying members a per diem instead of reimbursing for actual expenses to attend meetings. The AAFP pays per diems. The average reimbursement paid to members for attending the Albany and Hunter Mountain clusters in 2007 was $294. Many members delay submitting expense vouchers until a month or more after the cluster. Many vouchers also arrive without receipts. This makes it difficult to accurately monitor expenses for a cluster. Some members do not request reimbursement at all which adds to the difficulty in determining the per capita cost of a cluster. In 2007, slightly more than half of the people who attended the Albany and Hunter Mountain clusters requested reimbursement. The cost of paying per diems, therefore, could increase our cluster costs. Discussion focused on enforcing the existing policy whereby members must submit expense reimbursement vouchers by 30 days after the cluster.
Downstate RFMC
Jun said he wanted to have a downstate RFMC to generate additional revenue. The program has been consistently profitable in Albany. Jun plans to discuss a downstate RFMC with the Brooklyn and Long Island chapters.
Board Size and Commissions
Drew recommended that the Leadership and Membership commissions be combined to save money and because these commissions do not have enough work at present. There was discussion regarding including the speaker and vice speaker on the joint commissions because the commission would be responsible for planning the COD. There was agreement that these commissions should be combined on an experimental basis. Jun would appoint one person to chair the merged commission. If the experiment works, the Commission will consider whether a bylaws amendment is necessary. Drew asked that the Leadership Commission advise Operations whether it has been difficult in recent years to recruit candidates for the board and offices.
Drew also recommended that the Commission explore a plan to reduce the size of the board by phasing out three of the nine directors. There was also discussion of removing the alternate delegate to MSSNY and the two alternate AAFP delegates from the board. Opinion was divided on this recommendation.
The meeting adjourned at 1:00 p.m.
Recorded By,
Vito Grasso, MPA, CAE
Executive Vice President