Finance Committee Meeting
August 8, 2012
Committee Members Attending: Becky Jane, Theresa Stiner, Jack Price
Staff Attending: Scott Cassel, Amanda Nicholson, Brian Korby (contractor)
Not Attending: Peter Pettit
July Financial Statements:
As of July 31st, PSI was 8% through fiscal year 2013. PSI had reached 5% of its revenue budget, 7% of its expense budget, and had a cash balance of $208,000. There were $46,292 in outstanding invoices, of which $6,000 had been paid by this meeting, and there were $798,267 in outstanding proposals, some of which were verbally committed, but for which contracts had yet to be signed.
Revenue:
Membership revenue and Networking Call revenue was at or exceeding budget for this time of the year. Federal and State revenue appears depressed on the financial statements because invoicing was delayed in July. Delays are due primarily to the reduced staff and additional project work Amanda took on in July. However, project work continues apace, and though invoices were sent out late, and therefore their payments do not show on the books in July, this is primarily a matter of timing. Additionally, there are some outstanding payments that were expected in July, including the invoice for the mattress meeting in November 2011, that have still not arrived. Amanda continues to follow up on them.
Membership renewals are on-going and payments are trickling in. $20,750 of FY13 membership renewal payments arrived in FY12 and so counted towards FY12 revenue. PSI has received $12,500 in membership payments since the start of FY13. Many states have committed through email, and it is now a matter of processing the payments. Becky noted that the IL payment is underway, but due to new procurement software, the whole system is a bit slower. Jack relayed that he hasn’t yet received a “no”, but the membership is still a big question mark for this year, unfortunately. On a happy note, Maine has been able, through much persistence and commitment on their part, to once again contribute membership dues to PSI this fiscal year.
The Packaging Call Series, originally budgeted under the “Other Income” line item, has since been re-categorized as “Networking Calls”. This will be adjusted in the budget revision at the end of Q1. PSI expected to spend approximately $30,000 conducting these calls, and aimed to bring in that much in revenue to cover its costs. PSI actually secured over $13,000 in funding for the calls, and expects that it will cover the project costs, however final calculations for staff expenditures are not yet complete.
PSI has seen some very positive action on the proposal front. The EPA Region 9 proposal on packaging source reduction on CA campuses was approved for $164,245 after the EPA considered awarding just $22,000. Some of that revenue will go to PSI’s partners, the Plastic Pollution Coalition and CPSC. PSI will retain around $60,000 to cover staff costs. PSI’s proposal to EPA for the Great Lakes Regional Initiative on thermostats and auto-switches has been selected as a finalist from over 200 applications. PSI should hear by the end of August or September if the project was awarded or not. No word has yet arrived on the status of the MA DEP project proposal. In the meantime, PSI has secured $7,000 for a Northeast Product Stewardship meeting this fall; $8,000 for messaging refinement in Hartford, CT; $10,000 for setting priority products for CT; and $25,000 for an OR Paint Program evaluation.
Expenses:
Overall, expenses were under budget as of the end of July. However, there were some line items that exceeded expectations. Some are temporary, while others will require a reassessment in the budget revision at the end of the first quarter.
Meetings were higher than budgeted for the month primarily because there were many farewell and intern celebrations. In an effort to rein in spending on these events, PSI has instituted a new policy whereby PSI will cover snacks and perhaps one beverage, but any additional beverages that staff want to order, they will pay for themselves. This will limit our expenditures overall and also limit the amount of unallowable expenses that are calculated into our federal indirect cost rate. These gatherings have been good for staff morale this month.
Office supplies also look high, but primarily because of some larger purchases like ink cartridges and replacement parts for the server, which failed in early July. These will even out of the course of the year. Travel expenditures also seem high, though over the course of the year we still anticipate the budgeted amount will be adequate. Over $1,200 of the $1,700 expended were reimbursable expenses, and most were project related. Vacation payout expenses for Sierra were also higher than budgeted. That line item includes salary for the last two weeks of June and the vacation payout.
There are two items that must be reexamined in the budget revision at the end of Q1, rent and Insperity fees. PSI entered its 5 year option period on its lease this year and along with that comes a step increase of 4% per year. PSI hopes to sublet some of its excess office space to offset this increase. However, this expense will need to be re-budgeted in September.
Health insurance costs, which are part of the Insperity fee under the payroll line item, will also have to be re-budgeted. Health Insurance Costs are expected to rise with the new hires. PSI has had a very young and single mix of employees recently, but the strongest candidates we’ve encountered have spouses and/or families and therefore the utilization rate and plan selection mix will change, increasing costs. PSI will be changing to a “Buy-up” plan whereby PSI will continue to pay 100% of the HMO plan option, but employees who select the more expensive PPO or other options will contribute to the monthly premium the difference between the HMO rate and the other plan rate. This change will take place immediately. Future possibilities include covering just a portion of the family & dependent premium while continuing to pay 100% of the employee premium, and introducing an employee contribution to all plan premiums. These and others will be analyzed again come PSI’s annual insurance renewal period. The Committee was pleased to see these changes. Scott noted that when candidates are considering offers, they look primarily at the salary, and because PSI’s benefits, though very generous, are not visible in terms of dollar figures, it is hard to convey the competitiveness of the offer. Scott would like to show more on salary in the future, while saving money on the benefits. Scott noted there was a power point deck about the insurance costs and options that he would send out if any members of the finance committee were interested.
Mage management consulting will be $2,000 per month into the fall at which point we will reevaluate with the Q1 budget revisions. It is possible, once the new marketing director has been secured, that PSI can reduce the monthly retainer, but that will depend on who comes on board and their skill set. In the meantime, Jonathan has been an essential resource during the re-staffing process.
The expense for the new server and 5 new desktop computers will show on the August or September financial statements. We were able to purchase all of them for around the price we expected to pay for just server because Eric Marion, PSI’s IT contractor, was able to negotiate heavily on our behalf. The committee passed commendations along to Eric.
Additional Comments via email from Peter Pettit:
Though Peter was unable to attend the meeting, he did contribute comments via email. Peter noted the appropriate changes to the financial statements were made with regards to NYPSC. In fact, NYPSC revenue, expenses, and cash balance were removed from the financial statements as discussed and agreed upon in the July meeting.
Peter also stressed that while PSI reduced its loss in FY12, it was still a hefty loss of $71,000, and that PSI will need to be very conservative to ensure the situation does not repeat this year. There is not a lot of leeway in the current budget, and these year-end figures really support PSI’s decision to revise its budget after the first quarter of FY13, instead of waiting until January.
Next Finance Committee Calls
Upcoming calls will be conducted at 11 am ET/10 am CT through GoToMeeting. Fall 2012 meetings are as follows:
· September 13, 2012
· October 11, 2012
· November 8, 2012
· December 13, 2012
PSI Finance Committee – Meeting Minutes
August 9, 2012
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