ALA Budget Analysis & Review Committee (BARC) Report to the Executive Board
2008-2009 EBD #3.0
2008 Annual Conference
Wednesday, July 2
BARC met on four occasions during the 2008 Annual Conference and discussed the following agenda items:
- FY 2007-2008 Budget Status
- FY 2009 Budgetary Ceilings
- ALA Ahead to 2010 Financial Plan
- Planning and Budget Assembly
- Divisional Leadership/BARC Session
- Conference Update
- Council Resolutions
FY 2008 Budget Status – BARC #5.9
BARC reviewed the April 2008 financial performance report and complimented management on the performance of revenue with expenses. Such accuracy in forecasting revenue and controlling expenses is exceptional performance. The results of the Anaheim Conference is still unknown, and that alone is reason to remain cautious. Management’s vigilant cost containment procedures are already in process through discussions prior to conference. If it is necessary to make some adjustments in expenditures, it is possible to cover with delaying hiring until the new fiscal year, reducing the temporary hire budget and lastly to consider holding off on performance incentives in the personnel budget. We are assured that the last action, holding the incentive would be the last possible resort position.
One plus factor in the budget is a Blue Cross/Blue Shield refund, which will offset healthcare benefits cost.
G. Calloway, Associate Executive Director, Finance, reported to the committee on the eight month results for FY 2008. For the period, total revenues were $36.2 million or $1.4 million (4%) over budget due primarily to the level of grants & awards, which were over budget by $2.3 million. Total expenses were $35.6 million or $663,000 (-2%) over budget. Grants & awards expenses exceeded budget by $2.3 million. Both the General Fund and the Divisions revenues were under budget. For Total ALA, revenues are over expenses by $592,000 as compared to a budgeted net loss of $178,000.
General Fund revenues of $15.9 million for the period were under budget by $285,000 or 2%. Contributing to the shortfall was lower than expected revenue in Publishing, which was under budget by $141,000. Publishing results were less than budget due to the delayed release of the Guide to Reference Books and lower subscription and advertising revenue in Booklist. Management is projecting $300,000 lower year-end revenue in Publishing, as well as lower than budgeted expenses. Publishing net revenue, however, is projected to be $79,000 higher than budget, realizing $1.3 million. Membership now totals 68,033, an increase of 2,360 from last year. It was noted that organizational and corporate membership is still a concern. Organizational members and corporate memberships are less than budget. General Fund expenses of $17.3 million were under budget by $890,000 or 5%. Management is implementing expense controls to offset projected registration and exhibits revenue shortfall related to the Anaheim Annual Conference. Dues for the period were $3.7 million, which was $288,000 more than last fiscal year.
Division revenues for the period were $11.9 million, which is $495,000 or 4% under budget. The PLA national conference was under budget ($225,000) on its registration totals. Division expenses were $10.2 million and under budget by $706,000 (6%). Additional expenses related to the PLA conference are still being processed.
Approval of FY 2009 Budgetary Ceilings – BARC #22.2
Members of the committee received, reviewed and discussed items related to the FY 2009 budget. G. Calloway summarized for the committee members the process that was necessary at this conference to approve the budget. He also noted that this budget has been updated to include the proposed 3% (2.5% salary and .5% individual incentive) compensation for staff, as well as, the new indirect cost rate of 23.0% and depreciation related to new capital improvements. The following actions were taken:
BARC recommends to the Executive Board approval of the FY 2009 General Fund Budgetary Ceiling of $30,483,643 including a $1,770,556 transfer to offset the Plant Fund net operating expenses.
BARC recommends to the Executive Board approval of the FY 2009 Divisions’ Budgetary Ceiling of $24,680,707 including a $214,859 transfer from CHOICE to offset the Plant Fund net operating expenses.
BARC recommends to the Executive Board the addition of 2.4 FTEs to the Divisions’ Table of Authorized Positions in FY 2009; .4 FTE in ACRL, one FTE in AASL and one FTE in YALSA. Hiring is subject to accommodating space, IT, etc.
BARC recommends to the Executive Board approval of the FY 2009 Round Tables Budgetary Ceiling of $1,110,275.
BARC recommends to the Executive Board approval of the FY 2009 Grants and Awards (Restricted Fund) Budgetary Ceiling of $10,848,328.
BARC recommends to the Executive Board approval of the FY 2009 Long Term Investment Fund (Endowment Fund) Budgetary Ceiling of $861,325 including $166,396 capital gain to be allocated for funding the ALA Spectrum Initiative and a transfer of $228,073 interest and dividends from the Endowment Fund to the General Fund in accordance with Policy 8.5.1.
BARC recommends to the Executive Board approval of the transfers from Division operating fund balances to Long Term Investments: ACRL $100,000, AASL $50,000, RUSA $50,000, LITA $50,000, ALSC $49,000 and YALSA $25,000 with a total transfer to the Long Term Investments of $324,000.
BARC recommends to the Executive Board approval of the FY 2009 total ALA Capital Budget of $1,607,585. (CHOICE building project will be presented separately with the financing recommendations.)
BARC recommends to the Executive Board approval of the FY 2009 General Fund Small Division allocation of $92,421.
BARC recommends to the Executive Board approval of a 2.5% compensation adjustment to base salary and a .5% individual incentive with a fiscal year impact of $445,000 in FY 2009.
BARC recommends to the Executive Board approval of the FY 2009 Total ALA Budgetary Ceiling as follows:
|Budget Item||Recommended Celining Amount|
Grants & Awards
Long Term Investment
ALA Ahead to 2010
BARC discussed the progress toward a next generation of long range planning for the association, since the 2010 plan will be in its last year. Many accomplishments have come from the work that became the focus of the 2010 plan. Executive Director Keith Fiels, Treasurer Rod Hersberger along with the members of BARC discussed the challenges of ALA’s traditional service models and dependence on the three legged funding stool of Membership, Conference, and Publishing for its primary revenue.
ALA Revenue Sources – General Discussion
One consideration is that the dues increase is in its last year of implementation in FY 2009. Surprisingly the downside of the increase, that was of such great concern at the time, did not materialize. ALA memberships have increased by more than 2,300 to over 68,000. One of the new initiatives you’ve seen at this meeting is changing corporate membership, with potential positive impact on the bottom line of our budget. Conference services is increasingly thinking outside the box with combined registrations, shortening the calendar of the conference and compacting the campus which considers lesser meeting room costs. Another initiative is recruiting new exhibitors. Examples of that are the exhibitors who brought graphic materials, gaming and podcasting resources and exhibits that alert us to resources that support environmental efforts such as the greening of our library facilities.
The divisional leadership discussion with BARC immediately followed the PBA and addressed an agenda that was determined by the divisional executive directors in consultation with the divisional leaders and by BARC. Topics included: ALA cost containment efforts, facilities with a focus on space planning for staff and continuing discussion of the application of overhead to units and divisions.
In BARC’s subsequent discussion on Monday, June 30, 2008 about the results of the PBA and the divisional leadership/BARC session, BARC made the following recommendations regarding future planning.
- communication enhancement from BARC to divisions to assist the agenda and calendar for PBA;
- better orientation for ALA councilors elected to PBA
On Tuesday, July 1, BARC identified several areas for emphasis in the coming year, including:
- revenue growth enhancements;
- collaborative planning opportunities throughout the Association
- continued education on the financial processes of ALA for member leaders
Council Resolutions: BARC did not receive any current referrals. After Midwinter, BARC considered the shorter calendar for Conferences and recommended implementation.
As 2008 Chair, it is my pleasure to turn this report activity, and the coordination of the committee’s business over to the FY 2009 appointed chair Jim Neal, who will take the leadership of BARC immediately. Jim is a former ALA Executive Board member. It is a coup that President Rettig was able to convince him to step into the role of BARC chair in this critical time. Though he has departed the conference, Jim Neal joined us for all the meetings at this conference so we had the opportunity to jump start his year. You can look forward to a very dynamic relationship in the coming year.
I thank you for the pleasure of being in the circle of talent that is represented on BARC and on behalf of BARC, I thank the Executive Board for their leadership in focusing energy and attention on the financial well-being of the Association.
Rodney Hersberger, Treasurer
Charles Kratz, Jr.
J. Linda Williams
Marilyn Hinshaw, BARC Chair, 2007-08