APWA: Financial Overview for 1999
Peter B. King
APWA Executive Director
APWAs overall financial health continues to improve, based on findings of the 1999 year-end independent audit by our auditors, KPMG LLP. The Board of Directors continues to keep financial issues as a high priority, and remains focused on the need for a strong foundation to support our service programs. In our continuing effort to provide members with an annual overview of APWAs financial condition, the following is presented.
APWAs total net assets continued to increase in 1999, reaching $1.37 million at the end of the fiscal year ending December 31, 1999. This represents a 26% increase over the prior year, and continues the trend over the past several years. The trend is depicted in the accompanying chart, Headquarters Statement of Financial Position 1994-1999 showing assets, liabilities, and net assets.
Except for the bar chart entitled, Headquarters and Chapter Information for 1999, it is important to note that the information presented in all other graphs includes headquarters information only. (Chapter information is reported, but only in the bar chart.) APWAs year-end audit included an Independent Auditors Report (which gave APWA a clean opinion), a Consolidated Statement of Financial Position, a Consolidated Statement of Activities, and a Consolidated Statement of Cash Flows.
The following provides highlights of 1999 operations and APWAs financial position at the end of 1999. The accompanying charts are intended to display 1999 revenues and expenses by general category of activity, as well as trends in changes in financial position from 1994 to 1999.
1999: National and Chapters
APWA headquarters revenues totaled $7,618,347, with expenses at $7,351,943 in 1999. Comparing 1999 to 1998, total revenues increased and expenses were reduced, resulting in an increase in net assets. With total net assets of $1,369,427 at the end of 1999, this represents an increase of $285,655 when compared to the prior year. Progress continues to be made on the Board-adopted goal of 35% of operating revenues (excluding grants and contracts) held in reserve.
Financial information was submitted by 52 of our 67 chapters in time for inclusion in the notes to the financial statements as audited by KPMG LLP. Our 52 chapters reported 1999 total revenues of $3,028,463, and total expenses of $2,854,445. Unrestricted net assets of chapters were $1,682,677 and restricted net assets totaled $895,874.
1999 Revenues and Expenses by Category and Activity
As depicted by the accompanying pie charts, APWA headquarters revenues continue to be derived primarily from four major sources. In 1999, they included membership service fees (30% of total), registration fees (19% of total), sale of exhibit space at conferences (18% of total), and federal grants and contracts (12% of total). Those four major areas of our revenue stream continue to be important for the organization, as they represent 79% of revenues for 1999.
As to expenses, APWA remains a typical not-for-profit association as far as where the Board of Directors allocates resources. Staff expenses of salaries and employee benefits constituted 32% of total expense, federal grants and contracts were 10% (essentially balancing with the grant and contract income), conferences and meetings were 17%, administration was 20%, publications/education/subscriptions came in at 13%, and chapters and membership expense was 8%.
Trend Lines Show Continuing Increase in Net Assets
From 1994 to 1999, APWA headquarters has steadily increased net assets. In 1994, there was a slight deficit, and total net assets climbed to $1.37 million at the end of 1999. The Headquarters Statement of Financial Position 1994-1999 chart illustrates the trend in total assets, total liabilities, and total net assets for the period.
As to Statements of Activities over the reporting period, the trend line shows revenues ahead of expenses for each year, with an increase in the gap at year-end 1999 where revenues were $266,404 greater than expenses.
Staying Focused on Finances
Throughout 1999, the Board of Directors, Finance Committee and executive staff remained focused on carefully reviewing APWAs financial performance, monitoring the organizations financial health, and evaluating the outlook for the future. Since early 1999, the Finance Committee, under the chairmanship of Tom Trice, has met quarterly to hear reports from management, discuss finance issues, and report to the full Board.
As part of the 2000 budget process, in late 1999 the Board referred several finance-related issues to the spring delegate meetings for comment and input. By asking for delegate review, the Board was seeking input issues such as future dues increases, chapter rebates, APWAs fiscal year, financial support for delegates attendance at spring meetings, and the like. This input will be invaluable as they develop strategies to provide resources to implement the strategic plan.
APWA continues to seek ways to implement the newly adopted strategic plan as creatively as possible without placing undue financial burden on members and chapters. All of our members and each of our 67 chapters are an important link in APWAs success in meeting the needs of the public works community in the United States and Canada. I encourage you to continue your high level of involvement and activism in both chapter and national affairs. If you have questions on our financial status or future, please feel free to contact me.