Expanding services, improving reserves: APWA financials for 2005
Peter B. King
APWA Executive Director
|Peter B. King|
2004-2005 resulted in yet another positive year of financial performance for APWA, highlighted by expanding programs and services while maintaining our goal of 35 percent of our net operating budget in unrestricted reserve. The Board of Directors continued to implement our Strategic Plan elements by expanding educational services and advocacy activities, and communicating our "brand" and the critical nature of public works to the citizens served.
In the education arena, several new programs and products were introduced including the Public Works Institutes in cooperation with several chapters; research on a Public Works Master's Degree Program initiative for more life-long learning opportunities; approving steps toward a fleet certification program for our members, set to launch this spring; and development efforts on a construction inspection certification program.
Our advocacy efforts to promote increased investment in infrastructure in the United States and Canada and the public works role in emergency management and homeland security were also enhanced. We held "National Public Works Week on the Hill" for the second year, reinforcing our message on Capitol Hill in Washington, D.C. A series of Congressional Staff Briefings were also introduced to provide a forum for members to present key public works issues to Senate and House staff. These supplemented our continued efforts of our Government Affairs Committee (GAC) and our TEA-21 Reauthorization Task Force to promote road safety and homeland security issues. Working partnerships with other organizations and federal agencies remain strong, as we are regularly at the table with FHWA, DHS, EPA and others. In Canada, working through CPWA, significant strides were made promoting the principles included in the Technology Road Map and continued support of the InfraGuide.
This past year also saw a focused effort to push our "brand" initiative and strive to carry out our "public works solutions network" brand essence by supporting production of a special PBS "Spotlight On Public Works" television program. The program was aired over 1,000 times by 138 stations reaching nearly 4.6 million viewers, and was also released on DVD. For the younger, future public works directors and informed citizens, we finalized "Discovering the World of Public Works," the educational outreach toolkit for K-5 students.
The audit for the twelve-month period ending June 30, 2005 was performed by BKD LLP and was formally reviewed by the newly-formed Audit Committee in December 2005. The audit reports were accepted by the Board of Directors in February 2006. As is customary, our year-end audit included an Independent Auditor's Report, which reflects a Consolidated Statement of Financial Position; a Consolidated Statement of Activities; and a Consolidated Statement of Cash Flows. Again this year, the report provided an "unqualified opinion" supporting our sound financial condition.
APWA National's total net assets continued to increase in fiscal year 2005, reaching over $3.47 million at June 30, 2005, up from $3.36 million at June 30, 2004. This continues the positive trend of the past several years. As you view the graphs, please keep in mind the information presented, with one exception, includes APWA National information only. Chapter information is reported only in the bar chart entitled "APWA National and Chapter Information for 2005." The following provides highlights of 2005 operations and APWA's financial position at June 30, 2005. The accompanying charts display 2005 revenues and expenses by general category of activity, as well as trends in changes in financial position for the past decade.
National and chapters' revenues reach an all-time high of $16.1 million
APWA National revenues totaled $9.532 million with expenses at $9.418 million in 2005. In 1998, the Board adopted a specific goal for funds in reserve, that being 35 percent of operating revenues (excluding grants and contracts) held in reserve. The reserve goal was met for the first time in 2004 and was maintained in 2005. Based on the fiscal discipline demonstrated by the current and past Finance Committees and Boards of Directors, the Board has given the Finance Committee the task of reviewing the current reserve goal and policy on reserves to determine if changes are warranted. One concept to be explored is further designation and creation of funds for investment in specific, strategic initiatives.
Once again, thanks to the work of chapter treasurers, financial information was submitted by all 65 active chapters. In 2005, chapters reported total revenues of $6.611 million, and total expenses of $6.282 million. Unrestricted net assets of chapters were $4.344 million and chapter temporarily restricted net assets were $656,608. And, for the first time in APWA's history, combined revenues of National and chapters surpassed the $16 million mark at $16.144 million.
Revenues and expenses by category and activity
The APWA National revenue picture continues to be well-balanced. In 2005, membership service fees were 30 percent of total, sale of exhibit space was 22 percent, registration fees came in at 15 percent, advertising/sponsorships/other was 13 percent, federal grants and contracts was 12 percent and technical publication sales and support fees reached 8 percent.
The allocation of resources by the Board of Directors continued to be typical of the association community as a whole. Management and general (including staff salaries and employee benefits, development and advocacy) constituted 29 percent of total expense (consistent with the prior year), federal grants and contracts were 12 percent, conferences and meetings were 24 percent, publications and communications both came in at 7 percent, education and technical services constituted 10 percent, and chapters and membership expense was 11 percent.
Net assets continue upward climb
From 1995 to 2005, APWA National has steadily increased net assets. Prior to 1995, there was a slight deficit, with total net assets climbing to $3.473 million at the end of 2005. Please see the accompanying chart, "APWA National Statement of Financial Position 1994-2005."
As to Statements of Activities over the reporting periods, the trend line shows revenues ahead of expenses for each year, as can be seen from the chart entitled, "APWA National Statement of Activities 1994-2005."
Chapter Treasurers the backbone of chapter financial reporting
Once again, volunteers serving as treasurers in our 65 active chapters are owed a special debt of gratitude for their diligence. Our chapter books are in order and their commitment to meet all financial reporting deadlines is appreciated. As part of our audit and completion of annual tax returns, we are required to provide financial information from all activities—including all of our chapters—so we sincerely appreciate the work of chapter treasurers.
Finances are key
Over the past several years, improving APWA's financial condition and performance has been a top priority. It is fair to say that the persistence of the Board of Directors and Finance Committee has paid off. The Finance Committee meets quarterly with management to carefully review our financial performance, to monitor our overall financial health, to evaluate the outlook for the future and to develop our annual budget for consideration by the full Board of Directors—all key steps to getting us where we are today.
2005 was a year when most of our members—whether public or private sector—continued to face budget uncertainty. We sincerely appreciate our members' longstanding commitment to not only be a member of APWA, but to be an active member at the branch, chapter and national levels. During 2006, the Board of Directors will be adopting a revised Strategic Plan to assure that our goals are in line with our members' expectations and that we are well-positioned to meet the challenges ahead. If you have questions on our financial status or future, please feel free to contact me.
Peter King can be reached at (202) 408-9541 or at email@example.com.