2002 Financials: Strong performance, again

Peter B. King
APWA Executive Director

Continuing our commitment to provide all members with an annual update of APWA’s financial condition, the following provides highlights of the twelve-month period ending June 30, 2002. A word of explanation is in order: On June 30, 2002, APWA completed the transition from a fiscal year ending in December to a June 30 year-end. In order to make this transition, the APWA Board of Directors approved an 18-month budget covering two fiscal years: the six months ended June 30, 2001 and the twelve months ended June 30, 2002. This 18-month period presented several anomalies, but we concluded the period with an overall increase in net assets of $119,928.

During this transition, APWA’s independent auditors, KPMG LLP, performed two audits—for the six-month period ending June 30, 2001, and for the twelve-month period ending June 30, 2002. The audit for the period ending June 30, 2002 was formally accepted by the Board of Directors in January 2003. APWA’s year-end audit included an Independent Auditor’s 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 data presented here does not include 2001, due to the transition and “short” six-month fiscal period.

The financial health of the organization continues to be strong, thanks to the diligence of the Finance Committee and Board of Directors who continue to remain focused assuring a strong financial foundation from which to serve the membership.

APWA National’s total net assets continued to increase in fiscal year 2002, reaching $2.4 million at June 30, 2002, up from $2.28 million in 2000. This represents a 5.3 percent increase over December 31, 2000, and continues the positive trend.

It is important to point out that the information presented in all graphs, with one exception, includes APWA National information only. Chapter information is reported only in the bar chart entitled “APWA National and Chapter Information for 2002.” The following provides highlights of 2002 operations and APWA’s financial position at June 30, 2002. The accompanying charts display 2002 revenues and expenses by general category of activity, as well as trends in changes in financial position for the past seven years, 1995 to 2002.

2002: National and Chapters
APWA National revenues totaled $8,732,688, with expenses at $8,389,485 in 2002. Significant progress continues to be made toward the Board-adopted goal of 35 percent of operating revenues (excluding grants and contracts) held in reserve, as we ended the June 30, 2002 period at 83% of our reserve goal.

Financial information was submitted by 63 of our 67 chapters in time for inclusion in the notes to the financial statements as audited by KPMG LLP. In 2002, 63 chapters reported total revenues of $5,793,074, and total expenses of $5,275,991. Unrestricted net assets of chapters were $4,303,688 and chapter restricted net assets were $384,859.

2002 Revenues and Expenses by Category and Activity
APWA National revenues continue to be derived primarily from four major sources. In 2002, they included membership service fees (32 percent of total), sale of exhibit space at conferences (22 percent of total), registration fees (17 percent of total), and federal grants and contracts (9 percent of total). Those four major areas of our revenue stream continue to be critical for the organization, as they represent 80 percent of revenues for 2002. There was no significant change in the mix of revenue sources when comparing 2002 to the past few years.

As to expenses, APWA remains a fairly typical not-for-profit association in terms of where the Board of Directors allocates resources. Staff expenses of salaries and employee benefits constituted 32 percent of total expense, federal grants and contracts were 11 percent (balancing with the grant and contract income), conferences and meetings were 21 percent, administration was 14 percent, publications/education/subscriptions came in at 15 percent, and chapters and membership expense was 7 percent.

Continuing to Increase Our Net Assets
From 1995 to 2002, APWA National has steadily increased net assets. Prior to 1995, there was a slight deficit, with total net assets climbing to $2.4 million at the end of 2002. The accompanying chart, “APWA National Statement of Financial Position 1995-2002,” shows assets, liabilities, and net assets.

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 1995-2002.”

A Thank-You to Chapter Treasurers
The treasurers of each of our 67 chapters are owed special thanks for their work in keeping chapter books in order and commitment to meeting all financial reporting deadlines. As part of our audit and completion of tax returns, we are required to provide financial information from all activities—including chapters—so we sincerely appreciate the work of chapter treasurers.

Staying Focused on Finances
Throughout the 18-month fiscal year transition period, the Board of Directors, Finance Committee, and executive staff remained focused on carefully reviewing APWA’s financial performance, monitoring the organization’s financial health, and evaluating the outlook for the future. The Finance Committee continues to meet quarterly to hear reports from management, discuss finance issues, and report to the full Board of Directors.

APWA continues to seek ways to implement the goals of the 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 APWA’s success in meeting the needs of the public works community in the United States and Canada. Thank you for your continued 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.

Peter King can be reached at (202) 408-9541 or at pking@apwa.net.