APWA Financials for 2003: Healthy and Growing

Peter B. King
APWA Executive Director

Despite the challenges of a slower overall economy, APWA's financial foundation is solid and trends point to continued stability. During 2002-2003, we were able to expand services in education and advocacy, as well as continue to serve as "the gateway" to public works information, services and products. All during a year when our net assets grew to $2.78 million.

The audit for the twelve-month period ending June 30, 2003 was formally accepted by the Board of Directors in January 2004. APWA's year-end audit was performed by KPMG LLP and included an Independent Auditor's Report, which reflects an "unqualified opinion" supporting our sound financial condition; a Consolidated Statement of Financial Position; a Consolidated Statement of Activities; and a Consolidated Statement of Cash Flows.

The financial health of our organization continues to be strong. The Board of Directors and Finance Committee continue to focus on maintaining a solid financial foundation while moving forward on the goals identified in our strategic plan.

APWA National's total net assets continued to increase in fiscal year 2003, reaching nearly $2.78 million at June 30, 2003, up from $2.4 million in 2002. This represents a 16 percent increase over June 30, 2002, and continues the positive trend. 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 2003." The following provides highlights of 2003 operations and APWA's financial position at June 30, 2003. The accompanying charts display 2003 revenues and expenses by general category of activity, as well as trends in changes in financial position for the past seven years, 1995 to 2003.

National and Chapters' Revenues Approach $15 Million
APWA National revenues totaled $8,884,810 with expenses at $8,508,001 in 2003. 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, 2003 period at 96% of our reserve goal.

Financial information was submitted by all 65 active chapters and is included in the notes to the financial statements. In 2003, chapters reported total revenues of $5,875,510, and total expenses of $5,713,925. Unrestricted net assets of chapters were $4,012,906 and chapter restricted net assets were $613,612. Combined revenues of National and chapters nearly reached the $15 million mark.

Revenues and Expenses by Category and Activity
APWA National revenues continue to be derived primarily from four major sources. In 2003, they included membership service fees (32 percent of total), sale of exhibit space (23 percent of total), registration fees (16 percent of total), and federal grants and contracts (10 percent of total). Those four major areas of our revenue stream continue to be critical for the organization, as they represent 81 percent of revenues for 2003. There was no significant change in the mix of revenue sources when comparing 2003 to the past few years.

The allocation of resources by the Board of Directors is typical of the association community as a whole. Staff expenses of salaries and employee benefits constituted 32 percent of total expense, federal grants and contracts were 11 percent, conferences and meetings were 22 percent, administration was 12 percent, publications/education/subscriptions came in at 15 percent, and chapters and membership expense was 8 percent.

Our Net Assets Continue to Climb
From 1995 to 2003, APWA National has steadily increased our net assets. Prior to 1995, there was a slight deficit, with total net assets climbing to $2.78 million at the end of 2003. The accompanying chart, "APWA National Statement of Financial Position 1995-2003," shows assets, liabilities, and net assets over this time horizon.

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 1995-2003."

Chapter Treasurers are Key
Treasurers and administrators in our 65 active chapters are owed special thanks again this year. Our volunteer treasurers' 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 a Top Priority
Over the past several years, improving APWA's financial condition has been a top priority for the Board of Directors, Finance Committee, and executive staff. The Finance Committee continues to meet quarterly 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.

2003 was a year when many of our members and other professional associations were forced to trim services and retrench in the face of a slower economy and deteriorating finances. Due to careful forecasting and being "close to our members," we were fortunate that we could continue to meet or exceed our members' high standards and expectations. Through the recently concluded work of the Strategic Planning Committee, we are well-positioned and have built the financial foundation to continue to serve the public works community. 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.