Tuesday, July 14, 2009

ADA Board proposes balanced budget, no dues hike for 2010

ADA Board proposes balanced budget, no dues hike for 2010
Posted July 13, 2009

By James Berry

In a message of solidarity to members contending with a down economy, the ADA Board of Trustees will send the House of Delegates a balanced budget proposal for 2010 and no recommended increase in membership dues.

The House will meet Oct. 2-6 at Annual Session in Hawaii.

"The [budget] process this year worked better than I've seen it in my time on the Board and as an officer" of the Association, said Dr. John S. Findley, ADA president. "The process worked because we recognized as a primary factor the economy and its effects on our members and the Association—and we realized we had to operate in a sound manner in that environment."

The 2010 budget proposal, prepared for the House as Board Report 2, balances revenues of $114,836,450 against equal expenses and seeks no increase in membership dues. With approval from the 2009 ADA House, annual dues for active members would remain at $498 in the coming year.

That would mean no dues increase for the second straight year, the House having rejected a proposed $14 increase last year. What's more, expenses in next year's proposed budget are $1,067,550 less than 2009 expenses approved by last year's House.

Dr. Edward Leone Jr., ADA treasurer, said he expects the House to be "receptive" to the budget proposal because of the effort that went into making it "as efficient as it can be, given the economic times."

He added, "The officers and trustees are all practicing dentists experiencing the economy in the same way as other dentists. We're not insulated or immune from any of that."

ADA Bylaws require that each year constituent (state and territorial) society leaders receive 90-day advance notice of any resolution affecting active member dues for the coming year and that they, in turn, share that notice with their delegates and alternate delegates to the ADA House.

This year's notice went to constituent executives June 26 in a joint memorandum from Drs. Findley and Kathleen O'Loughlin, ADA executive director. The ADA leaders note in the memo that the initial budget submissions from senior management projected a deficit of about $6 million.

"Through the collaborative effort of senior staff, guided by the Board, difficult choices were made to balance the budget," said Drs. Findley and O'Loughlin. "A theme of shared sacrifice permeated these decisions with the goal of not sacrificing key programs that benefit the membership and support the ADA's mission."

They added, "The state of the economy and its impact on our membership was the crucial factor in recommending that the dues rate for 2010 remain unchanged."

An administrative review committee encompassing the ADA president, president-elect, treasurer and four trustees scrutinized the division budgets and decision packages on new programs and advised senior management on areas that could be adjusted to bring down costs. (The executive director is a member of the review committee, but most of this activity took place before June 1, when Dr. O'Loughlin joined the staff.)

"The administrative review committee talked to senior staff about the adjustments they were recommending, accepting some and rejecting others," noted Dr. Leone. "The full Board then went through the very same exercise at its June meeting, reviewing the adjustments, accepting some, rejecting others. The Board also reviewed the decision packages; some were recommended, some were not."

Budget adjustments were made in all areas, with special emphasis on reducing travel expenses, meeting costs, consulting fees and outside services. The Board will complete its work on the budget at its August meeting. The report then goes to the delegates and alternates.

"Understanding the state of the economy, senior staff were very helpful and willing to suggest reductions in their areas to keep the ADA fiscally sound," said Dr. Ronald L. Tankersley, ADA president-elect.

He noted that "like most of our 401(k)s," the Association's reserves "took a hit" at the height of the economic downturn, but appear to be recovering slowly.

At the end of February, for example, reserves as a percentage of the budget were 24.1 percent. By the end of May, they had climbed to 31.2 percent, a gradual improvement but still well below the House-approved target of 50 percent.

"The trend is favorable, but we still have a way to go," said Dr. Leone.

The budget proposal, Board Report 2, remains only a draft until it is reviewed and approved by the House, which can alter it as it wishes. Dr. Tankersley, who will succeed Dr. Findley as president at annual session this fall, was asked what message he wished to convey to the House on the budget proposal.

"This is your organization," he replied. "The Board's responsibility is to represent you and promote your policies. We believe that this budget fulfills your wishes and our responsibilities, without endangering our short-term future.

"However, abandoning our dues stabilization process in the face of diminishing reserves and tremendous external challenges to our profession is a huge decision. So, if you feel that we need the financial resources to do more during these turbulent times, I'm sure the Board will be receptive."

The ADA, he added, is fiscally sound, and its leaders are doing what they believe is necessary to keep it that way.

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