Our unaudited financial statements for Fiscal Year 2001 display a mixed financial performance for the just-completed fiscal year. On the one hand, the statements show a small operating profit for the year. This could change slightly as some final bills for the year trickle in. This means that for the second consecutive year, our net operating revenues exceeded our projections and represent significantly improved performance over previous years. Our total operating revenues increased by 15% in FY 2001, from $1.22 million in FY 2000 to $1.41 million last year.

The attached statements indicate, however, that our annual meeting performance fell short of projections. We incurred a loss on the annual meeting of about $47,000. This loss was higher than we reported to the Board in February, primarily as a result of higher than expected audio-visual charges, speaker travel, and printing costs. Although this is a substantial loss, it is comparable to recent PREVENTION meetings and probably represents a good first year’s effort.

I should also point out that the statements indicate that our annual meeting revenues fell short of projections by about $50,000. This is actually a reporting artifact. The annual meeting line item does not include about $57,000 in federal grants that were received for the meeting. These dollars appear in the grant and contract line item. Thus, our true meeting revenues slightly exceeded projections, but are non-meeting related grant revenues are actually $57,000 less than what is shown.

The troubling for the year is that stock market losses resulted in significant losses in our reserve fund. This was of course not within our control, and we did ensure that our asset allocations remained consistent with the Board-approved investment policy (i.e, 60% in equities, 30% in fixed income instruments, and 10% in cash and equivalents).

We expect that Fiscal Year 2002 will present significant challenges to the College. Our rent expense will be about $17,000 higher than in FY 2001. In addition, we have seven FTEs on board compared to six for the first five months of the previous year.

There is also uncertainty both about the impact of the economy on membership levels and about the impact of the September 11 events on travel to the annual meeting.

Although none of us are expert stock prognosticators, we do expect that our investment performance in the coming year will be far better than in the year just completed.

Although the College’s financial performance has improved significantly in the last several years, we continue to operate very close to the margin. As shown in our budget projections for the coming year, we face serious financial challenges. The challenges will increase in future years as, for example, our AJPM expenses increase and as we expand our online capabilities.

Thus, your Treasurer recommends that the Board enact a dues increase beginning in the 2002-2003 membership year. A $35 dues increase for those currently paying annual dues of $240 would allow us to not raise dues again for several years.

The last dues increase was a $10 increase in the 1998-1999 membership year. Thus, this would represent the first dues increase in four years. In that time, our expenses – along with our membership services – have grown.

I recommend the Board adopt a dues increase at the October Board meeting.