Member Update (MU04-10)

*To:*	Members & Affiliates
*From:*	National Office
*Date:*	June 14, 2004
*Subject:*	REPORT TO THE MEMBERSHIP FISCAL & ORGANIZATIONAL INITIATIVES FY 2005 PRELIMINARY BUDGETS
*Reference:*	MU 04-10

Each year AMSA’s budget development process includes a careful review of revenues and expenses, as well as an assessment of dues levels to ensure that our ability to deliver essential services to our members is consistently improved. It is based on this approach that preliminary Fiscal Year 2005 budgets for AMSA’s General Fund and Technical Action Fund (TAF) were developed and, subsequently, approved by the Board of Directors in May.

Under AMSA’s budget cycle, the Association’s Board of Directors adopts preliminary budgets in May, distributes the budgets to the membership for comment in June, and votes on final budgets in July. AMSA is pleased to provide the Association’s membership with this report addressing both fiscal and organizational initiatives for the 2005 fiscal year.

Board Strives to Ensure Quality Service – Control Costs
AMSA’s Audited Financial Statements for FY 2003 were finalized earlier this year. The Association’s Statement of Activities reflected a surplus of Revenues over Expenses for FY 2003 of $524,000. While the majority of the surplus was directly related to temporarily restricted net income, from Grants and the Wastewater Infrastructure Funding Task Force, the overall financial performance was positive.

AMSA’s Technical Action Fund continues to be strong and is well supported by the Association’s membership. Twenty percent of each member’s annual AMSA dues are allocated to the Technical Action Fund. In FY 2004 that amounted to over $535,000. This allocation has proven to be approximately equal to the needs that have been identified by AMSA’s committees and members. Most importantly, it has enabled AMSA to pursue a wide range of projects that are of critical importance in achieving our strategic goals and objectives.

FY 2005 Preliminary Budget Adopted
On May 24, 2004, AMSA’s Board adopted preliminary budgets for Fiscal Year 2005. These budgets are now – via this Member Update – presented to AMSA’s membership for review and comment. The preliminary FY 2005 General Fund Budget is presented in Attachment A and the FY 2005 preliminary Technical Action Fund Budget is provided under Attachment B.

General Fund Realigned – Reserves Enhanced
In preparing the FY 2005 General Fund budget, we have evaluated and realigned our expense categories to better reflect actual expense types (in some cases this has resulted in a line item name change). Due to these reallocations, some expense line items may show a dramatic increase/decrease in the budgeted amount from FY04 to FY05.

A critical part of the budget development process was ensuring that funds are available to build AMSA’s reserves. The General Fund Budget allocates $75,000 for this purpose in FY 2005, and plans call for similar allocations in future years until such time as AMSA’s reserves reach a level of 25% of total budgeted expenditures, as called for in Board policies.

In addition to providing for high quality management and enhanced service to members, AMSA’s FY 2005 General Fund Budget anticipates two changes with regard to member dues. The first is a 5% increase in Public Member Agency and Public Affiliate dues. This increase will provide enhanced support for AMSA’s Technical Action Fund – and ensure the ability of the General Fund to respond to increasing expenses and build operating reserves.

Secondly, a change in the Private Affiliate Dues Structure is proposed. This change would create separate dues categories for AMSA’s traditional affiliates (i.e. engineering consulting firms, management consulting firms, etc. . .) and law firms. It is anticipated that this change will make Private Affiliate membership in AMSA more accessible to a wider variety of firms by basing dues on municipal wastewater-related revenue, and in the case of law firms – on number of attorneys.

The proposed revised Private Affiliate Dues Structure is described in Attachment C of this Member Update. The revised dues structure, as proposed, would be phased in over two years (FY05 and FY06). As with all dues revenue, 20% would be allocated in support of the Technical Action Fund.

Still ‘TAF’. . . But More Targeted and Diverse
AMSA’s Technical Action Fund (TAF) continues to prove its value. Established nine years ago to commemorate AMSA’s 25th anniversary, the “stand alone” Technical Action Fund strengthens the Association’s capability to achieve its short and long-term objectives. The TAF has provided dedicated funds to gather and analyze data, initiate litigation, and secure the services of consultants having expertise beyond that which the National Office can offer. These funds enable AMSA to pursue a wide range of projects that are of critical importance in achieving our strategic goals and objectives. A complete summary of Association activities currently being supported by the Technical Action Fund is provided in this Member Update under Attachment D.

Advised and inspired by our Strategic Planning Initiative, AMSA given considerable thought to ways to enhance both the structure and viability of the Technical Action Fund. The proposed FY 2005 Technical Action Fund budget reflects specific revisions that we believe improve the clarity of the fund’s presentation and enhance its operation.

For FY 2005 we have grouped Project Expenses under three categories: Technical Projects; Litigation; and, Ongoing Initiatives/Coalition Work. Within the categories, Technical Projects is comprised of specific initiatives that are finite in nature and relate to AMSA’s advocacy agenda. The category Litigation contains specific litigation in which AMSA is engaged. Initiatives that are ongoing in nature and/or represent AMSA’s participation in coalition activities can be found under the Ongoing Initiatives/Coalition Work heading. You will note that we have also included $30,000 for a Government Affairs Rapid Response Fund, modeled loosely after the General Legal line item. It is envisioned that guidelines would be developed to enable this fund to provide limited funds, without prior approval, for targeted project support.

Lastly, we have changed the name of the fund from Technical Action Fund to Targeted Action Fund – with the same acronym – TAF. We believe that “targeted action” better captures the true intent and use of the fund, and acknowledges its support of areas outside of the ‘technical’ realm, like litigation, utility management, coalition work – to name a few. The process and criteria for identifying and evaluating TAF projects for funding is under review and will be refined and improved to further support the enhanced viability of the fund. Clearly, AMSA’s Technical Action Fund plays a prominent role in the Association’s ability to ‘get the job done’ for its members.

Infrastructure Funding Remains Prominent on AMSA’s Agenda
AMSA’s Clean Water Funding Task Force (formerly the Wastewater Infrastructure Funding Task Force) has worked in collaboration with the Water Infrastructure Network – and most recently environmental activist organizations and conservation groups – to further cement the need for clean water infrastructure funding into the nation’s consciousness. The Task Force is ready now to work hard to build an increasingly broader coalition of individuals and organizations in support of a dedicated, long-term, sustainable source of clean water funding.

As the Association continues on this path, short-term needs of AMSA’s members will not be overlooked. The Association has worked enthusiastically this year to support increased funding for the State Revolving Loan Fund and to pursue stormwater funds through the Highway bill.

Strategic Planning Initiative Focuses AMSA on the Future
Beyond the funding issue, AMSA has looked it its overall future as well during the past year. Since late 2003, the Association has been engaged in an aggressive Strategic Planning Initiative. The Initiative began in November with a Member Needs Assessment and series of one-on-one interviews with member agencies. Through this initial step we learned that there is generally a high level of satisfaction with the services that AMSA provides and the issues it considers its priorities. As we drilled down deeper into the information we also learned more about programs that can be strengthened and improved.

With member input in hand, the Association’s Board, committee leadership, staff and a cross-section of member agencies engaged in two multi-day Strategic Planning Sessions – the most recent one completed just last month. These efforts have resulted in a new Strategic Plan for the Association and a Big Audacious Goal for AMSA’s long-term future.

AMSA members will hear more soon about the strategic planning process and its outcomes. We plan to create a special section for it on our website – and share additional information in communications with members. But, for the time being, we would like to tell the membership more about AMSA’s Big Audacious Goal.

This Big Audacious Goal, by definition, is intended to be a clear and compelling catalyst that serves as a focal point for action. In their deliberations the Association’s leadership and staff talked a lot about AMSA’s role as a leading advocate for responsible national policies that provide clean water and a better environment. As a result, they created the following Big Audacious Goal to take AMSA 10 years into the future and beyond:

The Association’s leadership and staff want AMSA to be the nation’s premiere environmental organization – because, after all, AMSA members are true environmental practitioners. AMSA’s work ahead, in the coming weeks, months and years – will be to make this Big Audacious Goal a Big Audacious Reality. AMSA members will be kept up-to-date as the new Strategic Plan is finalized and the work of implementation begins.

Growth in AMSA’s Membership Continues
This past year we have continued to implement initiatives aimed at both retaining our existing membership and at attracting new members. Although municipal budget constraints cause a limited number of agencies to discontinue membership in AMSA, the Association’s membership roster continues to see a net increase each year, and boasts a retention rate of 97.5%.

With the help of member agencies nationwide, AMSA’s membership has increased this year to include 288 Member Agencies, 13 Public Affiliates, and 59 Private Affiliates. These 360 entities work together to increase our collective political clout with Congress and the U.S. Environmental Protection Agency, thus ensuring that our messages are heard by national policy makers.

In Summary . . .
As AMSA moves forward in its fourth decade of advocacy and service, initiatives throughout the year will support the objective of maintaining AMSA’s strategic position as the driving force in national clean water policy. We plan to continue to focus our efforts largely on the legislative, regulatory and legal arenas. Through leadership and member support, we will also continue to commit time and resources to address the challenging management issues faced by our membership – as well as provide support to wastewater sector-specific to security initiatives.

This past year we have accomplished many things. Playing the most instrumental role in these accomplishments were AMSA’s leadership and members, whose firm decisions and substantial participation lent unquestioned credibility to AMSA’s positions and led to increased attention to its policy goals. Many thanks for your continuing participation and support.

Member Comment Invited
The Board of Directors encourages all members to review the FY 2005 Preliminary Budgets for both the General Fund and the Technical Action Fund. Please direct any comments you may have to Dick Champion, AMSA’s Treasurer and Chair of the Association’s Budget & Audit Committee at 816/325-7711 or via e-mail at dchampion@indepmo.org, AMSA’s Executive Director Ken Kirk at 202/833-4653 or via e-mail at kkirk@amsa-cleanwater.org, or the member(s) representing your region on AMSA’s Board of Directors (for contact information see AMSA’s Board Roster in the Member Pipeline at http://www.amsa-cleanwater.org/private/amsaroster_leadership.cfm?cmt_id=A3).

The Board of Directors will meet in Denver, Colorado on July 21, 2004, and will adopt final FY 2005 budgets at that time. Please provide your comments and recommendations prior to Wednesday, June 30, 2004.