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American Public Transportation Association

 Financial Policy

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D​UES & ASSESSMENT LEVEL POLICY

Adopted: June 8, 1997
Revised: May 22, 1999
Revised: March 9, 2003
Revised: November 14, 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association to collect annual dues from its members to provide a regular stream of revenue to help fund the current operations of the Association. The following policy parameters will be utilized concerning annual dues:

  • Annual dues revenue will be equal to or greater than 40% of the annual operating expense budget less grants and special project related expenses.
  • Annual member dues including portions allocated to base dues, RCA and the Standards allocation for all member categories may be increased annually as recommended by the Finance Committee and approved by the Executive Committee as part of the annual budget approval. The basis for any increase may include CPI and other factors.

DISCUSSION:
Member dues are the primary source of income for trade associations and as a consequence deserve careful management and attention. As the operating budgets of member organizations become tighter, there is an increasing resistance to regular dues adjustments. There is also a climate of wanting to increase the level of services provided to members. In an effort to balance the demand for more expense creating services and the desire to minimize dues increases, the development of a guideline is appropriate to measure dues income against operating expense. A traditional measurement used by associations is the relationship or ratio of dues income to total income. In order to make the measure more sensitive to expenses, a ratio of dues to expenses is appropriate.

In 2002, a Budget Strategy Task Force was created by the Chairman to review the Association’s financial capacity over the long-term, in particular the financial policy on dues levels. The Task Force felt a 40% dues level policy is still a rational and important benchmark to continue in order for the Association to maintain the financial capacity to fulfill its mission over the long-term. The Task Force felt that establishing an annual “indexing” of dues will allow the Association to maintain its core revenue base at the established 40% dues level as the Association’s operating budget increases in the future.

In 2013 the definition of membership dues was modified to include other fees included in the annual dues assessment including the portion segregated for Standards work and the Research, Communication and Advocacy (RCA) fund. The finance committee recommends this policy be determined on an annual basis as part of the budget development.

IMPLEMENTATION AND ADMINISTRATION:
The Finance Committee will ensure that the dues to total expense ratio is evaluated as part of the development of the annual operating budget. The budget shall contain a statement noting the ratio on an annual basis.

When the dues income expressed as a percentage of total expenses, as noted above, falls below the established minimum, among some of the alternative budget scenarios that may be explored are a dues increase and/or scaling back of program effort.


MAJOR MEETING COST RECOVERY

Adopted: June 8, 1997
Revised: November 14, 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association to recover through major meeting income all direct and overhead expenses associated with each major meeting.

DISCUSSION:
The Association conducts four major meetings annually. Major meetings are an important revenue source for the Association. As a consequence, it is critical that income generated by the four major conferences meet and ideally exceed all expenses, direct and overhead, associated with each meeting. It is also recognized that the high quality of the meetings must not be compromised. The setting of registration fees and the containment of costs are of paramount financial importance in the management of high quality major meetings.

IMPLEMENTATION AND ADMINISTRATION:
The staff as part of the budget development process shall ensure that the four major meetings are programmed in such a manner to return revenue in excess of all expenses. Corrective action may include an intensified marketing campaign, increase in fees, consolidation of the meeting, restructuring to make the meeting more attractive to the membership or other cost reduction efforts or elimination of the conference.

In the event a meeting fails to meet the cost recovery measure, after adjusting revenues and expenses, then the meeting shall be highlighted for review and consideration by the Finance Committee. The compliance of this policy will be reviewed annually as part of the monitoring of the financial statements. A meeting that does not achieve financial goals must develop an action plan to bring the meeting into compliance. The Finance Committee will make a recommendation to the Executive Committee on the elimination of the major meeting should the conference fail to meet financial targets.


WORKSHOPS AND SEMINARS COST RECOVERY

Adopted: June 8, 1997
Revised: May 22, 1999
Revised: November 15, 2002
Revised November 14, 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association that each training development workshop and seminar will recover all direct expenses associated with the meeting and to the extent practical make a contribution to overhead expense.

DISCUSSION:
One of the key activities of the Association is to provide meaningful professional development training for the membership through a broad based series of workshops and seminars. By definition the workshops and seminars appeal to a smaller and more select audience. Frequently the meetings are directed at specific professional or definable groups within the Association (i.e. Legal Affairs or any number of technically oriented sub groups within the transit community). The importance of this training experience must be weighed against the financial realities of an Association with finite resources. It is also recognized that the high quality of the workshops and seminars must not be compromised.

It is the financial objective of the Association that workshops and seminars cover the direct cost associated with such meetings. Direct cost includes labor, fringes, printing, general meeting expense, etc. Some of the more heavily attended workshops and seminars will cover all direct expenses and even make a contribution toward covering the general and administrative expenses assessed to all program activities.

IMPLEMENTATION AND ADMINISTRATION:

The staff, under the direction of the Vice President - Member Services, as part of the budget development process, shall ensure that workshops and seminars are managed in such a manner so as to return revenue that covers all direct expenses. Corrective action may include an intensified marketing effort, consolidation of the meeting, restructuring to make the meeting more attractive to the segment of the membership that is the focus of the meeting, other cost reduction efforts or elimination of the Workshop/Seminar.

In the event a meeting fails to meet the cost recovery measure, after adjusting revenues and expenses, then the meeting shall be highlighted for review and consideration by the Finance Committee. The compliance of this policy will be reviewed annually as part of the monitoring of the financial statements. A meeting that does not achieve financial goals must develop an action plan to bring the meeting into compliance. The Finance Committee will make a recommendation to the Executive Committee on the elimination of the major meeting should the conference fail to meet financial targets.


USER FEE POLICY

Adopted: June 8, 1997
Revised: November 14 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association to recover, through reimbursement, any expense associated with a unique program that is for the benefit of a single, restricted segment of the Association membership.

DISCUSSION:
As the number of requests for increased and special services from segments of the membership grows it has become apparent that in order to maintain equity among the various types of members that a policy to provide for the recovery of costs associated with the special activities of the Association was appropriate.

It is the intent of the policy that all cost association with the program be reimbursed. These costs include staff time and related fringe benefit, other direct costs such as consulting fees, travel, printing, etc. and the current rate for general and administrative costs.

IMPLEMENTATION AND ADMINISTRATION:
Prior to implementation of a new special activity, the staff, in response to a request from a segment of the membership, must prepare a detailed operating plan and budget for presentation to the Executive Committee.

Normally, new initiatives will be introduced as part of the budget development process. As a consequence, the Finance Committee will review the proposal for a new program and make a recommendation to the Executive Committee.


EXPO NET REVENUES

Adopted: June 8, 1997
Revised: November 14, 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association to apply the net revenues realized from the triennial EXPO to support the mission of the Association. The policy will apply only if reserve levels are met. If the reserve target is met, net trade show revenues may be used for ongoing operational activity, dues stabilization or special projects. Specific uses will be determined annually by the Executive Committee.

DISCUSSION:
In May 1992, the Executive Committee directed staff to begin allocating the net revenue from the EXPO to ongoing programs instead of to the continuing buildup of reserves. It was the intention that approximately one-third of the net revenues from EXPO would be spent each fiscal year.

The practice of spending approximately one-third of the net revenues from the EXPO in support of program has become a routine part of the budget development process. Nothing in this policy is intended to restrict the use of Trade Show net revenue in order to meet the provisions of the reserve policy of the Association.

In 2013 the Finance Committee reviewed this policy and in light of the deficit situation discontinued this practice.

IMPLEMENTATION AND ADMINISTRATION:

The Finance Committee shall recommend a dollar amount that may be used from EXPO net revenues as part of the annual budget review. The Executive Committee has final approval.


RESERVE POLICY

Adopted: February 5, 1994
Revised: May 6, 2000
Revised: November 15, 2002
Revised: September 13, 2013

POLICY STATEMENT:
It is the policy of the American Public Transportation Association to maintain reserves as a contingency against a drastic and sudden revenue shortfall or to fund new programs or strategic initiatives that are deemed critical to the future success of the Association.

The following parameters will be used in applying the Reserve Policy:

  • Reserves are defined as the Association’s net assets (total assets less total liabilities).
  • The Association will target reserves at 50% of the Association’s annual operating expense budget, less grants and special project expenses.
  • Reserves will not be used to “balance” APTA’s budget during the annual budget process, except for the spending amount as stated in the Investment Policy.

DISCUSSION:
In 1994 a special task force of Executive Committee members was created by the Chairman to determine the proper level of reserves for the Association. In their deliberations the task force considered a letter report of the independent accountants of the Association. It was the opinion of the independent accountants that maintaining capital reserves within the range of 50% to 100% was an appropriate long-term financial strategy. It was acknowledged that the determination of what is an adequate level of reserves is clearly a matter of board policy.

In 2002, a Budget Strategy Task Force was created by the Chairman to review the Association’s financial capacity over the long-term, in particular the financial policy on reserve levels. It is clear from research obtained from the American Society of Association Executives that most trade associations target a reserve level of 50%, including those associations with revenue greater than $10 million. Most studies have shown that a 50% reserve is necessary as a contingency against a drastic and sudden revenue shortfall. This would give the Association six months to identify research and analyze the problem and implement the necessary changes.

In 2013 the finance committee reviewed the policy. The committee confirmed that the goal of 50% of reserves remained best practice.

IMPLEMENTATION AND ADMINISTRATION:
The Finance Committee shall review an annual statement as part of the budget development on the state of the reserves and if in compliance of policy. ​

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