Transcript A compelling case for a 2010 dues increase

Prepared by Angela Cain, CEO & William Fulton, CFO
There are four primary reasons a dues
increase is needed:

Increase in cost of doing business

Increase in member benefits and services

Decrease in dues revenue

Decrease in non-dues revenue
Since 2002 the purchasing
power of the dues we collect has
declined by 20.4%, yet programs
for members have grown
considerably.
According to Consumer Price
Index/Purchase Power
calculations*, annual state
association dues that were set at
$125 in 2002 have the same
purchase power as $150.51 in
2008.
Source: www.measuringworth.com
*The cost in a particular year of a bundle of goods and services purchased by a typical
consumer compared to the cost of that bundle of goods and services in a base period.
How Much Things Cost
Good or Service*
Average Cost of New House
Average Income Per Year
Average Monthly Rent
Gallon of Gas
US Postage Stamp
Loaf of Bread
Dozen Eggs
Minimum Wage
Case of Copy Paper
IRS Mileage Reimbursement
Rate/Mile
MAR Annual Dues
$
$
$
$
$
$
$
$
$
$
$
2002
2008
% Increase
136,150.00 $ 206,200.00
51.5%
42,350.00 $ 51,765.00
22.2%
715.00 $
850.00
18.9%
1.48 $
3.29 122.3%
0.34 $
0.42
23.5%
1.82 $
3.19
75.3%
0.90 $
2.59 187.8%
5.15 $
6.55
27.2%
24.99 $
33.95
35.9%
34.50 $
125.00 $
*National statistics available for 2008, not 2009
54.50
125.00
58.0%
0.0%
In the past 8 years, MAR has undertaken
several new initiatives that impact how the
association serves its members. These include
a continuing series of printed and electronic
publications, webinars, websites, standard
forms and contract software, and improved
member outreach and advocacy efforts
devoted to improving members’ knowledge,
skills, and business practices.
We are delivering great value for
each dues dollar. Since the last dues
increase, we have increased
member programming by more than
50% while reducing staff size
almost 36% and reducing operating
expense by 4.5 %.
We are actually spending LESS
than we did 8 years ago and
giving our members MORE.
In 2009, members get MORE
for dues dollars than ever
before…
Member Benefits
2002
2009
Quarterly newsletter
Standard Forms & Contracts in a pdf format
MAR Convention & EXPO cost members $249
Quarterly magazine
Standard Forms & Contracts in a pdf format
MAR Convention & EXPO cost members $159
Legal Hotline
Technology Hotline (outsourced)
Four Affinity Partners
One Association Website (www.msrealtors.org)
Legal Hotline
Technology Hotline (in-house)
Ten Affinity Partners
Four Association Websites: www.msrealtors.org, www.realtorinstitute.org,
http://411.msrealtors.org, http://hurricaneguide.msrealtors.org
Political Advocacy
Mississippi REALTOR® Institute
Political Advocacy
Mississippi REALTOR® Institute
REALTOR® Day at the Capitol
REALTOR® Day at the Capitol
Flyers and Quarterly Members Mailings on timely topics Monthly MARDigest e-mail
Weekly BrokerBuzz e-mail
Weekly Rookie Report e-mail
Opportunity Knocks newsletter
Real Estate 411: The Mississippi Consumer Real Estate Guide
Housing Opportunity Resource Guide
Monthly Virtual Sales Meetings
Lunch-n-Learn Webinars
Access to Mississippi REALTOR License Plate
Online chat helpline - tech, education, general
Zipforms software - desktop or web versions (every member gets a
first-time download for FREE - renewals are $59 annaully, a savings of $50 off the
orginal price)
Did you know…

MAR dues = $125/member

MAR benefits & services*= $200.74/member
*excluding Mississippi REALTOR® Institute
MAR Membership: Cost of Dues vs. Cost of
Services
Cost Per
Member
Benefits & Services
Political Advocacy/Business Protection
$50.00
Legal Hotline
ZipForms/Standard Forms & Contracts
$10.78
$11.95
Electronic Communications
$25.39
Magazine/Real Estate 4-1-1 Guide
$26.52
Professional Development
$26.40
Leadership Development
$49.70
Total Benefits per Member
$200.74
-$125.00 Dues Payment
$75.74
Added Value
Past, Present & Future
Operations
As of 12/31/2002
(Audited)
Income
$ 1,661,030.00 $ 1,430,519.00 $ 1,294,760.00
Expenses
$ 1,588,382.00 $ 1,518,840.00 $ 1,442,898.00
Surplus/(Deficit) $
72,648.00 $
2009 Budget
(Unaudited)
2010 Projection*
(Unaudited)
(88,321.00) $ (148,138.00)
*Assumes 9% decrease in membership , 7% decrease in education and 15% decrease in other income from 2009
budgeted income, as well as, a 5% decrease in expenses.
Operating Income/Expense History
2500000
2000000
1500000
1000000
500000
0
Operating income
Operating expenses
Then and Now
As of
12/31/2002
Audited
$646,474.00
Dues income
REALTOR®
Institute Income $824,174.00
Other Income
$190,382.00
TOTAL
2009 Budget Difference
$790,875.00 $144,401.00
$439,844.00 -$384,330.00
$199,800.00
$9,418.00
$1,661,030.00 $1,430,519.00 -$230,511.00
Income History
1200000
1000000
800000
600000
400000
200000
0
Dues
Education
Other
In the past, non-dues revenues, primarily
from our real estate school, have made it
possible to forego a dues increase.
However, we simply can't, in the future,
expect to raise sufficient non-dues revenue
to fund the level of member benefits and
services you’ve come to expect from this
great association.
And we can’t solve our budget
shortfalls forever by dipping into
reserves.
Reserves History
1998
1999
2000
2001
2003
Total
withdrawals
($90,000.00)
($120,000.00)
($200,000.00)
($150,000.00)
($67,000.00)
($627,000.00)
MAR used reserve funds 19982003 for operations and capital
expenditures
2004
2005
2006
2007
Total funds
deposited
$115,000.00
$183,310.55
$175,000.00
$125,000.00
$598,310.55
Funds added to reserves
2004-2007
• An association of this size and scope should have a
minimum of 6 months of operating reserves ($715,000.00).
• Reserves fund balance as of 4/17/2009 was $659,445.31.
What is MAR doing to cut
expenses?
Expense cuts made over past 4 years

Staff members decreased from 14 in 2002 to 9 in 2009

Recently laid off 10-year employee of association

No staff raises for 2009

Renegotiated multiple vendor contracts

Designated MAR building a smoke-free property and saved
$2,000/year in employee health insurance

Changed paper weight/printing/marketing approaches and
saved $41,500 annually

Changed member outreach strategy; utilizing more
webinars/technology-based outreach – saved $6,000 annually

Reduced staff and leadership travel expenses – saved $3,000
What are other states doing?
State
Alabama
Membership
in 2008
Budgeted
Membership in
2009
10%
14%
decrease decrease
Georgia
10%
20%
decrease decrease
Louisiana
8%
13%
decrease decrease
Florida
11%
10%
decrease decrease
Tennessee
6%
7% decrease
decrease
Mississippi
2%
12%
decrease decrease
Actual
Deficit
Membership Budget for Dues
in 2009
2009
Increase
11%
decrease
25%
decrease
14%
decrease
17 %
decrease
16%
decrease
11%
decrease
% of last
dues
increase
Apprx.
Membership
as of April
2009
Apprx. Dues Revenue
for 2010
Yes
2008 41.1%
12,600 $2,142,000.00
No
2009 25.9%
30,500
$2,226,500.00
No
2009 50.0%
11,250
$1,687,500.00
Yes
2010 15.0%
114,000 $13,110,000.00
Yes
2010 28.6%
23,000 $2,070,000.00
Yes
2002 47.1%
6,200
$775,000.00
What about other small states?
State
Projected
Actual
2010
% of
Membership in membership Membership
Membership Revenue Last Dues Membership
2008
in 2009
in 2009
Dues Amounts Projections from Dues Increase
Size
Maine
9%
9%
9%
$ 182.00
decrease decrease decrease
Rhode
Island*
New
Hampshire
90%
No
4130
10%
15%
15% $ 148.50 10%
decrease decrease decrease
decrease
35%
No
4040
8.5%
5%
9.8% $ 178.00 10%
decrease decrease decrease
decrease
70%
2009
5220
10%
11% $ 318.00
9%
decrease decrease
decrease
90%
2009
4086
New Mexico
9%
8%
17% $ 215.00
9%
decrease decrease decrease
decrease
85%
2008
6949
Mississippi
2%
12%
11% $ 125.00
9%
decrease decrease decrease
decrease
55%
2002
5768
Montana**
Flat
NA
*Shares 50% of expenses with Statewide MLS, this keeps dues lower. 65% of revenue from continuing
education (24 hours required every 2 years)
**Annual 3% cost of living dues increase each year
Why increase dues now when
our members are already
struggling?
Now, more than ever, our
members need help.
And MAR should remain a
viable resource in the
challenging months and years
to come.
Our financial challenges are
long-term. To dismantle our
reserves and/or cut back on
key programs, benefits, and
services now would be a
shortsighted and short-term
solution.
2010 Budget Projections

9% decrease in membership (budgeted
12% decrease in 2009)

7% decrease in education revenue

15% decrease in other revenue
(advertising, sponsorships, exhibits,
etc.)

5% decrease in expenses
Dues History

Previous State Association Dues Increase
1998:
 $60 to $85 – 41.7% increase

Last state Association Dues Increase
2002:
 $85 to $125 – 47.1% increase
Proposed 2010 dues increase
scenarios:

Long-term solution: $3/month or
$36/annual increase = 28.8% increase

Medium-term solution: $2.50/month or
$30/annual increase = 24% increase

Short-term solution: $2.08/month or
$25/annual increase = 20% increase
2010 Dues Increase Scenarios
Operating Revenue vs.
Expenses
No increase
$2.08/month
increase or $25
increase annually
$2.50/month
increase or $30
increase annually
$3.00/month
increase or $36
increase annually
Dues revenue
Education revenue
Other operating income
Total Operating Revenue
$
715,875.00
$
857,550.00
$
885,885.00 $
919,887.00
$
409,055.00
$
409,055.00
$
409,055.00
$
409,055.00
$
169,830.00 $ 169,830.00 $ 169,830.00 $
$ 1,294,760.00 $ 1,436,435.00 $ 1,464,770.00 $
169,830.00
1,498,772.00
Operating Expenses
Projected Operating
Surplus/(Deficit)
$ 1,442,898.00 $ 1,442,898.00 $ 1,442,898.00
$
1,442,898.00
$ (148,138.00) $ (6,463.00) $ 21,872.00 $
55,874.00
“Living in the past has one thing
in its favor – it’s cheaper.”
“The bitterness of poor quality
lingers long after the sweetness
of a cheap price is forgotten.”
“In any moment of decision, the
best thing you can do is the
right thing. The next best thing
is the wrong thing and the worst
thing you can do is nothing.”
A $3 a month investment in your state
association is a $3 a month investment in
your future business success. Vote YES.