Treasurer’s Comments
By Jim Kern, F63208
National Treasurer
July 2007
As national treasurer, one of my responsibilities in accordance with Policy & Procedure 2027 is to “have all books of FMCA and/or its subsidiaries audited and certified annually at the close of each fiscal year by an Independent Certified Public Accountant.” This year’s annual audit was performed by Plattenburg and Associates, and the financial figures accompanying this report were taken directly from the 2006 audit report. As much as I would like to report to you that FMCA had another good year financially, I am unable to do that for 2006. Many things contributed to this, which I will touch on in this report.
Total assets decreased 1.9 percent, or $326,000, while total liabilities decreased 10.7 percent, or $360,000. A significant amount of obsolete equipment was retired this year on the depreciation schedule, which resulted in a decrease in assets.
Total overall operating revenues decreased 7.2 percent, or $1,094,486. Overall operating expenses increased 5.9 percent, or $845,716. FMCA and its subsidiary’s total operating losses for the year ended December 31, 2006, were $928,679 before income taxes.
On a positive note, FMCA’s invested reserves earned interest and dividends and increased in market value in the amount of $854,752. Earnings on reserves are added to FMCA’s operating reserve, and operating losses are deducted from operating reserves. The net results for the year were a $34,357 increase in operating reserves. We feel fortunate that the invested reserves performed well in a year of operating revenue decline.
Convention revenue increased 0.7 percent over 2005. The convention in Charlotte/Concord, North Carolina, was a nice-sized event, but given that it was a new venue for FMCA, and the association had not had a convention on the East Coast for some time, the budget was based on a larger attendance figure than that which transpired.
Magazine revenue decreased 13.8 percent over 2005. The downturn in revenue for the magazine seemed to mirror the decline in sales in the motorhome industry.
Membership revenue decreased 1.9 percent over 2005. The active count as of December 31, 2006, was 119,747 families. One step required in an audit of a nonprofit association is to do an analysis of the functional expenses to determine the actual cost of the membership services provided versus the actual administrative costs. Administrative costs were 13 percent of the total expenses in 2006, leaving 87 percent as the cost of membership services provided. This equates to the cost per member being $110 at year-end.
I would like to assure the membership of FMCA that the Finance Committee, the Executive Board, and the national office staff are monitoring the financial operations very carefully. FMCA is still financially healthy, and we consider this past year a wake-up call with regard to doing some additional planning for the financial success of FMCA in future years. FMCA’s Finance Committee and staff worked very hard to develop a proposed budget for year 2008 that we believe will correct the current operating losses. This 2008 budget has been approved by the Executive Board and will be submitted to the Governing Board in August in Redmond, Oregon, for their approval.
This is my last report to the FMCA membership as national treasurer. I have enjoyed serving you, and I am most grateful of the friends I have made along the way. I would be glad to hear from you if you have any questions or suggestions with regard to FMCA’s finances. My best wishes to all of you for safe travels. Oh, and by the way, don’t forget to tell someone about FMCA. It’s the best-kept secret I know of given the benefits we have to offer.
Family Motor Coach Association and Subsidiary Consolidated Statement Of Financial Position
Assets 2006 2005
Cash and Cash Equivalents $809,437 $1,205,508
Accounts Receivable 136,123 351,792
Prepaid Expenses 2,352,695 2,715,668
Merchandise Inventory 137,376 141,617
Investments 11,001,549 10,682,077
Refundable Income Taxes 159,408 72,900
Deferred Income Taxes 394,500 35,200
Property and Equipment 1,824,696 1,936,790
Total Assets $16,815,784 $17,141,552
Liabilities
Accounts Payable $130,200 $241,386
Accrued Payroll and Taxes 116,748 111,572
Income Taxes Payable 0 13,300
Member Mail-Forwarding Deposits 66,657 63,774
Convention Deposits 844,304 895,338
Magazine Deposits 61,346 73,183
Contributions Payable 78,017 0
Deferred Membership Dues 1,295,123 1,529,261
Deferred Life-Member Dues 428,881 453,587
Total Liabilities $3,021,276 $3,381,401
Net Assets
Unrestricted-Board Designated
Current Operations $1,822,960 $1,956,304
Building and Equipment Fund 1,824,696 1,936,790
Building Reserve 4,628,030 4,628,030
Operating Reserve 4,628,030 4,628,030
Market Value Adjustment 890,792 610,997
Total Net Assets $13,794,508 $13,760,151
Total Liabilities And Net Assets $16,815,784 $17,141,552
Family Motor Coach Association And Subsidiary Consolidated Statement Of Activities
Revenue 2006 2005
Membership revenue $3,810,603 $3,882,517
Magazine revenue 6,755,189 7,838,914
Convention revenue 3,244,913 3,222,709
Commissions 131,490 92,250
Message Service 5,677 15,220
Road Atlas 61,365 86,448
Miscellaneous 156,890 122,555
Total Revenue $14,166,127 $15,260,613
Operating Expenses
Accounting and Legal Services $80,458 $75,516
Advertising and Promotion 260,254 299,883
Bank Service Charges/Credit Card Fees 150,036 142,211
Chapter Promotions/Service 244,597 216,244
Coach Plates 193, 945 213,165
Convention Expense 3,142,509 2,311,249
Contribution-Motorhome Museum 78,017 0
Depreciation and Amortization 288,408 278,070
Employee Wages/Benefits 3,434,912 3,232,661
Insurance 452,182 460,549
Magazine Agency Commission 897,529 1,050,031
Magazine Representative Commission 635,837 749,706
Member Directory 212,351 200,483
Member Services 796,710 806,817
Miscellaneous 639,959 547,988
Office Supplies/Building Maintenance 182,291 196,945
Payroll and Property Taxes 287,286 284,796
Postage 969,147 920,568
Printing 1,501,794 1,605,394
Telephone-General & Message Service 134,206 175,440
Travel-Officers, Committees & Staff 512,378 481,374
Total Operating Expenses $15,094,806 $14,249,090
Change in Net Assets From Operations $(928,679) $1,011,523
Other Income (Expense)
Interest and Dividend Income $281,456 $248,958
Net Realized Gains (losses) on Investments 291,723 112,602
Net Unrealized Gains (losses) on Investments 281,573 (25,115)
Total Other Income (Expense) $854,752 $336,445
Change in Net Assets before Income Taxes $(73,927) $1,347,968
Provision for Income Taxes $(108,284) $391,743
Change in Net Assets $34,357 $956,225
Net Assets, Beginning of Year $13,760,151 $12,803,926
Net Assets, End of Year $13,794,508 $13,760,151