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Board of Trustees proposes 2017 ADA budget

August 22, 2016

By Judy Jakush

Focus the message; fill the pipeline; simplify.

These three strategic priorities are driving the 2017 ADA budget proposal, which the Board of Trustees at its July 31-Aug. 2 meeting voted to transmit to the House of Delegates.

The Board is recommending a 2017 operating budget of $133.6 million in revenues and a dues increase of $10 to cover a projected 0.2 percent deficit. This would set a 2017 dues level of $532, a rate which does not reflect any potential costs for additional actions delegates may take at their meeting in Denver in October.

Dr. Summerhays

Dr. Roberts

Dr. Lemmo
In Board Report 2, which is the annual summary of anticipated revenue and expenses, the Board states it "believes that the process changes made this year put more emphasis on the importance of outcomes related to the advancement of the strategic plan rather than the financial budgeting process itself."

"In the 10 years I've served at the ADA," noted President Carol Gomez Summerhays, "the first four being on strategic planning, the budget has significantly evolved to support the Association's strategic priorities. It positions us well not only for next year but for years to come."

The intent of "Focus the message" is to connect with individual members and potential members. "Fill the pipeline" refers to creation of unique member outreach programs for targeting dental students and new dentists. "Simplify" includes standardizing and rationalizing how each level of the ADA operates and interacts with members actively in the best interest of the member rather than the organization.

As stated in the report, "Our ultimate long-term goal is to build the ADA into a business model that is self-sustaining through mechanisms such as strategy-driven budgeting that ensure that the organization changes to adapt to the needs of its dentist members. This ideal of operational excellence cannot be accomplished in one year and will be ongoing."

Dr. Gary Roberts, ADA president-elect, noted that "We are going to have to start looking at the budget three to five years out to assure that we are financially sustainable and able to deliver services that our members value."

In addition to anticipated revenues of $133.6 million in 2017, Board Report 2 projects $126.9 million in expenses and income taxes, generating a surplus before transfers to the insurance royalty reserve of $6.7 million. After transferring $7 million in royalty revenue to the insurance royalty reserve, the operating budget shows a net deficit of $300,000, thus leading to 0.2 percent deficit.

The House in Resolution 84H-2013 urged that the royalty reserve be dedicated to member value and long-term dues and financial stabilization.

Explained Dr. Ronald P. Lemmo, ADA treasurer, "Since there has not been a dues increase since 2013, and in light of the House policy urging us to handle the Great West Life royalty income the way we are presently doing so, the Board feels it is fiscally responsible to use a short-term scenario of a $10 dues increase until the study of our organization and business model is completed.

"The recommended dues increase," he said, "is designed to allow the ADA to operate in a surplus for the coming few years to allow the Association to undertake a comprehensive study of the ADA business model and develop proposals to assure long-term stability and sustainability."

As its title reflects, the strategic plan sets goals and objectives that put the member first, and the budget proposal includes support for programs that have been identified as having high member value, the ADA leaders noted.

This includes support for scientific research through a grant to the ADA Foundation Volpe Research Center as well as ongoing infrastructure support the ADA provides the states through Aptify member support software and website branding. The ADA has also embraced an innovation initiative: an example of that effort is the ADA Credentialing Service, which allows members to enter, store and update professional dental credentials in one place, at no charge.

The ADA House of Delegates will meet Oct. 21-24 in Denver. Board Report 2 and other House information are available to members only on ADA.org in the Member Center. Members First 2020 — Strategic Plan 2015-2019 is available online.