ADA News

There are two key actions the ADA Board of Trustees is asking the 2010 House of Delegates to take this year: adopt a $7 dues increase in keeping with the Association's dues stabilization policy; and approve a one-time special assessment of $23 to pay for a long-deferred investment in information technology infrastructure.

Association members have not had a national dues increase since 2008, although 19 constituent societies raised dues in 2009 and another 15 did so in 2010. The $7 proposal, if adopted in Orlando at annual session this fall, would bring 2011 national dues to $505. It does not include any additional expense for programs adopted by the House, which could affect the amount of a dues proposal.

"Everyone is feeling the effect of difficult economic times," said Dr. Ronald L. Tankersley, ADA president. "But, in order to better manage the Association's financial affairs, provide more accurate financial reporting to the House of Delegates and improve our ability to communicate our message to our members and the public, it is essential we invest in ADA's neglected IT infrastructure." (See Special assessment key points explained for details on the special assessment proposal.)

Dr. Tankersley

Dr. Tankersley also emphasized the need to support the programs and member benefits essential to the ADA mission.

"The staff and Administrative Review Committee made dramatic cuts in last year's budget, and the cuts made this year are, in some cases, Draconian," he said. "A dues increase compatible with our dues stabilization policy is necessary for us to fund those programs. If the members choose not to fund those programs, they will need to be eliminated."

The Board at its June meeting in Chicago proposed a 2011 operating budget of $114,951,700 in expenses against $114,217,650 in anticipated revenue, before factoring in the proposed dues increase. Last year, the 2009 House directed the Board to draw on reserves to make up a projected 2010 deficit. The Board had presented a balanced budget to the 2009 House, but House-approved programs tallied a $536,000 projected deficit. That action came one year after the House directed the Board at the 2008 meeting to cut operating expenses from the 2009 budget proposal by $2 million, down to $115.9 million.

A 2008 House resolution on dues stabilization (Res. 17H-2008) directed the Board to "develop annual budgets and manage the Association's finances and reserves in accordance with the long-term financial strategy of dues stabilization. The dues stabilization strategy seeks to achieve long-term dues stability by keeping annual dues increases at or below the level of inflation, based upon the Chicago Consumer Price Index (CPI) average for the prior three years. The strategy does not call for automatic inflationary dues increases."

"The $7 proposed increase represents full compliance with the dues stabilization strategy the House approved in 2008," said Dr. Edward Leone Jr., ADA treasurer. "It is very clear that over the past three years revenues have been stagnant and appear to be trending downward. This is very clearly the effect of the national economy and certainly the difficulties we are all experiencing."

Dr. Leone

The Association moved to a zero-based budgeting process this year, with staff directed to build their initial budgets around what is needed for 2011 and not based on the approved 2010 budget. The June draft of Board Report 2 (which will be updated with finalized numbers in July and posted in the House of Delegates section on ADA.org later this summer), notes that the initial 2011 base operating budget had a deficit of about $5.5 million. Each ADA division was asked to reduce its net operating budget initially and then twice more, once after internal budget review and again after the Administrative Review Committee meeting.

Dr. Raymond Gist, ADA president-elect, also noted the effect of current economic conditions.

"The ADA depends on proper budgeting to drive activities, but we are currently challenged to the point that most departments have severely reduced services in order to cut costs," he said. "We need a dues increase in order to maintain our core services, which are vital to keep our Association moving forward. Our dues stabilization policy would help to address this problem, but this poor economy is having its effect on our membership, and that process is not routinely followed. I am hoping that the House of Delegates realizes the significance of this proposed dues increase, which is again in line with dues stabilization, and gives it their blessing."

He also hopes that members understand the critical nature of the special dues assessment.

"The request for the special assessment for updating and unifying our IT services is also critical to our progress," said Dr. Gist. "We need to modernize our systems in order to provide better and more timely services to our members, and ensure that our checks and balances are working properly. This assessment is specific for IT. It is a separate proposal by the BOT, both to maintain the integrity of dues stabilization policy, and to provide the upgrades necessary for IT to drastically improve services, and maintain its integrity."

"These are one-time expenditures," emphasized Dr. Mary Krempasky Smith, 11th District trustee and chair of the Board's Finance Committee. "The upgrade of all these IT services is necessary in light of our auditor's recommendations. Investing in this now will save us money in the long run. We are looking at a three-year business plan. We have to be more far-sighted. Even though we can't commit the House year-to-year, we need an understanding of the direction in which we are headed financially so that we can make fiscally responsible decisions."

The June draft of Board Report 2 notes that:

• Non-dues revenues are budgeted to decline by almost 2 percent, with the most significant decline being in product sales, corporate sponsorships and rental income.
• Base budget operating expenses are projected to decline by 2.2 percent. The reduction in operating expenses is due to declines in print and publication costs, consulting and outside services, office expenses, meeting expenses, travel expenses and professional services.

"The ADA continues to offer value to members in the form of strong and effective programs," Dr. Leone said. "Tremendous credit really should be given to our very dedicated and professional staff. It is a certainty that all of them are working above capacity."

The 2011 proposed budget adds value to membership, Dr. Leone continued, with new programs totaling $1,641,600. Initially presented as separate decision packages, the Board chose to include them in the 2011 budget, he said.

"The Board of Trustees in their own examination of adjustments determined which reductions were appropriate and which would have a significant effect on member programs," said Dr. Leone. "As a result of those discussions, they came to the conclusion that a number of adjustments needed to be re-instituted. That explains how we got to the $7 dues increase."

Some of those programs include money for hiring consultants to help with advocacy in Washington, a new dentist practice management program, promoting the Find-a-Dentist feature on ADA.org, House of Delegates collaboration software, as well as personnel costs associated with new or expanded program activities across the Association.

"Without a dues increase, we are facing reduction in services," said Dr. Smith. "If we have to cut more, this could mean decreasing the number of days for council meetings or removing a council meeting. We are looking at cutting programs that directly affect the membership. We've been utilizing reserves to make up deficits, and we instead need to build them."

The Board of Trustees did not support some $1,928,400 in decision packages, so the Board will not forward those to the House for consideration.

Dr. Leone heads the Administrative Review Committee; Dr. Smith heads the Board's Finance Committee. Members are common to both: Dr. Charles H. Norman III, 16th District trustee; Dr. R. Wayne Thompson, 12th District trustee; Dr. A.J. Smith, second vice president; and Dr. Dennis Engel, 9th District trustee. Also serving are Dr. Idalia Lastra, Miami, and Dr. J. Ted Sherwin, Orange, Va., who are members of the Financial Affairs Committee, which was created in response to a 2009 House directive to study the feasibility of creating a Financial Affairs Council.

Drs. Tankersley and Gist, as well as Dr. Kathleen O'Loughlin, ADA executive director, participate in the Administrative Review Committee along with Paul Sholty, chief financial officer.