ASERL Finance Committee

Overview of Current Financial Status

November 2009

John Ulmschneider, Jennifer Cargill,

Connie Dowell, Susan Nutter,

Nan Seamans, John Zenelis

Background

• Founded in 1956, ASERL existed for decades with little or no operating budget

• Traditionally, ASERL maintained approx $17K in Net Assets

• Today’s program fees (Kudzu, Lanter courier, etc) are a “wash” – costs are paid by participating libraries and not subsidized by ASERL dues

Background

• In December 2006, ASERL voted to increase dues from $3K/year to $4K/year to cover operating expenses and to build Net Assets

• Increased Net Assets intended as “agility fund”: enable ASERL to respond to opportunities and initiate activities requested by the membership

• ASERL’s Net Assets increased from $17K to $89K as of Sept 2009

Looking Ahead

• In October 2009, ASERL Board set aside $40K of current Net Assets into “reserve fund” to cover shut-down costs if ASERL ever ceased operations, leaving ≈$49K in available Net Assets

• Finance Cmte recommends replenishing Net Assets to $60K over time

• $60k target deemed sufficient for “agility fund” to allow ASERL to respond to opportunities that may arise

Financial status, November 2009

• Current ASERL dues will fail to cover operating costs beginning 2011-2012 program year

• Some increase in dues is needed to meet the Net Assets target of $60K

• No growth is membership is foreseen, so no expectation of additional revenue from new members.

• Membership may decrease if dues are set too high

Proposal

• 2009-2010 dues are $4,000/library/year

• 2010-2011 dues prop as $4,100/lib/year

• 2011-2012 dues prop as $4,300/lib/year

These increases would replenish ASERL’s Net Assets to $60K over two years and cover ongoing operating expenses.

Dues beyond 2012 are difficult to forecast.