Budget Blundering Results in an Unnecessary and Irresponsible Annual Dues Increase

Budget Blundering Results in an Unnecessary and Irresponsible Annual Dues Increase

At the 2023 TIPOA annual meeting VP and acting Secretary Cliff Sowell took questions from the floor about the 2024 budget and the Board mandated annual dues increase. Myself and several others directly challenged certain budget items and the alleged need to increase the annual dues assessment.

As one of the four members who directly asked questions and expressed their concerns to the Board, I am posting this blog to further express my concerns in hopes that the new Board will take action to reverse the budget blundering of the past president Susan Fardy and VP Cliff Sowell. It should be noted that the 2024 Budget was NOT unanimously approved by the Board.

Fardy and Sowell stated that there was an anticipated budget short fall for 2024 due to the Board planning an "Audit" that was based upon some member's demands and this audit would cost an estimated $13,000 to $18,000 to complete and the dues increase would offset this expense.

Fardy and Sowell also stated that "due to inflation" and "a reduction in purchasing power" a dues increase is necessary and the Board can increase dues assessments at a 5% maximum per year.

Fardy and Sowell brought attention to the balances in reserve accounts amounting to approximately $340,000 combined in two accounts.

Sowell stated that an interest rate of "7%" was the return on the reserve accounts.

In my challenge of Fardy and Sowell, I pointed out the following:

1. There was a budget surplus from the previous years expenditures of approximately $3,300 that should carry forward to the 2024 budget.
2. The 2024 estimated budget should already have inflationary factors and reduced purchasing power considerations in the budget. That's what a budget should reflect.
3. Excluding the 'one time audit' expense item, the current dues assessment covers the 2024 budget.
4. The annual dues increase would yield a year over year budget surplus of approximately $10,400 every year and would increase the already significant balance in the reserve accounts.
5. The dues increase is unnecessary and irresponsible of the Board when the existing significant surplus could be negligibly impacted to cover the small budget shortfall of an "audit" rather than mandating an annual recurring dues increase of $40/year/member.
6. The "7%" historical rate of return on the reserve accounts declared by Sowell is highly suspicious in today's economy and must be factually investigated.
7. The 2024 budget was based on the first 6 months of 2023 rather than a more current P&L
   
   

My challenges were publicly dismissed and not directly addressed by Fardy and Sowell. Since Fardy was not re-elected and Sowell chose to retire from the Board, I have posted this blog to encourage further community dialog with the newly elected 2024 Board regarding the 2024 budget and annual dues increase that only had the minimum required Board support of Fardy and Sowell to officially pass.