To:	Members & Affiliates
From:	National Office
Date:	June 5, 2008
Subject:	REPORT TO THE MEMBERSHIP     FY 2009 PRELIMINARY BUDGETS
Reference:	MU 08-08
Attachments:	Attachment A -   Preliminary FY 2009 General Fund Budget Attachment B -   FY 2009 Preliminary Budget Membership Dues Attachment C -   Preliminary FY 2009 Targeted Action Fund Budget Attachment D -   FY 2009 Critical Issues Action Initiative Attachment E -   Targeted Action Fund FY 2009 Continuing Project Analysis Attachment F -   Targeted Action Fund Project Overview & Status Report

Comments Requested By:
June 20, 2008

NACWA’s Board of Directors met on May 7, 2008 and took action on a number of issues of strategic importance to the Association.  The Board acted to adopt preliminary budgets for both the General Fund and Targeted Action Fund (TAF) for Fiscal Year (FY) 2009, including a proposed 3.5% dues increase for Public Member Agencies and Public Affiliates, a 5.5% increase for Legal Affiliates, and a revision to the Corporate Affiliate dues structure that includes additional categories more accurately based on domestic, municipal-related revenues.  At their May meeting, the Board also endorsed a Critical Issues Action Initiative as the means through which to ensure that key member interests are represented in the most effective manner possible.  This Member Update describes this important initiative and requests member comment on the preliminary budgets by June 20, 2008.

FY 2009 Preliminary Budgets Adopted

Each year the Association’s budget development process includes a thoughtful review of revenues and expenditures, as well as an assessment of dues levels to ensure that NACWA can maintain and enhance its ability to deliver essential services to its members.  The state of the economy, and associated challenges facing NACWA members, also figured prominently in the Board’s deliberations.

This Member Update presents a FY 2009 General Fund Budget (Attachment A) which, through limited dues increases and a revision to the Corporate Affiliate dues structure, allows for continued progress in achieving the key goals of NACWA’s Strategic Plan.  This Member Update provides an analysis of the impact of the dues adjustments to each membership category (Attachment B).

A heightened focus on non-dues revenue generation is also planned for FY 2009.  In order to allow NACWA to accomplish more on behalf of its members, the Association plans to work aggressively to indentify and implement initiatives to increase non-dues revenue.  With an eye toward value-added offerings, we plan to take a comprehensive look at pricing and explore possible new ‘products’ that have the potential to create new and sustainable revenue streams for the Association.

Also presented for your review is a FY 2009 Targeted Action Fund Budget (Attachment C) which supports engagement in both ongoing and evolving legislative, regulatory and judicial issues.  The TAF budget will be bolstered in FY 2009 by a Board-endorsed Critical Issues Action Initiative focusing on what is rapidly becoming an active and aggressive public policy debate on issues such as nutrients, climate change, pharmaceuticals, watershed management, infrastructure sustainability and security.  Additional details on the Critical Issues Action Initiative are presented in the following paragraphs and in Attachment D of this Member Update.

Consistent with Board policy, $590,000 in FY 2009 dues revenue will go directly to support NACWA’s Targeted Action Fund.  In FY 2009, NACWA’s TAF continues grow and consistently prove its value through protecting Member Agency interests and providing both cost savings and avoided costs.  Now, well into its second decade, the TAF strengthens the Association’s capability to achieve its short and long-term strategic objectives.  In addition to the preliminary Targeted Action Fund Budget for FY 2009, an analysis of continuing TAF projects for FY 2009 (Attachment E) and an overview and status report of all TAF projects currently underway (Attachment F) are included for your review.

Critical Issues Action Initiative to Protect Member Interests – Both Fiscal & Environmental

In FY 2009, the day-to-day operations of the Association will be supported in the preliminary General Fund Budget by limited increases and adjustments to Public Member Agencies, Public Affiliate, and Corporate Affiliate and Legal Affiliate dues.  Beyond the day-to-day operation of NACWA, it is becoming increasingly clear that legislative, regulatory and legal activities will challenge traditional ways of doing business and place increasing pressures on clean water utilities across the country.  NACWA’s Board sees clear indications that public policy will be actively and aggressively moving forward in the areas of nutrients, climate change, pharmaceuticals, watershed management, infrastructure sustainability and security – and feels strongly that clean water agencies must not only have a seat at the table, but they must also be prepared to effectively and articulately fashion the future of clean water in this country.  Clearly, the potential financial and operational impact on NACWA member agencies is great – and the significant benefits from a targeted advocacy agenda on these issues cannot be understated.

The necessary level of engagement for the Association will, of course, have a price tag.  These costs, however, will be dwarfed by the financial impact on public clean water utilities if NACWA is unprepared, or under-prepared, to defend its member’s interests.  With this in mind, the Board has endorsed a Critical Issues Action Initiative (Attachment D).  The Initiative identifies specific projects, estimates their costs, and quantifies their potential benefit to NACWA Member Agencies.  It complements projects underway and anticipated to be funded through the Association’s Targeted Action Fund and will significantly strengthen NACWA’s ability to effectively represent its member’s interests.

When totaled, the projects identified in the Critical Issues Action Initiative call for $400,000 in funding.  These funds would be raised through the voluntary support of NACWA Member Agencies coupled with $100,000 in FY 2009 Targeted Action Funds and a transfer of up to $100,000 from operating reserves.

Whether you call it ‘bang for the buck’ or ‘economy of scale’, NACWA’s Board believes that – with essential Member Agency support for these critical projects – the Association can generate the data and provide the expertise and analysis needed to ensure clean water agency interests are effectively represented.  The potential benefits of this level of targeted action are great, and the potential consequences of inaction – both financial and environmental – are significant.

Board Strives to Ensure Quality Service, Meet Challenges

Through FY 2009 Budgets & Critical Issues Action Initiative

NACWA plans an active and diverse agenda of actions and initiatives for FY 2009 in legislative, regulatory and judicial advocacy, ensuring that valid science is the foundation of environmental policy, enhancing utility management, expanding strategic partnerships and applying effective membership development and retention strategies.  As stated, much of this work will focus on initiatives in the areas of nutrients, climate change, pharmaceuticals, watersheds, infrastructure sustainability and security – requiring Member Agency support to provide additional resources to be fully responsive to the complexity inherent in these issues.

Overall, the Association’s FY 2009 General Fund and Targeted Action Fund budgets, and the Critical Issues Action Initiative will ensure that NACWA can both maintain and enhance its aggressive agenda in the legislative, regulatory and judicial arenas – making certain that issues of critical importance to our members receive the attention they deserve in Washington.  In considering the preliminary budgets for FY 2009, and funding of the Critical Issues Action Initiative, the Board worked hard to meet their commitment to move forward with implementation of NACWA’s Strategic Plan, rise to the challenge presented by both the economic downturn and rising costs, and realize their goal to keep member dues increases to an absolute minimum.

Member Comment Invited on FY 2009 Budgets

Consistent with NACWA’s budget cycle, the Board of Directors encourages all members to review the FY 2009 preliminary budgets for both the General Fund and the Targeted Action Fund and the Critical Issues Action Initiative.  Please direct any comments you may have to Marian Orfeo, NACWA’s Vice President and Chair of the Association’s Strategic Planning Committee (617/788-2264 or via e-mail at This e-mail address is being protected from spambots. You need JavaScript enabled to view it This e-mail address is being protected from spam bots, you need JavaScript enabled to view it), Jeff Theerman, NACWA Treasurer and Chair of the Association’s Finance Committee (314/768-6245 or via e-mail at jlthee@stlmsd.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ) and NACWA’s Executive Director, Ken Kirk (202/833-4653 or via e-mail at kkirk@nacwa.org This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ).  Please provide your comments and recommendations prior to Friday, June 20, 2008.  All comments received will be carefully considered and final budgets will be adopted when NACWA’s Board of Directors meets on July 16, 2008.

As the Association approaches its fifth decade of advocacy and service, initiatives throughout the year will support the objective of maintaining NACWA’s strategic position as the driving force in national clean water policy.  As always, our primary focus is on advocacy on behalf of our member’s interests.  We look forward to sharing additional information on our advocacy work, and associated initiatives, in the upcoming Year in Review.

This past year we have accomplished many things.  Playing the most instrumental role in these accomplish-ments were NACWA’s leadership and members, whose firm decisions and substantial participation lent unquestioned credibility to the Association’s positions and led to increased attention to its policy goals. 
Many thanks for your continuing participation and support.

ATTACHMENTS:

Attachment A -     Preliminary FY 2009 General Fund Budget
Attachment B -     FY 2009 Preliminary Budget Membership Dues
Attachment C -     Preliminary FY 2009 Targeted Action Fund Budget
Attachment D -     FY 2009 Critical Issues Action Initiative
Attachment E -     Targeted Action Fund FY 2009 Continuing Project Analysis
Attachment F -     Targeted Action Fund Project Overview & Status Report