I just want to offer several comments on Mike Welch's column in the Dec. 12, 2001 Credit Union Times regarding CUNA's budget ("Observations on a plan, act, budget and name").
I could not agree more; any budget in the red is not good. However, I do want your readers to know CUNA senior management was prepared to make the necessary cuts and adjustments to project a break-even (or better) budget for 2002. After a review of the situation, however, the CUNA Board and its executive committee along with management determined it would not be prudent to preserve the budget with drastic short-term measures. Measures that would significantly impair the effectiveness of an association that I'm proud to say has developed into an extraordinary organization during the last five years.
Incidentally, during those years, CUNA with guidance from the Dues Review Committee has created a reserve of more than $12 million, up from $3.6 million at the end of 1995. Those reserves were built up precisely to prepare us for situations such as those that occurred after the terrorist attacks on September 11th.
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Prior to those attacks, CUNA had already prepared a 2002 budget projecting a $1 million operating margin. However, the cancellation of the Symposium and other major income-producing events led to what we believe is a short-term situation that required us to revise the 2002 budget.
That revision was prepared in a time with great uncertainty as to the financial impact on credit union meetings, programs and seminars – non-dues revenue that accounts for nearly 45% of our total revenue. CUNA's management team is preparing approaches to bring next year's budget into the positive, as well as considering a possible paradigm shift in the trade association business and the traveling habits of our membership.
I am pleased to say that CUNA management has already begun a proactive approach to strategic changes that may be necessary.
We hope these assumptions prove to be extremely conservative, and we will do everything that is in the board and management's power to eliminate the projected loss. But for reasons of prudence we decided to make conservative adjustments immediately following September 11th.
Credit unions can rest assured management will be monitoring our budget very closely during the first quarter of 2002 to assess the validity of our projections and make all the appropriate adjustments. Don Larsen CUNA Treasurer President/CEO Community Credit Union Tacoma, Wash.
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