FARMERS BRANCH, Texas – The Texas Credit Union League Board of Directors is recommending a new dues schedule for adoption at TCUL's Annual Membership Meeting on April 18 – one it believes is equitable and will generate more income for providing services to its 631 affiliated credit unions. The proposed schedule is based entirely upon assets, in lieu of membership-based calculations. It has 12 asset categories, reduced from 16, and will be phased in over two years – 2003 and 2004. The current cap (the maximum dues any credit union has to pay) will be phased out over those same two years. "We've put in place a dues structure that will generate revenues to fund the critical services of the League," said Chet Kimmell, president/CEO of Neighborhood CU and a member of TCUL's Dues Study Committee. Currently, TCUL generates annual dues revenue of $3.3 million. The proposed dues structure would generate $3.8 million in 2004, a $500,000 increase. "It removes the cap, which allows large credit unions to pay their share of the dues. It also addresses cost of living increases," Kimmell said, "and it focuses on asset size, rather than number of members, which is a better determinant of a credit union's ability to pay." Almost a year ago, TCUL Board Chairman Terry McCormick appointed a 12-member Dues Study Committee to develop a dues structure that would address League concerns over rising expenses and flat revenues. Members of the committee were selected to represent the various geographic and asset groups of credit unions in the state. The committee looked at considerable data before drafting their recommendation, including seven alternative dues schedules using existing base figures, and dues schedules from other Leagues. Since early December 2001, committee members and league staff presented the findings and recommendations to more than 1,400 people at 16 chapter meetings and 12 managers meetings statewide. In addition, all league-affiliated CUs were sent a dues information packet on March 29 with detailed information about the dues increase. "The committee worked to ensure that changes would not significantly impact any group of credit unions," Kimmell said. "The end result is fair, and we won't have to revisit this issue every few years." The proposed dues calculation formula is: Base Amount + Assets Greater Than Base x Factor. The factors function as a graduating assessment within each asset category to minimize impact as credit unions make the jump from one category to the next. "There's no mystery to the way we calculated the asset categories or factors. We just wanted the breaks to be reasonable and to work as much as possible within the framework that already existed," Kimmell said. If necessary, the League Board will have the option of adjusting the Base and/or the Factor to address cost of living increases, but not to exceed the 36-month average Texas Consumer Price Index (CPI) factor. The current maximum dues cap of $15,000 is being phased out, as large credit unions are experiencing the greatest growth. But even large credit unions will see little change in their dues, according to Kimmell. "Credit unions in the largest asset category represent 16% of total funding under the current dues structure, while they represent 17% under the proposed structure," he said. Randy Smith, president/CEO of $1.6 billion Randolph-Brooks FCU in San Antonio admitted that "no one likes a price increase, but this is long overdue." Smith continued to say that, "The cap is outdated and should have been removed a long time ago. We want first-class representation, cutting-edge technology and services. We just need to belly up and pay it. We support the proposed dues structure 100 percent." Like Randolph-Brooks FCU, Community CU, with $1.1 billion in assets and 200,000 members, also falls within the highest asset category of the new dues structure. President/CEO Gary Base said he has some concerns about the new dues structure, but for now he believes, "the benefit of membership is in being part of a unified credit union movement." Base said, "We will continue to evaluate the costs and benefits of membership. For us, the big picture is much more than dues. We're taking a year-long look at all expenditures. organizational memberships, magazine subscriptions, conference attendance, employee mileage." The new dues formula is comparable to those of other large Leagues, according to Kimmell. Committee data reports that 2001 year-end average dues per credit union were lower in Texas than in seven other states evaluated, including Illinois, Michigan and California. Based on calculations the committee did, even with the new dues formula the Texas League's dues will still generate less than the leagues for any of these three states. The League's last dues adjustment was in 1995. During this seven-year period, TCUL lost 152 dues-paying credit unions as a result of mergers and liquidations. In contrast, the League added only eight newly-chartered credit unions to its membership over the same timeframe. This might be a non-issue for a League that is static in its service offerings. TCUL, however, has regularly expanded programs to meet the demands of its membership. A Texas/Mexico Relations initiative, the production of a CD-Rom Compliance Manual, added emphasis on Councils and Chapters, and the formation of a Small Credit Union Committee are a few programs that have received a boost in recent years. Along with program expansion have come increased operational costs. The committee examined TCUL's operating costs and determined that, according to Kimmell, "the League is doing a good job of containing expenses." Further evidence that TCUL is operating within the collective will of its membership is its evaluation in its 2001 Annual Image Survey. The League received an overall satisfaction rating of 5.76 on a 7-point scale where "7″ equals "extremely satisfied." This is the second highest rating since this annual survey began in 1996. Chaired by Leon Ewing, president/CEO of San Antonio Teachers CU, other members of the Dues Study Committee were: Debbie Blackshear, CyFair FCU; David Brooks, Corpus Christi City ECU; Kelly Cooke, Fort Bliss FCU; Kim De Leon, Texasgulf FCU; Larry Hall, Amarillo Community FCU; James McCarley, Community CU; Devora Mitchell, Winkler County CU; Ron Montgomery, Rockdale FCU; David Reynolds, Security Service FCU; and Scott Rose, Kelly Tyler FCU. -
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