Whistle in the graveyard???

Please explain

BV

A colloquialism which means to engage in some sort of ineffectual behavior that makes you feel safe, but doesn't actually protect you from the swamp monster that is coming up from behind that gravestone to eat your eyeballs.

OK.


So now back to the Original Question,,, what really caused the dues to increase?

Certainly not the size, the speed or the pilot at the controls,,,

Could it be, Inflation?


BV

Bill,
You are partly right, mostly right, and close to right all in one post! <G>

The size and speed of any models covered under AMA insurance has absolutely nothing to do with the claims or the new insurance rates. However, the raw number of claims settled under the Self Insured Reserve has created a shortage in that fund that is created by our dues.

The insurance cost (secondary policy) has gone up, and will probably go up next year.

Inflation has not been addressed in several years.

The place where you are close to right has do to with unfunded Muncie development projects that finally got funded.

Well, there was alot of discussion, lots of info posted by a few, some digression (big vs. small aircraft) and some posts from individuals that were blowing a lot of smoke.............
Here's what I conclude from the info posted:

The AMA did in fact loose roughly ONE HALF OF A MILLION dollars in the stock market during 2001.

The AMA has probably lost a similar amount of money in the stock market during 2002, but nobody wants to admit that now, when the payment of the extra 20% dues is fresh on the minds of the membership. So we will have to wait for the audit results in May of 2003. (even though the EVP knows that figure now)

Despite the double talk about unallocated reserves & unrealized losses, these losses are REAL. If the AMA had to cash out these investments today, there would be $1,000,000 less than what was paid for them. That my friend is the classical definition of a LOSS ON INVESTMENT (and by the way, A HUGE LOSS AT THAT)

Regardless of the Captive Insurance Scheme, the Self Insurance Reserve has to be funded by REAL assets (cash, stocks, property, etc.) If the value of the asset "stocks" falls by 1 MILLION, this has to be made up by an increase in revenue somewhere else.
And can you guess where that increase might come from............

BINGO A 20% INCREASE IN DUES FOR YOU ME & THIS POOR YOUNG NEWCOMER THAT WE KEEP HEARING SO MUCH ABOUT!

INFLATION HAS BEEN ALL BUT NON EXISTANT DURING 2001/2002
SO DON'T GO THERE !

Sad , very sad...........probably even more sad next year.

KWIZARD

KWIZARD

You are arguing semantics. Accounting terms have very definite meanings. Your definitions are not those used by accountants. I don't agree with your reasoning for the dues increase, but, your case is as good as any I can make. If all the facts and numbers about this investment issue, insurance costs and other improvements that the EC desires to finish are correct, the dues increase would have had to be closer to $20.

The value of the AMA's investments dropped by $407,000 in 2001. Call it what you will. Regardless of whether it is a real loss or a paper loss, as you say, IF they had liquidated it, the amount would have been lost. The key there is IF. I don't think anyone is happy that the investment lost value.

If you really want to know how much the investment has increased/decreased this year, pick up the phone and call Doug Holland. Otherwise, it's just speculation. It's possible (in my opinion unlikely) that the investments have increased in value this year.

If you are the AMA EVP, and had a few million dollars in cash to protect/invest, what would you do with it?

Did you vote in the election? If I may be so bold as to ask, if you voted, who did you vote for and why? I asked my wife, who knows nothing about the AMA, to look at the campaign statements for EVP. Her assessment was "One guy says he can't do the job, one guy says he doesn't want the job. The other says he can do it and wants to do it. Where is the choice?" After that, I was not surprised to see the results of the election.

What would you suggest be done? If this forum is going to have any value, solutions are as important as identifying problems. Keep in mind that at least a couple of VP's and several AVP's lurk and read this stuff. They are looking for good ideas.

JR

While I agree that Mr. Barry's statement was Ra, Ra, Holland he is our man. I disagree that Mr. Cain's statement said he couldn't do the job. However I think that he should have been more clear that a CPA is not required for the position. Many CFO's of corporations are not CPA's. They are almost always businessmen. While a CPA will know how to book a profit or loss, some know little about how to make a profit. A businessman should know how to make a profit, and will understand the reports the CPA's provide. I am sure the AMA employ's CPA's, either on their payroll, or by contract, or most likely both.

JR

Regarding your comment "Accountants definitions differ from yours"

I am an accountant, retired now, but was a corporate accountant for 26 years.

A loss is still a loss, even if not realized.
Do you not consider the drop in your 401K plan a loss, if not, you are delusional.

I voted, & didn't vote for any incumbents.

On investments, I don't think the AMA should be in any speculative investments. They may have looked like heros in the late 90's, but they look like gamblers now.
If the AMA had invested in safe investments that guarantee principal retention, such as Treasury Bills, Strips back in the late 90's, they could have staggered maturities & still be earning 7 to 8% per year. Far exceeding todays inflation rates.

In this case, dues might still have had to go up, say $1 or $2
a year, and perhaps more if a worthwhile project was being funded. But, this is not how it was handled, they gambled with our dues, and they lost. Now we pay.

That's how an accountant sees it.

AMA is a great organization all they have to do is get back on track. They are not stock brokers. Use our funds as they are to be used not as an investment. This is to be the promtion of model aviation not to line some ones pocket.

kwizard

Are you saying that the doubling of the insurance policy cost, from about $250,000 to about $500,000 and the increase in the SIR costs would be covered by a $2 raise in the dues? Keep in mind that there are about 140,000 adult members covering those costs. The additional 30,000 youth members do not contribute anything toward covering any costs.

How would you cover the costs of projects that were not completed due to deficit budgeting? Each year the EC has been putting off accruing depreciation on some items. kwizard, have you looked at the 2001 audit in the members only section of the AMA site, or did you see the numbers in MA? The auditor's notes bring several questions up. Some are hard to answer without the underlying documents. I sure would be interested in your opinion, being an accountant. The EC minutes of each meeting are also on the site, and show a pattern for the justification of the dues increase. Have you read them also?

There is some justification for your number. Dave Brown originally set the goal for the dues increase at about $4, then it was raised to $7 after a couple of months. In the final EC meeting the number became $10 with the hopes of not having a dues increase for some time to come.

RC Outlaw said :

"This is to be the promotion of model aviation not to line some ones pocket."

RC Outlaw, would you explain the how's and why's of that statement? Maybe I am misreading the intent of what you said.

JR

JR, how did you do that? How did you do the same exact thing I did. And how did your wife respond with almost the same exact words? You listening to our conversations? (Grin)

Seriously, I also showed the campaign statements to a friend who is a respected CPA and AMA dumb who basically said the same

Rich Sanchez

KWIZARD..I agree 100% with you and atempted to make the points that you have made weeks ago, but failed to do so. Whould have sent this private but you wanted no emails. I can only coment for 10 more days as after 50 years I have deceided not to renew with AMA and to go with UMA. When SFA was around kept both AMA & SFA as I felt both were promoting our hobby.

Sorry, but I got the same message in your profile.

What is UMA and can you attend AMA events?

To JR,

Since you asked my some personal questions in a previous post, may I do the same to you...........

Who did you vote for in the past election?

Do you think it's ok for the AMA to enter into speculative investments?

Do you have any position with the AMA besides being a member?

kwizard

I nominated and voted for Horrace Cain for EVP.

I have mixed emotions about being involved in the stock market. I tend to think that Treasury bonds would have been a better investment, although there are those that would say that the bonds are speculative as well. I feel strongly that the AMA investments should be vested in a committee, and not in the hands of one person, whatever the investments might be.

My positions within the AMA are as a Leader Member and a CD. I have no interest in holding any political office.

Jean-Pierre Rondot (JR)
AMA 732
LM/CD

UMA. United Modelers of America (www.unitedmodelers.com) is a Insurance provider for flyers the same as Sport Flyers was. No magazine etc. No you can not participate in AMA contests or Clubs, But it does give you Insurance and lets you fly at open fields. It does not replace what AMA does which is good...but I feel is an organization that need change in leadership...term limits. and to make EVERY ONE WELCOME not just those that pay up...they will join after the see the good AMA has done in the past before it became another insrance company.
I have voted in all the elections every year, even ran for Dist X VP,
knowing that an unknowen from Utah was dead in the water. Have been a leader member and CD for forty years. Localy worked to get 4 flying fields in local area ( only one still is advaialable) and made all of them for all flyers not a selected AMA group. Donated money to AMA other than dues. Made a trip to Muncie to discuss what I felt was AMAs short comings to be left standing with my wife after an hour we left.(yes I did have a appointment) so all that I have attemped to do will not create any changes so I give up and will continue to enjoy sport flying a a field where every one is welcome..........and I can not complain after Dec 31,2002 as I will no longer be a member.

Bpanierr

Thanks for the info, I think alot of people, like you are very frustrated right now. I wish you good flying & a Merry Christmas.

Lets hope the AMA will someday wake up & smell the nitro.

Smell the nitro? Do you want to leave the FAI guys out?

post#60
I do not think investing AMA funds in unsecured investments is promoting Model air craft or AMA. Some where along the line their is some one shadows with their hand out. It is happening every day some one is getting caught with their finger in the pie. Some of the money spent Muncy has colateral to cover. Scolarships and awards to young people is expected but can not be done if money is lost

Just got my new copy of MA and it has some financial info in it
which answers some questions I had:

Membership Insurance decreased from $540,966 in 2000 to
$539,790 in 2001 (intresting isn't it!)

Salaries & Benefits increased from $2,093,642 in 2000 to
$2,304,552 ---THAT'S A 9.5 PERCENT INCREASE FOLKS. DID ANYONE OUT THERE GET THIS TYPE OF RAISE????

CHECK OUT PAGE 150 IN FEBRUARY'S MA

Then look at Mr. Holland's closing comments
"Those who judge do not matter, those who matter do not judge"

This statement should read "Members do not matter"

The increase in salaries and benefits might be attributed to.

1) additional employees.
2) increased medical insurance.

I doubt if very much of it went to individual salary increases. That is the trouble with some of Mr. Holland's revelations . . . he does not do a very good job of explaining the variances from year to year.

Red S. AMA 951
Leader Member/CD

Red

It's not helping to make the case when Mr. Holland states in reference to the Schedules of Operating Expenses, on page 150:

"You will notice that salaries and fringe benefits account for approximately half the increase . That increase is primarily cost of living and some merit raises."


kwizard

I do have some questions for you.

First, are you aware that the insurance policy with Royal is not paid on a calender basis, but is paid in the middle of the year? What effect do you think that has? What amount was paid to Royal and what amount from the SIR?

Secondly, why don't you go to the AMA web site? In the Member's Only section is a copy of the 2001 Audit, including the Auditor's notes, which, apparently Mr. Holland will not publish, or, if he does, we will get it all sometime toward the end of 2004.

I could make claims that raise tempers or calm them , like:

Long Term Liabilities increased from $5,776,301 to $9,065,233 in 2001,

or Assets jumped from $15,816,348 to $18,494,710 in 2001.

or imply something by stating that on the Statement of Cash Flows there was an increase to $5,288,209 in 2001 from $3,186,718 in 2000.

If there is going to be discussion of the numbers, let's discuss all of them, and if need be, lets request underlying information from headquarters. I am not trying to imply that anything you are saying is wrong, but, lets make sure the average reader on here understands what you are saying, and that includes me.

JR

Dear JR

With respect to your comment on the timing of the insurance payments, It does not matter. If the statements are in accordance with generally accepted accounting principles, they are produced using the accrual basis, which, unlike the cash basis, accounts for expenses when they are actually incurred as opposed to when they are paid. Therefore, the numbers for the membership insurance expense in Hollands report are those actually incurred for that period. The auditors at the end of 2001
would have sent a confirmation letter to the Insurance Company asking if there were any pending claims and/or any material changes in the policy or premium.

The statements on Holland's page in the February issue of MA
is revealing enough for me, it is obvious that the big increases in costs had to do with the new facilities. Mortgages, Utilities, Bank
Charges, Marketing Expenses, Maintenance all registered large increases. Corporate Professional Fees , which were also probably related to the new facility were also significantly higher.
It's right there on Hollands page and yet on Dave Brown's page we are told that it is the INSURANCE COSTS. Nothing about the loss on investments, nothing about the obviously higher than expected operating costs related to the new facility.

JR even the numbers that you give for assets vs liabilities, look at them, did the assets go up as much as the liabilities?

kwizard

You finally brought into focus what I see as our basic disagreement. You, on the one hand, are comparing what Doug Holland is reporting on from 2001 and what Dave Brown is reporting on in 2002, on the other hand.

I believe the two versions of different years to be accurate. As I said before, I talked to Doug Holland and he has stated that the insurance went up substantially this year. He also stated that Royal's estimate for next year is substantially higher than this year, IF it can be re-insured and placed at all. I guess our basic disagreement is the reason for the dues increase. I don't believe that it was necessary to raise dues to replace the "reserves' of the AMA, but, I do believe it was necessary to raise it because of the operating expenses caused by insurance increases and a desire on the part of the EC to proceed with some improvements at Muncie.

My point with all of this is you can not compare apples and oranges. It is quite unreasonable, in my opinion, to take what Dave Brown is saying now and try to use the 2001 Financial Statement to refute it.

The EC has done things I do not agree with, including "deficit budgeting" and including projected return on investments in the budget as projected income.

I have been described as an "AMA basher", of "thumping the EC", of being a " blind AMA supporter" and of being an "EC lackey". I have no ax to grind.

My opinion is that next year will not be pleasant. I expect to find that the AMA has "lost" more in the market, that insurance did, in fact, cost a lot more than it did in 2001 and I expect to see a drop in the membership because of the recent dues increase. I hope I am wrong on every count. If not, we may see another dues increase next year. Those items, coupled with Dave Brown's assertion that the AMA would have to drop coverage from the current $2,500,000 liability limit to $1,000,000 if we have to become self insured do not bode well for the AMA in 2003.

JR

JR

Your saying you believe Dave Brown is correct in saying the dues increase is necessary because of the Insurance increase.

I do not believe that. And since we will not see the 2002 Financial Reports until probably 10/03 no one really knows at this point.

One thing that is really lacking in any of the reports that I've seen to date is a comparison by line item of Actual Figures vs Budget Figures. This would tell members how the EC did in sticking to the budget. It would also show things such as if there was a budget item for Investment Income and how much is in the 2003 budget for membership insurance. Then and only then would we as members be able to tell if the EC is sticking to it's plan. And finally if we had a comparative buget by line item from 2002 to 2003, you & I could tell exactly what the reason for the $10 dues increase really was.
And from your posts, I'd describe you as an AMA employee.

Happy new year everyone, this is my last post on this matter.

After reading this whole thread, the only thing I can say is that the general lack of knowledge of finance, law, accounting, and general good business practice demonstrated by the participants in this forum is...amusing.

Thankfully you guys are NOT running the AMA. If you were, your sophomoric "knowledge" would be terrifying.