Annual Treasurer's Report 2005By Charles E. Robertson, Treasurer
Fall 2006 (Originally published in the Announcer)
The question is, “How does one write the annual treasurer’s report so that the reader will be enticed to read further?” Would drugs, sex, and rock and roll do it? Nah—not for a bunch of physicists. How about some quotes from Yogi Berra. You know, “And they give you cash, which is just as good as money.” And, “A nickel ain’t worth a dime anymore.”
Financially, AAPT is in very good shape. While the Auditor’s Report shows that our assets grew in the past year—and this is important—there are two other aspects of our financial status that seem, to me, to be more useful. First, we ended 2004 in the black, not by much, but in the black. Second, we reached our goal for long-term investments, which now equals one year’s operating budget. This means that we can now take some money out of those investments to use for physics programs.
In January 2004, the Executive Board passed an operating budget with an expected income of $5,143,581 and expected expenses of $5,474,388. This meant we anticipated ending in the red by $330,807. In actuality, we ended the year with an income of $6,076,347 and with expenses of $ 5,362,204. Included in the income was $700,036 from the sale of the Dodge building (our old executive office). Backing out this “unbudgeted” income, we made it into the black by $14,107, or within one quarter of a percent of our budget. That’s very good, and we can thank everyone at the executive office in College Park as well as those of us who paid our dues, went to the meetings, and occasionally collected some money from AAPT.
The budget for 2005 has similar numbers: income of $5,651,533 and expenses of $5,967,647. So again, the board passed a budget that is $316,114 in the red. However, about halfway through the year, the difference between expenses and income was only 1 percent in the red, much less than the original budget calls for. We expect to be in the black by year’s end.
By the time you read this, your board will have approved a new budget for 2006. With some new budgeting software, we anticipate this budget will be balanced from the beginning.
Our long-term investments with TIAA-CREF have done quite well, and we are now able to take some money out of that account for physics programs. Our financial advisor at TIAA-CREF worked up some numbers for us that indicate we can spend 4 percent of our investment each year without eroding our purchasing power. (Yogi Berra also said, “The future ain’t what it used to be.”)
On the recommendation of the Investment Advisory Committee, your board voted to take out 4 percent of the investment with 1 percent going to the Klopsteg Fund (which is our discretionary fund) and 3 percent going into the operating budget. Since the long-term fund is on the order of six million dollars, this will give appreciable help to the income side of the ledger.
By now you should be interested in reading the entire auditor’s report. If you have any questions, be sure to ask. I can be reached at email@example.com.
And yes my teacher friends, this will be on the test!