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Posted By: Glen Ramsey Industry News ,

September 22, 2022
 
I would like to provide you information about the financials of the association following the 2022 Summer Conference and where we stand today.

The final bill from the Cloister was received and it significantly exceeded the planned budget. Revenues from the conference exceeded budgeted revenues slightly for the event.

A majority of the revenues from the 2022 summer conference are typically needed in the operating fund to maintain the expenditures of the Association such as utilities, upcoming conference expenses, and payroll in the upcoming months. In addition, there were a number of unexpected costs this year that the association has incurred that have affected the overall cash flow.

To compensate for the increased expense of the conference, the association took several actions to ensure the stability of the association:
  • Liquidated some reserves to offset some of the debt
  • Added additional monies from our operating budget
  • We secured a line of credit to ensure stability of the association and due to the payment timeframe we faced
  • Arrow Exterminators made a significant contribution to the Association to offset the loss from the Summer Conference. This contribution in turn, made the Summer Conference a revenue neutral event
  • An additional contribution was also pledged in support of the association
  • In 2019, when the 2022 agreement was signed with the Cloister, an agreement was also signed that committed the association to hold the 2025 summer conference at the Cloister
    • Due to the results of the 2022 conference, it was determined that the association would not return in 2025
    • A significant cancellation fee would have been associated with this cancellation, but the association was able to reduce the expense and it was further reduced with the help of Arrow Exterminators assistance and the agreement for 2025 has been cancelled. We will not be at the Cloister in 2025
All of the actions taken provide the association the ability to maintain enough cash in our operating fund to ensure we have the money on hand to operate until we can receive revenues from future planned events. The Association’s monthly expenses are approximately $29,000.
 
The association has an outstanding balance for the line of credit that was secured of approximately $38,000. This loan balance will be a line item in the budget to provide transparency of the progress to eliminate the debt. We will also be highlighting it in all budget discussions.
 
The plan to pay off the line of credit is extremely rapid. We plan to have the full balance paid off by the end of the fiscal year June 30, 2023. Immediately, we have made budgetary cuts of at least $46,000, an excess of the current debt amount, but this is not cash on hand. It will be accrued as revenue comes in from future events this year.

Additional areas for cuts are being investigated and appropriate actions will be taken to ensure that our debt is paid down as quickly as possible.

To prevent this from happening again in the future and to create better transparency:
  • A policy is being drafted for board approval, requiring, “all expenditures that exceed 10% over budget line item, will require board approval”.
  • All conference planning committees will be presented with an individual conference budget that must be adhered to. In the past, conference budgets were pooled and did not provide the control or visibility necessary.
  • All conference budgets will include a cushion on the overall budget, not to exceed 10% so that expenditures will not exceed budgeted amounts.
  • Future events will all be evaluated to ensure they are, at a minimum, revenue neutral or positive.
  • If any planned event is revenue negative, the event will be reimagined to become revenue positive or it will be sunsetted.
These checks and balances are necessary policy moving forward to ensure that we do not find the Association in this position in the future.

The current executive team is extremely focused on this matter. We are committed to resolving this situation quickly, completely, and to implement processes to ensure a fiscally strong Association moving forward.

The association is not bankrupt in any sense of the word. We have taken this situation very seriously and will rise from this stronger than before, with better policies and transparency than we have ever had before.

If you have any questions, please feel free to email me at glen@gpca.org and I will get you a response. It is our goal to be completely transparent through this entire process.
 
Respectfully,
Glen C. Ramsey
President
Georgia Pest Control Association
 
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