Treasurer's Report to Convention 2023

PCC Lion Philip Goodier

I would like to thank the Council of Governors for again giving me the opportunity to serve the Multiple District.

This Report does not deal with any charity monies, which are covered within the relevant charity Report.

1. Current Situation

My primary objective since the start of the coronavirus pandemic, in March 2020, has been to ensure the financial stability, and safety, of the Multiple District.

There are old adages that 'cash is king' and 'turnover is vanity and profit sanity' and these have been my watchwords: as we have seen too frequently, businesses, many of them long-established and well respected, have ceased trading because, ultimately, they ran out of cash.

I have resolved to ensure that MD105 remains 'cash rich' and able to withstand financial shocks.

As Council Treasurer a great deal of time has been spent looking at the finances of the Multiple District, the budget and the forecast expenditure for the current fiscal year, 2022-23, in order to make recommendations to Council.

The Council of Governors is not planning any major capital spending; the MD Headquarters was modernised and extended to make it DDA compliant a few years ago. There should be no requirement to undertake major works in the medium term - we will of course have ongoing repairs and renewals, simply to safeguard the fabric of the building.

2. Liquidity

The MD is a cash rich organisation well capable of meeting all day-to-day obligations from cash flow: as at the 31^st March the Association has the following liquid funds:

GBP Bank Accounts, details of the account holding institutions are:

CAF Bank Ltd, RBS Farnborough, Lloyds Leeds - total instant access funds £242,146

It should be noted that financial movements are managed to minimize the risk of balances with any one institution exceeding £85,000, the maximum covered under the Financial Services Compensation Scheme.

In addition, investments with a market value of £196,899 are held: these are instant access, not term investments.

This gives total liquidity of £439,045

3. General Account

The Review of the 2022-23 out-turn is contained within the Convention papers, on page 8 of the audited accounts for the year ended 30 June 2022. The comparison of Budget to Actual expenditure for year to 30^th June 2022, is contained in the Budget Proposals for 2023/24.

4. MD Convention

At one time we held the MD Convention in a seaside resort, on the basis that we would receive what is termed 'subvention' from the local authority, who usually owned and managed the venue.

Subvention is the principal that our collective spend in a locality is worth the offset provided to attract our business. Increasingly, local authorities are handing over the management of venues to third party companies and subvention is a thing of the past.

The MD Convention Officer increasingly looks to large hotels as venues. It should be noted that many hotel groups incurred significant losses over the two to two and a half years of the pandemic and we have experienced significant cost increases from all hotel groups.

Unfortunately, predicting demand and attendance a few years in advance of the event has become very difficult and losses have been incurred on social events in recent years such that there is now no social reserve fund.

5. MD Finance Committee

The Finance Committee met on Saturday 7th January 2023 to review the financial position of the Multiple District, to discuss the Budget submissions and to make recommendations to Council for the 2023-2024 financial year on a range of issues. It should be noted that some expenditure has the weight of either the Constitution or Convention Resolution behind it and is mandatory, not discretionary.

The Finance Committee noted, with concern, that membership levels across the Multiple District continue to fall, albeit that the rate of loss has dropped since the exceptionally high levels seen during the pandemic lockdowns.

I would like to thank all members of the Committee and the MD Specialist Officers for their invaluable contribution, as and when requested, and especially, their attendance and guidance in the very complex budgeting process.

6. Budget for 2023/24

As Council Treasurer, I am aware that there is a demand from members that Council drive down costs, however, inflation hit four-decade highs in several economies last year resulting in a cost-of-living crisis that still threatens to tip the world into recession.

Consumers are reducing their spending to cope with soaring bills, especially in energy. Russia's invasion of Ukraine and the sanctions in response to Vladimir Putin's brutal war caused energy prices to spike, although prices have since fallen sharply from peaks seen last year.

I prepare a quarterly financial forecast for Council, which is presented at each Council meeting, so that Council are aware of expenditure levels as they change during the year and are informed as to the financial impact their decisions have.

Our Headquarters staff have been very active in seeking competitive quotes for a wide range of products and services; I commend the work put in by Brigitte Green who has been proactive in seeking to reduce expenditure across the board.

Certain costs are being borne by Headquarters because of work being transferred 'in' from MD Officers due to the volume and time being taken.

For many years we enjoyed, as a Not For Profit Organisation, what is termed 'Discretionary Rate Relief'. As a consequence of the financial pressures facing them, Birmingham City Council withdrew that relief with effect from the 1^st April 2011. This added more than £6,000 of cost to the organisation, this again is legislative, but provides no additional benefit.

Although an appeal was lodged against the withdrawal, it was refused on the basis that we are an organisation 'well able to absorb such a cost increase'.

The increase in VAT to 20% in January 2011 costs the MD around £7,500 in a full year. It is considered there is no advantage to register for VAT.

To reduce costs associated with mailings, a resolution was approved at Convention 2011 and Headquarters now distribute information by electronic means.

The Finance Committee discussed the overall budget proposals and the outcomes are incorporated in the "Cost Analysis For Dues Resolution" that accompanies this Report.

Historically, Headquarters have absorbed costs rather than apportioning costs to relevant budget heads. Where possible, Headquarters costs are allocated to the Portfolios they undertake work.
Headquarters salaries are in line with market rates for the Birmingham area.
All MD Officer budgets reflect one face to face meeting per year. Additional meetings are expected to be via zoom.
Following the success of the Community Report the M & PR budget was maintained to allow reserves to be generated to pay for production of the 2021 edition, 'Step Forward'.
The Budget is based on a projected membership of 9,400 as there continues to be downward pressure on membership.
The full schedule of budgets is set out in the attachment to the Dues Resolution.
Finally, I would point out that, for every 250 extra members that we get, we collect £8,750.00 more, however, the general trend is a falling membership. If we can reverse the trend and increase our membership then the resulting cost burden on each member will reduce.

7. CIO

The current position with regards to Clubs changing their status to a CIO (Charitable Incorporated Organisation) is that 474 Clubs have been allocated a Mentor, of which:
343 have had their 105 Order and transfer of assets completed, a further 5 need their 105 Order and transfer of assets completing and a further 14 need to complete the transfer of assets.

There are no Clubs on the waiting list for a mentor.

8. Questions

if anyone has any query or seeks any clarification of anything contained within this report or attachment, please do not hesitate to contact me, at least 7 days before the MD Convention, so that a detailed and complete response can be given.

Lion Philip Goodier CPFA
Council Treasurer

REPORT and ACCOUNTS for YEAR ENDED 30 JUNE 2022

General Fund Accounts Final 2022.pdf

COST ANALYSIS FOR DUES RESOLUTION

MD 105					Per Head		Per Head		Per Head		Per Head		Budget 2023-2024
1		COG Meetings etc.	10859	0.99	144	0.01	12,491	1.28	19,757	2.10	17,044	1.81
2		Council Chairman	1255	0.11	0	0.00	2,536	0.26	2,743	0.29	2,743	0.29
3		Secretary to Council	1922	0.17	0	0.00	931	0.10	1,000	0.11	1,000	0.11
4		MD Council Treasurer	1014	0.09	850	0.09	1,139	0.12	950	0.10	1,200	0.13
5	A	Sergeant at Arms	0	0.00		0.00		0.00		0.00		0.00	Budget included within Council Meetings.
	B	MD Convention	5158	0.47	7346	0.73	34,976	3.59	25,000	2.66	25,000	2.66
6	A	Elect Seminars - DG Elect net of Grant	3096	0.28	2149	0.21	2645	0.27	4,240	0.45	4,240	0.45
	B	1st Vice DG Elect Seminars	3438	0.31	0	0.00	0	0.00	4,740	0.50	4,740	0.50
	C	2nd Vice DG Elect Seminars	2069	0.19	0	0.00	0	0.00	-	0.00	-
7		Partner Travel International Convention	0	0.00	0	0.00	3,881	0.40	5,100	0.54	8,175	0.87	As approved by Convention Resolutions, most recently Southport 2009. 2023 Convention is in Boston, 2024 Melbourne, 2025 Mexico.
8		Sp Cttees, Meetings and Contact Govrs	235	0.02	0	0.00	0	0.00	-	0.00	-	0.00
9		Strategic Development Committee	116	0.01	0	0.00	0	0.00	600	0.06	600	0.06
10		Insurance (excl. charged to Clubs)	25830	2.35	28803	2.88	36,609	3.75	32,500	3.46	33,500	3.56	After discussion with MD Insurance Adviser.
11		National HQ	123556	11.23	117091	11.71	111,971	11.48	136,904	14.56	133,453	14.20
12		Directory & Postage	2135	0.19	475	0.05	0	0.00	-	0.00	-	0.00
13		Independent Examination - Accountants	1500	0.14	1750	0.18	1,800	0.18	1,750	0.19	1,750	0.19
14		Travel Aid (105CN, 105N, 105SC)		0.00		0.00		0.00
			182,183	16.56	158,608	15.86	208,979	21.43	235,284	25.03	233,445	24.83
		Communication
15		Magazine	42198	3.84	35732	3.57	25259	2.59	35,000	3.72	44,285	4.71
16		Information Technology Committee	0	0.00	0	0.00	0	0.00		0.00		0.00
17		Contribution from PR Reserve		0.00	0	0.00	0	0.00	- 5,000	-0.53	- 5,000	-0.53
18		PR Comm & Pub	33505	3.05	42660	4.27	35730	3.66	48,000	5.11	50,650	5.39	£20,000 minimum, dictated by Convention Resolution, budget in line with indexation.
			75,703	6.88	78,392	7.84	60,989	6.26	78,000	8.30	89,935	9.57
		GAT: Service, Leadership & Membership											To cover all GAT/GLT/GMT/GST activities.
19		MD Co-ordinator
20	A	Membership Officer inc Campus, Extension & Retention
21	B	Regional Institute/Faculty Development Institute.
22	C	Membership Activities
23		Leadership Development
24		Service Team
			8,809		2,527		3,642		9,851	1.05	9,851	1.05
25		New Lions Symposium	10,205				10,325		12,000	1.28	15,000	1.60
			19,014	1.73	2,527	0.25	13,967	1.43	21,851	2.32	24,851	2.64
		Youth
26		Lions Opportunities for Youth Com Chmn
27		Young Ambassador
28		Yth Exchange
29		Leo Clubs Co-ordinator (net of Yth Tst contr.)
30		Life Skills Officer
31		Peace Poster
32		Young Leaders in Service
			763	0.07	2,313	0.23	78	0.01	3,000	0.32	3,000	0.32
		International
33		International Conv. (including attendance	884	0.08	-	0.00	16,478	1.69	18,830	2.00	20,790	2.21

34		Europa Forum
35		Mag. Editor to Europa Forum
36		International Convention Committee
37		LCIF Officer
38		International Relations Officer
39		Patron Liaison
			4,355	0.40	1,237	0.12	4,396	0.45	6,903	0.73	7,000	0.74
		Projects
40		Sight First Officer
41		Portfolio
42		Speech/Hearing Officer.
43		Diabetes Education Prog Co-ordinator
44		Medic Alert Officer
45		P&L Disabilities Officer
46		Environment Officer
			542	0.05	146	0.01	929	0.10	2,500	0.27	2,500	0.27
		Adm. & Management
47		MD Officers - Attendance, Convention
48		Centennial Committee
49		Charities Treasurer
50		Constitution, Noms & Resolutions Officer
51		Credentials Officer
52		Data Protection
53		Health & Safety Officer
54		Legal Adviser
55		Tax Advisor
56		Vulnerable Person Co-ordinator
			567	0.05	218	0.02	1,714	0.18	3,900	0.41	3,900	0.41

		Gross Revenue Total	284,011	25.82	243,441	24.34	307,530	31.54	370,268	39.39	385,421	41.00
		Income & Injection	- 22,730	-2.07	- 14,402	-1.44	- 21,572	-2.21	- 15,500	-1.65	- 4,000	-0.43
		Budget	261,281	22.82	229,039	20.82	285,958	28.60	354,768	37.74	381,421	40.58

		No of members per budget	11,450		11,000		10,000		9,750		9,400
		Dues Calculation	28.80		30.45		28.60		36.39		40.58

		Income & Injection
		Sundry Expenses	9,443		3,986		799				10,000
		Depreciation	2,724		1,816		2,732		2,000		2,000
		Sundry Income	- 1,163		- 5,941		- 4,019
		Gross Profit - Sales (National HQ)	- 7,628		- 365		- 8,684		- 6,000		- 6,000
		Rental Income	- 15,396		- 9,987		- 10,866		- 8,500		- 10,500
		Contribution	- 9,349		- 3,322		- 1,244		- 5,000		-
		Interest	- 4,313		- 2,488		- 2,906		- 3,000		- 4,500
		Tax	2,952		1,899		2,616		5,000		5,000

		Total	- 22,730		- 14,402		- 21,572		- 15,500		- 4,000

		Dues Set	28.50		28.50		33.50		29.50		35.00
		Proposed Income Budget	329,805		334,987		337,914		354,768		381,421

		Dues Income					270,000		287,625		329,000