Ahoy, and welcome to the 2022 edition of “Making the Budget Sausage at the ASC”!
We’re in the process of putting together our annual budget for the ASC. Below is an outline of our approach, and if you need any clarification, don’t hesitate to ask. Currently, we’re working to put together a draft budget to review for the next board meeting.
Step 1 – Document All Funding Requests
The first step in the process is working with ASC committees to determine their spending priorities. This effort involves meeting with committee chairs and documenting spending requests in a spreadsheet of prioritized items.
If you have an idea for an ASC purchase, you need to find an appropriate committee chair and request that they add your request to the budget request spreadsheet. Following is a link to the active budget spreadsheet so that you can see it looks like:
Note that this budget is “live”, so you can see it evolve in realtime as committees add items.
Our committee chairs are as follows:
- Christopher Cryan, Education Committee
- Brie Busey, Race Committee
- TL Stanbro, Harbormaster Committee
- Dave Verbrugge, Site Committee
- Teri Stanbro, Events Committee & Membership Committee
- Steve Ryan, Boat Committee
- Geoff Wright, Technology Committee
- Ad Hoc Bucc Shootout Committee (no chairperson yet)
And if you have an idea for a club purchase and aren’t sure where to take it, just let me know, and I will point you in the right direction!
Step 2 – Estimate Revenue
Work with the ASC Treasurer (aka the fabulous Teri Stanbro) to estimate revenue for the coming year. Starting sources of revenue include the following:
- Returning family, single, and youth memberships. We base these estimates on reviewing current memberships and making educated guesses regarding who is likely to return.
- Dingy, keelboat, and youth class participants. For budgeting purposes, we assume $250 per participating adult class member and $100 per youth member.
- Expected fees. (moorings, trailered boats, RVs, etc.)
- Expected donations for fundraising revenue.
- Subtracting out the 1.99% PayPal fee. Since almost everybody pays by credit card these days, we just pull this from the total income. (And note that there is also a $0.49 charge per transaction)
Step 3 – Calculate Fixed Expenses
This includes all the stuff we have to pay for in order for the club to continue to exist. Examples include biennial reports for the ASC and ASCCOA, boat registration (Ensign & Pontoon Boat), charitable organization fee, electric bill, Quickbooks Online annual fee, insurance (liability, property, & board), Mat-Su land use permit annual fee, PO Box rental, Rent-A-Cans, and property taxes.
Step 4 – Total It All Up!
The fourth step in the process is to create an integrated budget request document. This is probably easiest in spreadsheet format. If history is any guide, the budget requests inevitably exceed available funding.
Step 5 – Categorize Spending Requests
The next step occurs during the initial budget meeting. During this step, we categorize each spending request into one of the following groups:
- Fixed. These are the basic expenses required for the club to exist in even the most basic format.
- High. These are mission-critical items. The test of whether an item is “high” priority is whether its absence would significantly degrade the club’s ability to perform its mission as compared to the year before.
- Medium. These are budget item that advance or improve the club’s ability to perform its mission as compared to the year before.
- Low. These are “nice to have” items that makes things a little nicer at the club, but that we could live without in a pinch.
If we don’t have a unanimous agreement on a given item category, we vote. Anybody in the meeting, except the Commodore, can vote. If we have a tie, the Commodore will cast a tie-breaking vote.
Step 6 – Rank the Funding Requests in Each Category
To accomplish this we start by approving all fixed expenses, then high-priority expenses, and so on. In practice, we can usually avoid this exercise for fixed expenses and high-priority items, since we can usually fund all of these. The exercise becomes more important with medium-priority items since we typically run out of funding before we get to the low-priority stuff.
Step 7—Approve or Reject Funding Requests in Order
Start approving funding for each item until we run out of available funds. When we’re out of money we have a draft budget!
Step 8 – Release Draft Budget to Membership for Comments
Once we have a draft budget, we release it to the membership for comments and feedback. We collect this feedback for a period of one month.
Step 9 – Review Feedback and Establish Final Budget
At the next board meeting, review all membership feedback regarding the budget. Make any necessary adjustments to ensure that the budget lines up with the priorities and goals of our membership.