Discussion: OUSA Budget 2015

At the Rochester meeting of the OUSA Board, no vote was taken on the budget for 2015 because there was a forecast $50000 plus deficit. The Finance Committee has worked on this issue and made a new recommendation to the Board and the Board will discuss this at a phone meeting this coming week. Below, I have pasted the recommendation of the Finance Committee to the Board. The Board may approve the proposed budget as written or they may modify it although the goal is to have a very small deficit projected for 2015. It may take 24 hours for the budget to be posted on the OUSA website but I hope it can be done earlier.
Peter Goodwin President OUSA

To the Orienteering USA Board of Directors:

The Finance Committee submits the attached Budget for 2015 to the Board and recommends its adoption. We anticipate some adjustment to the budget in late winter when more accurate numbers on expenses for World Championship events become available.
The Committee was asked to submit a budget that was no more than $10,000 in deficit and to recommend action that could be taken to assure a balanced budget in 2016 and later. We were asked to consider sources of increased revenue before cutting program spending.
We are recommending a budget with a $6,600 deficit for 2015 and are recommending steps to be taken to bring the budget into the black for 2016.
Our income stream consists of three distinct parts: 1) gifts, 2) grants and sponsorships, and 3) program income consisting of club charter fees, membership dues and A meet sanctioning fees. While we anticipate increased efforts to improve our income flow from sponsorships and gifts, the result of these efforts is uncertain. The third part of our income stream is more predictable. The Committee is of the opinion that raising program income will be necessary if we are to do more than minimally support our current program.
As an immediate action to help bring the 2015 budget closer to balance, we are recommending in this 2015 budget that A Meet sanctioning fees be raised to $5 per race (from $4) and that Championship Fees be raised to $10 (from $5). The Junior fees would be half of these numbers. The Orienteering USA discount would remain unchanged - which in the fees computation form means non-member surcharges would be unchanged. This will raise $14,500 on an assumption of start numbers and mix similar to 2013. (See the attached spread sheet).
We chose to use 2013 since the 2014 information is incomplete and the 2012 data includes a North American Championship and thus is unusually high. The A meet budget income figure for 2015 will be $43,300 which will give us a budgeted deficit of $6,900.
We discussed at length the possible effect raising sanctioning fees might have on A meet attendance. We do not propose to raise fees for non-championship A meets by the same percentage as championship meet fees to avoid discouraging attendance by local club members at those meets. We believe that championship meet attendance will be less fee sensitive. We also recommend having team members pay for their uniforms or increase their fundraising to cover that cost. We will revisit this when we look at the team budgets in January.
Looking further ahead, the Committee also recommends that the Board consider raising club meet start fees from 2016 by fifty cents to $1.50. This should receive wide discussion before adoption, but if adopted would improve our income by over $20,000 a year. This would eliminate our persistent deficit and allow us to expand support in areas that will improve our sport and support its growth. We also recommend that the board change payment of club start fees to semi-annual payments while leaving the dues on an annual basis. Receiving the start fees for spring races in September would help cash flow at a time when summer meet expenses are behind us and tax-driven end of year contributions are ahead.
What will the members get for the increased fees next year? The honest answer is only a budget almost in balance that does not require a cut in support for present programs. However, we further recommend that if the additional revenue increase for 2016 is adopted a significant part of the A Meet revenue increase going forward from 2016 be dedicated to improving the quality of the A Meet experience. We will propose that Orienteering USA make matching funds available to clubs for map, meet and course consultation and for consultant travel. While it is possible that large clubs with experience in holding A Meets may not need this service, others will avail themselves of it with resulting improvements in these meets. While the A Meet fee increase will not directly impact A Meet quality in 2015, in following years a significant portion of it could be dedicated to that end.
Louis Pataki, Vice-President, Finance
Finance Committee Members: Charlie Bleau; Gary Kraght; Tim Parson; Lou Pataki, Chair.

The Rogaine Committee has been seeking clarification from OUSA Board about the application of sanctioning fees in general, and Championship fees in particular, to participants in non-Championship-length rogaine divisions who compete concurrently with those in sanctioned Championship-length (24-hour) events.

A Championship-length (24-hour) rogaine is not necessarily a Championship. The Rogaine Committee currently only grants sanctioning to Championship-length rogaines.

The proposed fees are not at all inappropriate for Championship-length rogaines, but may well be for concurrent shorter events. The bulk of our attendees are extremely price-sensitive, and a $14 nonmember sanctioning fee would need to come out of an about $25 overall entry fee for a 4-hour event. This leaves nothing for park permits, which in California run at about $5 to $10 per person for events at expansive venues that can accommodate a 24-hour rogaine.

Increasing sanctioning fees for championship races without supplying anything more in terms of support or services to the club seems excessive and absurd.

I would much more support the modest local start fee which would raise more revenue without as large an effect on meet profitability.

Increasing sanctioning fees for championship races without supplying anything more in terms of support or services to the club seems excessive and absurd.


Indeed. Perhaps addressing the expense side, rather than the revenue side, would be appropriate to consider.

It is unclear why the finance committee was so instructed to only consider the revenue side. Certainly with a train wreck the size of 50K, one would think 50/50 sharing, at worst, would be appropriate, and certainly one can find expenses, which, when eliminated, will not change club services or support, or the consumer experience, in a meaningful way.

Moreover, since this massive divot wasn't likely caused by consumers, it is unclear why they are being asked to pay for it, especially when the product offers a poorer value proposition than competing products, and the consumer, just like last time, will not see an improvement in the product, despite the increased cost.

And, inflation has been quiescent since the last recession. Disinflation and deflation risk are more the talk these days. Can't blame inflation.

wasn't likely caused by consumers

Well, um, isn't the consumer presently consuming noticeably less of this particular product (sanctioned event-days) than before, and thus there is decreased sanctioning revenue?

I'm not necessarily endorsing the wisdom of passing the costs to the remaining hardcore consumer, but it's important to understand that this particular problem is not all Glen and Erin and whoever else gets paid. It seems to at least some extent stem from decreased attendance, so perhaps a product focus is even more appropriate.

To put it even more bluntly, if that is even possible from my lips: If your version of the sport scares away people, you can't any longer expect to buy it for cheap.

Inflation in general may be negative, but that doesn't mean that certain things that affect the cost of putting on an orienteering event (e.g. insurance, permit fees) aren't going up in price.

I would like to see the OUSA populace "get" something for the extreme increase in sanctioned meet fees. I'm all for paying more for an A meet start, if it means that I am guaranteed a quality event. Lately, I feel that guarantee has gone by the wayside, but it doesn't sound like there are any concrete plans to use this new revenue to bring that quality guarantee back.

Why wasn't cost-cutting considered? What is so wrong with asking a team, for example, to fundraise for more of their budget since less will come from the federation?

How about we save some money and only give medals to the junior classes in championships?

Just to make sure everybody is on the same page regarding Erin...
His salary and travel expenses are funded by a major gift from an anonymous donor. His position as US Junior Team Coach / Junior Program Coordinator has no effect on the OUSA budget, in terms of the difference between income and expenditure.

For future reference, the proposal is posted here:

http://orienteeringusa.org/sites/default/files/fil...

The Budget Meeting is scheduled for Thursday, 8:00 PM eastern time.
This will be a phone meeting. If anyone is interested in listening in, they can contact me for the phone number and code to listen in.

I figured I'd read the budget. I'm a financial noob, so maybe my questions are stupid, but I'd love some clarification in a few places. Maybe I oughta call in to the meeting, or email the board; but I figured maybe my questions and comments here could at least raise some answers or spark some discussion.

- EventReg income is going up - is that because we're increasing the "OUSA" fee whenever someone registers for an A meet online? So basically participants are being hit twice for increased costs of an A meet, once upon online registration and again at the actual sticker price?

- What is Map Loan? I thought our map program was to fund map making, which costs money. Did I just understand that wrongly?

- $2000 income from MTBO, on the assumption that there are 100 mtbo starts... we don't have that many MTBOers. Is the team doing something drastic to increase starts? Because we have no programs in place making the starts go up as far as I knew, so this number seems to come out of nowhere.

- Why are team uniforms considered income when the money is going straight back to NoName? Is that defendable in an audit? Doesn't that make it look like OUSA has considerably more money than it does, since OUSA doesn't actually own the uniforms that team members are paying for?

- Junior team is raising $5000 with training camp costs? That seems painful, when you're asking parents of juniors to also fund their kids' trips to Europe, uniforms, and any other fundraising.

- Ski-o Team budget numbers aren't quite right. Ski-o team members have paid $4734 this fall for uniforms, and if OUSA is counting that as income, someone should update that number. Ski-o team brought in ~$2,500 in fundraising from 2014 US champs. Not sure how or where ski-o team can raise $10,000 this year.

- Is MTBO WOC every year? $6000 is a big number for a small team, but shipping bicycles overseas is expensive, so I can see why this number is on par with ski-o team budget requests.

- Line 50, unrestricted contributions, is expected to climb from $18,000 in 2013 to $30,000 in 2015? Really? Why is that? Is there any work being done to raise this money, or are we just waiting on the magic fairy to bestow our organization with unrestricted contributions? This one doesn't make any sense to me.

- Line 75 - we're going to spend $6,750 on MEDALS?!?

- Line 84 - Why such a large number ($4000) for MTBO national champs? Are we spending that sort of money on the other champs and it just doesn't get listed here? What makes the MTBO team so much more special than the other teams that it gets an actual budget for its Nationals?

- Line 101 - $0 budgeted for athlete travel support? Why not? The other teams all have a line for it.

- Line 130 - we have $3000 budgeted for fundraises expenses - given that often we're fundraising for <$500 at a time, what is this item covering? Would be interesting to know.

- Lines 125-128 - I know this is a touchy subject, but when you pay a mid- to upper-level executive salary at a non-profit like this and you don't have a great idea of what that person is delivering or supposed to be delivering to the organization for which they are working, that causes some unrest. I've read a lot of Glen's articles in ONA, and I'm not clear what his roles really are, or if there is anyone who is evaluating his success in these roles. It's fine to not make someone's job specifics public, in fact that is how most of the world works, but also most of the business world also works in a way that requires folks to be evaluated at some regular basis against some metric. I would be interested in seeing a list of accomplishments or success or even failures (because at least you tried something, not everything will be a win), to justify spending a third of the overall OUSA budget on the salary/benefits/travel/expenses for one person.

To me, it seems obvious to make some cuts to both the ski-o team and the MTBO team budgets, as they are very small numbers of participants asking for large amounts of money from a tight budget. The senior team budget is also quite high, but that serves a larger number of people. Given that all three of these teams (and one could lump trail-o into this category as well) are performance teams, not development teams, it seems a bit wasteful to throw too much money at the programs. If the teams had a well-thought-out development pipeline, similar to what the junior team currently has laid out, it would make more sense to keep the full budget, as you may "get" something for your money.

I also think it is utterly ridiculous that OUSA is spending nearly $7k on medals. What about only giving out the metal medals to juniors, and relying on cheaper/more useful prizes for the other age classes? Is there anyone out there over the age of 16 who WANTS to get a medal as a prize? Is that actually a draw to people? I suppose winning a medal is probably the reason we have five-year age classes, so I should shut up, but that's an absurd amount of money for what I think is an absurd prize.

Underlying this entire discussion is the elephant in the room - start numbers decreasing. And nothing happening to change this.

There are line item notes for some of this later on in the document. For instance, we are apparently purchasing a many-year supply of medals in 2015, so the budgeted amount should be considered to be amortized over several years. Still, it seems like a heck of a lot to spend on bling that in many cases gets trashed very quickly.

Re: Map loans: OUSA map fund policy

Relevant portion:

Map Loan Fund (MLF): The MLF provides zero-interest loans to Orienteering USA clubs for production of IOF-standard orienteering maps and promotional orienteering maps. The MLF is funded by donations and managed as a revolving fund in perpetuity.

Presumably $ in the income section is a repayment of a previous map loan.

Re: Junior team items

- Junior team is raising $5000 with training camp costs?

And spending $8000 on Team Sponsored Training Camps (line 102).
The income will come from a few possible sources: non-Junior-progams participants at the training camps (i.e., local adults who want to pay to attend), and from clubs who will pay a fee to have the Junior Team Coach help with a local training camp.

Line 101 - $0 budgeted for athlete travel support? Why not? The other teams all have a line for it.

Because we didn't request a line for it. Each team proposes their own budget lines.

Thanks Cristina! That all makes sense.

Re medal costs:
Perhaps clubs hosting championship events could be required to pay directly for the number of championship medals they use. But they are currently paying this indirectly (and perhaps with simpler accounting and less administrative effort) through the higher sanctioning fees for championship events.

Many people like their medals, but for those who don't, they are welcome to turn it back in to be used at a future meet. I also suspect that the $6k number is producing a multi-year supply of medals to take advantage of quantity discounts.

Alex, you ask good questions. I have put the start of your questions into this reply and then some answers. The answers may not be complete but they are a start....

- EventReg income is going up - in part because of increased use by clubs. The increase in A-Meet fees is a separate increase. People going to A-meets are generally spending quite a bit of money so a one dollar increase is a small percent of their costs.

- What is Map Loan? - OUSA lends money to clubs who can’t afford the upfront payments for maps and then, when they run their meet, they repay the cost.

- $2000 income from MTBO, on the assumption that there are 100 mtbo starts... we don't have that many MTBOers. - This is a figure that was produced from the MTBO group and they are working to expand mountain bike starts across the US. They also charge a bit more for each start than for other starts.

- Why are team uniforms considered income when the money is going straight back to NoName? - This is how the accounting works. If OUSA pays a bill for uniforms, that is a debit. This is offset by the income and is the way that things must be accounted for. Seems dumb that is accounting…..

- Junior team is raising $5000 with training camp costs? - Some of this money is coming from the hosting clubs (and has recently been done by a club for a training camp) and the idea is that, while there will be expenses for getting the junior coach to an event, those expenses should be paid by the host club to OUSA to offset the expense. Clubs will benefit from the program so they can help fund the cost rather than the clubs that do not take advantage of the programs.

- Ski-o Team budget numbers aren't quite right. – The way the budget works is that there are carryover funds. The Ski-O team has “money in the bank” so they should already have basically covered their $10,000 fundraising. If there are other issues, they should be discussed.

- Is MTBO WOC every year? – It is every year and for the past two years, a full team has gone. It may be that in the future a smaller number of riders will go because the slower riders are not doing well on the world stage. This is a work in progress.

- Line 50, unrestricted contributions, is expected to climb from $18,000 in 2013 to $30,000 in 2015? – This is a goal. We have been doing better so it should be possible.
- Line 75 - we're going to spend $6,750 on MEDALS?!? - This is a multiyear purchase, not just one. It is also true that some of the cost of a championship entry goes to funding these medals. It is the reason that the sanctioning fees for championship events is larger than for regular A-Meets. There is also the belief that this cost can be reduced although the numbers are not in.

- Line 84 - Why such a large number ($4000) for MTBO national champs? – Some of what we are doing here is to try to get more enthusiasm for MTBO so that more people are involved. With a championship, there is more reason to train and to go to meets. It ultimately not be sustainable but it is an investment that the MTBO community thinks is worth it.
- Line 130 - we have $3000 budgeted for fundraises expenses – these expenses include putting adds into ONA, envelopes for mailings, postage and a number of other expenses like PayPal fees when people donate through that method. If everyone paid by check, that number would be lower but the PayPal method seems to get more people donating money so it seems to be worth it. (The donations associated with the PayPal fees are much more than the fees.)

- Lines 125-128 - I know this is a touchy subject, but when you pay a mid- to upper-level executive salary at a non-profit like this and you don't have a great idea of what that person is delivering or supposed to be delivering to the organization for which they are working, that causes some unrest. – The job description and the performance of the executive director is overseen by the Executive Committee. The work that the executive does is varied and, in many ways, hard to describe. He is involved in working with sponsorships (hours spent dealing with Choice and others), contact with clubs about issues, dealing with such events as the Deaf Orienteering Championships (they won’t be an expense to OUSA but are taking time to work through), organizing board meetings and the AGM, overseeing budgets, making budgets, making sure that the President doesn’t drop any balls, and the list goes on. We should try to be more transparent but some of the things that he does end up being “sensitive”.

To me, it seems obvious to make some cuts to both the ski-o team and the MTBO team budgets, as they are very small numbers of participants asking for large amounts of money from a tight budget. The senior team budget is also quite high, but that serves a larger number of people. Given that all three of these teams (and one could lump trail-o into this category as well) are performance teams, not development teams, it seems a bit wasteful to throw too much money at the programs. If the teams had a well-thought-out development pipeline, similar to what the junior team currently has laid out, it would make more sense to keep the full budget, as you may "get" something for your money. – These are questions that the board is asking but, at this time, we want to support all our teams. The work on the junior front is not just for the “team”, it is also for development of up and coming juniors.

I also think it is utterly ridiculous that OUSA is spending nearly $7k on medals. What about only giving out the metal medals to juniors, and relying on cheaper/more useful prizes for the other age classes? Is there anyone out there over the age of 16 who WANTS to get a medal as a prize? Is that actually a draw to people? I suppose winning a medal is probably the reason we have five-year age classes, so I should shut up, but that's an absurd amount of money for what I think is an absurd prize. – We should look at this. The medal count is historic. At the NAOCs, there were 10 year groupings for the older folk. No one seemed to complain and our medals would go further. We can also start a program of medal recycling. If you have enough of them and don’t want more, return it to the event organizers. (I know of at least one person at the US Champs in Rochester who got the medal and then turned and put it back in the box.)

Underlying this entire discussion is the elephant in the room - start numbers decreasing. And nothing happening to change this. – and yes, we need to work on this….

Widespread Medal recycling could preclude using stickers / labels that identify the category. Perhaps a minor point, but not something to dismiss out-of-hand.

BTW, in bulk purchase, just how much do US Champs medals cost each?

While on the topic of Chanpionships...
With the proposed doubling of Championship fees, this would be a good time to suggest that the non-age -- aka "open" -- categories which do not have Championship status either be exempt from Championship fees, be exempt from the proposed increase, or be elevated to Championship status.

Finally, from a twice-a-year A-event registrar's POV...
Could we please base sanctioning fees on A-event starts, rather than entries? Starts are more easily audited and better understood -- eg, "if it generates a result, it's one start..."

Everyone here seem to be deeply concerned with the prospects of paying double for entry fees on US Champs in the near future. The fees are quite steep as they are now. But the sad thing is that paying them does not contribute to promoting quality.
Remember 2012 in GA, when no one (controllers, federation, sanctioning committee, etc.…) bothered to check the credentials of people assigned to the task of conducting a WRE, and to check on the progress. Result – “epic s̶u̶c̶c̶e̶s̶s̶“ fail. A recent Classic Champs in CO was well below the level of a Championship: primitively-set courses on a blunt terrain, on a map that did not see field-checking since early 2000s. Reminded me those multi-day events from 15-20 years ago with the “laid-back”, “we hang ‘em high” attitude.
Paying to “professional CEO”, with no orienteering background, is pure insanity for the federation of this size. The money should go instead to producing high-quality maps and conducting Championships by teams of organizers, formed by contracted members of different clubs. The goal should be to have a world-class map on a world-class terrain, even if the nearby club is small or nonexistent, not the one with the largest parking lot, and the Golden Corral nearby --for celebrations by the CEOs. This way we may see one day modern maps made in places like Sand Dunes of Nebraska or Oak Mountain in Alabama.

I don't think A meet fees are particularly steep as they are though I do wonder whether all of the championships that exist are big enough draws to tolerate the proposed increase in OUSA charges - people will pay more to attend the Individual Champs, sure, but will price-sensitive adult orienteers (there must be some, even if we're mostly a reasonably well off bunch) pay more to attend the Interscholastics or Intercollegiates or decide they'd rather put a non-championship event on their schedule? Right now if no one bids for the Classic Champs, it's pretty simple to ask some club with a two day classic event planned to make it the champs but will that still be the case if that means they have to raise their fees significantly? Who knows, maybe the effect will be to kill off everything but the Individual Champs, getting the US to effectively the same championship structure as Canada.

Put me down, BTW, as thinking it would be madness to spend $4000 on holding an MTBO championship event, thinking that if we build it the participants will come, but only $1500 on club development. Maybe club development is inherently labour-intensive rather than capital intensive and difficult to do anything about at the national level but, mixing metaphors, if the elephant in the room is not enough starts, why are we proposing to spend a fair bit of money on a lovely MTBO champs tower but much less on strengthening the foundation of healthy, active, start-generating clubs.

About the Championship costs..... I went to the Colorado meet and also spent time at Laramie. The total cost of that trip was over $2600. $10 more in meet fee would have not made a difference as to whether I went or not. At the Championships in Rochester, I spent over $460 (much less because I drove instead of flying and it was shorter) and if I had to pay another $15 for that trip, it would not have changed whether I went or did not go. People who travel to the Championship events are paying a lot to get there and the extra entry fee is minor in the scheme of things.

The question is not whether an extra $10-15 on your entry fee is worth paying - marathon entrants regularly pay $100+ without blinking - but rather what are we getting for the steeper entry fees? The only answer that's been given so far is "a balanced budget". I'd prefer to see the answer "a quality guarantee on printing, control placement, and course setting".

I believe that we are going to work on better quality. The original post included the letter from the Finance Committee to the board. The last paragraph may answer this question and states:
What will the members get for the increased fees next year? The honest answer is only a budget almost in balance that does not require a cut in support for present programs. However, we further recommend that if the additional revenue increase for 2016 is adopted a significant part of the A Meet revenue increase going forward from 2016 be dedicated to improving the quality of the A Meet experience. We will propose that Orienteering USA make matching funds available to clubs for map, meet and course consultation and for consultant travel. While it is possible that large clubs with experience in holding A Meets may not need this service, others will avail themselves of it with resulting improvements in these meets. While the A Meet fee increase will not directly impact A Meet quality in 2015, in following years a significant portion of it could be dedicated to that end.

Does the proposed Strategic Plan include the goal to improve and insure A meet quality? I don't see it in the July 2014 draft.

I'm not sure A meet quality is so easy to measure that improving it makes sense as a strategic plan goal. At least starts are countable and not subject to there being no disputing matters of taste.

There is a lot of talk (in general) about raising entry fees, typically with the justification that (1) a lot of money is being spent elsewhere in order to participate, and (2) it takes a lot of effort to put on a meet, and that effort is being too cheaply given.

Argument 1 doesn't make a lot of sense. While some people come from far away, not all do. Most events attract a local crowd, diehard or otherwise, and that local crowd offers the best prospect for growth, precisely because you only need to inspire new local people to attend an event, rather than to inspire them to attend an event across the country. So the idea that it is a marginal increase in cost is, I think, short-sighted.

But leaving that aside, argument 2 seems to be very nearly absent here. The added revenue is not going to the host club; what benefit can they hope to derive from the added fees? The committee's concluding paragraph is not especially convincing in this regard; OUSA does little to ease the burden of hosting an A meet, or to ensure its success - a situation which has existed, unchanged, for quite some time.

In fact, if the host club were to want to increase their fees to fund their own local programs, this increase in sanctioning fees makes it a good deal more odious to do so. So I would argue that these increases are not merely a burden on the consumer, but also on any local initiatives.

...but will price-sensitive adult orienteers ... pay more to attend the Interscholastics or Intercollegiates...

They should not have to because OUSA does not require payment of US Champs sanctioning fees for the non-IS and non-IC categories at those events.

> OUSA does little to ease the burden of hosting an A meet

There is one major item: insurance.

Duly noted. The entire insurance bill is covered several times over by existing fees. Not saying the convenience isn't worth it, just asking: how much is it worth?

The budget was passed by the board last night at the meeting with all board members voting in favor.
There was a lot of discussion about improving the quality of meets and we will entertain suggestions and work on the problem. Map quality is a real issue and standardized procedures need to be developed so that from each starting point, whether it be purple pen or straight OCAD, the person printing the maps can get a quality rendition.

Didn't know that, Guy, and I forgive myself since it's not at all clear from reading the sanctioning fee computation form. Does that also mean entries in classes that don't receive OUSA medals at other championships - M-Green and the like - are assessed sanctioning fees at the non-championship rate? I assume non-eligible entrants in the classes that are competing for medals still get assessed the higher rate but it would be nice if this were laid out in detail somewhere obvious - in discussing starts statistics with those responsible for them, I've seem that it isn't unheard of for other misunderstandings of the sanctioning fee form, particularly the application of the non-member surcharge, to arise.

jt: That distinction is really only made for the Interscholastics and Intercollegiates. Championship sanctioning fees are currently charged for all participants (except recreational) at all other US Champs events.

Of course, QOC will not pay Champs fees for the Saturday non-championship middle races.