Officer’s Message

NMEDA’s Financial Health During COVID-19

stores are doing a booming business. Even some restaurants report sales increases with carry-out and delivery surpassing their total sales preCOVID. But many other businesses and industries are not faring so well. Our industry qualifies as “essential business” in most states, so that generally has allowed us to keep our doors open. But that doesn’t mean that our customers are willing to venture out. I have talked with a number of you, and learned that sales levels have varied from almost nonexistent, to nearly “business as usual” depending on our local situations. So how is your NMEDA organization doing? We count on our annual conference as a major revenue source. With our co-located conference being moved to fall of 2021, a big hit was made to our fiscal 2021 budget (7/1/20–6/30/21). And the pandemic put a big dent in our fiscal 2020 budget. We are seeing a lag in revenues. With our restructured QAP audit program, NMEDA bills us dealers, then pays the audit firm. Our contract reduced your audit fees, which is a great thing. But RADCO got off to a slow start, so there was decreased audit income for the first By Jud DeMott

The Coronavirus seems to have

affected most all businesses and organizations in one

way or another. Home improvement

NMEDA TREASURER

half of fiscal ’20. Then a number of dealers have requested that their scheduled audits be postponed due to budget restraints also affecting

NMEDA revenues.

Now the Good News….

First, Danny and the NMEDA staff have done a stellar job of holding down expenses. Any expense that can be cut has been cut. A salary freeze has been put into effect, and no new hires are anticipated in the short run.

Second, over the years, NMEDA has established a significant reserve fund to address just such shortfalls. That is in keeping with best practices for non-profit organizations like ours. The operations budget for fiscal 2021 was just approved by the board, and it does contemplate dipping into the reserve fund this fiscal year. The board also approved a recommendation from the Finance Committee to rebuild the reserve fund by setting aside an additional 25% of excess revenues in future years until the fund is replenished to FY20 levels.

With regard to the IPR (Industry & Public Relations) budget… As you know, IPR income is directly tied to sales of goods from our manufacturing members to us dealers (the CAP fund). With sales down, we dealers are buying less goods, ergo less IPR revenue. But you dealers had directed the association to target our IPR spending more on influencer groups and less on the general consumer. And since most of those influencer events and conferences have been cancelled, so have our participation and travel expenses. So the IPR budget is healthy by natural (although unforeseen) events.

All this to say that the NMEDA patient is healthy due to historically sound fiscal policies and good stewardship of NMEDA funds by leadership and staff over the years. And as your businesses re-open and you begin to “see light,” please be sure to get any postponed audits rescheduled. If you have ideas on how NMEDA can assist in the re-opening of our dealerships, contact Danny or any board member. We are very open to your input.