C.A.R. 2013-2015 Strategic Planning Presented by Joel Singer September 2012.
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Transcript of C.A.R. 2013-2015 Strategic Planning Presented by Joel Singer September 2012.
C.A.R. 2013-2015 Strategic Planning
Presented by Joel Singer
September 2012
CAR’s Strategic Planning Approach
Zero-basedObjective-FocusedActual Resource Allocation
CALMLS
RERS100%
REBT, Inc.100%
CREIEC
REBS
C.A.R.
CREPAC IMPACCREPACFederal
ScholarshipFoundation
HousingAffordability
Fund
EducationFoundation
zipLogix64.4%
REBOS50%
NHDXX REBT, LLCSARECX X REMT100%X X
Organizational Chart
Merged with REBS in 2011
X
CREIEC
REBS
C.A.R.
CREPAC IMPACCREPACFederal
ScholarshipFoundation
HousingAffordability
Fund
EducationFoundation
REBT, Inc100%
zipLogix, LLC64.4%
California Holding Co. Inc
Current Organizational Chart
2012 Projections and Long- Range History
Membership 158,000
Dues Revenue $ 17.5 million
Non Dues Revenue* $ 8.4 million
Net Deficit $ (1.6) million
2012 Revised Projection
* Investment income included.* No REBS transfer
1996 2006 2010 2011 2012P 2013B
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000RERS,LLC 100% zipLogix REBT, Inc REBS C.A.R.
37
$ Millions
14
4941
36
C.A.R. & SubsidiariesCombined Revenue
36
REBS.Revenue $3.8million
Net Surplus $243,700
REBT, Inc.Revenue $354,200
Net Surplus $307,200Before Transfer
zipLogix (64.4%)Revenue $6.3 million
Net Surplus $1.5 million
2012 Projection for Profit Entities
Combined Revenue
0
2
4
6
8
10
12
1996 2000 2010 2011 2012 P
REBS REBT, Inc zipLogix 64.4% RERS (100%)
REBS & Subsidiaries$ Millions
5.5
10.9 11.110.5
10.1
REBS & Subsidiaries Combined Net Income
-2
-1
-1
0
1
1
2
2
3
RERS (100%)
zipLogix 64.4%
REBT
REBS
20001996
$ Thousands
2010 2012 P2011
1,5231,541
(351)
1,587
489
1,045
(1,081)
360(177)
244
54
0
1
2
3
4
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P
2013B
.7
1.0 1.1
1.51.7
1.9 2.0
1.4
2.0
1.0 1.0
1.8
1.5
3.5
REBS Transfer to C.A.R.($ Million)
2.0
0.0
3.5
1.5
Total Dividend Transfer to CAR 1996 to 2011- $27.6 Million. No REBS transfer in 2012
REBS, Inc. 1.8$ REBT, Inc. 0.7$ zipLogix (64.4%) 3.9$ Total 6.4$
Million
REBS Inc. and SubsidiariesProjected Cash Balance – December 31, 2012
Initial investment $398,000Total dividend $ 8.5 million excluding tax distribution since inceptionTotal dividend and tax distributed to REBS $14.6 million since inceptionCurrent equity 10 million
(C.A.R. Portion $6.5 million)
zipLogix
2013 Budget Analysis
RevenueExpendituresMembership
Description 2013 Budget 2013 Budget 2012 Projection
Core ProgramIncludes New
Programs (Note)*
Operating Revenue 3,666,600$ 3,753,500$ 3,552,900$
Administrative Fee 2,337,800 2,428,000 2,506,800
Total Revenue 6,004,400 6,181,500 6,059,700
Operating Expenses Before 23,862,100 26,283,700 24,767,600
REALTOR® Advertising 2,007,500 2,007,500 2,026,700
Depreciation & Amortization 652,000 652,000 729,300
Total Operating Expense 26,521,600 28,943,200 27,523,600
Dues 16,731,000 16,731,000 17,500,000 New Member/Late Fee 741,000 741,000 756,500 REBS Transfer 1,500,000 1,500,000 - Investment Income 1,700,000 1,700,000 1,600,000 Net 154,800$ (2,089,700)$ (1,607,400)$
2013 Budget vs. 2012 Projection
*Note: 2012 projection includes the proposed augmentations and no REBS transfer
2013 Core Program Budget Expenditures vs. 2012 Projected Expenditures by percentage
Legal22%
Communication21%Governance
14%
Member Info13%
zipForm®12%
GovernmentalAffairs
10%
Operations5% Digital Ink
2% ZipVault1%
2012 Projected Expenditures
2013 Core Program Budget Expenditures
zipVault1%
Digital Ink2%
Member Information11% zipForm®
13%
Governance14%
Communication19%
Legal23%
GovernmentalAffairsl
11%
Operations6%
Program Description RANK 2013
2013 Budget RANK 2012
2012 Projection
Member Legal Services 1 3,026,700$ 1 2,952,700$
zipForm® 2 2,681,400 2 2,696,100
Realtor® Advertising 3 2,007,500 3 2,026,700
Governmental Relations 4 1,766,500 4 1,823,700
Corporate Legal Services 5 1,341,200 6 1,259,000
Board of Directors 6 1,277,000 5 1,283,500
Research and Economics 7 906,200 7 954,100
Communications 8 725,700 8 653,300
Membership Development 9 643,200 10 588,000
CRE Magazine 10 617,600 9 648,600
10 Largest Core Program Expenditures in 2013 & 2012
Number of Budgeted Staff Positions
121
122.5
128.5
127.5
120
114
116
118
120
122
124
126
128
130
2009 2010 2011 2012 P 2013 B
Number of Staff
In 2012 added four Field Representatives, one Membership and one Sales Rep. In 2013 eliminated one Field Representative, one Political Analyst and one Contact Center; two new staff added for new programs
Member-to-Staff Ratio
1,100
1,230 1,216
1,663
1,406
1,314
0
200
400
600
800
1000
1200
1400
1600
1800
2000 2005 2010 2011 2012 P 2013 B
Dues Per Member & Total Dues Collected
-
2
4
6
8
10
12
14
16
18
20
22
24
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P
2013B
Total Dues Collected
Dues/Member
California Association of REALTORS ®
115
90
115 115 115 115 115 115 115115
$ Millions
115115115
$70$64
$89
$115 $115 $115 $115 $115
$70
$55
$68$77
$69 $67 $65 $64
0
20
40
60
80
100
120
140
1990 1995 2000 2005 2010 2011 2012 P 2013 B
Current Dollars Inflation-Adjusted Dollars
Dues Per Member(Current Dollars vs. Inflation-Adjusted Dollars)
(Base Year = 1990)1995 IAF + $102000 PAF + $102011 RAA + $49
In 2013 the member benefit provided per member is $187 vs $115 actual dues
Membership Dues Reduction in 1995
The Membership Dues was reduced in 1995 from $77 to $64Same year the Issue Action Fund (IAF) $10 was implemented
Political Assessment included in Membership Dues
In 1995 Issues Action Fund (IAF) $10In 2000 Political Action Fund ( PAF) $10In 2011 Realtor Action Assessment (RAA) $49
3736
40
46
24
1418
3657%
45%
44%
46%48%
46%
34%
42%
5
10
15
20
25
30
35
40
45
50
55
1990 1995 2000 2005 2010 2011 2012 P 2013 B
20%
30%
40%
50%
60%
70%
80%Total Revenue ($ millions)
Dues as % of Total Revenues
Revenue Percentage
Dues Revenue as Share of C.A.R. & Subsidiaries Total Revenue
Member Benefit Dollars Provided
In 2013 the member benefit provided per member is $187 vs. $115 actual membership dues
New Member Services Added Last 10 years
Forms Advisor/TutorZipForms ® Digital InkZipVaultePUBSC.A.R. Online Redesign Consumer Advertising CampaignCustomer Contact Center
Field ProgramHousing AffordabilityLegal Hotline ExpansionStrategic DefenseCommunication Video ContentStatewide OmbudsmanYoung Professionals Network Local Candidate and Campaign
FieldC.A.R. Electoral Services
REALTOR® Advertising
Media:• Radio• Television• Online • Video• Social Media
Core Program Cost $2,007,500
90,500
155,000158,000
211,254
146,025
102,655
148,346
58,749
-
40,000
80,000
120,000
160,000
200,000
240,000
1971 1980 1983 1990 1997 2006 2012 P 2013ForecastCycle 1: 1980 148,346 (peak) to 1983 102,655 (trough). -30.8%
Cycle 2: 1990 146,025 (peak) to 1997 90,500 (trough). -38.0%Cycle 3: 2006 211,254 (peak) to
9 Ye
ars
3 years
7 years7 years
9 ye
ars
6 years
Membership Comparison
Liquid Reserves
5.21
40.3 40.5 38.937.1
5.57
4.4 4.7
20.120.2
17.8 15.6
0
5
10
15
20
25
30
35
40
45
1990 2000 2010 2011 2012 P 2013 B
Reserves ($ Millions) Months of Reserves
Net from Core Operation $ (20,517,200)
Dues (155,000 members at $115 per member) 16,731,000
New Member Fee (18,700 members) $30 561,000
Late Renewal Fee (6,000 members) $30 180,000
Investment Income 1,700,000
Net from Operation before REBS transfer (1,345,200)
REBS Transfer 1,500,000$ Net Proposed Budget 154,800$
2013 Proposed Core Budget Summary
Revenue ($)
Cost ($) Net ($)
Total Augmentation-One-time 64,500 518,700 (454,200)
Total Augmentation-Ongoing 112,700 1,903,100 (1,790,400)
Total Proposed Augmentation 177,200 2,421,800 (2,244,600)
2013 New Programs SummaryApproved by SPF Committee
Revenue ($)
Cost ($) Net ($)
Total Augmentation-One-time 1,000,000 (1,000,000)
Total Augmentation-Ongoing 50,000 98,800 (48,800)
Total Proposed Augmentation 50,000 1,098,800 (1,048,800)
2013 New Programs SummaryNot Approved by SPF Committee
2013 New Programs (One-time Impact)
Homeownership Matters/IDA ProgramReal Estate Research SymposiumTrends Database UpgradeREALTOR® S.W.A.T. Market Opportunity ConferencesStrategies for Thought Leadership ConferenceEnhanced Local Association Services
2013 New Programs (Ongoing Impact)
MLS-ConnectCE CreditThought Leadership InitiativeEnhanced Survey Research InitiativeLender Ombudsman Financing Resource for REALTORS®Industry & Broker Relations ProgramProperty Management & Investment SectionStatewide Ombudsman ProgramLocal Association Mobile AppChampion of Home HeroesREALTOR® Rating 360 (Peer-to-Peer) Pilot ProgramMicrotargeting StrategiesLocal AOR Incentive Program
REALTOR® Action Fund: Fundraising Program $524,500CREPAC Local Candidate Field Program $375,300REALTOR ® Receptions $197,100C.A.R. Electoral Services $39,500Federal Governmental Relations $25,100 for Officers travel to lobbying tripCommunications $20,000 for design of membership value campaign
materials
Total Funded by RAA - $1,181,500
Programs Funded by REALTOR® Action Assessment (RAA)
Worst Case Dues Adequacy Scenario$ (Thousand)
2012 2013 2014 2015 2016
Membership 158,000 155,000 140,000 142,000 144,000Operation Revenue $6,060 $6,004 $6,004 $6,004 $6,004Total operation cost (Note A) 27,524 26,522 27,185 27,865 28,561
Net before dues & intercompany (21,464) (20,518) (21,181) (21,861) (22,557)
Dues and Member Fees 18,257 17,472 15,443 16,210 16,280Inter-company transfer (Note B) 0 1,500 1,500 1,300 1,100Investment Income 1,600 1,700 1,600 1,550 1,500
Net-surplus(deficit) (1,607) 154 (2,638) (2,801) (3,677)
Reserve before augmentation $39,000 $39,154 $34,272 $29,636 $24,078
Augmentation-One-time (454) Augmentation-Ongoing (1,790) (1,835) (1,881) (1,928) Reserve after augmentation $39,000 36,910 32,437 27,755 22,150
Note A: Inflation 2.5% Note B: No intercompany transfer in 2012
Worst-Case ScenarioReserves
2012 2013 2014 2015 2016$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Reserves after Ongoing Augmt Current Reserves Trajectory
$ In Thousands
CREPAC
IMPAC CREIEC
CREPAC Federal
Political Action Committees
Membership Dues$184
$115 (62.5%)
Support Programs
$69 (37.5%)
Support Political Activities
Membership Dues and Assessments
Percentage of MembersMaking RAF Contributions
28.3%
33.0%36.0%
33.0%
29.0%26.4%
21.8%20.0%20.0%
12.0%11.0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
C.A.R. Membership Dues
Housing Affordability Fund(HAF)
$10 and up
VoluntaryContribution
Voluntary Contribution
Membership Dues Assessments & Voluntary Contributions
REALTOR® Action Fund(RAF)
$1 to $5,000
C.A.R. MemberDues $184
IAF$10
RAA$49
C.A.R. Dues$115
PAF$10
Political Activities FundPolitical Activities
Fund(PAF)$10
IMPAC-LocalMatching
10% of RAF
IMPAC- StateMatching
5% of RAF
RemainingBalance
Political ActivitiesFund support
Issues Action Fund(IAF)$10
Issues Action Fund
IMPAC/CREPAC/LCRCProgram Cost
Remaining Balance
Allocate 30% toLocal IMPAC
Allocate 70% toState IMPAC
REALTOR® Action Assessment
REALTOR® ActionAssessment
(RAA)$49
Program funded byRAA
CREPAC45%
LCRC30%
CREIEC25%
REALTOR® Action Fund(RAF)
$1 to $5,000
Personal Contribution
REALTOR® Action Fund
LCRC30%
$1 to $200
PersonalCREPAC Federal
70%$1 to $200
RAF $1 to $200
RAF Personal$201 to $5,000
to CREPAC/FED
REALTOR® Action Fund(RAF)
$1 to $5,000
Corporate Contribution
REALTOR® Action Fund
LCRC30%
$1 to $200
CorporateCREIEC
70%$1 to $200
RAF $1 to $200
RAF Corporate$201 to $5,000
to CREIEC
RAA ($49)$7,358,000
CREPAC State$2,687,979
CREIEC$1,493,322
RAF Receptions $175,000
Fed Gov’t Relations (Officer’s
Lobbying Trip) $25,100
Campaign School
$50,000
RAF Fundraising/RPC
$663,500
Program Costs$1,384,713
2012 REALTOR® ACTION Assessment Allocation
LCRC$985,592
IMPAC Local$806,394
PAF Field Program
$4,313
47
70% of RAA after program costs 30% of RAA after program costs
C.A.R. Electoral Services$39,700
Member Mob Phone App
$35,000
CommunicationsMembership
Value Campaign materials$20,000
CREPAC Local Candidate Field
Program$372,100
Based on 2012 Budget
RAA ($49)$7,202,400
CREPAC State$2,709,405
CREIEC$1,505,225
Fed Gov’t Relations (Officer’s Lobbying Trip)
$25,100
Program Costs$1,181,500
2013 REALTOR® ACTION Assessment Allocation
LCRC$812,822
IMPAC Local$993,449
48
*70% of RAA after program costs *30% of RAA after program costs
Based on 2013 Proposed Budget
CREPAC Local Candidate Field Program
$375,300
C.A.R. Electoral Services$39,500
CommunicationsMembership Value Campaign materials
$20,000
RAF Receptions $197,100
RAF Fundraising/RPC$524,500
Political Fundraising
0
2
4
6
8
10
12
14
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012August
RAA
IAF
PAF
RAF
3.84.6
5.8
$ Millions
6.6
California Association of REALTORS ®
7.4 7.4
5.85.1 5.0
11.812.2
FUNDS 2013 B 2012 P 2011 Actual 2010 Actual
RAF 1,500,000 1,550,000 1,561,700 2,782,700
RAA 7,202,400 7,358,000 7,581,200 -
IAF 1,469,900 1,481,300 1,548,000 1,621,200
PAF 1,469,900 1,481,300 1,548,000 1,621,200
TOTAL 11,642,200 11,870,600 12,238,900 6,025,100
Political ContributionRevenues
Political Action Committee- Fund Balance As of August 31, 2012
CREPAC 7.0$
IMPAC 8.8$
CREPAC/Federal 0.6$
CREIEC 2.3$
Total 18.7$
California Association of REALTORS ®
Million
FOUNDATIONS
ScholarshipEndowment$1.2 million
EducationEndowment
$96,929
Housing Affordability Funds Funds Available $2.9 million
FoundationsAs of July 31, 2012
$4.2 million
2.0
2.8
2.4
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2.4
2.7
3.0
C.A.R. Contribution Direct Contribution Contribution through Dues
$ Millions
Housing Affordability FundSince Inception, as of July 31, 2012
-
0.3
0.6
0.9
1.2
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 JulyYTD
NAR ContributionC.A.R. ContributionContribution DirectContribution-Dues
$ Millions
158
500
500
500500
500
420
240208
317286
300
415 189
189209
265305
280
216
178
Housing Affordability Fund
162
194
116
155
Questions?