First, I hope that everyone is starting to enjoy life in a way that somewhat resembles what our lives used to be. My family just took a short trip to Portland, and it was wonderful to stay at a hotel without having to wear a mask. Hopefully, you and your families are also enjoying similar experiences.
It’s a busy time of year, at least in terms of WSBA budgeting. We have just wrapped up our reforecast for the current fiscal year while launching into planning for the next. I have good news to report on both efforts.
CURRENT AND FUTURE BUDGETS
The “reforecast” is what we do mid-fiscal year to compare budgeted revenues and expenditures in each cost center with actual revenues and expenditures for the fiscal year. The reforecast shows us how accurate we were as to our original budgeting, while also accounting for expenses and revenues that were not expected at the time the annual budget was finished for FY 2022.
The reforecast shows a positive variance of $324,716. At a high level, this positive variance is due to the fact that we are forecasting that our revenue at the end of the year will be $94,623 more than originally budgeted and our expenses will be $230,093 less than originally budgeted. This reforecast includes a project that is forecasted to cost $75,000, to reduce, consolidate, and remodel existing WSBA office space to accommodate the significantly reduced number of staff who continue to work in the office. It also includes an estimated $3,300 expense to list for sublease part of the WSBA office space that is no longer needed in light of the number of staff who will continue to work remotely either full or part time. Given the fact that our annual budget is almost $25 million, a positive variance of $324,716 shows that our original budget was very accurate, at least to the midpoint of our fiscal year.
The positive variance in the General Fund is the result of purposeful and vigilant shifts in expenditures as we have navigated many unknowns during the pandemic. This positive variance should be credited to the Board of Governors and WSBA staff working hard together to be fiscally responsible for our members.
Of course, budgeting never stops! Just as we completed the reforecast, we launched into the heavy work of building the WSBA’s FY 2023 budget. The Board has already set steady license fees (no increases) for all license types, and we are in good financial stead to maintain and carefully grow operations while keeping reserve funds in a prudent range. Looking ahead, however, one of the Budget and Audit Committee’s challenges will be to prioritize and fund long-range goals and robust member services/benefits, all while trying to keep attorney member license fees from increasing.
NUTS & BOLTS: FINANCES AS OF MARCH 1
We have closed the books through February (five months into the fiscal year) with a net increase to the unrestricted General Fund of $1,383,823. This positive variance is primarily driven by higher-than-anticipated license fees, Pro Hac Vice application fees, and MCLE fees. Part of this positive variance is also due to the timing of those payments, which cannot be expected to continue through the end of this fiscal year. It should be noted that revenues are currently well ahead of expenditures for the fiscal year. This is consistent with the WSBA’s typical budget cycle. We are always revenue-heavy the first half (license season) and expense-heavy the second half (when many service contracts and expenses come due) of each fiscal year. That is an expected pattern; we expect to see expenses outpace revenue in the final months of the fiscal year. At this time, we forecast a positive variance of $250,000 by the end of this fiscal year.
If you would like more information about the meeting times and materials for the WSBA Budget and Audit Committee, please visit www.wsba.org/connect-serve/committees-boards-other-groups/budget-audit. In addition, you can find the WSBA’s annual report and the monthly financial information at www.wsba.org/connect-serve/committees-boards-other-groups/budget-audit.
Overall, I am proud of what we have accomplished, and what we are projected to accomplish, this fiscal year. As I write this, we are expecting to finish the year with revenues and expenses close to neutral, all while navigating a pandemic, still finding ways to expand member services, and without any increase in lawyer license fees. It’s my hope that as the year progresses we will do better than expected and beat our reforecast in terms of reserve spending. My goal is for the WSBA to have another year of net increases to the unrestricted General Fund. I would like to thank the Budget and Audit Committee members, WSBA staff, and various stakeholders for their hard work and input.