October 2002 - Dues

Dues invoices will be mailed this month

 

Skip Weiler
Treasurer

Let me explain some of the increases
When your invoice for 2003 membership renewal arrives this month, it will include CBR Local Dues of $167 (a $5 increase per the 3-year stepped dues increase approved in 2000.), Ohio Association dues of $100 (a $12 increase over this year), National Association Dues of $88 (no change), an Annual MLS Member Fee of $197 (increase of $22) and a keypad fee of $85 (no change) if you lease an electronic keypad. Assuming your invoice includes all the above, it will total $633 for the year.
Let me explain the increases…

CBR Local Dues
In 2000, a dues increase was approved to be implemented over a three year period. This is the 3rd year of the approved increase which was to be for $5.

OAR – State Dues
During the recently concluded state convention, Directors composed of representatives from all the Realtor® Boards in Ohio approved a $12 dues increase raising the state portion of your membership dues from $88 to $100. The increase will enable the Ohio Association of Realtors® to balance the budget as well as to establish an Affordable Housing Forum, a Realtor® Safety program and a toll-free technology hotline whereby members can access a qualified technician for assistance on everything from what type of computer to buy to how to install software.

Annual MLS Member Fee
Our MLS has operated as a separate for-profit corporation, completely owned by our Board, since 1971. It operates under the leadership of the Multiple Listing Committee, elected by the participating broker members of MLS; and the MLS Board of Directors, elected by the general membership of the Board.

Through the careful planning of leadership over the years, our MLS has grown self-sufficient. The MLS has cash in the bank to pay its bills, and has put aside cash reserves that are needed from time to time for the purchase of computer systems or software that are so necessary to meet the needs and demands of our members. Most members know our MLS Committee has been very diligent in selecting and converting to great new systems such as the new web-based Tempo system this past December. Such systems come at a real cost.

When you consider all the costs associated with these systems, including the computers, communications and cutting-edge web-based software; having a tech staff and trainers available to 5,400 members; and the needed administrative support it's not hard to believe that the total annual MLS operating budget can approach nearly $2 million.

Paying the Costs
Obviously the MLS pays the costs by assessing fees to the members. The $175 Annual Member Fee that we all pay has been providing approximately 47% or nearly half of the needed support. The Office Fees that are charged to only the participating brokers each month have been providing the next largest percentage of support at 30%.

Broker		Agent
Current Fees
Annual MLS Member Fee	$175	$175
Office Fees 12 mo.@$63	756
Total Fees	$931	$175
2003 Fees
Annual MLS Member Fee	$197	$197
Office Fees 12 mo.@$63	756
Total Fees	$953	$197

The balance of support has been provided through specific user fees, such as: sale of member software needed to access our MLS system; sale of weekly MLS books to those members who do still rely on the printed book; photography fees for special photo services; new member applications and Internet (realtor.com) royalty income.

Trends
A year ago the leadership determined that MLS had the reserves to absorb the initial costs of converting to our new MLS system, and also to operate for at least the first year within the existing fee structure. During recent months, in planning for 2003 budgets, both our MLS Committee and a special Board of Directors Task Force have evaluated cost studies with projected costs for 2003, and recognized some trends that affect how MLS will pay the bills for 2003. Some of these trends include:

• Members are no longer required to purchase software from MLS to access the system. Since MLS is now a web-based service, PC Access software which used to cost each member $125 to $150 is no longer needed.
• Weekly MLS books are in slow but steady decline. Be assured that the MLS Committee has no intention to stop the MLS books, but as their use declines, so must the dependency on this area of income.
• The number of participating broker offices in the MLS has slightly declined, partially due to mergers.
• Internet royalty income (from realtor.com) has declined.

Taking Measures
The MLS Committee has consistently avoided raising member fees any more than has been necessary to cover costs. In fact, history proves that MLS member fees have not increased in 5 years, even though the cost associated with the system conversion in December 2001 created an MLS operating loss for 2001, and the effect of the trends identified above are creating an operating loss for 2002.

The MLS cost study and projected budget include some cost saving measures. Among them, the MLS Committee closely examined the area of photography, a significant expense at $224,000. It is estimated that by requiring an entry during member loading of the listing data to order a photograph, the MLS can avoid unnecessary photos, thereby saving as much as 25% of photography costs. In the near future, look for this change in the listing data load procedure.

The MLS Committee also felt that, when establishing the fees to be assessed the members, that they should lower from 11% to 4% the profit margin that is added to the cost of services (an amount historically reserved for the purchase of future MLS systems and an operating reserve).

A combination of these trends that affect the MLS along with the cost saving measures led the MLS Committee to make a recommendation to our Board of Directors for a fee change effective January 1, 2003. Subsequently, the Board of Directors at their September meeting adopted the following recommendation for a fee change.

Keeping Tabs
To stay aware of the financial condition of the Board and MLS, your Officers and Board of Directors review each month's financial reports. And each year they receive a detailed audit performed by an outside CPA firm selected for it's expertise with associations and member-based organizations.

Any member, upon request, may review the financial statements, audit reports and tax returns. Such reviews should be arranged through your Treasurer, or through your Chief Executive Officer, Larry Metzger.

Your Officers, Board of Directors and MLS Committee sincerely invite you to attend the upcoming Annual Business Meeting, where you can learn more about the future of MLS services and how your leadership keeps your service operating.

This year's Annual Business meeting will be held at 9 AM on October 24th at the Aladdin Complex.

Note
As in past years, leadership has extended to members the privilege of paying their membership renewal in installments. Check your invoice for the minimum amount that must be paid by January 2003.

Important Tip: Many members gain a tax deduction advantage by paying their association and MLS dues by December 31st each year.

Dues notices will be mailed to members around mid October. Payments are due January 1, 2003. The Tax Reform Act of 1993 made the portion of dues paid to organizations which is spent to lobby the state and federal government nondeductible for income tax purposes. For the year 2003, the nondeductible portion of OAR dues is $18 (18%); NAR dues is $13 (20%) and CBR is 0% as CBR does not lobby state and federal government.