President’s Report
at December 11, 2008
Annual Meeting

This has been a very challenging year, to say the least! We have all watched TV news as the economies of countries all over the world have gone into recession. LCS has had its own financial downturn as well, which the board of directors addressed by downsizing the payroll and increasing dues by 100 pesos per person per year. These actions resulted in petitions of recall being circulated by some disgruntled members and a subsequent recall motion being made and voted on at an extraordinary membership meeting just prior to this one.

° The current board of directors, which took office in January 2008, included the first senior director of finance LCS had in more than 18 months! The previous one resigned in early 2006 and no replacement was appointed for the remainder of his two-year term. Rick Feldmann began evaluating LCS financial matters almost immediately and recommended changes that the board discussed and adopted in the first half of 2008. Among them were:

1. Cash controls were tightened in February. A new process for collecting and securing daily receipts into a locked box was inaugurated. Daily bank deposits of the contents of this box were begun.
2. Controls were tightened on discretionary spending, such as office supplies and items for sale on the patio, like books and maps.
3. Non-budgeted item spending was frozen at least until the financial status of the organization can be evaluated in January, 2009.
4. Efforts begun in 2007 to rein in Buildings and Grounds expenditures continued. Some vendors were replaced with more reliable, economical ones and only necessary maintenance and repair work was authorized.
5. Having discovered we had approximately 200,000 pesos in unpaid advertisement invoices from the 2008 directory, we determined that advertisers in the 2009 directory would have to be fully paid AND have all artwork completed before the cutoff date in order to be included in the 2009 directory. This lost us some ads this year. But in the long run we are far better off insisting that everything be paid ahead of the print date.
6. Following the advice of our Mexican accountant, we put a stop to collection of IVA from directory advertisers and made arrangements with Mexican authorities to resolve this issue from years past. Some advertisers were less than pleased with this change, but now we are fully in compliance with Mexican law.
7. We developed a multi-layered approval process for special requests from Student Aid recipients for help buying laptop computers. Coralie White, program coordinator for LCS Student Aid, ensured that the student paid a significant portion of the cost through savings or personal loan from a relative.

Next the LCS Education Director evaluated the need for the laptop for the individual. The LCS treasurer then verified that the Student Aid budget covered the proposed expenditure. Lastly, the LCS President authorized the purchase.

1. After our special Student Aid donor became ill in mid-2008, we froze the number of students aided by his generosity at current levels. LCS will be able to continue supporting these worthy students even though this benefactor passed away in October, 2008. All of those students attended his funeral in Ajijic.

° We created extra fund-raising efforts and activities, such as the quilt raffle that netted over 11,000 pesos for the library at the Craft Fair, and new T-shirts using beautiful designs by Luis Enrique, star of the LCS Saturday art class, are now being sold on the patio.Your board also instituted charging non-LCS groups for use of LCS facilities for regular meetings as well as for special events.

° We netted a record amount of revenue from this year’s July Fiesta with over 100 fewer people attending the event than we had last year. We had more and better items donated for the Silent Auction, two stages for entertainers that encouraged people to stay longer, more things for people to do. We also spread the event more evenly over the front and back parts of the grounds, so people felt more at ease and less crowded in the many seating areas available.

° We established and filled key positions long needed at LCS:

1. Defined, advertised and filled the new Office Administrator position. Terry Vidal started work December 01, 2008, and brings with him over 20 years of experience working for non-profit organizations in the USA plus an aptitude for computers and database management. With his help, in 2009, LCS will finally be able to replace the antiquated membership database with one that truly works for us.
2. We established the first Public Relations Committee LCS has had for a long time and recruited the PR Director. They have conducted a member survey, which resulted in such innovations as the Wi-Fi for members trial now being conducted.
3. We achieved an all-volunteer library with cross-trained people enjoying performing many tasks they have never done before under the leadership of the new library committee that includes several retired library professionals who freely share their expertise.

          4.  We recruited the first LCS Audit Committee ever and they have begun their                    
                work. You heard the initial report from the chair of that committee, Sherry
                Butler, earlier in this meeting.

° We expanded member value-added services such as the online bulletin board, the ability to join or renew membership in LCS online from anywhere in the world using Paypal. This week we began the month-long trial of Wi-Fi for members available free of charge on the LCS grounds.

° Could we have done some things better? Of course! In hindsight, we should have:

1. Specifically reported to members that budgeted revenues, especially membership dues and sales in various areas, were falling short of projections; that they were dipping lower than  they typically do in the low season. We are now publishing monthly financial reports and board meeting minutes on the LCS website for the first time in history. Archived reports are also available there.
Printed copies are also posted outside the Services Office.

2. Taken drastic actions such as downsizing the payroll done in early October much earlier in the year. The board along with the LCS treasurer kept watch on the financial reports from month to month, hoping that the downward trend would improve due to the less drastic actions we had already taken. But we saw it continue. This process should have been cut short and significant action taken earlier in the year to drastically reduce monthly expenses. We were guilty of the very human hope that we could all be spared having to impose such draconian measures. Downsizing the LCS payroll was something none of us wished to do, that we agonized over, since it involved doing away with the jobs of people who we knew needed to make a living. By September, it was clear that we could no longer delay making these painful but necessary decisions, not if we were to meet our obligations to the membership as LCS board members.  The fact remains that LCS would be in a better financial position today had we made and implemented these decisions earlier.

We have learned from our mistakes that we should face facts sooner and more bravely. The entire board of directors is committed to effectively communicating where LCS stands to you, the LCS members. Divided as the membership has been for the past few months, we will all suffer and LCS as an organization will suffer most of all if this divisiveness continues. But together we can all move forward to meet the challenges of the next year, whatever they may be.

--Nancy Creevan
LCS President