By Rich Pendergist
Executive Vice President, USUA
For those of you I haven’t yet met, I’d like to introduce myself. I’m Rich Pendergist, the new Executive Vice President of USUA, and the guy responsible for management of operations. If you read no further than this paragraph please know that the leadership at USUA has heard you. There are some current problems within USUA and while there is reason for a call-to-arms, there is no reason to believe the fort is going to collapse today. USUA is here to stay. I have hit the ground running. Normally I would spend some time telling you about my background, but there are folks out there who are very concerned about USUA. So I would like to jump in and report what I’ve learned so far about what is happening to our organization.
The USUA Board of Directors and I are well aware that we take a risk in providing an accurate appraisal of the issues confronting USUA today. The problems facing USUA are not insurmountable, but in order to solve them, they will require time and effort from everyone. I hope, even after you have read all this, you will continue to support USUA as it works to promote, protect and preserve your right to fly for fun.
First, if you are serving USUA in anyway, I am pleased more than you know. USUA needs you now more than ever. Specifically, due to our monetary situation, the possible impact of Sport Pilot, and the dissatisfaction of some members, I think that the next few months will determine the ways in which USUA will continue to operate. I’d like to touch briefly on each of these areas, with the hope that the exchange of information will help everyone understand the nature of the problems. For the staff, the Board and me, these are our top priorities.
Our financial situation. USUA has a debt of about $40,000. You may have heard a figure higher than that, but we have already managed to pay down our backlog of unpaid bills. (Note: For a more up-to-date look at how we are doing, return to this web site periodically.) Like many other organizations in the country, the combined wallop of 9/11 and a poor economy has meant fewer members, and fewer members means less revenue.
So how did it happen? Since about the time of the Sport Pilot NPRM, which was released February 5, 2002, membership has been declining. Revenue/income have slowed while efforts to maintain the same levels of service and program operations caused expenses and liabilities to increase. In order to meet operational obligations and to keep the doors open, it became necessary to increase the use of certain lines of credit, for cash and with certain vendors and creditors. The use of bank loans and other forms of borrowing ensued at an increased rate.
Membership is down but not completely stalled. The declines in membership, pilot and aircraft registration, and BFI and AFI registrations have all taken their toll. In a member-based organization, how the membership activities go, so go the revenues. I believe what is causing the decline in membership is the combined impact of the economy, 9/11, member dissatisfaction, and the proposed Sport Pilot/Light-Sport Aircraft programs.
Sport Pilot. Many potential pilots are waiting until Sport Pilot is finalized before they decide to take up our sport and join USUA. Some members are choosing not to renew, either because they are not sure that USUA will be relevant after Sport Pilot is finalized or because they were unhappy with our relative inability to influence how the NPRM finally came out and the way Sport Pilot could change things.
While there is no way to measure accurately, the Sport Pilot proposal is one of the biggest reasons for a decline in membership. As I mentioned earlier, we’re losing members and potential members because of the uncertainty about Sport Pilot. While there is every reason to believe that FAA really is going to protect FAR Part 103 operations, many in our community are stalled with indecision and are simply adopting a wait-and-see attitude about buying an ultralight, as well as learning to fly.
Member Dissatisfaction. Among some of our members there has been dissatisfaction with USUA for some time. Much of that dissatisfaction is due to the issues surrounding Sport Pilot and the negative press generated about personnel actions the Board of Directors has made. I don’t want to dwell on problems of the past within USUA, but I think that anger about the personnel actions has a lot to do with the Board being unable to tell members exactly why they made the decisions they did. Some members feel they have a right to know the details. However, virtually every organization, association, and corporation in the country does not discuss personnel actions. Personnel actions are confidential. A former employee can speak freely, but the organization is at great risk if it responds or tries to clarify. The Board is not willing to go against both their attorney’s advice and accepted management practice.
So that is the bulk of the bad news. While I don’t mean to minimize the seriousness of the problems, there is no need for investigative probing and extended in-depth analysis of the financial problems. USUA simply has not been making enough money to make ends meet for sometime now. Is USUA currently in trouble? Honestly, yes, it is. Is it time to close the doors? No, it is not. We must act just like we do when the engine quits and it gets very quiet in our cockpits. We learn early on as pilots that the first thing we do is to continue to fly the airplane and adopt the mental attitude that there is always one more thing we can do to land safely, or at least minimize any impact.
We have already started. We have pushed through the first phase. Coming to grips with the reality that we have a problem is the first step toward remedying things. The Board of Directors has already made some very tough decisions and taken some very dramatic steps toward returning USUA to solvency. We‚ve been doing a lot to get a handle on the finances. USUA has cut expenses in the past year. We laid off two staff members last year (ironically, one was me). In January, we moved the office to save rent.
Members of the Board are no longer reimbursed for any of their expenses (not even for going to Board and annual meetings) and recently, the staff voluntarily took a 5% pay cut, with one full-time staff member going to a 4-day work week. The staff, Board, and I are searching for more ways to cut expenses and for ways to raise additional revenues. One way is to increase the size of our membership and we will certainly need your help with that.
How do we move forward? I believe a large part of the answer resides in how USUA can best serve our members. We need better communication. For starters, the Regional Representative program is being energized. Open and positive communication between the representatives and members in their respective regions is more valuable to USUA than ever before. Also, we need to go after every opportunity to provide services to those members who will continue to operate under FAR Part 103.
Some good ideas have come out of all this, some of which we are already putting into effect. For instance, the recently revised by-laws creates an ex-officio Board position for a Regional Representative, chosen from a slate of nominees presented by the representatives themselves. Chairman of the Board Lew Clement has formed a committee, headed by Region 9 (Northwest) Representative, Vic Worthington, to investigate insurance options for the association. There is a renewed sense of commitment that has come about by bringing problems into the light of day.
I wish I had a simple resolution to all of this, but I don’t. We are streamlining our headquarters operation and doing reality checks on everything we do. We need to address all critical areas of our programs - such as the lack of insurance - with a sense of new energy and in full view of our members. We must be responsive to FAA and to our members by getting timely and accurate information to them. This takes time and a certain amount of creativity. So far, I have split my time between working on strategies to keep USUA moving and the development of new ideas for incentives that will cause an existing member to renew and a new person to join us.
We have a team comprised of a solid Board of Directors with an abundance of expertise and energy and a dedicated staff that has continued to perform selfless acts of service beyond the call of duty. Even amidst distractions, the staff has increased their efforts in getting products and materials out the door. The phones are still ringing from people across the country wanting information, memberships, renewals and merchandise, and the staff is handling it all. We have a team of professionals comprised of our CPA, bookkeeper, and attorney. Most significantly, we have an abundance of well-meaning members who want to see USUA grow once again.
I hope you are pleasantly surprised by our new web site. USUA AFI Bob Comperini has volunteered his time and expertise in making it dynamic, informative, and current. As you can see, he has already made great strides in that effort.
Right now I’m jumping in to learn all I can about USUA’s role in the status of proposed Sport Pilot and Light-Sport Aircraft programs and their implementation. Sport Pilot team leader, Sue Gardner, has been incredibly welcoming and helpful in bringing me up to speed. Sue says the goal is to have the rule in place before the congressional mandate of September 2003. I am asking the Regional Representatives, as well as each member, to let me know your specific concerns about Sport Pilot. This will assist USUA in providing meaningful and helpful services, both during any transition and afterwards.
I am still relatively new to the operation of USUA and I am continually looking for ways to cut expenses. For instance, we now pay $400 per month for a Pitney Bowes postal machine we don’t require. I am negotiating a way out of that contract. We are also actively looking for a way to cut the cost of our office space even further. We are making progress.
USUA does have good things brewing. Recently, the request for the Weight Exemption for Safety Equipment has been hammered out by USUA, EAA and ASC and, when approved by the directors of each organization, will be delivered to FAA. This exemption will have a positive effect for those Part 103 operators who have overweight vehicles because they chose to enhance their safety through the use of brakes, self-starters, and enhanced landing gear. Currently, there is no definite schedule for when FAA may act on this exemption request. I'll report on this further as information becomes available. In addition, there are individuals who believe competition is an program that needs development. I am pleased to announce that Dave Hempy and Paul Wells have accepted the positions of FAI Delegate and Alternate Delegate, respectively. I look forward to working with both of them as USUA members become more active in national and international competitions. I am encouraged by their willingness to invigorate the competition community and possibly make this a revenue-generating entity of USUA.
So what can you, as a member, do to help? Obviously, sending a donation will help. Today we have already received donations from two clubs and numerous well-meaning individuals. That money has been put in a special account and is dedicated to reducing USUA’s debt. It will not be touched until a request is presented to and authorized by the Board of Directors.
Renewing memberships and BFI/AFI registrations will help significantly. One member has informed me that he intends to raise money by holding a plane wash at his airpark. Please be patient. USUA is not going to disappear. On the contrary, with your help, there is every reason to believe that USUA will rise to the occasion.
I believe it is vital for everyone to have fun. Wherever you are, become vocal and visible to those around you. There are potential members waiting to be invited to join us. To attract them we must make the first move. Go out and have some fun, let everyone know about it, and then invite them to join us. They won’t be able to stay away!
Note from Webmaster: The USUA Bylaws can now be viewed online. See the About USUA page for details.