Treasurer's Report

In fiscal year 2022 the Harvard Club of Boston strongly recovered from the effects of Covid-19. Fortunately, membership slightly increase by 166 net new members with returning and new members balancing our historical attrition.

Our management team continues to do an extraordinary job. In perspective in fiscal year 2022 revenues totaled $14,207,494 up 78% from $7,971,131 in fiscal year 2021. Improvements occurred in all areas. Membership dues increased $162,475 or 2.7%. Food and beverage revenues increased $4,835,746 or 441%. Room revenues increased $960,237 or 343%, Parking revenues increased $228,825 or 84% and athletics revenues increased $68,020 or 33%. Consequently, operating income before fixed expenses and income taxes increased $1,377,198 or 403%. Fixed expenses decreased by $519,160 of which $257,659 was lower depreciation expenses. Taxes also decreased by $1,010. Entrance fees increased $247,554 or 95% During the year, our PPP loan of $1,901,225 was forgiven and we received an additional $124,061 to the $1,626,340 received in fiscal year 2021 in employee retention credits Overall, the change in net assets before pension related charges was $2,408,400 compared to a loss of $135,468 in fiscal year 2021

We began the year with $3,808,589 in cash and ended the year with $4,667,305 without utilizing our line of credit. With sensible cost controls, working capital management, and limited capital expenditures the Club hopes to end fiscal year 2023 with a positive cash balance again without utilizing our line of credit. Long term debt used to fund prior renovations totaled $8,055,273 compared to $8,611,925 in 2021.

Our pension fund has an underfunded position of $4,466,482 due to changes in actuarial assumptions regarding the present value of plan benefits, portfolio performance and contributions. This year the pension fund value decreased $1,638,746 to $7,860,404 with depressed market performance. The benefit obligation also increased $2,540,559 to $12,326,886. Consequently, the net Retirement Obligation increased to a negative $4,466.482 in 2022 from a negative $287,177 in 2021. The effect of this is seen in the audited financial statements which show pension related changes other than net periodic pension cost of $4,506,758 compared to a gain of $558,660 in 2021. This year the financial markets experienced a major reversal, and our fund was down 17 25% on a net basis Moreover, the pension committee in discussions with its consultant also decided to significantly revise the assumptions for calculating the liability and this resulted in reducing our discount rate from 7% to 4 45% and our expected rate of return from 7.5% to 6.0% (the fund’s 28-year historical weighted average annual compound return is 6.1%). The combination of the change in assumptions and market losses resulted in this significant increase in our unfunded position.

Both the retirement plans for union employees and all other employees have ceased benefits accruals

We still make payments into the pension plan to make up for actuarial deficits and we have additional costs for a 401K Plan the Club instituted to mitigate the changes in the pension plans. During 2022 and 2021 there were approximately $166,000 and $142,000 in employer matching contributions, respectively.

Fiscal year 2022 was a comeback year for our Club which we hope will continue in fiscal year 2023. Our management team has been instrumental in managing cash, controlling expenses, and maintaining the financial integrity of our Club while restoring the traditional programs and activities at the Club. Finally, this was a year of an important transition as we welcome our new CFO, Sara LaWare who succeeds Michael Jenkins who retired after fifteen years of tremendous service to our Club.

Respectfully Submitted,

Michael F. Cronin ’75, gb’77 Treasurer