The Minutes of the
73,
Jay, K0QB
================
Minutes
of the Administration and Finance Committee
of
the American Radio Relay League
Pursuant to due notice, the Administration
and Finance Committee of the American Radio Relay League, Inc., met at 8:30 AM,
Saturday, April 26, 2003, at Kansas City Airport Marriott Hotel, Kansas City,
MO. Present were the following committee members and staff: Directors Jay
Bellows, K0QB, Chairman; Walt Stinson, W0CP; Art Goddard, W6XD; Frank Fallon,
N2FF; Dick Isely, W9GIG; Joel Harrison, W5ZN, First
Vice President; Jim McCobb, W1LLU, Treasurer; Vice
Director Jim Fenstermaker, K9JF, Committee Secretary;
Dave Sumner, K1ZZ, CEO; Mary Hobart, K1MMH, CDO; Barry Shelley, N1VXY, CFO; and
Chairman Bellows welcomed the attendees to
the meeting. The agenda was reviewed and approved by committee members.
1. First Quarter Financial Update
Mr. Shelley discussed the first quarter
financial summary. The fiscal indicators are on track with financial
projections. There are no emerging trends that cause any concerns so far this
year. Overall expenditures a bit under budget YTD.
One area that bears watching is voluntary contributions, in particular the Defense of Frequencies fund
and WRC-03 follow up in progress now. We are also keeping an eye on the
Education & Technology fund, which is running behind projections. There is
enough to fund the program for 2003, but in 2004 we may not be able to fund
equipment for many additional schools.
Advertising revenue is a bit lower than planned
but staff is working on different marketing efforts with advertisers and April
revenue should bring us back on track. May QST
included a special 8-page
At mid-year, we will reforecast the budget
for the remainder of the year.
2. Investment Portfolio Review
Mr. McCobb
discussed the investment portfolio. He is not optimistic about the future
direction of the investment markets. The portfolio indicates market vs. book
value is different by $884,000 (–7.6%).
YTD cash-out is approximately $500,000 including $350,000 for pensions $150,000
for general operating cash. He expects another draw of $300,000 later this year
for operations. This is not a favorable trend. We need to watch changes in cash
(cash flow) to better assess the financial health of the League in the long
term. There was some discussion about how Life Membership dues are invested and
the cost of servicing the Life Members. The plan normally anticipates using
$500,000 per year from investment income for that purpose.
Mr. Stinson discussed the tradeoff between
the portfolio’s corpus and the amount of money that is taken from
interest and dividends earnings. He believes thresholds should be placed on the
overall operation of the organization and these need discussion during the
strategic planning sessions in a quantifiable manner that is proactive rather
than reactive. Mr. McCobb recommended a review of
trends analysis for drawing down investments, noting that long-term it is not
healthy for the League to continue to draw down reserves. The Board and
Management should set a specific target floor amount.
Mr. Stinson noted his continuing optimism
but he also feels the short-term trends are not positive. Mr. Shelley noted
that while the market has given us “hits,” we have lived within the
3-year plan regarding the updates to the computer system, startup of the
development program and other long-term investments.
Mr. McCobb
recommended that the A&F direct management to produce a baseline set of
financial projections for the three year period beginning
Motion : “Management is hereby directed to prepare a set of financial
projections and related assumptions for the three year period beginning
The motion passed unanimously.
3. Development Update
Ms. Hobart described the first quarter as
“challenging”. The overall mood of the nation has had an impact on
giving. This has been reflected in contributions to the Defense of Frequencies
and Education & Technology Funds. Given the continuing scenario, there is
movement beginning to happen but it will take time. Relationships we are building
will allow this to happen. The donors’ reception in
The grants from the Corporation for
National and Community Service and UTC Corp. for emergency communications
training are on target. In addition to providing needed training to our
volunteers, these grants give us visibility and credibility.
Development and Sales/Marketing meet
monthly to coordinate efforts with regard to membership renewals and Diamond
Club solicitations. The current strategy is to incorporate a Diamond Club
solicitation with renewal notices of likely prospects, rather than mail them
separately. Six people now qualify for Maxim Society (lifetime donations of
$10,000 or more), and there are 27 commitments to
The Committee reviewed further work on a
proposal for the structure of an ARRL Endowment. The proposal calls for six
broad funds (Spectrum Defense, Education, Research & Technology, Historical
Preservation, W1AW and General Fund). With the consent of the donors, the broad
funds will incorporate the existing smaller funds. The consolidation will
assist ARRL in better promoting the development program and give future donors
a way to more easily select an endowment that closely matches their interests.
The board can determine the use of unrestricted contributions based on management
recommendation. There was some discussion of the names of the funds, and in
particular the thought that the Spectrum Defense fund should better describe
antenna defense and other advocacy issues. Directors Isely,
Fallon, and Bellows will discuss this prior to the July meeting.
Mr. Stinson asked about the relationship
between development and the foundation. Discussions regarding integration are
now in order. The A&F and Foundation Board should discuss and give a report
to the ARRL Board in a future meeting.
Mr. Sumner discussed the power line
carrier (PLC) systems FCC Adopted NOI and the issue of spectrum defense. It
appears to be a “more friendly
environment” to power line communication. This has potential to be a
major problem. Frequencies affected are 2 to 80 MHz. Ed Hare anticipates travel
to a PLC test site for review and measurement of the potential interference
issue. Results of field tests and further FCC activity on the PLC issue may
provide a fund raising opportunity for spectrum defense in the coming months.
4. Employee Insurance Benefit Proposals
Significant
changes are proposed for health and dental plans. An RFP was requested from
seven companies and three replied. Current benefit levels and contribution
strategies are “generous” in relationship to other firms. With the
same benefit levels, the current carrier medical premiums would increase
approximately 19%.
The proposal
includes a movement to a more “standard” program for medical plans.
It will provide a core plan to employees and give them additional benefit
choices. Any difference in premium for coverage beyond the core plan would be
borne by the employee. Also included is a stratification of the
employee’s share of premium payments based on employee base earnings. This
proposal brings the ARRL medical cost and contribution methodology in line with
similar size companies in CT. Mr. Shelley noted a goal of ARRL contributing 75%
of the premium and the employee contributing 25%. In addition to changes to the
medical plan, changing providers can reduce dental costs. Based
on these changes to the benefit plan, the cost that the League will absorb
changes from a 19.3% to a 5% increase.
Mr. Shelley was
asked to review the costs for a “Flexible Spending Plan” to allow
for employees to be eligible for pre-tax savings on medical and other payments.
The following
motions were adopted:
Moved that the A&F committee
recommend to the Board that ARRL determine the community benchmark for employee
benefit cost as a percentage of salary.
Moved by Mr.
Harrison, Seconded by Mr. Isely. Passed unanimously.
Moved that the A&F committee
recommend that the ARRL Board establish a policy moving the percentage share of
employee medical and dental benefit costs toward the community benchmark over
the next two years. Moved by Mr. Harrison, Seconded by Mr. Isely. Passed unanimously.
Moved that the A&F committee
recommend adoption of the health care benefit proposal of the insurance
subcommittee and instruct staff to execute the appropriate contract.
Moved by Mr. Isely, Seconded by Mr. Harrison. Passed unanimously.
5. Pension Plan Investment Proposal and
Discussion
We continue to await information from
Massachusetts Mutual
6. Computer Project Update Report
The status report from Alan Cohen was
distributed and discussed by Mr. Shelley.
·
Accounting - It is installed, running, and being used!
·
·
E-Commerce – Klein implemented the native Siebel
e-commerce functions, but the resulting system is not satisfactory. They have
proposed moving to an implementation using JAVA software and are discussing how
best to meet requirements with staff. This will delay implementation of net
commerce, and the newly estimated date for partial implementation is June 30
with the final piece in place on September 30. Implementing this change may
result in some additional staff time and expense, but Klein has said that there
will be no additional software cost for the change to JAVA.
·
Logbook of the World
- There are three remaining items to be completed before a public
beta test. A locator for various awards has been expanded and will be done by
Jon Bloom. Expected completion date of May 12 to begin the general beta test
period.
·
DXCC - The specifications had to be redone. Within the next
few weeks, repaired code will be received. At that point, we will know if the
project continues to be viable. If not, we may ask for our investment back.
7. Update of Personnel Matters
No substantial
progress toward resolution of a complaint.
8. Preliminary Report – Employee
Compensation Issues
Process that is
followed occurs on anniversary date along with the annual performance review
except when promotion occurs, then the date changes. This year, there is not
much of a pool of monies available.
9. Discussion Restructuring of Committee(s)
At the March 15
meeting of the EC, there was discussion about the committee restructuring
process.
10. Agenda and Date of Next Meeting
The meeting will be held in
teleconference. Proposed dates will be set via e-mail by the committee. The
proposed fall date will be set during the teleconference.
Adjournment: The meeting
adjourned at approximately 1730.
Respectfully Submitted,
Jim Fenstermaker
K9JF
Secretary, Administration and Finance
Committee