The January 11, 2011 teleconference meeting of the ACB Board of Directors was called to order by President Mitch Pomerantz at 6 PM, PST. The following board members were present: Mitch Pomerantz, Kim Charlson, Brenda Dillon, Marlaina Lieberg, Michael Godino, Chris Gray, Berl Colley, Janet Dickelman, Marsha Farrow, George Holliday, Billie Jean Keith, Alan Peterson, Jeff Thom, David Trott and Paul Edwards. Ray Campbell indicated he would attend, but would arrive late. Staff present were Melanie Brunson and Lane Waters.
• Trott moved and Garrett seconded approval of the agenda and this motion carried. • Dickelman moved approval of the meeting minutes from December 13, 14, and 15 2010; Holiday seconded and that motion carried. Pomerantz reviewed three items Waters proposed via e-mail which should be discussed as a result of a major bequest received by ACB after approval of the 2011 budget. A copy of the Waters document is attached to these minutes.
• Edwards moved that the Board restore staff salaries and benefits in both offices as outlined in the emailed document from Lane Waters; Trott seconded, and that motion carried. The Board next discussed the idea of funding a development director position. Several options were considered, including whether this position description would include actual grant writing and incentives based on funding success. Additionally, there was discussion regarding the physical location of the person filling this position, and whether they should be actual staff or a contractor. Pomerantz stated that he hopes to establish a Development Board, guided by Charlson, Garrett and Brunson; corporate representatives and others prominent in the field of blindness would be invited to join this Board.
• Gray moved that Brunson be requested to amend the budget to include a salary for a development director with a base annual salary between $65,000 and $85,000 to be negotiated between Brunson and Pomerantz; Peterson seconded and that motion carried. Edwards, on behalf of the BOP, suggested that the policy to change non members subscription fee should continue. He expressed concern that production costs may change when numbers of copies decrease. The BOP requests authorization to produce a total of ten issues of the Braille Forum, with nine being 32 pages and one at 48 pages; the latter issue would be the convention and conference issue.
• Godino moved that the BOP line item be amended by the amount of $1889 Charlson seconded and that motion carried. Gray requested that Pomerantz and Brunson convene a task force to look at ways to continue communication with those who would no longer be receiving the Braille Forum. Pomerantz suggested that the BOP should take the lead in this effort; Edwards responded that the BOP is essentially on the same page and the BOP can both keep a better handle on who actually is receiving the Braille Forum, as well as expand opportunities to communicate with those who may no longer be receiving it. Edwards also reminded the Board that anyone would be able to receive the Braille Forum by e-mail. This issue will be discussed further during the February BOP meeting.
• Thom moved to rescind the motion for the affiliate fee for participation in the database project as moved at the January teleconference meeting; the motion was seconded by Holliday. Gray offered a friendly amendment to remove the $3,000 from the database management project line item from the budget, but still request a $250 voluntary contribution from affiliates who wish to participate and the motion carried.
• Godino moved that the revenue side of the 2011 budget, specifically the investment line item be amended to show a $35,000 increase as a result of dividends; Garrett seconded the motion, and the motion carried. During discussion, Gray suggested that the intent of this motion should be carried out on an as-needed basis, keeping the Board more in touch with the need to pull funds from reserves as necessary.
• A motion was made, seconded and carried to transfer $120,000 from reserves in order to create a short term cash account to revenue $123,189. Waters will adjust the figures as necessary, send the final revenue and expense numbers to the Board, the Board will follow through by e-mail and ratify its decision at the mid year Board meeting in February.
Maintaining a cash reserve for operating expenses. Prior to the mid year Board meeting, the Budget Committee will meet to make a recommendation to the Board for consideration at the February 2011 Board meeting.
Trott moved and Thom seconded adjournment, the motion carried and the meeting adjourned at 8:00 PM PST.
Marlaina Lieberg
Secretary
Submitted January 28, 2011
Approved: February 25,2011
Attachments: 1
Attachment
Date: January 7, 2011
To: ACB Board of Directors
The following information is provided as an aid to some of the subject matter that will be discussed during the upcoming board meeting.
The Gift On 12/22/10, ACB received notice of stock transfer from the trustee of the estate to Dain Rauscher. As per ACB’s Investment Policy, Dain Rauscher immediately sold the stock and placed the proceeds of $1,092,889.43 into the Short Term Cash Account. On 12/28/10, $842,889.43 of the total proceeds was transferred to the ACB Reserve Account and invested according to the asset allocation model in the ACB Investment Policy. When combined with ACB’s remaining reserves, the new balance in the Reserve Account at 12/31/10 is $1,151,112. This left a balance of $250,000 in the Short Term Cash Account. On 12/23/10, $50,000 was transferred to the ACB Bank Account and is being used for December/January operational cash needs. This leaves a balance of $200,000 in the Short Term Cash Account, upon which the Board will need to make a decision. Based on Budget decisions and other considerations, the Board will need to decide what portion of this balance should be moved to the Reserve Account. This decision does not necessarily need to be made at the January 11th Board Meeting. The Budget The 2011 budget has a $778 surplus from the resolutions passed at the last Board Meeting. Following are certain major budget line items that Mitch has recommended for discussion, along with the impact each item will have on the budget. Note that positive numbers will increase expense or decrease revenue, and negative numbers will decrease expense or increase revenue.
Restore Arlington Office Wage Reductions $24,854
Restore Minneapolis Office Wage Reductions $20,260
Restore ACB 403B Contribution $12,245
Restore ACBES 403B Contribution $ 8,719
Hire Development Director ($65k salary plus benefits prorated April to December, less Grant Writer Expense previously budgeted) $51,400
Restore three issues of Braille Forum ($6,163/issue) $18,489
Resolve to use Reserve Dividends as Unrestricted Funds ($35,000)
If all of the above changes to the Budget were implemented, the Budget Deficit would be right at $100,000 for 2011. This means that if 2011 went according to Budget, ACB would need to use $100,000 of the $200,000 in the Short Term Cash Account and could move some or all of the remaining $100,000 back to the Reserve Account.
Other Considerations Before making a final decision on the disposition of the gift proceeds, there are several other issues to consider: Cash does not flow equally over the course of the year-generally January, February, September, October, and November are low. March, July and December are high. April, May, June, and August are neutral. This means that there will likely be a need for additional operating funds in the early part of the year, for which the only source of funds at present is the remaining $200,000 in the Short Term Cash Account. Other businesses use a bank line of credit to help handle the ups and downs of cash flow during the year- drawing on the line when cash is down, paying on the line when cash is up. Interest is paid monthly on the balance drawn on the line. ACB does not presently have this flexibility, and has had to use the reserve account to cover cash needs over the course of the year. Using the Short Term Cash Account for this purpose is not a good idea, as it requires using Board Reserves and negates the fundamental purpose of the investment policy, and forces ACB to sell investments when it may not be prudent to do so. Lane Waters is investigating the possibility of securing lines of credit for ACB and ACBES and will bring his findings to Mitch and Melanie when available. If the Board feels that lines of credit are a prudent way to help manage cash flow, the Board may wish to defer the final decision on the disposition of the gift proceeds until the lines of credit are established.