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Document No. 19
The American Radio Relay League
2003 Second Meeting of the Board of Directors
Committee Members: Director; Jay Bellows, KØQB, Chairman; Vice President Joel Harrison, W5ZN; Directors Walt Stinson, WØCP; Dick Isely, W9GIG; Frank Fallon, N2FF and Art Goddard W6XD; Vice Director Jim Fenstermaker, K9JF (secretary); Executive Vice President Dave Sumner, K1ZZ; CFO Barry Shelley, N1VXY; Treasurer Jim McCobb, W1LLU; and President Jim Haynie, W5JBP (ex-officio).
Introduction
This has been a banner year for US Amateurs both domestically and internationally. These achievements have been funded by the dues of ARRL members, publication sales and the contributions of Amateurs to ARRL efforts and our reserves. Unfortunately, the projected dues, income and contributions have not been sufficient to meet the costs incurred to provide current services and achieve those results. As of the date of this report projected losses for the year will exceed the plan by upwards of $200,000 unless revenues increase or expenses are reduced accordingly.
The long awaited, final implementation of the Siebel Enterprise System will occur between now and September 1, 2003; Logbook of the World will be available for use by members, September 15, 2003; it is unlikely the DXCC program upgrade will be finished this year though we expect the pending dispute with Strong Systems, Inc., over its failure to complete the DXCC Program will be resolved this Fall.
Revenue and Expense
As you will read in the report of CFO Shelley the projected deficit will exceed the approved plan deficit of $292,000 by an additional $200,000 unless the pending reforecast presumes a substantial increase in revenue or reduction in expenses. There are several causes for this shortfall; continued declining membership; contributions falling below projections in a challenging economic time; and reduced revenues from program fees are the principal factors.
In the past three years the Board has sought increase the resources devoted to member benefits to reward current members and attract new members to ARRL. Prime examples are the addition of color throughout QST and improved accessibility with headquarters via the Web. An increased share of League resources have been devoted to activities benefiting non-members, as well as, ARRL members, such as regular improvements to the ARRL WebPage, redoubled efforts to defend frequencies and heightened efforts to advocate for Amateur Radio domestically and internationally.
The resources devoted to Advocacy and raising awareness of government and private industry of the value and capabilities of Amateur Radio are beginning to bear fruit and generate funding. At the same time ARRL membership continues to decline and an ever greater percentage of Amateurs are content to take the benefit of League efforts without joining or lending their support. We cannot continue to fund member services and advocacy activities at the current level at our present income levels. Unless we are able to find alternative sources of revenue we must attract a larger percentage of Amateurs to join in the support League advocacy initiatives and hopefully become League members.
In light of the additional projected deficit each of our programs and activities must critically examined to determine the level of benefits and service we can continue to provide to members and non-members given current needs and our current projected income. The only other alternative is to further consume our investments and the use the investments generated by the prior efforts and contributions of ARRL members and benefactors for day to day operations.
Computer Update
By this time we expected the new enterprise computer system would have been in place for the better part of a year. That hasn't happened. Enhancements to the system and unexpected problems have delayed full and final implementation of the complete enterprise system.
In 1999 A&F recommended and the ARRL Board committed to a significant and needed improvement in the accounting, enterprise and membership service equipment, tools and capability at ARRL headquarters. The plan envisioned implementation of the new system in two years, a transitional period and scheduled deficits through 2003. We expected that by 2004 the systems would be up and running and we would be operating on a break even basis with significantly enhanced capabilities.
It should be remembered that at the time of adoption, several members pointed out that the implementation of major systems of hardware and software frequently fail to meet delivery schedules and cost estimates. As we approach the midpoint of the third year of scheduled deficits full implementation of the computer system upgrade is approximately a year behind schedule. Nevertheless, the accounting system is in place and has been running for eight months and the full enterprise/e-commerce system is moving to full implementation by September 1, 2003. One of the membership service programs, Logbook of the World, is currently being beta tested by users. We expect LOTW to be in full use by September 15, 2003.
The remaining membership service program, the DXCC update is significantly behind schedule. We have advised the DXCC program vendor, Strong Systems, Inc., that unless they commit to completing the DXCC program for the contract price by a specific date we will immediately proceed to seek damages for their breach of contract under the
Arbitration provisions of the contract. Further information on this matter will be deferred to executive session because of the possibility of litigation.
Where Do We Go From Here?
Current membership and support is not sufficient to fund the broad range of programs and activities provided to our members and the benefits furnished to the entire Amateur community. Somehow we need to make the entire community of active and interested Amateurs understand that neither Frequencies nor Freedom are Free. They come at a price.
Somehow we need to find an answer to these underlying questions. Why aren't more amateurs attracted to ARRL membership? Why don't more non-members support ARRL advocacy efforts?
Unless we succeed in this effort we will need to eliminate or substantially reduce our advocacy efforts or limit them to defense of only fundamental matters. The most successful Defense of Frequencies effort occurred when the Little Leos threatened the two meter allocations. Why? One significant reason is that over the years two meters has become the "party line" for much of Amateur Radio. Along with 440MHz, two meter repeaters provide the connection for amateurs during "drive time". It is the home for Club repeaters and special interest groups, DX Packet clusters, APRS and the backbone of ARES and RACES emergency communication activities. Unlike HF Amateurs of every license class use VHF/UHF repeaters. The Little Leos challenge cut across all special interest divides and engendered a level of concern, response and support rarely seen in Amateur Radio. For once it was THEM against us, not one Amateur interest group against another.
A somewhat similar situation confronts us in the BPL/PLC efforts of the utilities. Unlike Little Leos proposal the frequencies affected do not directly impact Technician Class Amateurs. It should be noted that that may well change if the FCC eliminates the HF Morse requirement.
As the National Association for Amateur Radio ARRL must be the umbrella organization for all Amateurs. We cannot afford to or justify excluding the interests of any group of Amateurs if we are to be "the" National Association. Our focus has to be providing core services to Amateurs and Amateur interest groups and guarding the Amateur Service from the real threats from competing services and in the case of BPL/PLC squatters without frequency allocations.
Unless absolutely necessary we should not expend time, effort and limited resources in "refereeing" or becoming embroiled in internal conflicts between Amateur sub-interests.
Whenever possible, as a self-regulating service, we ought to encourage and foster use of ARRL's Mediation when significant issues arise between Amateurs or interest groups.
All too often we Amateurs have difficulty seeing beyond the interests of our own particular interest group. We must constantly remind ourselves and our members that every ounce of energy and every penny spent on internal disputes reduces our ability to fulfill our duties as Amateurs and defend against external challenges.
Conclusion
In the short term given our current situation and the current projected income we must carefully examine each of our programs and activities and adjust the level of benefits and services we can provide. If we are to continue to provide a meaningful level of services to members, continue to be the National Association for Amateur Radio and remain solvent we must either convince Amateurs of every interest and every license class it is in their self interest to join and support ARRL or alter our vision of what services ARRL can afford to provide. The Strategic Planning effort we are embarking on provides a excellent opportunity to address these core questions.
Respectfully submitted,
Jay Bellows, K0QB
Chairman
July 10, 2003
