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Document #20
The Administration and Finance Committee for 1998 consisted of Directors Tod Olson, K0TO (Chairman), Ed Metzger, W9PRN, Jim Haynie, W5JBP, Tom Frenaye, K1KI. International Affairs Vice President Larry Price, W4RA, Executive Vice President Dave Sumner, K1ZZ, Chief Financial Officer, Barry Shelley, N1VXY, Treasurer Jim McCobb, W1LLU, and President Rod Stafford, W6ROD, ex-officio.
This report has been deliberately drafted to be very brief. The reports of the Executive Vice President and the Chief Financial Officer are the places that discuss operations for the past year and the Plan for the coming year. At the point on the agenda for the report of the A&F Committee I will offer motions to approve the 1999 Operating Plan and the 1999 Capital Spending Plan. The A&F Committee recommends that the Board approve the Plans.
In 1998 the A&F Committee recommended and the Board approved processes that provide formal performance reviews, with input from Directors, designed to assist the Executive Management of the League in enhancing their performance in their positions. In a separate action the Board approved a special compensation program for Executives with respect to the achievement of objectives considered by the Board to be especially important to amateur radio. This will be the first year in which such awards are made. These awards are separate from the regular compensation through salary and benefits, and reflect only performance toward achieving the objectives.
Since the July Board meeting there have been two A&F meetings; one in Mendota Heights, MN and the other in Newington, CT. At the first of these meetings the EVP and the CFO advised the Committee that the downward trend in ARRL membership numbers was continuing and that 1998 revenues would be considerably lower than the planned amounts. The Committee was advised that the 1999 Plan would reflect an expectation of considerably less revenue than had been forecast for 1998 - in fact, perhaps as much as $500,000 less. We were advised that the ARRL EVP would be proposing a 1999 Plan, which had a spending reduction of approximately that amount in order to balance income and outgo. An extended discussion followed during which the Committee stated that it felt it would be necessary to as quickly as feasible assess the current status of amateur radio, establish a vision of amateur radio for the future (not greater than a ten year horizon), create a written set of proposed actions which could be expected to form the situation today toward that future vision and gain the approval of the ARRL Board of Directors and the support of the amateur community to proceed with those actions.
It was recognized that to do this would require a major and almost full time effort on the part of someone --- the A&F Committee felt that the only person it could identify who might be able to do this task was the ARRL Executive Vice President. The meeting concluded with no decision other than agreement to discuss this topic further at the November 21 1999 Plan Review Meeting when additional Directors would be present and the A&F Committee members would have had additional time to consider what had been discussed.
On November 21 the A&F Committee plus representatives from the MSC and VRC (and Director Craigie who was in town for the ballot counting) met to discuss the 1999 operating Plan proposed by the EVP. With only a few recommendations for changes, that plan was approved for presentation to the Board. The 1999 Plan should be viewed as a "status quo" Plan in spite of the fact that there have been adjustments to staffing levels and funding of programs. At this point management has not recommended dramatic changes in services nor did they propose programs which would generate entirely new sources of revenue.
The changes recommended by the A&F Committee primarily addressed Committee meetings. After discussion, it was decided that funding for a number of the Ad Hoc committees be discontinued as of January 1999. In addition, it was recommended that all Standing Committees plan to meet "in-person" twice in 1999 rather than once as had been the practice in 1997 and 1998. It was the feeling that small groups of Directors need to meet periodically face-to-face to discuss ARRL matters and the Standing Committee meetings provide an opportunity for that to take place. The increased cost is expected to be very modest, yet the anticipated communication benefit is expected to be significant. That decision can be reviewed at the time the Operating Plan for the Year 2000 is prepared. Another recommendation from the November meeting and the teleconference meeting of the A&F in December was that the CFO and the EVP (or his delegate) provide monthly reports to the Directors so that everyone has a current sense of how 1999 operations are tracking the 1999 Plan.
During our discussion of the 1999 Plan it became increasingly clear that there appear to be trends in US demographics and culture that may limit the number of active amateurs, the number of new amateurs and the number of ARRL members. As the National Organization for US amateur radio, it is incumbent upon us to recognize the nature of these changes and trends and to prepare responses which will benefit amateur radio.
All Board members are aware of these changes in some degree. We have been advised from several sources about the drop in ARRL membership, drop in the number of new amateur licensees each month, the reduction in advertising revenue as companies leave the amateur radio business, the diminishing attendance at Hamfests and Conventions, the growth of interest in computers and the Internet, etc.
Last July we conducted a planning session which looked at the nature and strengths of the ARRL. At the same meeting the Board achieved consensus on suggestions for modifications to the licensing structure and authorized a letter to the FCC which proposed those modifications. One objective of the changes was to increase the opportunity for common operating experiences for all licensees as compared to the operating dichotomy that exists currently between Technicians, Tech-plus and the General, Advanced and Extra class licensees. The modifications would allow creating a better set of tests and study guides with questions and knowledge more consistent with the operating privileges at each license level.
We know from our own experience in trying to assess what is happening in amateur radio and trying to understand what those changes imply for the future that this is not a one or two day exercise for 15 or more people. The Board members who were present at the November 21 meeting were convinced that in 1999 the Executive Vice President should distribute his day-to-day activities to one or more other people and focus his attention almost exclusively on what the future of amateur radio might be and how ARRL might contribute positively to that future. We asked him to take those steps necessary to make it possible to do this. The work output from the EVP's effort might be a written statement of the following things: (the list is not to be viewed as limiting)
Before the end of 1999 the Executive Vice President should state for the Board the direction and actions that he recommends be put in place starting in or before the year 2000 and ask the Board to approve them for inclusion in the Operating Plan for 2000.
This work has NOT been funded in the 1999 Operating Plan that the Board has been asked to approve at this meeting. The Plan had been prepared before the A&F Committee arrived at the decision that this effort was imperative. It is the belief of the Committee that whatever resources the Executive Vice President may believe to be required should be made available to him. That might take the form of paid consultants, special meetings where ARRL pays the expenses of the participants, unusual travel or similar things. The 1999 A&F Committee will be meeting approximately each quarter of 1999 and it can review the expenses incurred and proposed. At the annual meeting in 2000 a motion can be presented to approve the total expense so that it will meet auditing requirements as well as our own control requirements.
The Executive Vice President has indicated in his Report to the Board his acceptance of this very important challenge. It is also the most significant objective in his personal objectives for 1999. He will need our support and encouragement as he carries out the work on this objective.
Respectfully submitted
Tod Olson, K0TO
Chairman
