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Minutes
Board of Directors' Meeting
January 20-21, 2006
Alumni House
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Friday, Janaury 21, 2006
In attendance: Doug Adams, Steve Azevedo, Bill Beeson, Christina Brittain, Andrea Campos, Pam Chun, Debbie Cole, Damon Connolly, Linda Dempsay, Darek DeFreece, Jim French, Josh Fryday, Holly Lake, Cris Larson, Nancy McKinney, Rick McMichael, Alan Mendelson, Randy Parent, Garry Parton, Dave Pearson, Jason Sherr, Melissa Snyder, Julie Tran, Jack Van Zander
Absent: Rick Chinn, Carlene Davis, Katy Foulkes, Steve Ramirez
The meeting was called to order at 9:00 am by President Debbie Cole.
Debbie announced some changes to the agenda for the weekend:
* The Awards Committee cannot be approved this meeting as Debbie has not heard back from all of the non-board members who have been asked to serve. Julie Tran will serve as Chair. Jason Sherr, Steve Azevedo and Andrea Campos will be the current board members who will serve.
* Darek DeFreece will give an update on the nominations process at the Saturday business meeting
Debbie also announced that board members Carlene Davis, Katy Foukes and Rick Chinn have approved absences for this meeting. Steve Ramirez has been contacted by e-mail and phone but did not respond. His absence is unexcused.
M/S/A The agenda for the weekend is approved with the above changes.
M/S/A Approval of the minutes for the October 2005 meeting
*2 abstentions
I. President’s Announcements : Debbie Cole
* Thanked the staff for their hard work that resulted in such a successful Pure Vision Pioneer Las Vegas Bowl.
* Acknowledged Director Bill Beeson for attending the AAUC meeting in San Diego on Debbie’s behalf.
* Stated that there is no specific form of governance that this board will take. The board will move forward in a way that works for them. It is incumbent upon the Directors to question and agree that gray areas are within or outside of their realm. It is okay to change policies and processes that do not work.
II. Finance Meeting – Monte Meyers and Cris Larson
2006 Operating Plan Update (Monte Meyers)
· Monte presented staff’s proposed changes to the operating plan that the Board approved at the October 2005 meeting.
· Revenue changes reflect $300,000 in additional funding above the original budget from MBNA (because of the new agreement in place) and $50,000 more in Membership revenue (due to the Board’s approval of the increase in membership dues rates).
· The changes proposed to the expense side include the following:
- $111,000 for the information technology department. This is a direct reflection of the growing dependence on the use of technology to accomplish the Association’s work. Specifically, the money would be used to hire a new full-time computer support analyst (replacing part-time student staff) and other personnel changes bringing more resources to this key infrastructure area.
- $60,000 towards implementing strategies in support of the “Year of the Volunteer” including modifying the duties of the former Student-Alumni Mentorship Program manager to take on additional responsibilities as volunteer coordinator, and faculty recruitment for CAA events and programs.
- Accounting Department is expecting to have $50,000 increase in expense to pay for the increased cost of the annual audit, and to fund the hiring of a new Controller (upgrading the Accounting Manager position). This is in response to the increased scrutiny on an organization’s accounting and internal control practices as a result of the changing regulatory environment, including the implementation of the Nonprofit Integrity Act.
- $27,000 for the Executive Director to use to balance the overall pay structure at the Association as a continuing part of review for internal equity and external competitiveness in the bay area employment market.
- $24,000 increase in rent for the new 2440 office location. This increase is necessary to pay for the cost of tenant improvements that the building owner will amortize over the life of the lease.
- $30,000 for Membership collateral, including brochures and a manual.
Forecasted 2005 Operating Results
· The year-end 2005 forecast shows $9.5 million in revenue and $9.2 million in expense compared to the total year budget of $9.8 million revenue and $9.3 million expense. This is an expected decrease in Net Surplus of $200,000 compared to the original budget.
· MBNA revenue is $484,000 less than the operating plan due to the suspension of the payment by MBNA. Membership revenue is expected to be $91,000 less than the operating plan. These revenue decreases were partially offset by California Magazine’s revenue which was $51,000 better than expected.
· In response to the expected decrease in revenue, CAA staff reduced discretionary spending, and delayed filling several open positions, which resulted in considerable cost savings.
Update on MBNA (Randy Parent)
In compliance with the new law, SB569, CAA sent out about 500,000 “opt-out” cards to Cal Alumni. As of the Board meeting, about 2,500 alumni have responded to “opt out” from receiving mailings from CAA’s affinity partners. As the result of a newly negotiated agreement, we expect to receive a $550,000 payment from MBNA in early February.
Update on Audit (Nancy McKinney)
The audit fee for 2005 is about $71,000, an increase of about $20,000 over the initial budget. The fee increase is due to the increased scrutiny, changes in procedures, and overall higher level of due diligence the auditors must perform to adhere to their internal auditing standards and practices. In addition, the audit will focus on the SWAP transactions for Lair Bond and the pledges receivable recording. There will also be additional requirements for footnote disclosures related to the SWAP and the CAA Pension.
The Audit Committee has charged staff, lead by AED-Finance Monte Meyers, to perform an Entity Level Internal Controls assessment. This will be completed in March.
Lair Master Plan (Monte Meyers)
Tuck Coop will be providing more information regarding the Lair Master Plan in a presentation on Saturday. However, as this a key focus area of risk, the Finance Committee wanted to provide regular reports regarding the financing and progress of this large construction project. The maintenance facility is expected to be completed by December 2006. The swimming pools are expected to be rebuilt by June 2006. There are on-going costs for the project manager, architect, and NEPA. The time value of money was taken into consideration when Lair Master Plan was developed, and is reflected in the projected costs.
California Magazine (Monte Meyers)
Another area requiring the Board’s attention is the growth of the California Magazine. The Editor is planning to hire one more full-time position in 2006. To pay for these additional expenses required that the Magazine staff raise the funds. So far, California Magazine has received $54,000 cash from fundraising and $35,000 in pledges. In a new way to find advertising dollars to help defray the costs of producing the Magazine, the sales staff and management has identified new sponsors and new ways to bring in more advertising revenue.
Office Move (Monte Meyers)
The Board approved $65,000 in moving expenses for 2005; however, these costs are now expected to be incurred in 2006. With the building owner taking on the cost of building the necessary tenant improvements, staff expects the rent to increase from $66,000 to $90,000. The estimated capital expenditures for this project include $60,000 for office furniture and equipment and $40,000 for renovations at Alumni House. The move is expected to be completed by the end of second quarter in 2006.
III. Proposed Bylaws Changes – Jim French
Timely notice was given to the board of proposed changes in the bylaws, which do not address subjects requiring approval by the general membership.
There was discussion about the proposed changes:
* Article V, Section 4: Replace “electronic mail” with “electronic means”
* Article XI: Replace “electronic mail” with “electronic means”
* Article V, Section 11: “Any Director may be removed with or without notice, with immediate effect, and with or without cause…”
* Article VIII, Section 8: “Any Officer may be removed with or without notice, and with or without cause…”
* Article V, Section 9: Add “or his or her representative” to sub-sections e. through h.
* Article V, Section 11: Add the words “in attendance” after “2/3 majority of Directors…”
* Article XIV, Section 3e: Add the word “Officers” to “Directors or Designated Directors”
IV. Policy Manual – Nancy McKinney
President Debbie Cole suggests appointing a small group of board member (Dave Pearson volunteered to serve) to decide on the format of the policy manual and to put it online. Cindy Leung would be the staff liaison to work with this group. Nancy noted before the announcement of the changes that all Directors had the most recent copy of the policy manual with changes that had been accepted thus far.
Primary changes:
* Removal of the preamble
* Section II. Board Self-Management Policies:
1. Audit Committee guidelines have been streamlined
2. Expense reimbursement policy needs to get pulled into this section
* Section III. Board-Executive Relationship Policies
1. Only a few clarification issues
2. Modernize the language
* Section IV. Executive Limitation Policies
1. Simplifying issues and removing layers
The Secretary of the Board will eventually take over the policy manual and will be the person responsible for making changes. It needs a table of contents and needs to be a useable document with clarity and practical ease.
V. Life Member Fund Policy Discussion – Cris Larson
* Background: 50% of the Life membership dues is contributed and invested. The end of 2005 will have an anticipated balance of $20 million.
* How is it used today?
5% average of the market value over the last 12 quarters is distributed for current operations. Additional funds can be used with board approval.
* Potential Uses
1. Capital improvements
2. Investment in new CAA programs and activities
3. Payment for one-time activities or expenditures
4. As a loan for temporary cash needs to be repaid to the LMF
* When should CAA use the LMF?
1. Any use requires Board approval
2. What should the minimum balance be?
3. What is the criteria for using the LMF?
* LMF transfers for approval
1. Currently, 50% of life member dues are transferred
2. Proposed policy:
a. Transfer 50% of LMF cash received
b. Transfer quarterly with no board approval required
There was a board mistake for the 2004 transfer of $472K to the LMF. That is being taken care of now. The transfer for 2005 will be $235K.
Vice President of Finance Cris Larson proposed that an update on the LMF should be given in each board report at the meetings. The Finance Committee will decide when to give proposals on this subject to the board. Typically, the June meeting is a more forward looking meeting with less operational focus. This might be a good time.
VI. Travel Policy/Bear Treks – Jackie Olson and Debbie Cole
Jackie gave a brief overview of the goals for the Bear Treks office and introduced new staff, Charlotte Sproul and Christy Campbell.
Debbie Cole explained that the travel policy was public but not well publicized. The existing policy relied heavily on past presidents and former executive committee members. The past president of CAA typically was the Chair of the travel committee. With no Executive Committee any longer, there needs to be a change in direction and now is the time for this policy to be reviewed. Randy is appointing, at Debbie’s request, Nadesan Permaul to Chair a Travel Advisory Committee to review this travel policy and discuss the issue of hosts for Bear Trek trips. This committee will provide input to the staff. The Bear Treks staff will consider the input and propose a new policy to the Executive Director.
VII. Public Forum – There were no speakers.
VIII. Royalty Programs – Mark Appel
Affinity Partnerships and Sponsors
Primary objectives:
1) Add value to membership
2) Spread risk of income loss across multiple partners
3) Build revenue stream to support CAA programs and events
Process:
1) Identify potential categories and partners
2) Use RFP to stimulate competition and gain quality
3) Use rigorous due diligence and quality assurance to maintain partner integrity
Results:
1) Nearly $400,000 of incremental non-MBNA revenue in 2005
2) Significantly mitigated MBNA crisis
Merchandise
Objectives:
1) Add value to membership, extend brand
2) Provide unique Cal goods to Cal community
3) Build incremental revenue for CAA programs
Process:
1) Move incrementally, put infrastructure in place
2) Build channels of distribution (web, retail and event)
3) Emphasize just in time inventory, drop shipment from suppliers and automation
Results:
1) Gross receipts 2005 = $35K
2) Goal to break even by end of 2007
CAA Brand and Identity
Background:
1) The history and limitations of branding
2) Identity comes from the work, not the brand
3) Opportunity to significantly broaden and extend CAA brand
Objectives:
1) key CAA brand programs and events
Process:
1) Input from board via Strategic Plan
2) Input from executive via priorities
3) Input from staff
4) Input from industry peers and professionals
5) Input from research
Brand Guidelines
1) Set of standards, resources that enable brand leverage and integrity
2) Tactical and strategic requirements
3) Practical issues: scalability, readability, cost, schedule etc.
4) Refine logo, create logotype, implement UC colors and font
IX. Diversity Discussion – Cindy Leung
Gregg Thomson, Director of Student Research, presented figures and trends on the admissions of underrepresented minority students. Walter Robinson, Director of Undergraduate Admissions, shared his insights on how CAA has been and can be helpful in recruiting underrepresented students to Cal.
X. Roundtable Discussion with SCAA (School and College Alumni Associations)
There were three SCAA representatives (Matt Fratus, College of Natural Resources; Tangarine Brigham, Goldman School of Public Policy; and Clark Kellogg, College of Environmental Design) and Karin Mack, Alumni Relations Director for the School of Engineering on the panel. All four talked about their experience with building alumni relations and how better CAA could work with the representatives on campus to the end of getting more alumni involved and tied back in to the University.
The meeting was adjourned at 5:00 pm for the evening event, “California Honors,” at the Morrison Room in the Doe Library.
Saturday, January 21, 2006
President Debbie Cole called the meeting to order at 9:00 am.
In attendance: Doug Adams, Steve Azevedo, Bill Beeson, Christina Brittain, Andrea Campos, Rick Chinn, Pam Chun, Debbie Cole, Linda Dempsay, Darek DeFreece, Jim French, Holly Lake, Cris Larson, Nancy McKinney, Rick McMichael, Alan Mendelson, Randy Parent, Garry Parton, Dave Pearson, Jason Sherr, Melissa Snyder, Julie Tran, Jack Van Zander
Absent: Damon Connolly, Carlene Davis, Katy Foulkes, Josh Fryday and Steve Ramirez
Announcements:
* Debbie thanked everyone involved in the volunteer event last night at the Morrison Room. It was a lovely, warm event honoring the award recipients!
* Happy birthday to Jim French, Cris Larson and Robin Lewis
* Thanks given to Rick Chinn for organizing the SCAA presentation on Friday
* To date, 70% of the Directors have given to CAA
I. Lair Master Plan Update – Tuck Coop
Personnel announcements/introductions:
* Sue Byers – Camp Oski Manager
* Mike White – Camp Blue Manager
* Dave Musgrave – MDP Project Manager
Hot Projects of the Master Plan:
* NEPA – hopefully complete by April ’06. Currently over budget
* Swimming pools – in construction, complete by June 1
* Blue pool bathroom and Gold bathroom #2 – start construction this spring
* Maintenance Facility – start construction this summer
30-year Financial Recap:
* Total Funds Available: $95 million (Operating surplus + net bond proceeds)
* Use of Funds: Capital expenditures $31; debt service $16 million; funds to CAA $48 million
Major Concerns:
* Can we spend it fast enough?
* Controlling the process
* Minimizing camper inconvenience
* Reaching campaign goal (need $1.1 million more)
II. California Magazine – Kerry Tremain
In the wake of California Magazine’s redesign, Editor Kerry Tremain assessed the progress since the beginning of 2005, including development with consultants of a business plan passed by the CAA board in June, beginning a development effort with prominent alumni, enhanced relationships with several campus units including the school of journalism, significantly enhanced coverage of campus research initiatives on energy, security, stem cells, and China, and successful completion of a redesign of both the magazine and web site. Tremain discussed the philosophy of the magazine to cover important public issues in the front of the magazine, and traditional alumni functions in Sather Gate, elaborated on a the management policy of hiring and encouraging talent, and answered questions on the redesign from members of the board.
III.Year of the Volunteer Discussion – Tabled to a future meeting
IV. Executive Performance (Closed Session)
· Past President Nadesan Permaul and Vice President of Finance Cris Larson were asked to sit in.
Business Meeting
M/S/A Board to adopt proposed changes in the bylaws draft as presented on
Friday with the following exceptions:
* Proposed changes to Article III, Section 6 (attendance at Cal)
* Proposed changes to Article V, Section 8 (Roberts Rules of Order)
1 Abstention
M/S/A To accept the Policy Manual text as presented
Unanimous
M/S/A Approve the Life Member Fund transfers of $472K for 2004 and $235K
for 2005
· The approval of a quarterly transfer without board approval was tabled until the April 2006 meeting.
M/S/A Approve the final 2006 budget/operational plan as presented
The meeting was adjourned by President Debbie Cole at 12:30 pm.
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