Executive Council Meeting
Toledo OH
April 6, 2014
Official

Introductions
President's Report

Executive Vice President's Report
Chief Financial Officer's Report
Executive Director's Report

NAA Report
Committee Reports
Old Business
New Business


Note: District II VP Eric Williams, District IV VP Bliss Teague and District X VP Lawrence Tougas were not in attendance.
The meeting was called to order at 8:00 a.m. by the President.

1. Opening Business 
a. Introductions: President Bob Brown, Bradford, PA; Executive Vice President Gary Fitch, Franklinville, NY; Chief Financial Officer Keith Sessions, Burlington, KY; District Vice Presidents: I-Andy Argenio, Smithfield, RI; Associate VP Dist. II-Jim Goodemote; III-Mark Radcliff, St. Marys, WV; Associate VP Dist. IV-Jay Marsh; V-Kris Dixon, Dexter, GA; VI-Randy Cameron, Springfield, MO; VII-Tim Jesky, Monroe, MI; VIII-Mark Johnston, Albuquerque, NM; IX-Jim Tiller, Custer, SD; Interim Dist. XI VP Chuck Bower, Langley, WA; NAA President Jonathan Gaffney; Executive Director Dave Mathewson and AMA Legal Counsel Felix Gora, Rendigs Fry Kiely & Dennis.
 
Others in attendance: Claude Melbourne, President M.A.A.C.; Bob Reynolds, Brady Ware; Paul Bretsen, Harry A. Koch Co.; Steve Brehm, AVP Dist. I; Luke Akemon, AVP Dist. VI; Gary Himes, AVP Dist. VI; Lee Frederickson, AVP Dist. VII; Randall Gibson, AVP Dist. VII; Marc Shelstrom, AVP Dist. VII; Noel Hunt, AVP Dist. VII; Rich Hanson, AMA HQ staff and Rusty Kennedy, Chairman Leader Member Committee.

MOTION I: Moved by G. Fitch (EVP) and seconded by R. Cameron (VI) to approve Chuck Bower as Interim Vice President for District XI.
MOTION passed unanimously.

b. Additions to the agenda: 
There were no additions to the agenda.

c. Final Flight List (Appendix I)
A moment of silence was observed.

2. Consent Agenda: 
It was moved, seconded and approved by consensus to approve the Consent Agenda as amended. Consent Agenda items: January 12, 2014 Executive Council meeting minutes amended to include Jonathan Gaffney, NAA President in ‘Introductions’; February 14, 2014 mail vote re Membership Join/Renew date and April 1, 2014 conference call re: Accept Scholarship Committee recommendation on first place recipient.

3. President’s Report 
The President awarded Andy Argenio the Fellowship Award for his years of service on Council. The President asked Chuck Bower to present the Award of Exemplary Service to Mike Mosbrooker for his service on Council.

The President noted the passing of former District IX VP Jim Wallen.

He noted the suspension of the TFR in Palm Springs, CA; he commended R. Hanson and D. Mathewson for their efforts. They expect to meet with the FAA and others in D.C. in a few weeks re TFR’s.

He had a meeting with Dr. Laird Jackson after the WRAM Show; Laird has agreed to chair the beginning operation of the AMA Foundation. An additional board member is expected to be Dan Bott (Scottsdale, AZ); he has outstanding credentials and will be an asset on the board. An update on board members will be given at the July EC meeting.

Events attended: Efest, where he met with Hobbico people; WRAM Show/District II meeting; along with D. Mathewson he met with C. Whitney of Atlanta Hobby; Perry GA swap meet and District V meeting; Lebanon, PA Flea Market and attended the NEF Indoor Fly-in/F3P Team Selection contest in Akron, OH. During the Weak Signals auction he auctioned off items that had been donated to AMA to benefit the AMA Foundation (around $1,200 was realized from those nine donated items.) The President thanked the Weak Signals for allowing AMA time during their Saturday night auction.

4. Executive Vice President's Report
Events attended:
Outdoor fly-in at Dart Airport Mayville, NY and toured their museum of full scale and model aircraft; along with E. Williams attended the Syracuse Symposium; WRAM Show/District II meeting; Lebanon Flea Market and met with numerous AMA members; Canandaigua (NY) Chiefs Auction; worked the AMA booth at the NEF Indoor Fly-in and was head jurist for the F3P Team Selection contest.

He worked with K. Sessions and D. Mathewson reviewing/discussing the financial investments with Merrill Lynch, AMA’s financial advisor. From this there were two conference calls which resulted in paying lower fees on our investments and a low interest line of credit that will be made available to AMA. The EVP noted that K. Sessions has made significant contributions to the AMA in the short time he has been on Council.

Spent many hours working with A. Argenio on the recommended By Law changes to Article III and Article XI.

Spent time at HQ working with the Marketing Department discussing future marketing strategies.

Met with the new accountant Vicki Barkdull and participated in a conference call regarding the audited financial statements.

At this point B. Brown introduced Claude Melbourne, President of M.A.A.C. (Model Aeronautic Association of Canada).

5. Chief Financial Officer's Report (Appendix III)
Did quite a bit of work with Merrill Lynch over the first quarter; this was a continuation of what Council talked about in Ontario in January.

AMA has a new portfolio manager, based out of Fishers, IN. HQ will realize a calculated savings of about 18k/year just in fees.

A line of credit was established with a very low (floating) interest rate. If it becomes necessary to draw upon it, it will be reviewed with the Executive Director, Comptroller and the CFO.

Bob Reynolds, Audit Partner at Brady Ware presented the Audited Financial Statements years ended December 31, 2013 and 2012. Highlights included:

• Net income indicated a strong financial year
• Investment policy weighted toward equities; over the long haul they have provided a greater return
• Deferred membership revenue at end of 2013 was up, this is historically due to more members paying their dues early
MA advertising revenue increased, as did subscribers
• Total revenue for the year grew 4.3%; operating expense growth was 1%. The core operating deficit was less than in prior years
• Now that AMA is drawing revenue from website advertisers, it was recommended that this activity be kept separate from the general ledger
• UBI (Unrelated Business Income) – certain revenue is taxable, such as advertising, Supply & Service, rental income on farm land. In the past AMA has realized large operating losses associated with those activities, but now AMA is making more taxable profit. Reynolds recommended HQ revisit the underlying cost allocations and make adjustments if necessary
• Given the demographics of the membership, Council was encouraged to take up the discussion of the current discounts offered and review the pricing strategy. Mathewson reported that his analysis showed by 2018, the senior citizen discount will have a half-million dollar impact on AMA’s revenue

MOTION II: Moved by G. Fitch (EVP) and seconded by T. Jesky (VII) to accept the Audit Report as presented April 6, 2014.
MOTION passed unanimously.

6. Executive Director’s Report
Mathewson spoke to a couple of issues reported by B. Reynolds.

Unrelated Business Income: HQ continues to try and identify all potential losses to offset increases in UBI. Council was encouraged to turn in their district asset list that was sent to them in January. As HQ increases non-dues revenue and UBI, there will most likely come a time when AMA will have some tax liability on our UBI. He explained this is not necessarily a bad thing.

Dues: The organization is financially strong. HQ has increased membership and non-dues revenue two years in a row and dues revenue were up as well. The last time dues were increased (2003) AMA lost around five thousand members. The ED noted the opportunity to generate more revenue from non-dues sources will help offset the rising costs of operations.

Operation Budget 2013: The ED thanked the staff for doing a great job in managing the operating budget. Membership numbers up this year for a second year in a row, as was membership revenue, donations and UBI. AMA has recovered all of its losses from the economic downturn in 2008, and recovered all of the losses from insurance claims anomaly in 2011. Overall revenue for 2013 increased about 4.5%; revenue from operations was up 3.75%; expenses were contained to about 132k increase over last year (a little over 1%) which means HQ contained expenses below the CPI for 2013. The Operations Budget ended the year with a surplus of $46,500 and at the same time rolled back about $124,000 from the foundation budget back into AMA operations because the foundation was not launched until January 2014. Overall AMA had a strong year, things moving in the right direction and 2014 looks to continue along the same line.

2014 Expo: For the second year in a row the Expo showed a profit. Booth sales did not meet expectations this year. HQ recognized this back in October 2013 and to offset that potential loss they sold sponsorships. The landscape of tradeshows is changing and Council will need to address this at some point. Our contract at the Ontario Convention Center ends after the 2015 Expo and other opportunities are being investigated in an effort to contain costs.

Digital Model Aviation update: This continues to do much better than anticipated. As of the first of April, 12,230 members have opted to receive the digital version of the magazine only and 3,917 members have paid the $9.95 to receive both versions. As part of the publishing contract AMA received a 10k technology credit from Quad Graphics. This credit will be used to develop a Park Pilot digital version and it is expected to be available for some beta testing last this year.

Supply & Service: As previously reported S&S sustains considerable losses, however everyone realizes there is an intangible value because of the ability to get the AMA brand, logo and image in front of our members. There is still a responsibility to run the operations from a business perspective as effectively as possible. Losses in 2012 from S&S were 115k; those losses were cut in 2013 by 25% and will be further reduced in 2014 as a result of internal changes on the expense side. Students from Ball State will be in to analyze the S&S operation and make recommendations on improvements. Mathewson hopes to have something to report to Council at the October meeting. HQ continues to do what they can to contain costs.

AMS: Another update in the next week or two with the AMS core team.

Plans Service: Contract has been sent to the owner for review and HQ expects to have that back shortly.


7. NAA REPORT
J. Gaffney noted
the rebates to NAC’s for dues not used for FAI dues.

Jim Albaugh, former Executive Vice President of The Boeing Company and CEO of The Boeing Commercial Airplanes Business Unit has been elected Chairman of the National Aeronautics Association. He is replacing Walter Boyne who is retiring.

8. Committee Reports
By Law-Appendices IV, V

Article III, Section 1:
the new membership categories will be listed as Adult, Youth and Special Members. Article III, Section 2 remains the same. The Standing Rules relating to Article III were reviewed; this section identifies the specific benefits and privileges for each of the membership categories and identifies the various classifications of Special Member. The definition and functions of an AMA Chartered Chapter were reviewed.

Article XI: The committee was charged with developing the duties and responsibilities of the Executive Council as a whole. The re-write of Article XI, Section 3 was reviewed and presented for approval.

Leader Members must vote on the changes to the By Laws; if the LM’s approve the changes, the recommended changes to the Standing Rules will then be voted on by Council.

MOTION III: Moved by A. Argenio (I) and seconded by M. Johnston (VIII) to accept the By Law Committee recommendations relating to Article III and Article XI presented April 6, 2014. (Changes to Article III-change in membership categories; Article XI-addition of Duties/Responsibilities of Executive Council.)
MOTION passed unanimously.

eLearning Related to sUAS
Education is a major part of the AMA FAA initiative. AMA’s eLearning system was introduced to the membership at the Expo this year. E. Loy reported that since then, they have been creating a course called ‘Introduction to sUAS’. A version of the course will be made available to the entire public, but there will be a testing module that is for AMA members only. AMA members that go through the course and familiarize themselves with the content will have the opportunity to complete an assessment (quiz/test), which could allow them to have a sUAS Course notation on their membership card. This would identify that the individual is aware of basic safety concerns, ethics and is an informed pilot. Headquarters is hoping to have the course ready for testing by June 2014.

B Pritchett reported that the Education Department is in the process of putting together a University Model Aviation Student Club (UMASC). D. Mathewson stated Council can expect a conceptual outline (via email) within the next few weeks.

Hall of Fame-Appendix VI

The President
reported that concerns relating to possible conflicts of interest were brought to the attention of Council at the October 2013 EC meeting. At Council’s direction, the chairman of the HoF committee was charged with developing a clause to address the concern for inclusion in the procedures.

It was moved, seconded and approved by consensus to approve the change to the AMA Model Aviation Hall of Fame Structures and Procedures as presented April 6, 2014. Change – item 4.9 The Chairman and Members of the MA HoF Selection Committee may not sponsor an application for a nominee during any year they are listed as a voting member of the MA HoF Committee.

AMA Advanced Flight Systems-Appendix VII

At the January
2014 meeting Council received a document addressing indoor FPV flying of Ultra-Micro and Micro aircraft; they were asked to review it and be prepared to vote on its’ approval at this meeting.

Argenio reported that the Council recommended changes to Document 550 were incorporated into that document, as well as Document 551 being presented today.

MOTION IV: Moved by A. Argenio (I) and seconded by M. Radcliff (III) to accept the recommendations of the Advanced Flight Systems Committee for revisions to Document 550 and approve Document 551 titled Radio Controlled Model Aircraft Operation Utilizing “First Person View” Systems for Indoor flying of Ultra-Micro & Micro Aircraft as submitted April 6, 2014.
MOTION passed unanimously.

Marketing/Membership

G. Fitch reported the department/committee has developed some new marketing pieces. The project plan includes: marketing in print magazines, especially in non-AMA publications; buying key words with Google; sending pro-rate advertising emails to new members and sending renewal emails to current members. They are also trying to engage the youth since the conversion rate for a Youth member to an Open member is quite low. Marketing and IT are developing a program for this and it is expected emails will be going out September 14.

Council viewed a brochure handout that lists why a person needs to belong to the AMA. These will be distributed at trade shows and going out as part of the Point of Purchase displays with the hobby shop program. (If any Council members wants a supply of these they should contact Erin Dobbs Headquarters.)

One of the things learned from the MCA survey is that even though AMA has been passive about talking about insurance in the past, members perceive it as one of the number one benefits we provide to our members so we should laud it.

Storyboards were passed around that depicted the print advertising and on-line marketing; they tell the message we are trying to hit and are expected to produce good results.

Fitch reviewed the cost and results so far of the key word purchase from Google; this is being funded out of the general marketing budget.

Council previewed the email marketing pieces for new, existing, lapsed (more than 5 years), and Youth members; as well as the hobby shop display Point of Purchase piece.

There was a brief discussion about the possibility of getting the new brochure included in model kits. The ED reported the manufacturers are willing to help us but it would require a significant financial investment on Council’s part as the brochures are expensive to produce; Council may want to consider a more economical piece to include. Everything we do relates to marketing and Fitch is of the opinion we should make the investment. Headquarters will investigate what options may be available.

R. Hanson felt the most understated marketing tool we have is the AMA membership card. When AMA is officially named a “Community Based Organization (CBO)” by the FAA, it should be printed on membership card.

Leader Member Program

The responsibilities
and duties of the Leader Member are listed in the Membership Manual. VP’s can find Leader Members in their district by contacting S. Grubbs at Headquarters. For the benefit of new Vice Presidents, R. Kennedy explained the LM application process; he recommends at least one or two LM per club. He sends out a newsletter to Leader Members to keep them up to date on what is going on.

Currently Kennedy is working with G. Fitch on AMA Chapters; he noted he started one in his area is it works very well.

Scholarship-Appendix VIII

M. Johnston
reported Council approved via email the Scholarship that will be given away this afternoon. Page 2 of the report shows the recommendations of the Committee.

It was moved, seconded and approved by consensus to accept the Scholarship Committee report.

Government Relations

CBO recognition
– Hanson explained why AMA hadn’t received CBO (Community Based Organization) recognition by now, as was expected per Jim Williams’ comments at the Expo in January.

TFR issue – Hanson did a search through the database and found that AMA has processed 650 FAA TFR’s in the last five year; most are for 2-5 hours, middle of the week and evening hours. A search of AMA sanctions revealed there was no official record of any contests/events being cancelled due to a TFR. HQ did have personal contact with 5 or 6 CD’s that reported having to cancel or postpone contests to an alternate date. Hanson explained how he was recently successful in obtaining a written waiver to a TFR in Palm Springs, CA. The club was extremely appreciative of what AMA did to make the event happen. Hanson feels this opened the door to having more dialogue with the FAA about how we can lessen the impact of TFR’s. Rich noted that TFR’s are not about perceived threats from model aircraft; they are part of a security system set in place to secure and create sterile airspace for VIP’s.

Hanson will continue to work on the airport compliance issue; this involves modeling operations on federally obligated airports.

Precision Agricultural Conference in Illinois – HQ was contacted by the group putting on this conference in July. They were trying to find any way to allow their vendors to demo their equipment, and the regional FAA representative suggested they talk to AMA. Rich explained the problems we have had in the past with the way the FAA system stands in terms of commercial operation of UAS, but he offered to contact the UAS integration office. Following Hanson’s discussion with J. Williams, the regional FAA representative was contacted and the event will take place. It will be an AMA sanctioned Class D aero modeling demonstration; R. Cameron (Dist. VI VP) will be the Contest Director; local clubs will be approached to help run the flight line; anyone that flies must be an AMA member; and flying will be done by AMA rules.

The Sony Open (one of the largest tennis tournaments in the country) was being held near Miami and due to sequestration and cutbacks, they didn’t have any way to do a fly-over for the National Anthem. HQ was contacted by member Dean Polermo to see if AMA could arrange for a model demo to be done. Hanson contacted Nick Maxwell and RJ Gritter who agreed to perform demonstrations (Maxwell flew a Raptor; Gritter flew a 3-D foamie).

Personal/Light Commercial sUAS Program –The staff is developing a program that puts in place the safety structure allowing members to fly safely and responsibly. Members flying FPV and semi-automated platforms are covered as an AMA member for any recreational flying they do with the current AMA insurance. If they choose to do anything business related, or for some purposeful use activities they will not be covered. HQ is talking with the insurance provider about putting together an “ad on” package, a member adjunct, not a member benefit, through the AMA where they can get primary insurance for that coverage at a greatly reduced exclusive rate. Council was in agreement with the direction the group is going.

Tallahassee incident – Hanson shared information regarding an incident involving a US Airways Express jet where the pilot reported seeing a radio controlled F4 go past his aircraft. HQ sent a safety notice to all AMA members in the Tallahassee area letting them know this occurred and if they had any information regarding the incident to contact HQ. No one ever contacted HQ saying they knew anything about it; but HQ did receive many emails saying thank you for letting them know. That safety notice was copied to J. Williams at the UAS integration office; he commended AMA for their response noting it is a perfect example of how the MOU is working.

Flying Site Grant-Appendix IX

R. Cameron
presented the committee’s recommendations for the grants. This included the amendment relative to the Kansas clubs’ application.

MOTION V:  Moved by R. Cameron (VI) and seconded by M. Johnston (VIII) to accept the recommendations of the Flying Site Grant Committee.
MOTION passed unanimously.

Changes to the program were recommended; the committee will review the program and present their recommended changes to Council for approval at the July meeting. The Vice Presidents were asked to review the applications carefully before signing them and sending them to Headquarters.

EXECUTIVE SESSION/LUNCH

MCA Survey Update-Appendix X
The survey was done to better understand both the recreational and light personal commercial user of sUAS. Barry Elk presented the 8 recommendations as a result of the survey data, input from AMA HQ staff, participation in the advisory group conference calls and MCA’s experience in membership marketing since this was about creating programs to grow the membership. The AMA has been using the advisory group as an information source for internal decision making. It was recommended that a standing committee under Council be created to address the needs and wants of the recreational/light commercial use member.

The ED noted that as we build our program we will use Barry’s guidance as part of a roadmap; taking the recommendations an incorporating them into our day-to-day programming and operations.


9. Old Business
Non-U.S. membership

This involves a person in District XI that lives in Canada, is a member of M.A.A.C. and would like to become an Officer in an AMA club. It was noted that within the minimum requirements to be an AMA chartered club, item 5 states ‘An Affiliate or M.A.A.C. member may not be an Officer of a club’.

There was a brief discussion of the AMA and M.A.A.C. insurance coverages.

Bretsen reported he uncovered the potential for a Canadian to join AMA as a full member and extend U.S. coverage into Canada for their daily flying activity. This prompted an amendment to the definition of an Affiliate member in the insurance policy to say an Affiliate is “a non-U.S. resident”. This would limit their insurance coverage to only the United States, its’ territories, Puerto Rico and possessions; removing Canada.

No additional action was taken by Council.


 10. New Business
Class C/C-restricted events-Appendix XI

M. Johnston
reported Council had received an email from his RC Contest Coordinator Doug Powell suggesting changes to the sanction form, and comments on changes that had been made at the Oct. 2012 and Oct. 2013 Council meeting. Powell expressly had concern with how those changes got worded in the Membership Manual that essentially gave C-restricted events a 100 mile protection area; this was not Councils intent.

MOTION VI: Moved by G. Fitch (EVP) and seconded by M. Johnston (VIII) to rescind MOTION IV of the October 19-20, 2013 Executive Council meeting.
(Rescinded MOTION IV: It was moved by E. Williams (II) and seconded by M. Mosbrooker (XI) to change the definition of Class “C-restricted” events as defined in the last sentence of section 3.10, page 18 of the 2013 Membership Manual to read: “If entry is restricted to, or preference or priority is given to, members of a club or clubs; or to an organization affiliated with the AMA; or to residents of a confined area, such as a city or county; or for exclusive aircraft type (e.g. helicopter, turbine, electric, etc.), it should be listed as “C-restricted”.”)
MOTION passed unanimously.

As a result of rescinding the motion, Headquarters will make the necessary changes to the membership manual and send revised versions of the appropriate materials to Contest Coordinators and Contest Directors. The ED noted Powell had made some good suggestions relative to the sanction form; no fundamental changes were made so no Council action or approval is required. Those changes were incorporated into the paper sanction form as well as on line.


AWARDS
No awards were requested.

Prior to adjournment, the President once again stated all agenda items, including supporting documentation and committee reports, must be at Headquarters 30 days prior to the meeting date.

Next meeting: July 19, 2014 – Muncie, IN

The meeting adjourned at 1:35 p.m.