0412 EC Minutes
Executive Council Meeting
April 15, 2012
1. Opening Business
Bob Reynolds of Brady Ware presented the Audit Report at this time.
B. Reynolds highlighted some of the items: Audit opinion was unqualified; cash balance was down the end of 2011 vs 2010 due to operating loss for current year; receivables increased 300k as a result of a bequest; liabilities up about 700k most related to legal claims and settlements; temporarily restricted assets up 300k (associated with the Bates estate.) Income statement: Unrestricted revenue down about 150k attributed to a decrease in membership revenue; operating expenses were up; did not generate positive cash flow operating activities, used about 500k for investing activities mostly on the purchase of capital assets; other revenue down about 500k most attributable to the market adjustments on investments.
Management Letter: all of the Academy’s accounting policies were disclosed; no new policies adopted in 2011; no difficulties encountered during the audit; no unrecorded adjustments; and no disagreements with management. Update on last years Management Letter comments: comment on the need for more timely preparation of internal financial statements for Council review-this issue was addressed in 2011; independent review of the bank and investment statements by someone other than the comptroller-this recommendation was implemented by management in 2011; HQ implemented a process to track more closely advanced ticket sales to the AMA Expo; and Reynolds reported that there has been a marked improvement with timely turning-in of supporting documentation for credit card purchases.
MOTION I: Moved by G. Fitch (EVP) and seconded by C. Bauer (VI) to accept the Audit Report.
MOTION passed unanimously
Bob Reynolds thanked the Executive Director, HQ staff and Council for the opportunity to work with the AMA and he looks forward to continuing the relationship. The audit was started on time, finished in a timely manner and the process went very smoothly.
Michael Kranitz (RC Pilot) made a presentation to Council on a world wide syndicated event planning system that lives on any website. This means any club, SIG, governing body, commercial enterprise, etc. can post this calendar on their site and when they do it means that anyone that posts an event on this calendar is automatically publishing it to hundreds of web sites simultaneously. He is of the opinion it will resolve many problems, issues and inefficiencies in the current event system. Since January they have gotten IRCHA, IMAA, NSRCA and over 300 clubs on the new system. The system publishes events, takes pilot registration, and allows people to see who is registered for a specific event. Searches can be done (filtered) by event type, within a determined radius, host organization, sanction status and authority (AMA, MAAC, BMFA, etc.). Other highlights included: has the ability to submit sanction on-line or manually; all event posts look identical; there is a social networking aspect to each event site; allows specific area for teams to post they are attending events, as well as a vendor section; allows attendees to register and pay on line (via Pay Pal) for attending events.
Discussion and concerns included: how long past events are kept in the database would be determined by AMA if the system is accepted; there was concern with the security of the data and who has access to the database-there would be a master administrator and everyone else must ask for permission to access; concern with regulation of comments to events – RC Pilot administers this; the system will not verify if a registrant is an AMA member, this would be up to the CD; tools can be built in that would allow AMA to download information (batch update) to its’ database on a regular schedule; and the system should not allow an event to be published until it has received a sanction number or the event should be displayed as ‘sanction pending’.
Kranitz knows AMA has been working on a sanction system for a number of years; this would save AMA from having to invest in developer’s costs; RC Pilot is proposing to give this service to AMA in exchange for promotional recognition in the magazine and some ads. The same proposal was offered to MAAC. They are not quite ready to move on it however 40 Canadian clubs are on it currently. There was concern with the possibility of Kranitz selling the system; he reported there would be a continuity of service agreement and AMA would be offered first right of refusal to acquire the software.
Kranitz defined Continuity of Service Agreement as: a combination of service level agreement, which says the software must stay up ‘X’ percent of time (24 hours/day) and a continuity of service component would say in the event of a sale of all or substantially all of the assets or transfer of ownership the license granted continues through to the new owner. If there is a change in ownership of all or substantially all of the assets, it triggers a right on the part of AMA to acquire the software straight out and take it from whomever the subsequent owner might be. The terms of the purchase would have to be worked out. The investment in the system right now is just over 100k. Concern was expressed relative to the owner or host/programmer of the software leaving the company; Kranitz responded the option would be to buy the system outright and the parties enter into an Operating Agreement (AMA owns, they would operate the system). He indicated he would be willing to talk about any issues that arise. He stated that AMA’s license to use the system would be free, included in it would be two hours a month of complimentary service for features; after that there would be an hourly rate. He reiterated that he is open to discussion if the AMA wants to purchase the system outright.
The President thanked Mr. Kranitz for his presentation.
It was moved, seconded and approved by unanimous acclamation to approve the minutes of the January 8, 2012 Executive Council meeting.
Activity since last Council meeting
• Visited AMA HQ following the last Council meeting, primary focus was the FAA issue
• E-Fest; B. Brown, D. Mathewson, C. Brooks and others met with Horizon and Hobbico to explain AMA’s position and direction with the FAA. Both offered their support to the AMA. R. Hanson was thanked for his seminar on the FAA during E-Fest.
• Attended the WRAM Show in it’s new venue in Secaucus, NJ; the change of venue seemed to increase attendance this year.
• Southeast Model show in Perry, GA; attended Dist. V meeting hosted by Dist. V VP Jose Soto.
• Met with J. Gaffney in Washington, D.C.; focus on FAI and establishing a better relationship with the FAI office. Gaffney set up a meeting between the President and the FAI Secretary General Jean-Marc Badan.
• Reviewed AMA’s Marketing Programs with committee chair G. Fitch and HQ staff in Muncie.
I- Carl Vogel; Steve Brehm
II- Frank Granelli; Peter Seiffert
III- Jim Martin; Randy Adams
IV- Josh Bunn; Jay Marsh
V- Kris Dixon; Humberto Pomales
VI- Frank Roales; Bob Underwood
VII- Lee Fredrickson; Randall Gibson
VIII- Mark Johnston; Randy Brown
IX- Jim Tiller; Mike Tallman
X- Roger Willis; Greg Clemenson
XI- Chuck Bower; Chris Rankin
4. Executive Director’s Report
Publications: Model Aviation redesign launched with March issue; publication department did great job and have been receiving positive feedback from the membership. Electronic advertising program launched March 1. Have sold out of banner ads in the first five months of the program; anticipate that to bring in 40k in non-dues revenue in the next year. Update on Model Aviation digital archives is on track to be launched before June 1; digital version of Model Aviation to launch approximately the same time. Expect to have a tablet version of the magazine available later this year. The magazines web site (modelaviation.com) launched six months ago; since then traffic has doubled and this leads to additional advertising and revenue opportunities and helped engage our members with the organization.
Competition: currently in the middle of the rules cycle for 2013/2014; voting begins on Monday (April 16). The FAI team programs are ready to go for this year; World Cup Free Flight events have been sanctioned. A total of 986 events have been sanctioned in the first quarter and have signed up 78 new CDs.
Safety and Member Benefits: 2012 charter renewal process is complete; 2100 clubs have renewed with about 400 still outstanding. Have issued 1700 insurance certificates for club flying sites (P. Bretson confirmed these are all being issued out of Koch/Omaha). All insurance policies have been renewed and within budget. Annual claims reports completed for 2011 and sent to Council. I. Maine continues to work with F. Gora on legal issues; to be reported on during Executive Session. This department is working with IT to improve the accuracy of the club search function.
Marketing: Launched new web site home page about a month ago; this includes a blog system in an attempt to generate more traffic to the web site. Marketing assisted in launching the new Youth E-Newsletter in Feb. They worked closely with Membership to implement three more renewal reminders; we are currently at 99.7% of 2011 numbers. They are redesigning the hobby shop program which presents another opportunity to generate memberships as well as ways to generate non-dues revenue.
PR and Development: Brooks and Mikulski working with J. Wallen and the non-dues revenue committee as well as working on other non-dues initiatives (outreach on memorial funds, estate planning, museum patron and scholarship fund.) Mandee took over the AMA Walk of Fame Brick Program; in the first quarter of 2012 AMA has doubled the number of bricks sold last year. AMA Today continues to grow; goes to roughly 143,000 individuals/month, approx. 25,000 are lapsed members. Generally see a bump in renewals following these mailings. Chris Brooks remains the prime contact for FAA issues at headquarters.
Education: Completed and launched the CSI Flight Adventure Exhibit in February at the Indianapolis Children’s Museum. This was a collaborative effort between the Children’s Museum, NASA and AMA and was funded through a NASA grant. Earlier this month the Education Dept. attended the NSTA Convention in Indianapolis. Preparations continue for the USA Science Engineering festival at the end of April in Washington, DC. Launched the new Youth E-Newsletter.
Accounting: Worked closely with Brady Ware on the audit this year. When the ED came to HQ last summer, one of the first things he talked about with the comptroller was to address the issues in the auditors Management Letter; as is evidenced in the auditors report, those issues have been addressed to the satisfaction of the auditors.
Membership: Busy with renewals, staff has been working overtime. S. Grubbs has been helping to keep up with renewal process while being short-handed. The ED also noted Grubbs is ‘the’ statistics guy; whenever information is needed they go to him and he is doing a great job.
IT: The fiber optics are in the building ready to go, still waiting for approval from the railroad to allow AT&T to cross their property to finish the project. This should be completed by April 26. This will improve Internet service in the building as well as better video and streaming capabilities on site. Discussion continues on providing improved internet service for members on site during the summer. IT continues work on the online sanction process, and helped with the redesign of the youth renewal and join page on the web site (working on this same process for the Open member form as well.) An option box was provided on the youth membership form which allows the purchase of subscriptions to Model Aviation and Park Pilot; it’s expected this will increase sales of our magazines as well as placing something in the youth member’s hands to give them the full scope of model aviation.
Museum: Much redesign work done in the museum; opened 1100 feet of exhibit space for the archives. This is a result of a project started a couple years ago once the screen printing service was closed. On display in the museum currently is the Take Flight hands-on exhibit which is on loan from the Oregon Science Works Museum. The AMA Museum hosted the Muncie Symphony Orchestra as part of the community outreach program. B. Teague reported an update on the Museum Master Plan will be presented at the July meeting.
Facilities: Much needed maintenance work was done over the winter. Staff restored the storage facility next to one of the houses AMA owns; in the process of putting the documents back into that facility. The Maintenance Dept. did the modifications to the museum. Improvements were made in the heating system to the west side of the administration building. Significant maintenance to a rental property on 200 South; PADCOM was involved with this. PADCOM should begin to address whether to improve or tear down other properties and make recommendations to Council soon. Complete restoration was done to the barn on the south side of 200. Drainage issues on Site 3 were expected to be completed last week. B. Teague reported that some of the drainage problems were a result of drainage pipes collapsing; they have since been replaced. PADCOM should review topography maps for evidence of ground settling which could lead to further problems; also investigate what effect if any, the rising river has on property. Minor grooming work will be done on Site 4 to improve the runway.
Miscellany: Working on improving the member/customer experience. Changes in the way the phone system works with department directors; if director not available the call is automatically routed to Kim J. so the individual speaks with a real person instead of a recording.
Ask AMA Tickets system: last fall there were on average about 40-50 open tickets at a time; J. Hager was asked to improve the process. As of last Thursday there were only three open tickets, with the oldest being 15 hours old.
When the 2.4 GHz craze started, Hitec found themselves with 3- and 4-channel radio systems on 72 MHz that they decided not to introduce into the country. Jay Smith and Bill Pritchett worked with Hitec, resulting in them offering the radios to AMA. We now have 743 3- and 4-channel RC radio systems to use for give away, youth education, etc. the cost was $1.42/ea.
5. NAA Report
• J. Gaffney thanked AMA for allowing NAA to present Dr. Laird Jackson the FAI Aeromodelling Gold Medal that was awarded to him in Lausanne Switzerland last year during the CIAM meeting.
• NAA closed their budget last week; showed modest operating profit as records work was down and paid FAI inflation dues (expected again this year).
• Gaffney noted the story about the Xtreme Flight Championships in Muncie, in the Smithsonian’s Air and Space magazine; this is great exposure
6. Committee Reports
NPRM: This has been pushed back to July 23 for publication; it is currently sitting in the office of the Secretary of Transportation. It is unknown whether any substantive changes have been made in terms of regulatory issues that would affect unmanned aircraft, especially the recreational side. James Williams is now heading up the UAPO (Unmanned Aircraft Program Office) and a restructuring of assignments and authority within the office is currently taking place.
Reauthorization Bill: Have been working with congressional representatives and both the House and Senate transportation committees to develop language within the act that would address the regulatory impact on model aviation. We were successful in getting language in the reauthorization bill that speaks to model aviation. More importantly, speaks to the effectiveness of a community-based safety program and the recognition of that program and limitation on regulations that would impact activity operating under that safety program. Hanson noted this falls short of calling it an ‘exemption’, but it does direct the FAA administrators to not promulgate regulation addressing model activity that operates within a safety based program, but the FAA is still given the authority and responsibility of maintaining the safety of the national air space. We still must have proper rules, procedures and understanding of how model aircraft are to continue operating safely in the national air space.
Publication of the reauthorization bill also brought attention to another aspect of it that addresses the UAS issue overall. As the bill became public, many people started understanding and envisioning the impact this might have in our community when these airplanes (UAS) start flying. There has been concern about privacy, national security, and civil liberties issues in terms of ‘big brother watching’. One of the early articles that came out in the LA Times was written by Professor John Villasenor who is a professor at UCLA as well as a non-resident Fellow at The Brookings Institute in Washington, DC. He recently participated in a panel discussion addressing those issues noted above. Rich and John have begun dialoguing about some of the information that was put out in the LA Times and clarified some of the issues specifically distinguishing between model aircraft and what the community is now calling drones. Trying to make sure that our community is understood and separated from the bigger issue of the drones which will be introduced into the air space over the next five years. Professor Villasenor stated he is committed to working proactively with the AMA to keep model aviation from being regulated.
Hanson has discussed with D. Mathewson and C. Brooks whether the AMA should create their own piece on the difference between model aviation and amateur UAS. Council needs to discuss whether there may be common ground in reaching out to the amateur UAS community. Due to heightened sensitivity of the FAA, AMA must get out at the district and national levels and relate to the community it is extremely important to comply with safety procedures. Jim Rice reported on a public complaint that was made based on a YouTube video of a person flying an electric FPV near Austin, which resulted in an FAA rep, Gary Stanford, attending a club meeting. He suggested club members try to contact this person and explain why what he did was unsafe. Rice noted he went to the YouTube site the day after the meeting and the video had been taken down.
Education (Appendix II)
Travis McGinnis presented Jim Rice with an Education Support Appreciation Award for his service on the committee and his efforts in support of the organization. He reported that a milestone had been reached and exceeded; AMA now has more than 20,000 youth memberships. M. Mikulski, on behalf of Bill Pritchett, presented each Council member with a plaque recognizing this milestone; the committee also received this plaque during their meeting on Friday. They opened their meeting with words of appreciation directed to April Conner for her years of service to the committee and department; she will be missed in the department and will assist during her transition to the HR position.
Jessy Symmes has been hired in the Education department and Emily Loy was hired as a curriculum developer and Museum educator, sharing duties with both the Education and Museum departments.
The chairman reported that the newly opened-up space in the Museum will allow AMA to host travelling exhibits; the Take Flight exhibit will be on display from April thru July. Camp AMA is expecting an increase in participation this year; a special camp is being organized on the west coast by Randy Carlson, under the auspices of AMA and the CAP. Tom Sanders was empowered to develop the concept for a youth oriented postal free flight competition; more as this develops. G. Schimmel continues his outreach activities in conducting Roundtable discussions; one held Saturday in Toledo. More will be reported on Aero Lab II and Alcoa Grant II as they develop. McGinnis reported a good portion of the meeting was spent discussing the history of education in AMA and specifically AMA leadership education as it relates to the education segment of the SLRP. B. Underwood and G. Schimmel updated committee members on how and when the AVP program started.
The next meeting of the committee will be in October the day before the Executive Council meeting; Council members were encouraged to attend.
J. Soto reported the committee met with R. Kurek and solidified their direction. Committee members are J. Soto, Jay Smith, Greg Gimlick, Mark Lanternman and Frank Granelli. They look forward to starting with important issues, one of which is the archives. This will be an added benefit to the members that will allow them to research issues from 1975 to the current issue. A tablet version of the magazine will be available later this summer. We will continue to make improvements to the magazine on the content side with input from our members. As we look to the future the big thing will be the archives and all of our electronic media. We will work closely with other departments to make sure the word is getting out about the new value added benefits for members.
Marketing (Appendix III)
The Marketing/Membership committee members are Gary Fitch chairman, Andrew Wachholz, Andres Rodriguez, Neil Roth, Ed Anderson and staff members J. Nance and S. Grubbs. G. Fitch reported he was in Muncie last month and was able to meet with numerous staff members over two days to discuss the committee’s objectives.
Action highlights as presented by the chairman included: engage automated emails using Exact Target (members can opt out of this); streamline the join and renew process; improve the new member engagement; reviewing a free month trial membership plan to increase the conversion rate to Open membership; increasing contact with members who have not yet renewed; and talking about changes to the hobby shop program to further engage the shops and make it more valuable to them.
The chairman noted that when the NPRM is finally published that will be the trigger point for AMA to react. AMA’s reach must include those fliers who are not AMA members. The committee is trying to identify how to reach the non member, educate them and engage with them on a regular basis.
The ED expanded on the enhancements made to the member experience through the three-month trial. When the person clicks the button to join, they immediately receive a thank-you email. Over the next 90 days they will receive 15-16 ‘touches’ by the AMA; will introduce them to clubs in the area, to the SIG’s and make them feel valuable to us. This is being beta tested with the three-month trial and it is expected to be expanded throughout the entire join/renew process.
Non-dues Revenue (Appendix IV)
The committee is looking for Executive Council approval of the principle of a separate administration and accounting for the charitable donation portion of non-dues revenue. The chairman wants more than a nod of approval to continue exploring the mechanism of an actual commitment to the development of a working system to properly administer, promote and effectively utilize the charitable donation portion of non-dues revenue. The committee is asking Council to buy into the principle of what the committee is trying to do, assist and work with the committee to make it work in a way that Council wants it to work.
The committee's mission is to support C. Brooks and his department in the execution of these duties to the generation of non-dues revenue. Committee members are J. Wallen, chairman; Chris Brooks; Mandee Mikulski; Dave Mathewson; Craig Schroeder; Mark Atwood and Laird Jackson. The committee determined their initial focus will be on non-dues revenue/charitable giving; they will not lose sight that other areas such as cost reduction should be explored.
Brooks reported they are trying to build the infrastructure for getting a much more assertive philanthropic program in place. The Comptroller and ED have identified the numerous donation areas and are putting it in a manageable format for the committee. Brooks noted that part of the infrastructure is the need for outside counsel (funding was in the budget for 2012.); they have employed the assistance of Mr. Phil Purcell, ID, MPA. He is the head of Ball State University Foundation, which raises ten million dollars a year. Investigating the potential for creating an AMA foundation, endowment or another vehicle to consolidate these and market to major corporations and high net worth individuals. Wallen stated at the July EC meeting they will present a handbook on how the foundation would be handled. He reassured Council they will not lose control over the foundation and how it would be administered. Near-term deliverables (July EC meeting) will be a donation policy/procedure manual (to include funding criteria and restrictions); program funding priorities/objectives and foundation analysis/recommendation.
MOTION II: Moved by J. Wallen (IX) and seconded by J. Soto (V) that the Executive Council approve of the principle of a separate administration and accounting for the charitable donation of non-dues revenue.
MOTION passed: 12-Y; 1-Abstain (VIII)
The committee was concerned that as the endowment is built, the proceeds of the endowment are not used to fund the day-to-day operations of the Academy. Separate administration and accounting means a change to the present way we address accounting of our non-dues revenue. It does NOT mean separate oversight from the Executive Council.
7. Old Business
HQ Computer System Upgrades
Mathewson reported that the Association Management System (AMS) is part of our database system Contact Management System and is where we intend to take the association over the next year. Council was given an update on the progress of the AMS. M. Benson reviewed the pros and cons of software as a service vs. an open source solution.
Software as a service (off the shelf programming)
Pros: quicker implementation initially; getting it up and running for us would be shorter-term and less costly; upfront costs are less; and software provided and maintained by others (other clients using it so they distribute the costs for maintaining the software over all clients).
Cons: more costly in the long run and difficult to customize, (to integrate someone else’s software into our system) and possible security concerns associated with someone else’s access to our data.
Open source solution - Druple
Pros: ability to add features (some could be added by staff) along the way; and AMA would own the code and have full control over the data.
Cons: there is a longer time and higher up front costs involved with getting it up and running to fit our needs; and maintenance and security provided by others (costs involved).
Core team: M. Benson, S. Grubbs, E. Bachman, B. Sullivan and C. Budreau; other teams could be formed as needed dependant on focus. Benson is the point person for the consultant. Consultant chosen is Phase II Technology, the premier Druple consultant. First step will be the discovery phase, which includes a group of people on site that will interview staff on varying points of view. Following will be recommendations on how to move forward including how to phase in the new AMS system.
Mathewson reported M. Benson is looking for guidance and support in moving in one of the two directions. Discussion included: have not gotten to the point yet where we can identify an implementation period or costs; cost for a consultant is about 18k and at the last Council meeting the ED asked if he could re-direct some capital expenditure over to the AMS upgrades, the request was approved by Council. HQ looking for authority to hire the consultant and begin the process to identify what we want and build a schematic for the ultimate system; interview the staff for specific needs, interview Council for specific needs of the AMS and possibly some outside focus group interviews.
Following a brief discussion the ED was authorized to move forward with headquarters’ recommendation to contract with the consultant Phase II Technology, for the first phase of the project to identify the needs of the schematics.
FAI cost reduction/Blue Book revisions
The President reported that there are no US FAI subcommittee chairmen or any US representative on the CIAM Bureau proper at this time; therefore no costs will be incurred by AMA for the CIAM Bureau meeting in the fall. The contingent attending the April 2012 CIAM Bureau/Plenary meeting was cut significantly; resulting in a savings of approximately $6,000 - $6,500. The committee is considering Blue Book revisions that provide a flat-fee per team member. They are also looking at supporting only the Junior FAI competitors. Part of the Blue Book revisions hinge on the outcome of discussions during the meeting of ASO representatives slated for June 2012 at NAA HQ.
8. New Business
RC Flight Deck proposal
Mike Mosbrooker and Andy Argenio will consult with M. Kranitz on his proposal and AMA’s sanctioning process. Mosbrooker requested that HQ continue to get the sanctioning software working in headquarters. An update will be presented at the July 2012 EC meeting.
Member petition re Term Limits
The President reported that a petition was received at headquarters requesting the By Laws Committee review the term limit portion of the By Laws. One VP reported having over 100 members concerned with the issue. The committee will review and report to Council at the July 2012 EC meeting.
At this time, the President reported that the CFO of the Academy has resigned; there was question as to whether or not Council should fill the position. If Council decides to not replace Mr. Holland it may be necessary to change, expand or modify what the Comptroller does to fill that void. This will be a point for discussion at the July 2012 EC meeting.
July 20-22, 2012 – Muncie IN (Full days Friday/Saturday, 1/2 day Sunday)
The meeting adjourned at 2:45 p.m.