Board of Directors Meeting Minutes, January 28, 2004, San Diego, CA

Attending: Board members John Bucher, Kathleen Christoph, Greg Jackson, Perry Hanson, Brian Hawkins, John Hitt, Jeffrey Noyes, Susan Perry, William Pritchard, George Strawn, and Ellen Waite-Franzen. Absent were Robyn Render and David Ward.

Also present: Staff members Carole Barone, Denny Farnsworth, Cynthia Golden, Richard Katz, and Mark Luker.

The EDUCAUSE Board of Directors meeting was called to order by Chair Kathy Christoph at 1:00 p.m. on Wednesday, January 28.

Motion: That the minutes from the November 3, 2003 Board meeting be approved.

Motion made by: Perry Hanson
Seconded by: Susan Perry

Passed by unanimous vote

I. Reports

President’s Report

  • The Core Data Survey has been reinitiated for this year. Response is very good and there are already more than thirty new schools participating. We have done a mailing to the League for Innovation to encourage community college participation. This year’s questionnaire is seeded with last year’s data. We have developed an arrangement with state college systems to aggregate data for their campuses with permission from the participating institutions. One of the issues we’ve been struggling with is the difficulty with IPEDS comparisons. IPEDS data are seriously flawed due to inconsistencies in the way schools fill out the survey. Highlights of Vice President Carole Barone’s program report
  • The NLII annual meeting included a tribute to Bob Heterick. The format of the annual meeting was changed this year by adding interactive track sessions, and the sessions were very well received. We did what we call the “San Diego experiment,” which included wireless being provided throughout the meeting and we used a group tool called iCohere that was operating in the background. The feedback indicates that the tool changed the dynamics and enriched the experiences of the participants. It also enabled us to collect all the PowerPoint presentations and have them online either before or right after the presentations.

Highlights of Vice President Cynthia Golden’s program report

  • The evaluations for the 2003 annual conference are the highest we’ve ever seen. Cynthia extended congratulations to John Bucher and his committee. John Bucher thanked the staff for their support on EDUCAUSE 2003.
  • The 2004 committee is very busy and will be ready to read proposals at the end of February. This year, we will be using member committees to broaden the network used to gather proposals. It is hoped that building these bridges will help to enhance the content of the conference. The EDUCAUSE 2005 is currently being assembled with Lucinda Lee chairing it, and Reid Christenberry (who will chair EDUCAUSE 2006) acting as vice chair.
  • Regional conferences are in full swing. The Southwest Regional will be held in Dallas in February. The Western Regional will be held in March in Sacramento, NERCOMP will be held in March in Worcester, MA, the Midwest Regional will be held in April in Chicago, and the Southeast Regional will be held in June in Atlanta. Demographics indicate new faces are still attending, and regionals are reaching new participants, namely individuals that don’t attend the annual conference. P2P and Security remain the hot topics for regional conferences.
  • We are continuing our partnership with CIC for presentations at regionals. Next year we will focus on security issues for small colleges. People are registering late, but registering never the less. Late registrations do cause planning concerns.
  • The Frye class has been selected and will be a class of 45 participants.
  • Our affiliate partnerships are continuing. The CUMREC Board is having discussions about whether a Board is needed. These are the same types of discussions the SAC Board had and focus on whether they need a Board and a program committee, or simply a program committee. CUMREC will have their 50th anniversary next year. This anniversary conference will be held in Denver next May.

Highlights of Vice President Richard Katz’s program report

  • ECAR is going well, with an increase of 27 subscribers for a total of 286.
  • ECAR is now in its third year, with four major research studies underway. Next month ECAR will publish a study on IT Leadership. In April a study on IT Strategic Management will be released. We have gained permission to deploy a student survey in nine institutions. It will be characterized as a pilot study on faculty and course management. There is a survey that has already been distributed that Phil Goldstein originated, dealing with IT funding and finance. Finally there is a draft instrument to be reviewed next week on integrated communication services.
  • ECAR will meet next month with David Ernst and Hillary Baker on the ERP study and where it will lead.
  • Richard gave the opening keynote to the higher education group that Oracle convened, and Oracle just became the most recent corporate sponsor of ECAR.

Highlights of Vice President Mark Luker’s program report

  • EDUCAUSE signed a contract with Dartmouth University for operation of the Higher Education Bridge Certification Authority (HEBCA).
  • The Security Task Force just issued the Effective Security Practices Guide. It introduces and organizes a large collection of documents on our Web site that provide practical, step-by-step advice on how to improve security on your campus.
  • EDUCAUSE is now closely involved in the National Summit on Cyber Security, a coalition of industries and associations with close ties to the Department of Homeland Security, that is drawing up implementation plans for the National Strategy. EDUCAUSE staff and members are chairing three of the subcommittees involved. Robyn Render is serving as one of the committee members on a governance subcommittee for education and non-profit organizations.
  • In the .edu domain, we are completing our study to characterize the legacy domain names; who owns them and what type of institution they represent. We’re about to start a technical trial to implement IPv6 on experimental domain name servers for .edu.
  • The Peer-to-Peer space is very active; we’re receiving more proposals in response to our second RFI for legal, on-line music providers. The technical leader of the Penn State Napster project and the technical leader of their LIONShare project are coming to speak at the [email protected] conference next week.
  • The Policy program is also very active. Broadband networking, Voice-Over-IP, and spectrum allocation issues are really starting to move, in terms of both technology and policy. We’ve mounted a one page brief on the issues most important to EDUCAUSE, including our policy position on each, on the Web.

Business Agenda

1. Financial and Investment Update

The Board book contains the November financial statements. Preliminary year-end statements were distributed at the meeting. They are preliminary because the year has not yet closed. Hawkins explained that Statement of Activities report was in a new format in response to a request made at the last Board meeting. The Board indicated that the new format met their needs. The report shows that EDUCAUSE is ending the year with an approximate positive balance of $430,000. Contributing to that surplus are unrealized gains, cost containment measures, and ECAR being well ahead of the plan to achieve self-sufficiency.

The investment reports are as of November 30. Since that time, we have seen another $225,000 in unrealized gains. The gains are coming from both fixed income investments and mutual funds. We hold three mutual funds, Washington Mutual, Growth Fund of America, and Bear Stearns Stars S & P 500. The Bear Stearns fund is a mid-cap fund and the most aggressive. It suffered the greatest percentage decline, but is now moving upward. John Hitt requested that we look into the wisdom of staying with the Bear Stearns fund based upon some investment advice he received. Staff will follow up and report back.

2. Review of reserve fund levels and targets

In previous meetings of the EDUCAUSE Board of Directors, it was determined that EDUCAUSE should have financial reserves that are adequate to allow the association to maintain a consistently high level of services to members through difficult economic times. Reserves should also be adequate to fund an orderly shut down of the association, permitting it to meet all its legal and moral obligations, should that ever become necessary. The most recent survey of the American Society of Association Executives (ASAE) found that the actual reserves maintained by associations that responded were approximately 56% of annual operating budgets. Based upon the budget approved in November, 2003 for FY2004, our financial reserve fund should therefore be approximately $6,530,000, including ECAR and the EDUCAUSE operating budgets for FY 2004.

In addition, a leadership fund of $2,000,000 was established in October, 1999 to fund extraordinary opportunities and investments that might arise, and to provide the initial capital for programs and initiatives that would afford the membership with a margin of excellence, and that could not be handled through the normal operating budget. This fund was (and is) not intended to be an endowment, but it is “seed corn” for efforts that the Board deems of extraordinary value to the membership. Based upon the criterion defined above for the EDUCAUSE financial reserve fund, and the target for the leadership fund, our combined reserves should be approximately $8,530,000, as compared with $8,200,000 that was approved last year at this time. Our current actual holdings are approximately $10.5 million, not counting excess operating revenue from FY2003.

Previous Board discussions and actions suggested that these reserve funds not grow significantly beyond defined and approved levels, and that excess beyond these targets be reinvested in programs and services for the membership. Pursuant to the motion of the October 25, 1999 meeting of the EDUCAUSE Board, these targets and actuals should be reviewed annually by the Board.

Motion: That the Board affirm that the current combined targets of $8.5 million for reserve levels in the EDUCAUSE Financial Reserves and the EDUCAUSE Leadership Fund are appropriate, and that this motion reflects the annual review of these reserve levels called for in a motion made at the October 25, 1999 Board meeting.

Motion made by: Susan Perry
Seconded by: John Hitt

Passed by unanimous vote

Motion: That the current excess above these levels be made available to management during 2004 to handle any shortfalls of projected revenue that might arise from the difficult economic environment currently being experienced by higher education, continuing the philosophy adopted last year that it is imperative to further invest in the membership, and invest in the services and programs in support of the membership during these difficult times. In the event that these funds are not needed to cover a shortfall, that they be available for special one-time projects (such as enhanced programs in business continuity and security), and the balance be left untouched in order to support initiatives approved in future years.

There was discussion of the risks of allowing reserves to grow too large. Since a portion of our reserves is comprised of unrealized gains and losses, it’s difficult to determine just what our tangible reserves are. To help address this problem, a request was made to produce summary financial statements that have the effects of unrealized gains and losses removed. Staff will have those statements available for the next meeting and the Board will examine those statements before determining if a strategy for dealing with excess reserves is necessary.

Motion made by: John Hitt
Seconded by: Susan Perry

Passed by unanimous vote

The projections for the year-end close suggest that the year-end balance shows revenue in excess of expenses of approximately $430,000. The past fiscal year shows a positive balance due to the success of ECAR; unused strategic initiative funds, and lower than projected expenses due to cost containment efforts in what was expected to be a very difficult financial year. This balance, plus the proposed motion in item 3 above, will allow EDUCAUSE to maximize services and programs that could be offered to the membership in 2004.

Motion: That the operating surplus for FY2003 be transferred to the Strategic Initiatives Fund for the implementation of the projects identified as off-budget projects in the 2004 Program Plan approved in September.

Motion made by: Ellen Waite-Franzen
Seconded by: Willie Pritchard

Passed by unanimous vote

3. 457(b) Plan

Motion: That the Board approve a 457(b) plan to be effective January 1, 2004.

Motion made by: Susan Perry
Seconded by: Willie Pritchard

Passed unanimously with one abstention (Hawkins)

4. Update on and discussion of e-content initiative

  • Cynthia Golden reported that Catherine Yang has been hired as director for the e-content initiative. Catherine will come on board in Boulder in mid-March.
  • We are moving to create a new professional development opportunity by having some of our members serve as editors for our resource pages.
  • The E-zine is in progress with some prototypes developed and we are establishing the pipeline for content.
  • Review of content management strategies is underway.

5. Conference call re: Board Slate – Proposed 4:00 p.m.(EDT), Wed, June 9

The time and date was acceptable to the Board members.

6. New Business

There was no new business

7. Adjournment

Motion made by: Willie Pritchard
Seconded by: Greg Jackson

Passed by unanimous vote

The meeting was adjourned at 4:30 p.m.
The next Board Meeting will be held Thursday, May 20, 2004 from 12:30 – 5:00.
The meetings will be held in Washington, DC at our offices at 1150 18th St.