Board of Directors Meeting Minutes, January 31, 2001, New Orleans, Louisiana

Attending:Board members Diane Balestri, Ronald Bleed, Gregory Jackson, William Graves, Joel Hartman, Brian Hawkins, Joanne Hugi, Joel Meyerson, Susan Perry, Donald Riley, Steven Relyea, Martin Ringle, and Amelia Tynan.

Also Present:Staff members Carole Barone, Richard Katz, Mark Luker, and Julia Rudy.

The meeting was called to order by Chair Ron Bleed at 1:00 pm on January 31, 2001. Susan Perry, Gregory Jackson, and Diane Balestri were welcomed as new board members.

Motion:That the minutes from the October 2000 Board meeting be approved.

Motion made by:Bill Graves
Seconded by:Joel Hartman

Passed by unanimous vote

Highlights of President Brian Hawkins' Report

Conference Update:

  • Diane Balestri did a marvelous job. Feedback was excellent. Evaluations suggested that we hear more from leaders within the IT field, so we will have a "featured speakers" feature again this year to ensure that this happens. Board members are encouraged to submit names.
  • 2002 Committee is scheduled to meet in early April to plan the Atlanta conference for which Larry Conrad from Florida State will be the chair and John Bucher from Oberlin will be vice chair.
  • Pre-conference seminars for E2001 are being selected. There will be about 25 in 2001, and there were about twice as many proposals this year.
  • A Mid-Atlantic regional conference will be held in December of this year; thereafter it will be in January beginning in 2003. It will be in Baltimore this year and in 2003; after then, the location will rotate.
  • EDUCAUSE has implemented a new process for the 2001 annual conference called Passkey, which will not let you reserve a hotel room until you have registered for the conference.

Highlights of Vice President Carole Barone's Program Report

  • NLII meeting attendance increased by 35%, and out of all who registered there were only nine no-shows.
  • NLII Web site will have URLs for all the prep material and a printed summary will be sent out to membership.
  • MERLOT and IMS boards are meeting this week; it's significant to note that these meetings are arranged around the NLII meeting and that their staffs attended NLII.
  • Carole will have an article in ER that is similar to the last chapter in the fifth EDUCAUSE-Jossey-Bass book on the 12 conditions for successful transformation.
  • Brian and Carole did a workshop with ACE fellows that provided an opportunity to talk with them about distributed learning.
  • Brian Lekander did a presentation on the LAAP program at NLII. FIPSE folks are very conscientious about coming to NLII and asking for input on the formulation of programs, thanks to the efforts of Garret and Mark.

Highlights of Vice President Richard Katz's Program Report

  • Richard has worked on two new regional EDUCAUSE conferences, the EduTex and Southeast Regional conferences. Jeff Noyes deserves a great deal of credit for the excellent program at the EduTex inaugural conference.
  • Richard has also worked with Joel Meyerson on the Forum for the Future of Higher Education proceedings from the 1999 and 2000 forums. Publication of the first volume under this joint arrangement is set for February.
  • Richard is developing a strategic relationship with the firm Eduventures.com that performs research and analysis on key technology issues for higher education.
  • Delivered a number of conference addresses, including the Nina Mattheson Lecture at the Annual Meeting of the AAMC.
  • Developed business plans, logos and word marks, and collateral materials to support the launch of ECAR, the EDUCAUSE Center for Analysis and Research.

Highlights of Vice President Mark Luker's Program Report

  • The wireless working group is working on WANs as well as wireless LANs, and is sponsoring a topic meeting at Virginia Tech.
  • The VoIP working group met in August and have come up with a good paper that covers most of the issues in the area of integrated communications services.
  • PKI group has been very busy and specifics are developed in a report later.
  • A Digital Divide for Smaller Institutions report was published in the fall and will likely result in recommendations to the new administration. NSF will probably announce another connections program "very soon," probably will be in the order of $150,000, and be compatible with "conditions of use" policies on Abilene.
  • Domain name system: appointment of new ICANN director, Stuart Lynn, as a friend of EDUCAUSE will be very helpful in international discussions.
  • Task Force on Systems Security with Internet2 will likely receive funding from NSF for information dissemination.
  • You will begin to see Washington Update published again, with a tighter focus on what higher ed cares about.
  • The D.C. office move is now complete, with the new address being 1150 18th Street. The offices are very attractive and usable, with a good conference room that accommodates board meetings and "working group" meetings.
  • The policy group has hired Laila Van Eyck into the position vacated by Casey Lide. She worked at NASULGC for many years and knows and has very good connections
  • Steve Worona of Cornell will join the DC office in the director position vacated by Jim Williams. Steve has been active with CSG and runs the Cornell Policy and Law Institute. He will be full-time in May.

Business Agenda

1.Financial Update

Auditors started yesterday on a fiscal audit. Brian explained that the excess surplus was due to four factors, including staff turnover (and staff salaries saved), special projects that couldn't be accomplished because of the staff vacancies, greater than predicted revenue generated from fixed-income investments, and significantly greater than expected income derived from the very successful annual conference in Nashville.

2.Investment Update

Investments have been equal or greater than the approved indicators of the markets that we use.

3.Review of reserve fund levels and targets

In previous meetings of the EDUCAUSE Board of Directors (October 1999 and January 2000), it was determined that EDUCAUSE should have financial reserves that are adequate to allow the association to maintain a consistent 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 rule of thumb that has historically been used is that one half of the annual operating budget should be kept for such emergency reserves. 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.

In addition, a leadership fund of $2 million was established in October 1999 to fund extraordinary opportunities and investments that might arise 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 these two criteria for the EDUCAUSE financial reserve fund, and the target for the leadership fund, our combined reserves should be somewhere between $7,070,000 and $7,680,000. Our current target is $7,000,000 and our actual holdings in these funds are $7,259,226, not counting the excess operating revenue and fixed income (but including unrealized gains) from FY2000. If the Board approves the motion in the next action item, these funds would be carried forward to use in FY2001 and not add to the reserve levels.

Previous Board discussions and actions suggested that these reserve funds not grow significantly, but that excess beyond approved targets be reinvested in programs and services for the membership. This background is provided pursuant to a motion of the October 25, 1999, meeting of the EDUCAUSE Board, which determined that these targets and actuals should be reviewed annually by the Board.

Motion: That the Board affirm that the current targets and actual levels of reserves 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 the previous motion made at the October 25, 1999 Board meeting.

Moved:Marty Ringle
Seconded:Susan Perry

Passed unanimously.

4.Use of positive cash balance for FY2001

The projections for the year-end closing suggest that the year-end balance shows an excess of revenue of $1,053,094. The past fiscal year shows this very positive balance due to four factors:

  1. the larger-than-expected conference revenue;
  2. significant salary savings due to unplanned vacancies;
  3. projects that were funded in the budget, but which could not be undertaken due to the shortage of staff to conduct these efforts; and
  4. fixed income that was significantly larger than projected or approved.

In October 1999 the Board approved the use of all projected fixed income to be included in the annual operating budget. At the time of that motion, the projected amount was $150,000 and this was what was included in the FY2000 budget. However, the actual fixed income during the past year exceeded this amount by $265,218, largely because of the amount of funded projects that didn't get expended at the rate expected, and because of higher than projected interest rates. It is therefore recommended that this excess be rolled over to FY 2001 to fund the strategic initiatives fund and support one-time projects approved in the 2001 program plan.

Because of the amount of the proposed carry-over from operating funds ($656,152), and the fixed income revenue mentioned above, as recommended in the motion below, management does not plan to use any of the $500,000 from the leadership fund that was approved in August 2000 for the establishment of ECAR. Instead these carry-over funds would fund ECAR and other projects, leaving the leadership fund intact. While it seems premature to rescind that motion at this time, no funds will be drawn from this authorization without the advance approval of the Board.

Last January the Board approved the policy of authorizing the rollover of unrealized gains from the previous year to fund the Strategic Initiatives Fund. This year that amount was $131,725. However, due to the volatility currently being experienced in the stock market, it is recommended that we not sell anything at this time, as the other funding already described will adequately fund the special projects that we have planned, and these funds will cushion any unexpected stock market correction.

All of these issues in combination allow EDUCAUSE to maximize services and programs that could be offered to the membership in 2001, while not significantly adding to the current level of reserves, as was defined as a specific goal of the Board last October and again in January. Therefore the following motion is suggested to manage EDUCAUSE resources to the predefined set of goals and to provide maximal services to our members.

Motion: That the operating surplus for FY2000, including the fixed income growth in excess of the planned budget, be transferred to the Strategic Initiatives Fund for the implementation of the projects identified as off-budget projects in the 2001 Program Plan approved in October.

Moved:Joel Hartman
Seconded:Mely Tynan

Passed unanimously.

5.Discussion of directions for new dues structure

Brian explained the proposed new dues structure that would be for the 2002-03 academic year, describing the rationale for the original EDUCAUSE dues structure based on Carnegie Classifications. The vast majority of members got a decrease or stayed the same at the time of the merger. Then Carnegie changed their classifications so we had to revise the EDUCAUSE dues structure. Brian has developed a new structure that "grandfathers" certain categories of membership and is seeking approval of the model, rather than approval of actual dues or the increase. The Board agreed with the new direction and approach.

6.Discussion of the .edu domain issues

EDUCAUSE will likely be able to ensure that community colleges will have access to the .edu domain as it assumes authority for the domain. EDUCAUSE first sought stewardship for the .edu domain almost two years ago and there have been many challenges that kept it from going forward. But it now seems ready to move ahead and hopefully the Department of Commerce will shortly announce a call for comments for sole stewardship by EDUCAUSE. There will be a 30-day period during which comments will be considered. EDUCAUSE qualifications are outstanding; we represent the IT part of the .edu community, especially the networking aspects; we also have excellent technical means of supporting registrations in the domain.

EDUCAUSE would have responsibilities in three areas:

EDUCAUSE proposes to start with the present domain of U.S., four-year, accredited institutions of higher education. A policy board consisting of the presidents of ACE, NACUA, and EDUCAUSE would then hear suggestions for modifications in the policy and recommend changes, if any, to the Department of Commerce. Mark Luker of EDUCAUSE would staff this Board.

The actual registry operations are currently being supported by NSI, recently acquired by VeriSign. EDUCAUSE plans to subcontract these functions, and such discussions are underway as a business plan for this effort is being finalized.

The registrar function has to do with who makes eligibility determinations, takes applications, checks for conflicts, and does paperwork, billing, records. It is planned that EDUCAUSE would perform most of these functions, although some could be outsourced. It is perceived that it is important for EDUCAUSE to be the "front door" for these requests and maintain a high level of customer service in handling requests, questions, etc.

  1. Policy stewardship
  2. Operations -- Registry
  3. Operations -- Registrar

We are proposing to operate at cost-recovery or less. It will cost about $320,000 to do this, including costs in EDUCAUSE and VeriSign. The suggestion was made that we try to get VeriSign to listen to our community's problems with their contracts.

7.Discussion of Higher Education Bridge Certification Authority

The Higher Education Bridge Certification Authority (HEBCA) proposal is coming out of the HEPKI group (working group on PKI, I2 middleware project, and CREN staff). EDUCAUSE has been very active in this area for several years. The government is unable to pick a single solution (like higher ed), and different certificate authorities are being selected. This works well within an organization but not across the organizations. It requires making lots of different connections and agreements. Technology is a relatively small issue in this solution, but the policy issues are large.

The federal government now has a working pilot system for a bridge technology that translates between alternate CA systems. More importantly, they have a policy document that provides a central point of agreement into which all the organizations can plug.

Higher ed has a similar situation. We recognize that we would benefit with a Higher Education Bridge Certification Authority that would help speed up adoption of PKI. If such an entity could be built and operated, who would be the policy authority that takes the place of the council of CIOs in government? EDUCAUSE has been suggested as the organization to be the policy authority in higher education. While this is a high priority, it is not an urgent agenda that must be developed immediately. The real driver is coming through federal government financial aid systems, and fall 2003 is a likely date when this would become critical.

Politically, we are working well and closely with I2 and their middleware efforts related to all of this. EDUCAUSE will pursue leadership of the HEBCA, although it will be a big-ticket item with costs involved for virtually all campuses. Charges will not be insignificant, and campuses will need to pay. Perhaps we'll be able to have a two-tier structure for EDUCAUSE members.

8.Internet2's K-20 initiative

Mark presented an update on I2's K-20 initiative and asked the Board's input on the EDUCAUSE position on this. The initiative got started with the concept of opening connections to Abilene for state K-12 networks but got expanded to an applications focus. EDUCAUSE has been asked to be one of five leaders, but because there is no business plan and since it is being rushed without having been thought through, EDUCAUSE management plans to decline this opportunity. There are many unanswered questions - is it a new organization, are there meetings, will there be dues, will this further diffuse efforts in these areas, and so forth. EDUCAUSE has been invited to meet on February 8-9 to discuss the project and we plan on participating to see if the issues listed above can be clarified.

9.Millennium Partnership directions

Brian described the Millennium Partnership initiative being proposed within NASULGC. EDUCAUSE was asked to participate in the discussions and we have done so. The Board and the membership will be kept informed as this project becomes more tangible.

Adjournment

The meeting was adjourned at 4:35 p.m.

The next Board Meeting will be held Thursday, April 12, 2001, from 8:30 to 3:00, in Washington, D.C., at our new offices at 1150 18th Street.