FPPTA Board of Directors Meeting Minutes
Date: October 3, 2015
Call to order: 2:05 PM
Quorum: Verified and Seconded
Directors Present:
Pete Prior, Chairman
George Farrell, Vice Chairman
Steve Aspinall, Treasurer
Tim Olsen, Director
Gary Clark, Director
Dwight Mattingly, Director
Ann Thompson, Secretary
Ray Edmondson, Director Emeritus
Ken Harrison, Director Emeritus
Others Present:
Kim Ryals, CEO
Peter Hapgood, Education Consultant
Jeanine Bittinger, Board Accountant
Richard Cristini, Board Auditor
Ron Cohen, Board Attorney
Fred Nesbitt, Media Consultant
Susan Marden, PR Consultant
Brent Chudachek, Board Attorney
Randy Touchton, Legislative Consultant
Darrell Presley, Photographer
Mike Spencer, Dean of Faculty
Stephanie Wehrly, Executive Assistant
Sean McKinstry, Executive Assistant
MJ Chwalik, COO
Lois Edmondson, Executive Assistant
Directors Absent:
Renee Lipton, Director Emeritus
Mr. Edmondson requested the Board and meeting members recognize a moment of silence for Stanley Lipton.
Approval of Minutes:
Ms. Thompson asked if the minutes would reflect the changes. Mr. Prior said they would. Mr. Farrell motioned. Ms. Thompson seconded.
Passed unanimously
Old business: None.
New business: None.
Chairman – Pete Prior
Mr. Prior reported that he has had numerous phone conversations with the CEO regarding issues with the bylaws and audit committees. He will let the respective chairs of each committee speak to those issues in their report.
Vice Chairman – George Farrell
Mr. Farrell referenced an email sent by one of the directors citing recent events of domestic terrorism, and because the nature of the FPPTA membership involves so many law enforcement personnel, the FPPTA should at least discuss ways to keep its events safe. Discussions with board members led to the idea of a committee made up of the professionals within the membership who deal with domestic terrorism within their professional life. The Board of directors would like to be careful how it is labeled; this is not “security,” but rather a program that promotes awareness. The committee will be made up of Mr. Farrell, Mr. Aspinall, and Mr. Corbet. Mr. Farrell asked that anyone with experience in these matters who may be interested or know of someone who is experienced in these matters to please refer them.
Secretary – Ann Thompson
Ms. Thompson has no Secretary report but requested to report on the Voice magazine.
Ms. Thompson reported the magazine was an easy publication to put together this time. Ms. Thompson reported that she receives a lot of response from Associate Members. She finds it is easier to get advertisements from Associates than it is to get editorial content. Citing a request from Mr. Clark at a previous meeting Ms. Thompson reported that the Voice magazine received 28 advertisements, 9 of which were part of the sponsorship program. The seventeen additional advertisements resulted in $14,799 new revenue in addition to the revenue generated from the sponsorship program for a total of $21,850 in sponsorships for the magazine.
Ms. Ryals added that the Voice has been mailed out and should be delivered by the time everyone returns home, if it had not been already.
Mr. Clark asked of the Associate Members participating in the sponsorship program, how many associates have advertisements in the magazine?
Ms. Thompson responded that all but one who sponsored submitted an ad and also all but one who submitted an article submitted advertisements. Meketa was the only firm with an article that did not participate in the sponsorship program. A lot of the Associates who participate in the sponsorship program upgraded their advertisement from the “business card” size to a larger advertisement.
Treasurer – Steve Aspinall
Mr. Aspinall reported that the balances shown in the meeting book was from September 25th. He has compared that to the bank account as of October 1st and there are just minor differences. Mr. Aspinall reported a total of $23,156.44 in the BB&T account and $499,834.64 in the Prime Meridian account.
CEO – Kim Ryals:
1. Ms. Ryals reported that the 2015 membership currently has 220 Associate Members, 268 pension boards. There were a few new members who joined in order to attend the June conference but there have not been others who joined since. Ms. Ryals reported that there are five firms attending the school that paid a registration fee, but were not required to pay a membership fee because they were there to check it out and consider membership in 2016. Ms. Ryals reported that this a common practice and that there has never been a firm that did not join the organization after attending an event.
Ms. Ryals reported there are 669 attendees registered for this school occupying 425 rooms on property. Attendees filled up two overflow hotels, and there are an additional 100 people who made other arrangements. Because of the increased attendance, Ms. Ryals reported that they increased food and beverage guarantees with the hotel. Ms. Ryals reported that the Welcome Gathering and lunches would be in Orchid ballroom and will spill out into the hall way.
2. Ms. Ryals introduced the new COO, MJ Chwalik. Ms. Ryals reported that Ms. Chwalik joined about a month ago and MJ is adapting very well and Ms . Ryals looks forward to working with her going forward.
3. Ms. Ryals referred to the previous February meeting and reported the move to Prime Meridian for the operating account as well as their merchant service has been a good one; the FPPTA bookkeeper is receiving weekly reports and has been able to utilize their services with ease.
Ms. Ryals reported that the audit committee will discuss credit cards for employees during its report.
4. Ms. Ryals referenced the sponsorship program reports for the Annual Conference and October Trustees School in the meeting booklet.
5. Ms. Ryals reported that the financials regarding the 2015 Wall Street Program had not been reported in June because they were still working out billing discrepancies with the hotel. Ms. Ryals reported that the hotel had over charged the FPPTA by $10,000-$12,000. The hotel reduced bill by $10,000 which was less than the desired amount but there was little to do beyond that. Ms. Ryals reported the income and expenses in the Wall Street event’s financial report in the meeting booklet. Ms. Ryals reported a revenue loss mainly due to under budgeting food and beverage costs with the hotel. There were also an additional five attendees with the recent change of capping the attendance at 35 rather than 30. Going forward, there have been two additional sponsors added for a total of 12 Wall Street sponsors. The program will also be extended by one day. Ms. Ryals reported that over the past couple of Wall Street Programs, the attendees participated in a small focus group at the program’s conclusion. The largest issue was the amount of information provided in just one day that would be better if spread out over two. The additional two sponsors also need an opportunity to be included in the agenda. Going forward there will be two ¾ length days. Tuesday night will now be the welcome dinner, Wednesday and Thursday will be the educational sessions, and the visit to the NYSE on Friday.
Ms. Thompson asked if the two additional sponsorships are sufficient to cover the extra day. Ms. Ryals responded that the additional sponsorships generated $13,000 and that would cover the costs for the extra day. Ms. Ryals reported that the program would also be expanded to 40 attendees due to its popularity. Ms. Ryals reported that staff has been brainstorming ways to improve the registration process to make it fairer and to avoid having people lined up starting at 5AM as they were4 at the June 2015 Conference. One potential suggestion was to utilize a lottery of all eligible members interested in the trip. As of this date no decisions have been made.
6. Ms. Ryals reported the June Conference financial reports in the meeting book citing $488,000 in income, $375,000 in total expenses resulting in a net profit of $112,000.
7. Ms. Ryals reported that the Trustee Handbook is at about 95% done. At this point it is mainly formatting and a few edits and reviews left before it can go to print.
8. Ms. Ryals referred to the cash luncheon at the June conference reporting that it was not well received or well attended. The hotel had the FPPTA guarantee $8,000 for the lunch service, however dropped that to $5,000 for the second day. After receiving very little in revenue generated from the lunch, it was understood that the FPPTA would pay the difference but the hotel waived that cost understanding it was a trial run at the new lunch format. Going forward, the FPPTA may not provide a cash box-lunch. Ms. Ryals will open the issue up for discussion with the Advisory Board since the format was the proposal of a sub-committee on the Advisory Board.
Mr. Mattingly reported that he had some comments regarding the lack of options offered in the lunch and asked if a hot lunch with more options might have made it more successful. It also had the feel of a pre-packaged deli or airport option.
Ms. Marden also added that cost was a factor as the packaged lunch was the same price as the hotel restaurants.
Ms. Ryals will work with next hotel to see what the options are available, but she does not want have any additional food and beverage guarantee that can’t be met.
Mr. Prior asked if it made sense to go to a pre-paid lunch and include the cost in the registration fee as discussed at one time.
Ms. Ryals responded that it was discussed, but it would require increasing registration fee by substantial amount to cover costs, citing a $25 minimum cost per person.
9. Ms. Ryals proposed registration fees increase for schools and conference at the morning Directors meeting. Directors would like some more information on the expense side of it. Ms. Bittinger just needs a little more time to work through those numbers. Ms. Ryals asks the Board for instruction going forward on this proposal.
Mr. Prior reiterated the sentiment from the morning meeting that if no changes are implemented we may be looking at a deficit as projected in 2014. The Board could approve the proposal, contingent upon the expenditures provided by Ms. Bittinger provide a sustainable income going forward.
Mr. Mattingly motions to open up discussion. Mr. Aspinall seconds. Mr. Mattingly expresses he would like to track down what contributes to the shortfalls and address those issues and to make sure the increase will cover those losses. Mr. Aspinall offers that one of the reasons it should go forward is that the FPPTA has not raised fees in four years for the school and an incremental increases is easier to accept by attendees than a large jump in the registration fees.
Mr. Clark suggested that it would be helpful if Ms. Bittinger identified what is driving the cost increases so the Board can determine if the costs are avoidable or a natural increase in the cost of doing business.
Ms. Bittinger responds that it is mainly hotel costs driving the increase. Ms. Bittinger cites that while attendance growth and the revenue are up, the costs of the event venues is up as well and outpacing the cost of attendance.
Discussion took place.
Mr. Prior asked Ms. Bittinger to clarify what the increase or decrease in net assets included, such as, does it include the mortgage payments on the office building, and could those variables be responsible in the downward trend in income. Ms. Bittinger clarified that the figure included all operating costs, including mortgage payments.
Mr. Edmondson asked for the figure for the reserve fund. Ms. Bittinger responded that there is approximately $153,000 being maintained as a separate account. Mr. Edmondson doesn’t believe that is enough to cover a function. Ms. Ryals adds that the reasoning behind the membership rate increase proposal was to better cover and reflects cost increases of putting on a function.
Mr. Prior explains that the $150,000 figure was determined when the organization was much smaller with a fraction of today’s attendance.
Mr. Aspinall recognizes Ms. Ryals’ work and thought that went into this proposal and is relying on the analysis of the CEO that $100 is a sufficient increase and expresses that he does not think it was arbitrary number.
Ms. Ryals concurs but adds that she thinks it should be more than $100, but is concerned that a higher increase could negatively affect attendance. At the same time fees have not been increased in a long time and the services provided to the membership have expanded. Ms. Ryals predicts even with the fee increase, another increase will be required in a couple years if the organization continues on its growth trend.
Mr. Aspinall states that the organization could raise fees on associates down the line if the increase to registration fees does not prove to be sufficient. Ms. Ryals goes on to explain that she targeted registration fees because that is where the growth is and it would translate to more revenue.
Mr. Farrell states he would feel more comfortable if the Board looked at ways to increase revenue as well as cut expenses. If some services need to be cut in order to off-set the increasing costs associated with functions, then that should be looked at.
Ms. Thompson would like to remind the Board that relatively speaking to the scope of the organization; the deficit is not a bad one. Recognizes that it should be addressed but does not feel the organization is in financial trouble.