Board Members Present: Susie Garretson, Chair; Susan Olberding, Secretary; Linn Montgomery, Treasurer; Bill Beaver; Susan Golightly; Max Oelschlaeger; Carl Phagan; Peter Pilles; Wayne Ranney; Katrina Rogers; Carolyn Shoemaker; and Miguel Vasquez

Board Members Absent: Ann Poulos, Vice Chair; Jon Bonnell; Deb Hill; Leigh Kuwanwisiwma; Louis Jacobs; and Larry Stevens

Emeritus and Ex-Officio Members Present: Dean Pickett, Emeritus and Ben Smith, Emeritus

Others Present: Dennis Miller, President of Miller-Russell; Robert Breunig, Director; and Roger Clark and Lynn Yeager, MNA staff

Before the meeting was called to order, Chair Garretson introduced Dean Pickett and Ben Smith to the other trustees.

I. Call to Order
Chair Garretson called the meeting to order at 10.30.

II. Approval of Minutes of Last Meeting
A motion was made and seconded to approve the minutes of the December 6, 2003 meeting. The motion passed unanimously.

III. Report from the Chair
Susie stated that the executive committee met twice since the last board meeting, but that no actions were taken. She reminded the board that Joan Scott resigned soon after the last board meeting. She explained that the membership meeting would be held June 5 this year. Because the meeting this year will include a guided tour of the enduring creations gallery after hours, the board meeting was delayed until June 26th. Susie also explained that following the March 6 board meeting, from 5:00 to 6:30 p.m. there would be a community welcome for Bob Breunig and a public thank you for Max Oelschlaeger as the outgoing interim director. Immediately following this event, there would be an alumni rendezvous for MNA alumni, staff, and board to gather with the director.

IV. Report from the Director
Bob explained that January was an intensive month. He has examined MNA’s past; reviewed policies, staff issues and concerns, the SW mural project, the Colbert Endowment, the issues surrounding a potential repository, and MNA’s relationship with the Muses; overseen budget development; met with MNA’s partners for the Plateau Journal; and visited with NAU and other community groups. He explained briefly that MNA’s 2003 finances were bolstered by the sale of assets, and that MNA has no intention of selling other assets this year. The only solutions to this year’s budget deficits are to 1) increase sources of revenue, or 2) decrease the scope of operations or 3) a combination of the two. He would also like to revitalize our exhibits and programs, and has discussed pertinent ideas with the NAU anthropology department. He looks forward to meeting with NAU’s geology and biology departments, as well as other science and arts groups in the community.

He reminded the board that David Gillette was hired as the Curator of Paleontology in November, which led to restoration of the geology department. Bob asked that the board approve the Memorandum of Understanding (MOU) concerning the reestablishment of the Colbert Endowment in the tradition of its original intent as suggested by Ned Colbert. He explained the parameters of the MOU, including the responsibilities of the Colbert Chair, and the financial restrictions of the endowment. An amount consistent with MNA investment policies (that will not erode the principle) will be used primarily to support the salary and benefits of the chair. Should there be any amount remaining, up to 10% can be used for overhead costs for the geology department. Finally, if funds remain after the salary, benefits, and overhead are paid, they can be used to fund research in support of the Chair and other geology staff. The endowment is restricted in its use, and cannot be used as collateral for a line of credit. If the program is abandoned, the endowment shall be transferred to use at a similar institution. A motion was made and seconded to approve the Colbert Endowment MOU as presented. Dean Pickett explained that because, unlike other employees, the Colbert Chair is appointed for an initial period of five years, and is still subject to the personnel policies of the museum, some clarification needed to be made. A motion was made and seconded to add in paragraph 4 of the MOU, after “subject to personnel policies”, “except as otherwise amended in this MOU.” The amendment to the motion passed unanimously. The original motion also passed unanimously. Bob clarified that it was his intention to hire Dave Gillette in the position of Colbert Chair immediately upon signing the MOU.

V. Report from the Finance and Investment Committee
Linn Montgomery introduced Dennis Miller, of Miller-Russell and Associates, the firm managing the museum’s endowments. Dennis explained that he meets with the finance and investment committee on a quarterly basis to insure that the committee fully understands the portfolios of each endowment. He stated that since 1998, when the endowments were moved to Miller-Russell, they have increase in value by $807,675; however, over $750,000 of this amount was in 2003. He believes that the endowments will increase another 8 to 10 percent in 2004. Dennis explained the idea behind modern portfolio theory and why it is important to portfolio construction. Using a power point presentation, he was able to show what would happen to the endowments in specific circumstances. For instance, if the principal of the endowments remained the same, the endowments would grow to about $9 million in 20 years. However, if the principal of the endowments grew by $12 million, the total value of the endowments would be about $54 million in 20 years (even if the interest were used at a rate of 4.5% per year). Linn thanked Dennis for presenting the information to the board, and his ability to communicate complex ideas in easy-to-understand terms. Linn explained that although each endowment had been managed separately in the past, all would be managed with the same strategy using the same mix of stocks and bonds in the future (unless the endowment has restrictions on the investment funds to be used).

Lynn Yeager passed out the financial statements for December. She explained that the total cost of operations was up about $200,000 from 2002 because of increases to salaries and wages, adding personnel, and increases to other costs such as legal fees and advertising. Other costs were down, but not enough to offset the increases. The Ventures programs cancelled about one third their programs. However, interest was down for the lines of credit (saving about $500 per month), and some job positions were not filled (e.g., full-time exhibits manager and librarian) at the beginning of the year, resulting in some savings. Lynn also stated that the audit was scheduled to begin on March 22. Bob explained that the museum’s expenses exceeded income by about $724,000 in 2003 if the sale of assets were not considered. He reminded the board that staff was submitting budget estimates for 2004, and that these were under review. The original prediction of a $721,000 deficit for 2004 has been reduced to a $382,000 deficit by squeezing expenses, moving restricted funds to unrestricted funds where appropriate, and anticipating $300,000 more in development revenues. Bob stressed that these numbers were not “pulled out the air,” and that a specific development plan would be drafted and presented to the board with the budget (at next month’s meeting). A second “Danson event” has been proposed, with an estimated $50,000 in revenue expected. Susie thanked Lynn and Bob for their hard work on this very important item.

VI. Report of the Board Development Committee
Susan Golightly had earlier distributed a number of reports by email to all but one board member (who does not receive email). She explained that some of these reports could be reviewed by trustees at a later time. She asked the board to consider the article to be submitted to MNA Notes concerning the process of submitting candidates for consideration for inclusion to the board. She thanked everyone who participated in this morning’s board tour of the departments housed in the exhibits building, the facilities’ buildings, and the geology department, as well as the Historic Colton House. She stated that FALA had asked that the board tour their facilities next, and she thinks that a tour of The Peaks would also be helpful.

A motion was made and seconded to accept Joan Scott’s resignation from the board with regrets. The motion passed unanimously. Susan G. reminded the board that they could appoint someone to complete her term (there are about 17 months remaining on her term). Susan noted that of the five people whose terms expire this June, Bill Clark, Deb Hill, and Louis Jacobs do not intent to stand for reelection, while Leigh Kuwanwisiwma and Jon Bonnell will stand for reelection. The trustees noted that they anticipate that any board member whose terms ends in June will be included on the ballot automatically, and will not be subject to pre-approval by the BDC or the board as a whole.

VI. Report of the Fundraising Committee
Katrina Rogers reported that the fundraising committee had not met since the last board meeting. She and Susie encouraged board members not already on the committee to attend the next meeting and contribute ideas for fundraising.

VII. Report of the Governance Committee
Susie stated that Deb Hill asked to move from the collection committee to the fundraising committee. She reviewed the changes to the structure of the board committees, and explained that the next item to be addressed would be MNA’s mission statement. She intends to have Gail Anderson, an expert on museum mission statements, work with the board to review and revise the mission statement. She emphasized that staff and volunteers would also participate, and that museum members would have an opportunity to contribute as well. Peter Pilles suggested that once input had been offered, the committee work with Ms. Anderson to condense the statement into one or two sentences that could be memorized by all affiliates of MNA.

VIII. Report of the Building and Lands Committee
In the absence of Larry Stevens, the chair of the committee, Bob gave a report on the repository subcommittee. The National Park Service (NPS) has been notified by the Department of Interior (DOI) that, unless other appropriate provisions can be made, their cultural collections should be moved to the Western Archaeological Conservation Center (WACC) in Tucson. Neither NPS nor other agencies, MNA, nor the local tribes, want these collections to pass from the hands of MNA where they are currently housed. However, MNA facilities do not meet federal standards for care. On January 27th, MNA hosted a gathering of representatives of the NPS and the US Forest Service and other federal agencies, MNA, Northern Arizona University, Representative Rick Renzi’s office, and others to discuss the potential for constructing a new repository in northern Arizona, perhaps to be built on MNA’s campus. Most attendees agreed that they would like a new facility to include accommodations for visiting scholars, public access to appropriate areas, and sufficient space to house cultural, biological, and geological collections from land managed by various agencies throughout the Colorado Plateau region. The attendees agreed that the new facility would need financial support, most likely from collaborations with agencies, tribes, and perhaps state and university funds. Although there was some concern about which collections would be included, and the ability of MNA to house all regional collections from federal lands, the general sense was that attendees were very supportive of MNA. Representative Renzi will be invited to visit MNA to see the campus and to discuss the topic in more depth. Bob emphasized that although WACC is accepting collections from federal agencies, MNA has long-established relationships with regional agencies that originated with the museum’s founders, and that MNA has a very strong interest in maintaining the collections department here (although about 88% of the collections housed at MNA belong to federal and state agencies and the regional tribes.) Peter added that MNA is well suited to leading a collaboration to raise funds for this project.

The board recessed for lunch at 1:08 and returned at 2:00 p.m.

IX. Report from the Collections Committee
Ann Poulos, chair of the committee, was unable to attend the meeting due to illness. Bob updated the trustees on the AAM’s decision to revoke MNA’s accreditation. Because there is no process for appeal of the decision, MNA must reapply in December of 2004. MNA is currently involved in a MAP II program (sponsored by AAM) to determine the state of the collections department. Although not required by AAM for accreditation, the process will demonstrate the museum’s interest in maintaining the collections department at standards acceptable to AAM.

X. Report of the Outreach Committee
This committee now encompasses the publications, public programs, and mural projects. Wayne Ranney, as co-chair of the publications subcommittee, stated that the subcommittee met three times since the last board meeting, and had distributed minutes to the board from each meeting. The subcommittee had determined that the Plateau Journal was a valid and worthwhile vehicle for reaching the members. Bob stated that he had had two meetings with Brad Wallis, president of the Grand Canyon Association (GCA), and that GCA was interested in pursuing a collaborative effort with MNA to continue publishing the journal. The Plateau Journal partners met in Utah (and Bob on the phone) to discuss 1) how to make the journal more sought after, and 2) how to reduce the cost of production to MNA. Currently, partners are purchasing only the minimum number of copies required, and are charged only the cost of production (not including salaries). Many participants agreed that the publication was neither a newsstand item nor a membership publication. They suggested that the journal return to the format of some years ago that included a focused, in-depth look at a specific topic in each issue. Upon suggestion from Bob, the participants drafted a mission statement (without Bob’s input), as follows: The Plateau Journal mission statement: through a collaborative partnership, the Plateau Journal exists to engage, inspire, and educate readers about the diverse geological, biological, and cultural processes that shape the Colorado Plateau through time. The publication is committed to fostering stewardship by presenting a holistic view of science, art, and culture. He explained to the partnership that MNA could not continue to lose money. He suggested that MNA and the participants work together to reduce costs and increase sales. The partners wanted a commitment from MNA that the publication would continue to be produced. Max stated that he would like to see a business plan that provides for specific costs, the numbers needed to make the publication sustainable, and a date to stop publication should it not meet its targets. Bob stated that the next step is to meet with GCA, then write a business plan. MNA will make a commitment for two years of production only once they have a business plan showing that there will be no loss of money. A motion was made that the MNA board would consider a two-year commitment if MNA can develop a clear business plan demonstrating there would be no loss of money, with input from the Grand Canyon Association and other interested parties. The motion passed unanimously.

Susan Olberding stated that the public programs committee, comprised primarily of staff, meets monthly to discuss all education, heritage program, exhibits and other public programming events. She represents the board and encouraged other board members to attend.

XI. Report of the Research Committee
This committee includes the natural science/Colbert Endowment review subcommittee, the anthropology subcommittee, and the contract science review subcommittee. Carl Phagan, the chair, stated that the committee has not met yet, and that he was trying to schedule a meeting for February 20th. A brief discussion followed on the status of the contract science department, and their need for more staffing. Carl stated that this department also needs a business plan. Several members are of the opinion that the department should continue soliciting new projects as long as they fall within the mission of the museum. These issues will be addressed at the committee’s next meeting. Carl stated that several other topics, including scholars in residence, and research associates will be introduced at the meeting.

XII. Report from the Muses
In the absence of Chio Black, the Muses representative to the board, Bob updated the trustees. He had lunch with the leadership of the Muses, and felt it was very positive. The second in the lecture series will be Gary Nabhan from NAU presenting the next Monday.

XIII. Reports from the Volunteer/Docent, The Peaks, and the Coyote Sprints Representative
Susan Golightly referred trustees to the reports she distributed earlier. The Peaks signed a new construction agreement, as the old one expired in December. The new version makes The Peaks more responsible for environmental cleanup upon completion of new construction. Coyote Springs received a new conservation easement, which has been recorded by the county. Some residents are now ready to proceed with construction.

There being no other business for the public session, the board moved into executive session.

EXECUTIVE SESSION

XIV. Adjournment
There being no other business, the meeting was adjourned at 3:55 p.m. The next scheduled meeting of the board of trustees is March 6, 2004, at 9:00 in Pearson Hall.

Accepted at March 6, 2004 board meeting.

Susan Olberding
Secretary to the Board