Board Members Present: Bill Beaver; Susie Garretson; Susan Golightly; Sam Henderson; Jack Metzger; Linn Montgomery; Max Oelschlaeger; Susan Olberding, Carl Phagan; Peter Pilles; Barbara Poley; Wayne Ranney; Carolyn Shoemaker; Miguel Vasquez

Board Members Absent: Leigh Kuwanwisiwma; Ann Poulos; Katrina Rogers; Larry Stevens; Octaviana Trujillo

Emeritus Members Present: Ben Smith

Ex-Officio Members Present: Mary Ann Isom, President of Sedona Muses and Board
Representative for the Muses

Others Present: Robert Breunig; Lynn Yeager; Ann Deegan

Invited Guests: Jill Korenek of JDS Professional Group (auditors) attended to give the auditor report.

I. Call to Order
Chair Garretson called the meeting to order at 11 am. Ben Smith, emeritus board member and former Chair of the Board, was introduced by Susie Garretson.

II. Approval of the May 7, 2005 MNA Board minutes:
The minutes for the Board of Trustees meeting of May 7, 2005 were approved by a motion that was seconded and passed unanimously.

III. Approval of the Consent Agenda:
The Executive Committee minutes from April 28 and May 19, 2005 and the Finance and Investments Committee minutes from December 1, 2004, March 30, 2005 and May 6, 2005, were approved by a motion that was seconded and passed unanimously.

IV. Board Development Committee: No report was given.

V. Muses Report:
The Muses Report was given by Mary Ann Isom, President of the Muses and MNA Board representative from the Muses. Mary Ann read the year-end report on the Muses written by Chio Black, outgoing President of the Muses. Mary Ann also announced the annual Muses meeting and picnic to be June 5th at Indian Gardens Park in Sedona.

VI. Governance Committee:
Governance Committee Chair, Katrina Rogers, was unable to attend this board meeting. The report was given by Carolyn Shoemaker. Carolyn reported that nothing new was being presented to the Board from the Governance Committee at this time. It was expected that Bylaw approval would be sought at the August 6, 2005 board meeting. The remaining steps before then include taking the Bylaws to lawyer Patrice Horstman for comments, receiving additional Board comments, and then back to Ms. Horstman again for final legal comments. Susan Golightly requested that if board members do not like some aspect of the current rough draft Bylaws that they suggest how the Bylaws should be changed to help the Committee in their work. Max requested that the board be provided with the rationale behind any changes to the Bylaws. Susie stated that, yes, this could be done. The next meeting of the committee will be June 8 at 1:30 pm in the MNA Administration Building conference room and invited board members to attend. Carolyn asked all board members to please provide them with any additional suggested changes and the wording desired.

VII. Report from the Finance and Investment Committee:
Lynn Yeager presented the April financial statements. Lynn went over the balance sheet. A CIP for the Collections Center was added to the expense account so that as work is done on the Collections Center it can be tracked. Admissions is about $4600 off budget this year and about $8000 behind last year. Membership is strong at about $7000 above last year. The Bookstore is on budget but the Gift Shop is about $36,000 behind versus 2004 and about $40,000 behind budget this year. Expectations for the Gift Shop were lowered for this year. Robert explained that the Gift Shop is building its inventory back up this year after the tight winter cash flow and that there might be a donor interested in donating to buy inventory. The Gift Shop has been relying on consignment a great deal so that the profit margin is less than if MNA owned the items. He stated that MNA needs to buy more inventory in order to increase our profit. New software is to be installed in the Stores to help track admission by zip code which will improve profiling of visitors to aid in sales. It was asked if the MNA Stores plan to have an on-line store. Robert said that this is being discussed and is on the MNA IT list of things to investigate. It was also stressed during discussions that as per the MNA Code of Ethics, staff members may not consign items for sale in MNA Stores.

Lynn continued her discussion of the April financial statements. The Discovery Program is on budget this year. Annual budgets are designed to reflect the April revenue from the Discovery Program and the December year end revenue from fundraising. Robert mentioned that the MNA is overbudget on revenue and underbudget on expenses for this month which is overall positive and optimistic. However, the last quarter of 2005 will rely heavily on revenue from donations and that all must work hard to be on budget at year end. The target needs to be a balanced budget. Expenses are tight and the museum is short staffed at present. The MNA needs to improve on its revenue side through continued hard work to keep getting contributions.

The Finance Committee unanimously recommended acceptance of the April financial statements to the Board for acceptance. It was seconded and unanimously passed.

Robert stated that he felt privileged to work with and grateful to Lynn Yeager for her work as Controller. He feels that if the MNA comes out ahead financially it will be due to Lynn’s work. Linn Montgomery supported these comments and stated that Lynn has good relations with the Board and with the auditors. Susie mentioned that Larry Fester, the Finance Committee non-board member who is an accountant, also thinks highly of Lynn’s recordkeeping.

Since Shirley Groenhout, Facilities Use Manager, is on leave through December 2005, and Jessica Pope is substituting for her, a resolution was needed to place Jessica on the checking account for Colton House. This account is not used often but is for supplies needed at the Colton House. A resolution “To remove Shirley Groenhout and add Jessica Pope to the Colton House checking account” was moved, seconded, and passed unanimously. The other signer on the checking account remains Robert Breunig.

VIII. Other Business:
Bill Beaver and Max Oelschlaeger thanked Barbara Poley and Leigh Kuwanwisiwma for the fabulous, educational Board trip to Hopi. Bonnie Sekakuku, who catered the lunch, was thanked for a great job.

A list of future Board meetings will be arranged soon. Most likely the Board meetings will be on an every other month schedule.

Susie would like to produce the annual members meeting minutes as soon after the meeting as possible each year. After discussion, it was agree that we will try to produce a draft of the minutes as soon as possible after the annual meeting, and then post it on the website for members to view and respond with corrections during the year. They will be approved at the next annual meeting as usual.

Susie reminded the Board members to pay for their pledges to help fund the art lawsuit. They were asked to give their checks to Lynn Yeager or to Susie Garretson and to put on the memo line that it is for the MNA art sale legal fund.

Susan Golightly announced that gifts were purchased for some of the outgoing Board members: board members Bill Beaver and Ann Poulos and outgoing Muses president Chio Black. Discussion was held on how to cover costs for these gifts and for things such as board lunches. A motion was made to set-up a special “Board Fund” through Lynn Yeager that would be a restricted account usable for such things as paying for Board lunches and gifts for retiring Board members. It is to be paid for by Board members and replenished as needed. The motion was seconded and unanimously approved.

Susan Golightly gave a brief history of her involvement as the Board representative to the Peaks retirement board. She has served in that capacity since 2002 and would now like to resign from that role. She moved that Robert Breunig be the MNA Board member on the Peaks board in this non-voting role. The motion was seconded, and unanimously approved.
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A break was taken from 12:13 to 12:30 pm.
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The meeting reconvened at 12:30 pm.

IX. Continuation of Finance and Investment Committee:
Jill Korenek of JDS Professional Group presented a report on the MNA audit. She gave Board members three printed reports: (1) Consolidated Financial Statements as of December 31, 2004; (2) Report to the Board of Trustees; and (3) Recommendations to Management. These three reports are also available from Lynn Yeager, Controller, MNA.

The audit is complete and the MNA has received “unqualified” status. As noted in the “Report to the Board of Trustees,” full cooperation was provided by management with all information asked for provided. No errors or fraud were noted. All internal accounting was okay and it was noted that a good accounting system is in place at the MNA. Jill also went through the “Consolidated Financial Statements” report and summarized and highlighted information in that document.

Discussion followed including a question about why the Museum’s cash deposits exceed the FDIC coverage. Jill stated that these are safeguarded at night through a sweep account. Lynn Yeager will talk to the bank about this procedure and safeguarding the funds.

In the “Recommendations to Management” on pages 3 and 4 are several internal accounting control recommendations carried over from last year—no new recommendations were made this year. These included new options for handling admission fees at the front desk of MNA. A cash receipt was recommended. Robert stated that MNA is working on new procedures.

Jill mentioned that the 2004 Nonprofit Integrity Act was passed in California in January 2005 and would probably begin to have an impact on tightened rules for nonprofits in other states before too long. A motion was made to accept the 2004 audit, seconded, and passed unanimously.

The next board meeting will be at 9 am August 6, 2005, in Colton House.

The meeting moved into Executive Session at 1:08 pm and adjourned at 2:23 pm.