Board Members Present: Susan Garretson, Chair; Ann Poulos, Vice-Chair; W. Linn Montgomery, Treasurer; Bill Beaver, Jon Bonnell, Susan Golightly, Leigh Kuwanwisiwma, Max Oelschlaeger, Carl Phagan, Peter Pilles, Wayne Ranney, Carolyn Shoemaker, and Miguel Vasquez.

Board Members Absent: Deb Hill, Louis Jacobs, Susan Olberding, Katrina Rogers, and Larry Stevens

Emeritus and Ex-Officio Members Present: Frances McAllister and Dean Pickett, Emeritus

Others Present: Robert Breunig, Director; Lynn Yeager and Ginger White, staff; and Jill Korenek, from the auditing firm of JDS Professional Group.

I. Call to Order
Chair Garretson called the meeting to order at 12:05 p.m.

II. Approval of Minutes of Last Meeting
Susan Golightly asked that Susan Olberding’s last initial be included at references made to her name in the last minutes, as there are three Susans who serve on the board. A motion was made to approve the minutes of the May 1, 2004 meeting, with the corrections as suggested. The motion was seconded and approved.

III. Report from the Chair
Susie G. read a draft resolution stating that the Museum wished to congratulate the Heard Museum on their 75th anniversary (see attached). A motion was made and seconded to approve the resolution. The motion passed with one abstention. Susie read a second resolution stating that the museum supports the proposed expansion of the Petrified Forest National Monument, and supports David Gillette’s expert testimony before the US Congress as a representation of the museum (see attached). The purchase of land for the National Park Service must be approved by Congress and the museum’s curators and others believe this is a win/win situation for both the NPS and the land owners adjoining the current NPS boundary. A motion was made and seconded to approve the resolution. The motion carried unanimously.

IV. Report from the Director
Director Breunig mentioned that the staff is working on the items required for AAM accreditation. It is anticipated that the request and self study will be submitted to the AAM on December 3, 2004, a year to the day from the letter received by AAM telling the museum it had lost its accreditation. Robert explained that the usual process after the request is submitted is that the self study is submitted at a later date (the AAM expects the self study to take about 9 to 12 months, but MNA hopes to submit it in December with the application) and the museum is given “provisional accreditation.” Several months to a year later, a visiting committee comes to the museum to conduct an on-site investigation. Only after the visiting committee’s recommendations are approved by the AAM’s accreditation commission at one of their three annual meetings does the museum become accredited. The AAM has assured Robert that they will try to expedite our application and schedule the visiting committee as soon as possible.

Robert recently attended the annual AAM conference in New Orleans, where he met with Ann Hitchcock, the chief curator for the National Park Service’s southwest region and with Virginia Salazar, a regional coordinator for the National Park Service. They discussed the museum’s need for a new collections center, and the museum’s desire to keep the collections of federal agencies at the museum. Robert traveled to Page for the opening of the plesiosaur exhibit at the John Wesley Powell Museum. He was able to meet with Kitty Roberts, the superintendent of Lake Powell NRA, to discuss the collections center. He also met with Representative Rick Renzi, who also promised his support for a new collections center at MNA should he be reelected. Robert and several staff members recently visited a large storage and office building in Flagstaff to determine whether or not it should be considered as a potential interim collections center. Although it was not decided for certain, the general consensus was that the museum should focus all attention on a permanent collections center instead of moving collections off campus for an interim period.

V. Report from the Contract Science Review Subcommittee
Carl Phagan reported on the recommendation of the Contract science Committee for MNA to create a for-profit subsidiary for the contract science program. He noted that he had sent draft bylaws, articles of incorporation, and an operational agreement to the board for review last week. Carl explained that it had become necessary for the contract science department (MNA Environmental Solutions – hereafter referred to as ES) to become a for-profit subsidiary in order to 1) allow ES to bid in competition with other firms for federal jobs deemed “small business set-aside,” and 2) separate MNA and ES for tax purposes, so that ES does not endanger the museum’s non-profit status. The board voted late last year to support ES through the 2004 calendar year to better determine if it could be a profitable venture. Carl asked the board to now support ES’s change to a for-profit subsidiary. To do this, ES would need to form their own subsidiary with a separate board of directors, maintain a separate accounting system, and have their own facility and staff (or reimburse MNA for the use of their facilities and staff). The museum would benefit financially from the payment for use of staff and facilities, and from dividends recognized by ES. The recommendation of the contract science review committee is that the board approve making ES a for profit subsidiary, using the Articles of Incorporation as drafted. Approximately $30 to $40 thousand of the $250,000 approved as funds for the development and management of ES has been used to date. Concerns were expressed about utilizing staff who are already stretched to the limit. It was explained that it would take no more of the accounting, HR, and director’s time to perform functions for ES than it currently used. In addition, as ES grows, it and the museum will be able to hire more young professionals in the fields of archaeology, anthropology, and the natural sciences. In addition, ES can offer their clients the potential to use artifacts found on their projects in exhibits and for other educational purposes, which most consulting firms cannot. Robert also explained that much of the research science conducted today is done through contract science: if MNA is not involved in contracting, they are not “players in the archaeology world on the Colorado Plateau.” Dean Pickett recommended that lines be drawn firmly between MNA and ES; financial records, contracts, and other “firewalls” be put in place and used consistently. Max Oelschlaeger requested that a business plan be drafted so that the board and others could have a more firm idea of actual budgets and use of facilities and staff (It was noted that some of the specifics Max is seeking are noted in the bylaws). Leigh Kuwanwisiwma suggested that MNA concentrate on the overall stability of the museum, and wondered if it were prudent to take on more risk. The board was assured that, in compliance with the board’s past motion to approve supporting ES, the program would be reevaluated at the end of this year. A motion was made and seconded that the board approve the recommendation to have MNA Environmental Solutions become a for-profit subsidiary, and that their associated Articles of Incorporation be approved today as well. The bylaws and operational agreement, as well as the structure for a business plan should be ready for review at the next board meeting. The motion carried with Max Oelschlaeger and Leigh Kuwanwisiwma opposed.

VI. Report from the Finance and Investment Committee
Linn Montgomery stated that the museum’s accounting system was improved substantially over the past year. The Finance and Investment Committee approved both the April financials and the audit as presented, and recommend that the board approve them as well. A motion was made and seconded to approve the April financials. After a brief discussion, the motion passed unanimously.

A motion was made and seconded to approve the 2003 audit as presented. Jill Korenek explained that three documents were included as the audit: a report to the board of trustees, the audit in detail, and a recommendation to management. JDS Professional Group gave the museum an unqualified opinion (or “clean” opinion) and stated that there were no errors, no fraud, and no illegal acts. Ms. Korenek explained some differences between 2002 and 2003, such as gains on investments in 2003. Revenues from the contract science and the retail operations were up significantly from 2002, although contributions were down. Salaries were lower in 2002 as the museum was not fully staffed (e.g, no paid director for a portion of the year). Ms. Korenek explained that JDS Professional Group did not review the 2002 audit in full, but did compare items from 2002 with 2003, and did not find anything that required comment. In addition to the audit report, she reviewed the audit firm’s “management letter”. She explained that recommendations included 1) requiring more than one signature for checks written above a certain threshold. A written agreement with the bank(s) should be kept on file with bank so that they can be held liable should something happen, 2) insuring that the director receive and review all bank statements independently of the accounting department, 3) enhancing controls over admissions processes (e.g., currently no receipts are generated), and 4) maintaining a central location where checks are logged in and stamped with deposit information. Although it was not mentioned as a recommendation, Ms. Korenek suggested that the museum review rental facilities, as they could be considered revenues that should be reported to the IRS using a 990-T form. The motion was approved unanimously.

VII. Report from the Mission Review Subcommittee
Robert explained that the mission, vision, and values statements had been reviewed by staff and board. A draft will be presented to the membership later today at the annual membership meeting, and comments can be submitted to Susie Garretson through June 15. It was the intention of the subcommittee to acknowledge the intentions of the original statements, and to expand on them, as these statements become the guiding philosophy for the museum.

EXECUTIVE SESSION

VIII. (Out of Executive Session) Other Business
As this meeting is the final day of service to the board by Jon Bonnell, Deb Hill, and Louis Jacobs, Susie thanked them for their service. Jon was the only one of the three present, and Susie presented him with a glass candy dish engraved with his name and dates of service as well as the MNA logo. She reminded the board about the board and staff picnic to be held at Susan G.’s house after the next board meeting on June 26th.

Jon suggested that the board research the capabilities of two public relations firms. He also explained that an average of about 3000 cars drive by MNA daily, and there could be significant potential if MNA could find ways to attract these people into the museum.

IX. Adjournment
There being no further business, the meeting adjourned at 2:40 p.m.

Minutes approved at June 26, 2004 board meeting.

Respectfully submitted,

Susan Olberding
Secretary to the Board