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MUSEUM OF
NORTHERN ARIZONA Active Trustees Present: Bill Beaver, Jon Bonnell, Bill Clarke, Susie Garretson, Deb Hill, Linn Montgomery, Max Oelschlaeger, Susan Olberding, Carl Phagan, Peter Pilles, Ann Poulos, Wayne Ranney, Katrina Rogers, Joan Scott, Larry Stevens, Miguel VasquezActive Trustees Absent: Susan Golightly, Louis Jacobs, Leigh Kuwanwisiwma, Carolyn Shoemaker Emeritus, Honorary, and other Board Members Present: Chio Black Representative for the Muses; Ron Hubert, Honorary; Frances McAllister, Emeritus; Dean Pickett, Emeritus; George Podd, Emeritus, and Ray Thompson, Emeritus Staff and Others Present: Ginger White, Assistant Secretary to the Board. Please note that because meetings from this date forward will be open to the staff and members, others present will be noted only when they address the board. Because the board consists of 17 newly elected members and three reelected members, no officers were in place at the beginning of the meeting. Susie Garretson was elected to serve as Chair for the duration of the meeting. I. Call to OrderThe meeting was called the meeting to order by the Chair at 1:38 p.m. There was some discussion about procedures to be used and whether or not a parliamentarian might be needed. A motion was made to use Roberts Rules of Order. The motion was seconded and passed. A motion was made and seconded to have emeritus and other board members sit with the active board. The motion passed. II. Approval of Minutes of the Last MeetingNo motion was made to approve the minutes of the July 25, 2003 meeting. III. Appointment of an Acting Director After short discussion about the current signer for the museum, and options for a “management team” in lieu of one acting director, a motion was made to elect Max Oelschlaeger as the acting director and, thus to conduct business on behalf of the Museum of Northern Arizona. A short discussion followed to further explain the duties and length of service of the acting director. It was decided that Dr. Oelschlaeger would perform as acting director until the search committee has determined how long it might take to hire a permanent director. Should the board agree that the current listing of “final candidates” includes strong candidates, Max will retain his position until the permanent director is hired. However, if the board decides that the search for the director should continue for any length of time, an “interim director” and/or “management team” would take over until the permanent director is found. Because of various legal, financial, and staffing issues pending at the museum, the board was urged to select a permanent director as soon as possible. A “management team” could be comprised of an interim director, a staff representative, board members, museum members, and experts in the museum field from the greater community. It is expected that Max will serve at least one week and not more than two months. The motion was seconded and passed unanimously. IV. Presentation by MNA’s Attorney Dean Pickett introduced himself and his associate, Liza Daley. He gave a brief presentation explaining the responsibilities of a non-profit board, federal and state laws, including IRA codes and Title X of the Arizona Revised Statutes. He explained that often language is included “unless covered in articles or bylaws, the following apply.” Other places the statutes must be followed absolutely by law (articles or bylaws do not supercede statutes in these cases.) He urged the board to review the committees, both standing and ad hoc. Liza explained that she is willing to assist the board with in service training and ethics issues. Liza explained that she is involved with NAGPRA (Native American Grave Protection and Repatriation Act) issues with which the Museum must comply. She also deals with a number of federal agencies and Native American tribes who are also involved with NAGPRA. Liza also explained the importance of complying with the requirements of the 501(c)3 non-profit status. The board was reminded that members to standing committees are appointed by the Chair. Also, the bylaws concerning standing committees and appointment of the officers and the director can be changed, but only after 21 days notice to the board concerning changes. Max asked how soon officers need to be elected, and was assured that the board could wait a week or two until board members can better determine who is most suited and willing to serve, and what other priorities take precedence. Susie asked if anyone else were interested in working with Max. Susie stated that she could, and Larry Stevens said he would be available to help for the next three days. Susan asked the attorneys if it would be a conflict of interest for her to be a member of the board, as she has a contract to assist with the exhibit for the 75th anniversary that terminates in November. Dean explained that as long as she disclosed her involvement and did not vote on any issue related to the one under which she was contracted or takes any role in the administration of her contract, no legal conflict of interest would exist. V. Report from the Search Committee Ron Hubert explained that the search committee (comprised of the Executive Committee, Gene Hughes, Bob Baughman, and 3 staff advisors: Shirley Groenhout, Ed Wade, and Elaine Hughes) had responded to over 35 unqualified candidates, five better qualified for the Assistant Director for Development and Marketing position, and 10 to 12 qualified candidates. He stated that if the new board were to work fast, they might be able to have a director in place in 30 days. Max stated that the museum needs a healer, a people person, and someone who knows this museum, and liked the idea of a (permanent) director hired within 30 days. Jon Bonnell stated that he thought that because of the current situation with the Museum, some qualified persons had not yet “put their names in the bucket.” He thought that the first of the year was a more reasonable date for finding a director. Ron agreed, but also urged the board to remember that by waiting too long, some of the current qualified candidates might decide they were no longer interested. Wayne Ranney, Peter Pilles, and Deb Hill volunteered to serve on the search committee. Bill Clarke reminded the board to maintain confidentiality concerning the search for a director as some candidates may be employed elsewhere. The search committee will review the candidates and make a recommendation to the board at their next meeting. VI. American Association of Museums (AAM) Issue Trustees were asked to volunteer to serve on an ad hoc committee to address allegations concerning the sale of art and lack of a director at MNA. The Museum’s attorney is already preparing a draft letter of response and has requested an extension from the August 8 response due date. Ann Poulos, Deb Hill, and Bill Beaver agreed to serve on this committee. Wayne asked the attorney if the AAM would withdraw their allegations upon notice that a new board was in place. Liza responded that once an allegation has been made, the AAM must investigate it. However, the AAM could determine, once they have completed their investigation, that the matter could be dropped. VII. Line of Credit Upon request by the Chair, Ron Hubert explained that the Museum had two lines of credit with National Bank of Arizona totaling $700,000 that expired in June. One line was for $675,000 and the other was for $25,000 with the City of Flagstaff. When the Flagstaff Arts and Leadership Academy was opened on Museum grounds, the Museum became obligated to install lighting, sidewalks and gutters on the north side of Highway 180. These projects are under negotiation, and have not yet begun, so that the City of Flagstaff maintains the $25,000 line of credit as a retainer for that work. The lines of credit are secured with Museum endowments, which allows the Museum to have lower interest rates. When the lines of credit expired in June, one line of credit for $225,000 was renegotiated at an even lower interest rate because it became secured by CDs. In order to renegotiate the lines of credit with the bank, the board will need to elect a treasurer as a contact person. VIII. 75th Anniversary Campaign Susan Olberding was asked to serve on a committee to report about the status of all issues of the 75th Anniversary Campaign. To avoid a conflict of interest, Susan agreed to serve if another Trustee would prepare the report. Katrina Rogers agreed to this task. At this time, an informal birthday party is planned at the Museum for September 6, with a formal black tie gala scheduled for October 24th. IX. Relationships with Staff and Members The board reiterated its desire to work with Museum staff and members without micromanaging staff’s work. They requested information from each department head and resumes for each employee. Trustees were reminded that each department submits a quarterly report to the board, that organizational charts were distributed, and that resumes could be added to that report. The active director and board can also meet with individual staff for more information when appropriate. X. Financial Report Ron Hubert gave a report on current financial information, including the audit, the May statements, and the quarterly statements from Miller-Russell (concerning the Museum’s investments). Concerning the audit, Ron explained that the actual operating deficit was about $491,550, but that this amount was not reflected on the report. Ron arrived at the figure by subtracting from the total sale of assets ($947,115) three non cash sums as follows: depreciation of facilities and other assets the amount of $292,969, a reserve for doubtful accounts (monies promised but not yet delivered) of $183,673, and unrealized investment losses (stock market losses on MNA investments) of $231,541. To this sum he added the $212,523 in general operating deficits for a total of $491,455. Ron moved on to explain the budget included in the board’s minutes of April 2003. He explained that the Museum received about 68% of its revenues in the middle four months of each year, as that is when attendance is highest. However, estimated revenues for the shops were low: $99 thousand was budgeted, and only $55 thousand received thus far this year (end of June). May figures for membership were ahead, but most of the gain was lost by the end of June. The budget projection is for a deficit of $645,000 in 2002. If the museum does not go over budget further this year, it is already over the projected deficit by $86,200. He felt that the Museum would have funding through the end of the year if they remained conservative, but that the new board should begin raising money immediately for the near future. The only alternative would be to make serious cuts soon. Ron also cautioned the board about using monies received for specific projects (restricted funds). He stated that many museum boards do not understand that when monies are received for a specific project or program, those funds do not cover overhead (benefits, leave, utilities, equipment, etc.). Thus, if money is raised for a new program, funding should include the amount needed for overhead. If money is raised for a program already in place, it may not need to include 100% of the overhead, as staff, equipment, and facilities may already exist. Ron then explained that the Southwest Mural Project had full funding, as the Museum moved monies into that account so that funding foundations could be assured that the project is on target. If it appeared that the project were not receiving funding from outside sources as thought by the other funding sources, those funding sources who have donated could call for the return of their funds. This would not only blemish the Museum’s and the project’s reputation, but would put serious financial pressure on the museum. It would make it extremely difficult to raise funds for this project, and for other Museum projects, in the future. Ron explained that because a donor had withdrawn his support last year, it took the board some time to approve moving funds to the Southwest Mural Project account. While the arrangements for replacement funds were being made, the project was put on hold, and is now behind schedule. Bob stated that Ed is working with several foundations to find new venues and a permanent place for the project (which is too large to house permanently at MNA). Costs from the exhibits firm that will be working on the project are currently under renegotiation, and the new contract has just arrived. Ron then explained that there were two ways to determine an amount that could be utilized from endowments each year. The Museum currently utilizes the earned income method: this means that if an endowment loses money during the year, there is no income to be used. Conversely, if the endowment does well, there will be a great amount to be used, without touching the principal. Because it is difficult to budget for this unknown income ahead of time, most museums use an average total return method. They estimate that an average of 8% will be returned over a 20-year period. Of this, they utilize 5% each year, and keep 3% in reserve for those years of no return or loss. He recommended that once the Finance and Investment Committee is formed, they discuss which of the two methods discussed above be used. Ron mentioned that Dennis Miller, of Miller-Russell would like to meet with the new Treasurer once he/she has been elected, to explain the investments and determine if changes need to be made. When asked if he could continue to volunteer his time and energy, Ron stated that he would like to continue in any way that he could be helpful. Katrina stated that Ron’s report was one of the finest she had seen, and Miguel stated that the Museum had not seen that amount of detail in at least 20 years. There was some confusion about restricted and nonrestricted funds reflected differently in various reports. Ron explained that some items had been lumped together (such as geology and other programs) in some reports, and those items would be broken down in the future. Also, Trustee giving was assumed to be the same in 2003 as in 2002, but 2002 was an extraordinary year for Trustee giving, as several gave generously in a time of serious financial crisis. Recess The board thanked Ron for his report and his continuing support of the Museum. The meeting was recessed for the day. Call to Order The board reconvened at 8:10 a.m. in Pearson Hall on July 27, 2003. Twelve Trustees were present. Susie asked each Trustee present to explain how they were feeling about the new board and the challenges they were facing. Most expressed cautious optimism and a sense of excitement. All realized that there was an enormous amount of work to do, and the importance of “hitting the ground running.” Max stated that there were two priorities to focus on: finding a director and starting a capital campaign to raise 18 to 21 million dollars. He reiterated that the Museum would need to have funds to run in the first quarter of 2004, and suggested that a Capital Campaign Committee be formed. The other thing to remember was that the board members are stewards of the Museum: their job is to facilitate the staff and museum operations. Deb Hill distributed a list of requests to the board that will be incorporated with other materials reviewed by the Board Development Committee. Deb reiterated the importance of acting as a representative of the Museum, and cautioned against speaking out individually on an issue before the board. Bob Baughman explained that Michele Mountain, as the Museum’s public relations and marketing manager, would assure that formal statements by the board were released to the press as a way to insure that no one need speak individually. There was some discussion about attempting to have a weekly column in the Arizona Daily Sun, with contributions from one department each week. It was agreed that interest in such a column would wane eventually, and that the column would add more work to already-burdened workloads. XI. Meeting Procedures and Policies There was some discussion about whether to continue having Ginger White record minutes at each meeting, as it is anticipated that there will be a meeting every week for at least a month. Some Trustees felt that a Trustee could take minutes while participating, while others felt that a separate recorder was necessary. Some wondered if a volunteer could be found, and others felt that a paid recorder should be used. The members also discussed whether in-depth minutes were necessary, or if only a record of motions, committees formed, and other highlights were needed. Peter suggested a facilitator that would keep notes on a flipchart. No one wanted to have Trustees referred to a recorded tape for details. A motion was made to table the discussion until the next meeting. The motion was seconded and passed. A short discussion followed on whether individuals should be noted in the minutes when motions were made and votes were taken. It was agreed that the board should be seen as acting as a whole. Thus the minutes will reflect only that a motion was made, and will reflect that someone abstained or voted against approval of a motion only when that Trustee requested that his or her vote be specifically recorded. The board discussed keeping meetings open to the public and when to allow public participation. No consensus was reached, although it was decided that the public should be allowed to participate at any appropriate time, and that some items would need to be discussed in Executive Session. Dean suggested posting an agenda ahead of time. A motion was made to have open meetings with a component for public participation to be determined at a later date and subject to the right of the board to enter into Executive Session. The motion was seconded and approved. XII. Appointment of Committee Members The board discussed the various standing and ad hoc committees needed to address various current MNA issues. The following were reviewed or established: Collections Committee Ad Hoc Search Committee Ad Hoc 75th Anniversary Committee Finance and Investment Committee Fund Raising Committee Board Development Committee Governance Committee Advisory List (emeritus and others who
can advise the board on various issues) The need for ad hoc committees concerning science and arts was discussed, and tabled until the next meeting. XIII. Election of Officers After a short discussion, a motion was made to elect Susan Garretson as Chair, and William Clarke as Assistant Treasurer. The motion was seconded and passed unanimously. Max agreed that he could serve as Secretary once his appointment as Acting Director terminated. XIV. Adjournment There being no further business, the meeting was adjourned at 12:15 p.m. Respectfully submitted, Susie Garretson |
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