American Philatelic Society
Board of Directors Meeting Minutes

August 22-23, 2000
Providence, Rhode Island

First Session - August 22, 2000

Click here for Second Session - August 23, 2000

Attendees:

Board of Directors: President Peter P. McCann; Vice Presidents: Gordon Morison, Charles Peterson, Diane Boehret; Secretary Janet Klug; Treasurer Nancy B.Z. Clark; Directors-at-Large: Jeanette Knoll Adams, Lloyd de Vries, Ann M. Triggle, Wayne Youngblood; Immediate Past President John M. Hotchner.

Dealer Liaison: Irving Miller.

Staff: Executive Director Robert Lamb; Director of Shows Ken Martin; Controller Scott Frazier; Editor Bill Welch, Dennis Gilson.

Guests: Foster Miller, Jim McDevitt, Ken Lawrence, Rob Haeseler, Lois Evans de Violini, Robert de Violini, Lucille Lamb.

Call to Order:

President Peter P. McCann called the meeting of the American Philatelic Society's Board of Directors to order at 7:09 p.m. in the Blackstone Room of the Westin Hotel in Providence, Rhode Island on Tuesday, August 22, 2000. President McCann welcomed the Board, Staff, and Guests. President McCann announced the mayor of Providence would be attending STAMPSHOW on Thursday morning and would open the show.

Society Attorney's Report:

David Flood produced a written report to the Board that indicated the Attorney has been instrumental in the areas of:

1. Review of Investment Guidelines and Objectives.

2. Review and advice to Executive Director relating to the performance of the insurance contract with HWI, Inc.

3. Advice to the Executive Director relating to building expansion and the Bellefonte Match Factory.

4. Advice to Board of Vice Presidents and Executive Director relating to the Dupont and Edelman cases.

5. Rendered opinions to the Board of Vice Presidents, Board of Directors, and others relating to general Society business, agreements, complaints of members, expulsions, appeals, and matters of a similar nature.

Executive Director's Report:

Lamb: The Society is extremely healthy financially. We have grown every year for the last seven. Lamb wished membership was doing as well as the finances. We are still not growing. We are fairly static with membership and we will have to work very hard to break even at the end of this year.

The Internet Sales Program still has a couple of bugs in it that need to be straightened out before we go live. We were planning to go live last weekend. We decided not to go live until after the show because so many people were tied up in the operations of the show. Renee will have a booth at the show demonstrating Internet Sales. New material is coming in very quickly. We are getting new material at the rate of 500 items a day. We are overwhelmed. This has been better than our highest expectations. On one day we received 1700 items. That was an exceptional day. It is growing quickly.

McCann: Can you estimate how many items we will have when we go live?

Lamb: We have a counter on the front page that tells how many items we have on the site. When Lamb left to come to Providence there were 5800 items on the site. In testing we have bought items. We have things on hold just to make sure the system is working. Any time anyone wants to find out how many items are being offered, just go to the front page of the site and it will tell you. We decided to be quite candid about that. By the time the site goes live, we expect to have 10,000 items.

Sales Division inventories are continuing to decline, but the rate of decline is slowing. Thanks to some really creative marketing and a lot of hard work, the Sales Division employees have managed to keep the sales at 1% below last year's level despite a decline in inventory. They deserve a lot of credit with what they have done.

The sales books have been audited. Nancy Clark will be the first treasurer to be able to report that qualifier has been taken off the audit statement. That is a real feather in her cap. We don't have the formal audit yet, but we are told informally that the disparity between what the members say the books are worth and what they are worth is within acceptable limits. There is bound to be a certain amount of error because we all make mistakes in adding the values of the books, but it is a nominal amount.

The Expertizing Service continues to perform extremely well. It is running well ahead of last year. If this keeps up we will be in our fifth record year out of the last six in terms of number of certificates produced. Lamb did not bring the proposal of guaranteeing certificates at this time because it was a full agenda. The proposal is ready and will be presented to the Board in Tucson.

The Reference Collection is really growing. Lamb thanked Scott Publications for the donation of the albums for the Reference Collection. There was recently another major shipment of albums. It is very generous on the part of Scott to provide us with these materials free of charge.

We are working closely with the Postal Service on the Stampers program and youth programs they are phasing out. They have come to State College and spent a day with us. Kim and Doris have been to Washington and spent a day with them looking at how we can fill the gaps that will be created by these cuts in the youth programs. There are prospects for very close cooperation. In the same regard we have agreed to provide support for Jim Bruns Grandparents Day in November at the National Postal Museum. We will have staff and activities there.

We expect to have several Online Correspondence Courses this year. Since we met last time we have had one correspondence course - a beginners' course. It got rave reviews. Ada Prill was the instructor. Kim and Ada did a super job. The classes were supposed to be an hour of online discussion. They were meeting on Friday nights. In every case they had to be cut off after a couple of hours because the instructor had to leave. It really did go well. One young lady had started a website as a result. She is to be commended for the enthusiasm the site exhibits. She is learning a lot about setting up a site.

Lamb commended Krause Publications for allowing the APS to use their "Whatzit?" title for the stamp evaluation program at STAMPSHOW. We did not want to use Stamp Roadshow because of a possible copyright infringement. We borrowed the term "Whatzit" from Krause.

All of the initial indicators for Providence are very good. We had 240 people preregister for the banquet which is already more than we have attend most banquets. Just the preregistrations alone make this the second largest banquet we have ever had. The Tiffany Dinner has 112 - 115 people preregistered, which is by far the largest we have ever had. If it gets beyond 120 we will have to refuse some people. We have about 150 dealers, so it promises to be a good show.

Motion: To accept the Executive Director's Report. Moved by Clark. Seconded by Boehret. Passed unanimously.

Committee Reports:

Triggle: We have 17 standing committees and 2 ad hoc committees. Each of them have been approached to provide the Board with current updates of what they are doing. In some cases nothing has changed dramatically from what was filed in Portland in February. Triggle distributed synopses of the reports from the various committees to the Board, and invited Board members to read the complete reports. The committee chairmen would appreciate some feedback. Triggle thanked Doris Wilson for putting all the names of committee members on the website. This has really been appreciated by the committees.

Some committees have been extremely active. It is a diverse group, and McCann reducing the number of committees was a good move.

McCann: These committees are an extremely important part of the APS. Many of us don't fully appreciate how much time Triggle puts in to coordinating the committees and working with the chairmen. She and the staff who work with the committees are the lifelines from the committees to the APS. It is a thankless job in some ways, but McCann is very appreciative of the work she does.

Clark: Corrected the report. The Finance Committee meeting was June 24, and there was a misspelling of her name.

Morison: Also corrected the spelling of his name.

Motion: To approve the Committee Reports. Moved by Clark. Seconded by Morison. Passed unanimously.

Phone Votes:

Lamb: There were four phone votes that need to be approved. Beginning on February 29 there was an e-mail vote on the USPS agreement. The results were unanimous.

Motion: To approve the e-mail votes that unanimously approved the USPS agreement. Moved by Clark. Seconded by Adams. Passed unanimously.

Lamb: Beginning on March 29 there was a unanimous vote to ratify decisions that were made in Executive Session regarding the Luff award.

Motion: To approve the e-mail vote to ratify decisions that were made in Executive Session regarding the Luff award. Moved by Clark. Seconded by Adams. Passed unanimously.

Lamb: Beginning on April 4 there was a unanimous vote to approve the minutes of the Portland meeting.

Motion: To approve the e-mail vote approving the Portland minutes. Moved by Morison. Seconded by Clark. Passed unanimously.

Lamb: Beginning on July 25 there was a unanimous e-mail vote to approve the minutes from the June 26 State College meeting.

Motion: To approve the e-mail vote approving the State College minutes. Moved by Peterson. Seconded by Boehret. In favor: Morison, Peterson, Boehret, Klug, Clark, Triggle, Youngblood, Hotchner. Abstained: Adams, de Vries. Motion passed.

Appointments:

McCann: We have two appointments that need Board approval. The first is a very important appointment for the chairman of the Stamp Theft Committee. We have had a vacancy here for some time. The person that has volunteered is Ephraim Day from Maryland.

Hotchner: Day is a retired policeman from Montgomery County, Maryland. He is a serious collector, exhibitor, and judge. He knows his way around the hobby and knows his way around law enforcement.

McCann: We are fortunate to have his services.

Triggle: He is also enthusiastic about doing this.

Motion: To accept Ephraim Day as Chairman of the Stamp Theft Committee. Moved by Klug. Seconded by Peterson. Passed unanimously.

McCann: The second appointment is Irving Miller from Uncasville, Connecticut. Many know him as a professional philatelist. He is here with us at this Board meeting as the new Dealer Liaison to the APS Board. This came as a result of an idea Wayne Youngblood had a few months ago.

Youngblood: For some time there has been a feeling that dealers, particularly APS bourse dealers, did not have an adequate voice on the Board. They did not have access to members of the Board, although Board meetings are open to the public. Our initial discussions were whether to have an APS Dealer Board Member or Dealer Liaison. This would be someone who would actively sit in on meetings and translate the concerns of the dealer community to the Board.

McCann: The idea is that Irv will be here and attend the Board Meetings and be someone who dealers can ask questions of and then bring dealer concerns to the Board. We want to increase the dialogue with dealers.

Motion: To approve Irving Miller as Dealer Liaison to the APS Board. Moved by Hotchner. Seconded by Clark. Passed unanimously.

Irving Miller: This will work both ways. If anyone has a complaint for the dealers, Miller promised to try to handle it diplomatically. The APS Board needs a dealer's point of view sometimes. After what happened at World Stamp Expo where the Postal Service took total control and it didn't work out, a lot of dealers tried to give the Postal Service a lot of input and they refused to accept it. The consequences were obvious. This will work both ways.

Future Stamp Shows:

Ken Martin: There is only one viable candidate for Winter 2003. Martin has looked to try to find hotels to host the show. There were three possibilities, but none of those three will give us the space. One of the hotels in a relatively small city, Charleston, wants a minimum of 1,000 hotel rooms. One wanted over $150 per night for their rooms. Another wanted 500 rooms per night at a rate in the low $100s. None of those three are financially feasible. The only candidate at the present time is Memphis, Tennessee, using their convention center. The convention center would cost us about $16,000 for a three day show. Martin did not think we could break even on that. We can choose Memphis and expect a loss of between $10,000 - $15,000 or Martin can keep on looking and not take any action on 2003.

Triggle: Did Martin look into a small show as we had discussed previously?

Martin: Has been looking at a minimum of 30,000 square feet. Martin does not believe fewer than 40 or 50 dealers and less than a couple of hundred frames would be feasible. It would fall below APS standards.

De Vries: At what point do we have to have a decision on the show?

Martin: It is not an ideal situation waiting any longer than this, but it is not an ideal situation losing $10,000 - $15,000 either. Some things may free up. Some places have hotel requirements, and suddenly two years out they may loosen up on the hotel requirements because the space is not being utilized. There is no guarantee of that.

De Vries: How long will they keep Memphis open?

Martin: They have been holding it for us for quite some time already. They will keep holding it for us until somebody else makes a firm commitment. If somebody came in and said they would sign a contract, we could lose it. Nashville has moved us up from third option to second option for space. There is no guarantee for a second option. It could be that we would only be told a year before if we could get that space.

Klug: What do we have to do to get the Winter Show to make money or break even?

Martin: We would need 75 dealers and a rental of no more than $10,000 or less to have a chance.

McCann: With 50 dealers we couldn't do it?

Martin: The rentals would have to be $5,000.

Klug: Does such a space exist where we could have 75 dealers at a rate of $10,000?

Martin: Yes. In theory it exists, but the question is does it exist far enough in advance for us to make the plans? We can't do a Winter Show with only six months notice. The minimum we could operate on is one year, and that is not ideal considering we need to get out prospectuses. For a 50 dealer show we would need to have it in a hotel and would have to pay virtually no meeting space fees in order to break even or make a small amount of money. AMERICOVER did not pay anything for their space in Houston this year. That was tight for them. They had 110 frames of exhibits. They didn't have 50 dealers, either. We would need twice as much space they had. They probably did not have 20,000 square feet.

Triggle: A $15,000 loss is not something we should do.

McCann: We have been juggling with this problem of what the Winter Show should be and how much we should spend or not spend on it for several years now. The Board would clearly like to have a smaller show that would be in a hotel type space that we would not have to rent a convention center, and where we could have 50-plus dealers and 250 frames. We want to have a smaller show so we can continue with experimental things we are doing.

Lamb: We have all been thrashing with what the Winter Shows should be. The solution is not an easy one. Lamb questions whether going to a smaller show is worth it to us. The smaller it gets the more difficult it becomes for us to make our expenses. We will lose more and more money. The smaller the show is, the more we compete with other WSP shows. The APS shows are something special. STAMPSHOW is the best show in philately. The Portland show was one of the top ranked shows in philately. If we can't do that, the question becomes why should the APS be doing it at all.

Youngblood: What about partnering with other types of shows - other collecting areas? We can still separate off, but we could utilize their room nights and they could use ours.

Martin: The American Numismatic Association has expressed some interest. There are a lot of issues that would have to be worked out. They charge hefty admissions, and there are other issues. It is something we are exploring, but we are no where near to coming to an agreement.

Lamb: Spoke with the ANA Executive Director about it and they are eager and enthusiastic to do a joint show with us. The problem is they, too, are running four or five years out. If we are to consider doing a joint show we are looking at 2003 or 2004 or later.

Klug: Maybe we should start thinking about doing what we used to do, and that is going to a WSP show for our Winter Meeting. It has become too expensive for us to be on our own. Klug didn't think any of the Board were very happy about that, but we have to face the financial realities. Klug wanted to hear what Irving Miller, the new Dealer Liaison, had to say about this.

Miller: Asked if APS lost money in Portland.

Martin: Yes.

Lamb: We lost $17,000 in Portland.

Martin: We have had good shows. Houston was a good show, too, but we lost a lot of money there. Memphis would be a very good show, but we would lose money.

McCann: There is another philosophy. Maybe we should be prepared to spend $10,000 to $15,000 to give the show to the members. It's a philosophical question. McCann was not advocating we do that, but it something we have been grappling with.

De Vries: We were using this as a show that would go to areas that don't have a major stamp show and were relying on small bourses. This was being used as a way to bring a bigger stamp show into those areas as a gift to the members. Lamb mentioned that partnering with the ANA was difficult because they are working as far in advance as 2003, but we are talking here about 2003. Is it still too late for us to explore that possibility for the 2003 Winter Show?

Lamb: We can certainly talk with him. The coordination is difficult because their timing is different from ours.

Martin: Did not believe they had made a decision, but they may not want to wait until our next Board meeting.

De Vries: Would there be enough space in Memphis to accommodate both the ANA and APS?

Martin: Did not know. What is on hold right now would not be sufficient for both shows. Martin did not know if there was more space available for the same dates.

Lamb: We had a joint show with the ANA once in Cincinnati years ago. Both organizations require a lot of show space and not a lot of hotel rooms. They have exactly the same kind of imbalance. What we did was have the ANA show one weekend and APS came in the following weekend. We billed it as a cooperative effort. We could do that coordination even better.

McCann: They got the hotel block of rooms over a nine day period. They were able to negotiate with the hotel and convention center for a better deal than either group could get by themselves. That's not a bad way to proceed.

Lamb: Said they would talk to the Executive Director of the ANA to see if something could be negotiated.

Martin: Believed it was the sense of the Board that we would have to go back jointly with another WSP show or we have to say we are planning to lose a certain amount of money in order to promote philately. There are not many viable alternatives where we are able to do it on a break-even basis.

Morison: We talked about the coin organization and they are the obvious society, but there are other organizations that are equally big such as antique societies, manuscript, and post card collectors. Maybe there is also a possibility where we could bring together some of the smaller societies and have them join us - groups such as the automatic coin bank collectors. Maybe there would be a way to put together a hobby show in the winter rather than just a stamp show or a stamp and coin show. We should look beyond coins, too.

David Flood: We might want to contact Greenberg Shows. They do the model train and antique doll shows. The train people always seem to pack in thousands of people. Greenberg goes all around the country, and he may have four or five shows a month.

Triggle: The Winter Show has the AAPE tacked on to it. The thinking Triggle has heard from AAPE is that if something happened and APS no longer put together a Winter Show, AAPE would then piggyback on to a WSP show. It doesn't have to be in the winter. It can be at any time of the year.

McCann: There are a couple of other options to look at. The idea Flood had of contacting Greenberg was a good one. McCann asked Martin to get the information and bring it back to the Board.

Morison: We might be able to piggyback on something that is completely unrelated. One of those might be the Postal Forum. Those are usually October and May. It doesn't quite fit the Winter Show, but they have a big exposition and they take up many hotels. Maybe we could just say we'd want another hotel ballroom.

De Vries: The Postmasters have an organization, too. They also have regional meetings.

Morison: They have three national meetings of those groups, and they do very well.

Adams: While we are looking at other people we may wish to partner with, we may wish to consider partnering with crossover groups having similar types of interest such as paper memorabilia or the post card people. These are areas that stamp collectors might like to explore. We should concentrate on like-minded people rather than those who are interested in dissimilar collectibles. This kind of partnering would expand the horizons of the other collecting groups, and it would expand theirs.

Morison: Have we ever looked at a museum such as in metropolitan New York?

Lamb: We need a great deal more space than we could get there. This gets back to the hotel issue. Our shows are so big that we tax the capacity of something like that.

Hotchner: We have at least two post card organizations that are affiliates of the APS that we might wish to approach about having shows.

Dennis Gilson: Is a person who recently joined APS staff, but has been a member of APS for 23 years. His wife is not a collector. Whenever he wants to go to a show, his wife always says there is nothing there for her. One of the things she is interested in is sewing and quilting. There are lots of that kind of show in the country. Parterning with that sort of show could benefit collectors and their wives.

Ken Lawrence: We might want to consider having Winter Show 2003 in Bellefonte.

McCann: What are we paying for in Riverside for their convention center?

Martin: It depends heavily on the room utilization. It goes down to between $4000 - $5000 if we have 800 room nights. That is room nights, not rooms per night like some of the convention centers are asking for. If we got zero room nights it would cost $16,000. That is unrealistic. We may not achieve the 800 room nights, but it is based on a graduated scale.

McCann: Did not hear wild enthusiasm for Memphis at this time from the Board for that $17,000 loss. Let's keep looking and take into account some of these other suggestions. McCann asked Martin to look for another alternative.

Lamb: Believed the sense of the Board was that we would like to have the shows eventually make money but it is worth subsidizing them a while longer for philately.

McCann: Yes, but not a $17,000 loss. That is why McCann asked about Riverside, which is a third of the price if we get 800 rooms. McCann thought that was a possibility.

Martin: For STAMPSHOW in August 2003, we have a different problem. There are five viable proposals. One of the proposals arrived Thursday and one of the proposals Martin had just gotten off the answering machine in the hotel before coming to the Board meeting.

There is a proposal from Portland. We had a good Winter Show there. Martin is not convinced that if we had 150 dealers it would be as good or that we would get the attendance we would need to support 150 dealers. All five of the proposals have reasonable costs, which means in the vicinity of $30,000. The convention center here in Rhode Island is about $50,000. They are all relatively reasonably priced. All have hotel rooms that aren't going to be cheap, but are within reason. None of the proposals can be eliminated based on cost of convention space. The local committee in Portland would like us to come back.

There is a proposal from Pittsburgh. We have done two shows in Pittsburgh. Martin has two concerns about Pittsburgh. They are building a new convention center. When it was first proposed, it was supposed to be completed in 2002. Martin visited Pittsburgh two months ago and now they are saying completion won't be until February 2003. Martin thinks it will be completed by then, but there is some concern about it. The neighborhood felt unsafe around the convention area. Martin felt less safe around the Pittsburgh convention area than in New York City. There were bars on the shops in the area of the convention center. It could change in a few years, but at this point in time it is a concern. We have had two shows in Pittsburgh in the past and they have both gone very well.

We have tried to have a show in Charlotte, but we have not been able to get the convention center. There is a Merchandise Mart on the outskirts of town, about 5 miles from downtown. Charlotte is an area we have not visited. There are local collectors who are really trying to get us to come. They are enthusiastic, but Martin did not know their level of experience.

Boehret: Very minimal.

Martin: They don't have a World Series show. The major concern with Charlotte is that there is no major hotel within walking distance or facilities for banquets. There are no first or even second class hotels. We would have to go downtown for headquarters hotel or a banquet. We would need shuttle buses, and people would have to pay for parking both at the hotel and at the Merchandise Mart. They would not like that. Despite saying that, until last Thursday Charlotte would have been Martin's first choice.

Last Thursday Martin received a proposal from Columbus, Ohio. Columbus had given us a proposal previously, but the previous one was for the same weekend as BALPEX and Omaha. That was unacceptable. Klug received some of the proposals which she has distributed to members of the Board. It is a viable proposal. There is a group of local collectors who are very interested in having us come. The Ohio Bicentennial is 2003. They believe the show could be listed as an official event for the Bicentennial and we would get additional publicity. Martin visited the Columbus Convention Center this summer. It is a larger facility than Rhode Island, Portland, or Santa Clara. It is not on the scale of Orlando. We would take up a relatively small portion of the convention center. They do have a wide variety hotels in the immediate walking distance. Prices would range from $75 - $125 at today's rate within walking distance. The downtown area basically shuts down in the evening. There is already a World Series show in Columbus, but it is not the strongest World Series Show.

Boehret: It used to be.

Martin: That may be. Martin only knows what it has been the last few years.

Triggle: The people whose names are on the Columbus proposal are not those who are affiliated with the Columbus WSP show.

Klug: This proposal is not coming to us from the Columbus Philatelic Society that runs COLOPEX, but rather from some members of the Worthington Stamp Club. That is where the difference is.

Youngblood: That group is very progressive.

Martin: The concern has been alleviated but when they first came with their proposal there was definitely some friction between Worthington and Columbus.

Klug: That has been taken care of.

Martin: At least it is much better than it was.

David Kols called this afternoon and said St. Louis has finally agreed they would provide space for 2003. We don't know how much they would charge for their convention center. Kols said there were four hotels. Martin did not know where the hotels were located, or what the rates would be for the hotels.

All five are potentially viable. Based on what Martin has, he would recommend Charlotte or Columbus.

McCann: The Charlotte site is out of the city too far. It would be difficult and the members would not appreciate it.

Hotchner: Knows Charlotte very well. Five miles from Charlotte is like 25 miles in Los Angeles. People there are used to moving around. Our members, however, might be another issue.

Peterson: About six years ago COLOPEX itself was having a lot of friction between the old guard and the new guard. Has that healed to the point where there would be a good, solid core of people to put this on?

Adams: From the names of the individuals on the proposal, that is a very good group of people. Adams would be very comfortable with the APS working with that group.

Martin: Agreed.

Triggle: These people who have put together this proposal do not work for COLOPEX.

Lamb: There are advantages for both proposals. We tried for a long time to get a good show in the South. Membership-wise we are very weak in the Southeast. There is a good population base there, and Lamb believes part of it dates back to the old SPA days. We have been trying to attract people in that part of the country. There is a lot to be said for a chance in the Southeast where they want us. It would be to our advantage to take the opportunity and go after it.

On the other hand, we have had our best shows in the belt from Chicago to New York. There is a good population base there. Pittsburgh is in that belt. Either one of those would work for us.

Irv Miller: Did not believe Portland would be able to support a summer show. It was a very good Winter Show with 65 dealers, but they would not be able to draw enough people to support 150 dealers. Miller liked Charlotte or Columbus.

Hotchner: For the unsuccessful petitioners for the summer show, would any of those be considered for the Winter Show?

Martin: Charlotte has given us a proposal for 2004 for August as well, again at the Merchandise Mart. They came up with space for us at the convention center for the Winter Show, but they couldn't come up with any hotel rooms because they had someone using 50,000 square feet and they wanted 14,000 hotel rooms. They had all the space in the world but nobody could fill it because they had all the hotel rooms. Charlotte, if they could come up with space for the Winter Show, would be perfect, but they have not been able to come up with the space for us at a price we could break even.

Adams: With the Columbus proposal, something that Adams really liked was that the dates were in early August. We would not be conflicting with back to school problems for families with children or people who are teachers or college professors.

Martin: To be fair, every one of the proposals is for early dates in August. None of the dates go beyond the 15^th or 16^th. All are for either the first or second weekends in August. In Atlantic City for 2002 we are the 8^th through the 11^th. Martin has been looking most for the second weekend in August because he did not want to infringe too much on AMERICOVER, which is of some concern with some of the dates he is looking at. He has not been able to get dates for AMERICOVER for 2003 or beyond.

Foster Miller: AFDCS does not have a date yet. It is likely to be in New York City to Boston, very possibly Stamford, Connecticut.

Clark: Agrees with Hotchner about Charlotte. Would the shuttle between a downtown location and the Merchandise Mart be easy to arrange?

Martin: It is easy to arrange, but it is not inexpensive. Depending on the service we wanted, we could easily be talking about between $4,000 and $5,000. Neither the hotel nor the Merchandise Mart have any inclination to want to subsidize that.

De Vries: How does the Merchandise Mart compare to the convention center?

Martin: It isn't very large overall. The entire facility is a little bit larger than the Rhode Island Convention Center. It has more public shows that are similar to ours. It does not have high ceilings. It does not have much in the way of amenities in the site and it does not cater to conventions. It only has two hotels within walking distance and both are third tier hotels like Motel 6.

De Vries: What is mass transit like in Charlotte?

Martin: Did not know.

McCann: It probably has bus service but not light rail.

Martin: It has no railroad transportation, but it is easily accessible from the Interstate.

Klug: We seem to have narrowed it down to either Charlotte or Columbus. There are difficulties with both locations, but Charlotte has difficulties similar to Houston a few years ago. We had our Winter Show there and the convention center was a good, long way away from the hotel. You either had to walk or wait for the shuttle bus. A lot of people complained heavily about that. This arrangement in Charlotte will not make people happy and want to attend.

Martin: It will hurt with the people who fly in. It won't hurt those who drive unless they stay at a hotel that charges for parking and they have to pay parking at the Merchandise Mart.

Triggle: For those who haven't looked at the Columbus proposal, it is really well organized. Are the Charlotte people as organized?

Martin: Was not aware of any local committee that has gone to the effort Columbus has. Martin was concerned about the problems COLOPEX has had with its own show committee and whether the people in Columbus could put together an acceptable committee.

Youngblood: We have narrowed it down to Charlotte and Columbus. The people who are prepared to do it best right now is probably the Columbus group. Lamb's comment that we have an opportunity to open up to a whole new area of the country by selecting Charlotte should not be lost. This has been one of the major goals we have had with STAMPSHOW - to get to different parts of the country that don't typically have that big a show.

McCann: Did not quite agree. He had written a column a few months ago about two philosophies about STAMPSHOW. One is that we take the APS around to people and try to get them to come to the show. The other is that we go to places where we will have a very good show that will draw a lot of people and our dealers will do very well. McCann thought we should always go to places where we know we will have good shows. If that means we return to the same part of the country more often than not, that's the way it is.

Hotchner: That is true for STAMPSHOW. We should use Winter Show to go to new places and do different things.

De Vries: Is the Charlotte proposal workable as a Winter Show venue?

Martin: Not financially.

De Vries: The Merchandise Mart would charge too much?

Martin: They are in the $25,000 - $30,000 range for the space we need for STAMPSHOW. That could go down to the $15,000 range for Winter Show, but that is still not in the range we could do a break-even show.

Irv Miller: What month do they have their World Series show in Columbus?

Martin: March or April the last couple of years.

Miller: It is close to the STAMPSHOW dates. Would they be willing to give it up for a year? There is a stamp show in Johnston, Rhode Island in September that they gave up to do this show.

McCann: They probably would give it up for a year.

Martin: It is hard to say. When we had STAMPSHOW in Milwaukee, they did MILCOPEX three weeks later. Chicago has recently expressed some concern about us having another show there. We are committed for 2001 in Chicago. We can't tell the local committee not to have their show, but there is a provision in our rules for World Series shows that they can take off a year without losing their accreditation.

Morison: At one point we discussed going to Chicago every year or every other year for one of our shows.

Martin: It was for the August show, but there have been some comments recently that Chicago is not pleased we are coming to Chicago for 2001 because of the effect on their show. We have no sense from Chicago they want us to come on any kind of a permanent basis.

Motion: To accept Columbus as the site for STAMPSHOW 2003. Moved by Morison. Seconded by Triggle. Passed unanimously.

Martin: Wished to defer discussion on STAMPSHOW 2004. He has two candidates. One is Detroit, but that may be too close to Columbus for 2004. The other is Charlotte, but we are not convinced that will work. Martin will speak with Charlotte again to see if something could be done for Winter Show.

McCann: Requested Martin speak with David Kols about the possibility of St. Louis being the venue for STAMPSHOW 2004. The St. Louis Stamp Show has been very impressive the last several years.

Youngblood: Would St. Louis make a good place for a Winter Show?

Martin: Their World Series show is the first weekend in March. It would have to take the place of that one.

Foster Miller: We are potentially looking at St. Louis for AMERICOVER for 2004, and we have a hotel proposal already.

Boehret: Has Martin talked to people from Philadelphia?

Martin: No. Martin spoke with the current decorator about all these locations. They had no problem with any of them. They were also the decorator for the Republican National Convention in Philadelphia and our main coordinator said he hoped he never had to work with the Philadelphia unions again. If we went to Philadelphia our costs would escalate because we would have to work with their unions.

Boehret: Do you have to use the unions?

Martin: Yes. There is no way around it.

NORDIA 2001

Morison: NORDIA 2001 is well along its way. The bourse is completely sold out for that show. We have 75+ dealers, plus postal administrations from the Nordic countries. The exhibits for Nordia are closing on September 15. The prospectuses from the APS part of the show and from ARIPEX WSP show are available. Judges have been selected. A grand tour for spouses has been arranged for the Tuesday before the show. This Board should get their registrations in. Ken Martin would like to have an acknowledgement shortly so he can tell the hotel how many rooms and what nights you need.

Martin: Reservations have been made for everyone here, but they are only for Thursday through Saturday.

Morison: The postal history symposium takes place Wednesday morning and Thursday morning. We currently have 13 papers that are being published, but we expect only five or six to be presented. Gini Horn is one who is doing a paper.

We are going to be solvent.

McCann: Tucson, Arizona in January is a very nice place to be.

Grand Prix Americas:

Klug: The concept called Grand Prix Americas was proposed by Roger Schnell, however a similar proposal was made a few years ago by Betsy Towle but there was no action taken at that time. The proposal being presented to the Board was massaged by the Committee on the Accreditation of National Exhibitions and Judges. It was not unanimously accepted but there was sufficient support to ask for Board approval as a trial at Winter Show in Riverside, California.

We have chosen to do this at the Winter Show because of the experimental nature of that show. It would not detract from the Champion of Champions the August show has. We would have another show feature to publicize, which hopefully would get more people into the show, and would bring in some of the hobby's top buyers which would make the dealers happy. It would also serve as an outreach to our neighbors in North, South, and Central America.

The competition would be limited to those exhibits that may no longer be shown competitively because they have received three international large golds, or won the Champion of Champions award.

McCann: Believed this was a good idea and that it was a plan that would give people a chance to see outstanding philatelic collections that are not shown on this continent. They are usually only seen in international exhibitions. It would be something we could do that would not cost much.

Klug: Did not anticipate a negative cash flow.

McCann: We would use the judges that are already at the Winter Show. The participants would be paying frame fees. There would be no extra medals. The only cost would be for the Grand Prix award itself. The main advantage would be that it would give collectors some outstanding material they would not ordinarily see. It would also bring these exhibitors to the show. These are people that buy good stamps, and the dealers should like to have them as customers.

Klug: We have a provision in the proposal that indicates Riverside would be a trial. Once that show is over, we will go back and review it to see if we can afford to have this competition, and if we have the physical space at the show to have it. Klug worked with Martin about the space issue for Riverside, and Martin indicated the necessary space was available for Riverside but may not be available at other venues we would consider for Winter Show.

Martin: We do have the space at Riverside. If we figure this into our space requirements beyond 2002 it would make it more difficult even though 120 frames is not a huge amount of space. It would make a difference though. With the single frame exhibits, single frame championship, and display class at Portland, we had 300 frames. Space is the only concern.

Peterson: What coordination have we made with FIAF about this regarding judges and exhibits?

McCann: None as yet, but if we decide to go ahead with this we would have to coordinate with them.

Klug: We will coordinate with FIAF about exhibits they want to send, or even if they want to participate at all. Right now this is just a proposal. We don't yet know if FIAF is interested. We have not approached them yet. Klug said she would talk with Jim Mazepa about this if the Board approved it.

Morison: This is a wonderful way to get more exhibits that you don't see. The only difficulty is with clause 6 which states we will charge the standard fee for multiple frame exhibits. It should say the fees will be based on the standard fee. This kind of exhibit should have a multiple price for exhibits as opposed to a basic fee. Then we can give a very nice award. They can afford it anyway.

Klug: We haven't discussed what we want to give as an award yet.

Morison: We want to be certain the price of the award is covered.

Boehret: When we did the Winter Show in Orlando a few years ago there was some upset with the South American and Central American exhibitors. Do they even want to talk to us again?

McCann: Yes. The fence mending Dr. Mazepa has done has made a big difference.

Martin: Did not want to get into a situation where we would take on commissioners.

McCann: No. That will not happen.

Martin: Realized there were no provisions in the proposal for commissioners, but wanted to make certain.

Klug: Assured Martin that would not happen.

Adams: This is an excellent proposal for all the reasons stated. There are no negatives whatsoever.

De Vries: Is there a feeling that these exhibitors who have won three large golds would be interested in putting their exhibits into this competition?

McCann: That is a very good question. McCann believed they would, but we would find out.

Martin: Believed exhibitors would want to participate.

Triggle: What about trying it as non-competitive? Do we need to have another competition?

McCann: More people will be interested if it is competitive.

Motion: To accept the Grand Prix Americas proposal. Moved by Peterson. Seconded by Morison.

Triggle: Asked for more opinions about whether it was necessary to have it competitive.

Clark: Thought it was necessary to have it competitive. If you want to have the big time players come and play, what they are looking for is a bigger field to play in.

Youngblood: They are looking for more hardware.

Klug: Please remember this is just a one-time trial that we are voting on today. It may die after that one time trial; or it may evolve into something else.

McCann: Called the question. Motion passed unanimously.

APS Leadership Medal

Klug: This proposal was presented at the last Board meeting and discussed. Suggestions were made by the Board at that time, and since then Board colleagues Adams, Peterson, and McCann have worked on the new version of the proposal presented to the Board in written format. We have refined the criteria for the category for national recognition because that was the main concern of the Board the last time this was presented.

In the last day or so Morison received comments from Bill Bauer about this award. There is still some concern about this award being confused with or duplicating the Luff Award. The purpose of the award may need to be restated so that truly reflects an award for leadership at the grass roots level. It is a way we can do something positive for the hobby without adding more financial problems to the APS.

Morison: This appeared to be a competitive type of award. Bill Bauer, in reading the description in the agenda, believed it was another type of Luff Award. Morison suggested rewriting the purpose of the award slightly to say that the APS Leadership Medal would be to encourage leadership at a local and regional level through chapters, affiliates, and other philatelic or non-philatelic organizations that promote stamp collecting. This would keep it on a local basis as opposed to a national award. You would not get this kind of an award if you were doing things nationwide. You would then be in competition for the Luff Award.

The first two criteria for service to an affiliate or service to a chapter are very clear. The third criteria is not as clear. It should not say outstanding philatelic leadership in the United States, because that implies national contributions rather than local or regional. It should say that it is for contributions within an organization whose principal objectives are not philatelic, such as a Rotary Club or foundation. If it wanders off to national level activities it conflicts with the Luff Award. If it is kept locally with a club, affiliate, specialist society and a person did something to promote philately, this Leadership Award would be appropriate. That was the intent of this award. It just needs more wordsmithing.

Hotchner: Was not present in Portland and was not a part of that discussion, but has had correspondence with the British Philatelic Federation on this general subject on a program they have done. This is fine so far as it goes, but it does not go far enough. We have 700-plus chapters. We have 100-plus affiliates, and we have uncountable philatelic-related volunteer efforts. There are hundreds, if not thousands, of people who are eligible to be nominated and who deserve some sort of recognition. Having one awardee in a year would not only be hard to select, but would end up making all those nominated and all their sponsors awfully unhappy. We would have fewer friends of the APS after this is all over. We need to go back on this entirely. We need to set very definite criteria, and anyone who meets it should get a silver medal. Of those people, we pick one in each category at the end of each year.

Clark: It doesn't specify this at all. Is APS membership a prerequisite?

Klug: No. They have to be nominated by an APS member, but the honoree would not have to be an APS member.

De Vries: Hotchner has an excellent point that there would be a flood of people who would be eligible who would want this award. De Vries questioned Morison's wording. Our affiliates are national societies, but Morison was specifying local and regional level. We should state the award was to encourage leadership outside the APS on a national level service. The Luff Award is for national level service. This would be for something other than the APS, that would include the BIA, ATA, AFDCS. These are all national organizations that are affiliates. If you say it is not for national service, then you cut out all the affiliates.

McCann: Slightly altered Morison's purpose to read: "The APS Leadership Medal will be awarded to encourage leadership at a local and regional level, and in chapters, affiliates, and other philatelic organizations." It specifies that they are separate, and it is not just for local and regional activities.

De Vries: It should say "outside of national-level APS leadership and service." We are trying to differentiate this from the Luff, and the Luff is for national-level APS service.

Morison: No, not necessarily. The winner this year for philately generally is not an APS member and really represents a national organization but not the APS.

McCann: De Vries and Morison are talking about the same thing. It is just a matter of how to word it. We can't rewrite all of it right now.

Klug: Hotchner made the point that we have thousands of volunteers in this country who are doing good work and they should all receive an award. This is something special where we would honor just one individual in a year and make it a focal point. It would be a major award. There are other awards the volunteers qualify for. We have sparkplug awards. Local clubs give awards for exemplary service. Other chapters and affiliates have service awards. But this would be the APS Leadership Award. It is meant to be something very special like the Academy Awards. If a movie gets an Academy Award for being the best movie, other filmmakers don't stop making movies because they didn't win.

Boehret: This is a replication of the Kehr Award.

McCann: No, it is not.

Youngblood: Agreed with Hotchner. We are stepping into the abyss of grass roots philately. If we sanction this type of thing and only pick one person out of thousands to receive it, it will do more harm than good. It will upset people in small local clubs because they didn't win. Hotchner's idea of doing silver medals for everyone who is nominated is probably better. Another problem is how do you weigh the three categories against each other. How do you determine if a nominee for outstanding service to an affiliate is better than outstanding service to a chapter? Do you have one for each?

McCann: At this point there is enough difference of opinion on the Board about what we should do with this. Everybody seems to think it is a good idea in some form or another, but we aren't clear what to do. Klug just privately suggested that we should ask the Chairmen of our Chapter Activities Committee and our Affiliates Committee to sit with some Board members as a subcommittee and work this over and come back with a suggestion.

Morison: Put the chairmen of the Kehr Award and the Luff Award on it too.

McCann: The Committee will be Morison, Hotchner, Fortunato, McDevitt, and Klug (chair).

Peterson: Did not believe we should begin giving 1000 silver medals a year.

Lamb: Technically this award that we found is still an APS award. It has been awarded three times for extraordinary service to the APS over a period of about a decade. If we decide to supplant that award with something broader, we will need to abolish that award in the same action.

McCann: We can do all that at once.

Klug: We haven't gotten that far yet.

[A break was called at 8:45 p.m. The session resumed at 8:55 p.m.]

Investment Policy

Clark: The Finance Committee is bringing to the Board a modification of the APS Investment Policy. The Board approved this Investment Policy recently, but in changing over to PNC and in considering the costs in dealing with investment managers the Finance Committee felt it was appropriate we change the wording. We are recommending the wording under "Investment Policies" reads: "The APS Finance Committee believes that the Society's assets should include both fixed-income and equity investments, managed by professional asset managers." We would leave off everything that comes after that to the bottom of the page. The rationale is that if we have multiple investment managers, we have multiple fees.

Motion: To accept the change in the Investment Policy. Moved by Clark. Seconded by Klug. Passed unanimously.

Clark: Requested Peterson seek the same approval from the APRL Board.

The Finance Committee has had a subcommittee working on finding a new investment manager for Society's funds. We had proposals from A.G. Edwards, Merrill Lynch, Salomon Smith Barney, T. Rowe Price, Mason Wood Walker, and PNC Bank. The subcommittee interviewed two finalists and came up with PNC Bank. The Finance Committee agreed to support this decision and believed it was the right thing to do. PNC requires a resolution that our Board does not require, that states our Board has passed a resolution naming PNC Bank as investment manager.

The assets were transferred from Merrill Lynch to PNC on August 7.

Motion: To approve a resolution naming PNC Bank as the Society's investment manager. Moved by Peterson. Seconded by Klug. Passed unanimously.

Morison: For the record, the APS Finance Committee has the decision making authority in this matter. It has been delegated to them. We transferred the funds already.

Clark: We transferred the funds on the authority of the Finance Committee.

McCann: We needed the resolution on the request of PNC Bank.

Budget:

Clark: There were changes made to the budget based on suggestions made by the Finance Committee. The Sales Division was audited.

Lamb: Clarified that the Sales Division is audited every year. The sales books in the Sales Division were actually audited.

Clark: The sales books in the Sales Division were audited for the first time. There was a recommendation from the Finance Committee that the Board leave the AP mailing surcharge to Canada at its current rate and raise the foreign surcharge to all others to $10. That was moved by the Finance Committee for the Board to consider.

Lamb: The staff supports this. The general membership is subsidizing the foreign membership. Even this does not bring it up to the total cost of mailing AP. There was no controversy about this.

Adams: How much is the foreign surcharge now?

Frazier: $6.

De Vries: What is the actual cost for foreign members?

Frazier: $11 or $12.

Clark: Raising to $10 is still not going to cover the cost.

Motion: To raise the foreign surcharge for all countries except Canada to $10. Moved by Clark. Seconded by Hotchner. Passed unanimously.

Clark: A second recommendation from the Finance Committee was that we raise the single frame exhibit fees from $10 to $15 and that staff and Board look at all frame fee structures.

Martin: We have been charging $15 for single frame exhibits. The prospectus for Winter Show 2001/ ARIPEX/ Nordia has the frame fees for single frame exhibits at $20.

Clark: Staff has already reexamined this.

McCann: This is not a Board issue. It is a recommendation from the Finance Committee to the administration.

Clark: The way it is phrased is that it should come to the Board. Clark felt it should be handled administratively.

McCann: The sense of the Board is that it should be handled administratively.

Martin: Back in 1997 the Board did set the single frame fees in a Board meeting and stated they should not exceed $15.

Clark: There has been an overall growth of the Society's assets of over $2 million from 1994 to 1999. In that same period, services that have been added include the youth department, which will cost about $40,000 this year. We are returning circuits without charging postage or insurance, which is around $7,000. We have started up an Internet Sales Division, which is around $50,000. We have added web page services, which is around $30,000. We have added color in the AP. We have Winter Shows. We have computer and information services, around $8,000. We have over $200,000 of new services that have increased in that period of time.

The Finance Committee has proposed there be an increase in dues. When the motion was made it was noted that in the period since the last dues increase eight years ago, all forms of leisure and entertainment have become more expensive. The budget for 2001 indicates it would be beneficial and prudent financially to increase the revenues even at the risk of loss of some membership. No one ever wants to raise dues. It has been so long since dues have been raised that our dues are now substantially lower than those charged by organizations similar to ours - lower even than some of our leading affiliates.

Furthermore, if the Board envisions a need for a dues increase any time in the foreseeable future, now is the time to enact it during this period of unprecedented prosperity. Our members are more affluent than they have ever been before, and more so than they are ever likely to be again. Yes, we will lose some members but that will be true whenever the decision is required. All told, it would be better to put the pain behind us to begin the recovery while our members' financial conditions are so favorable.

The Finance Committee recommendations are overseen by the Board. Our shareholders are our members. It is our duty as Board members to determine what percentage of the investment income each year should be applied to member services and what percentage of earnings should be retained simply to keep ahead of inflation. According to one Board member's analysis, we have been keeping a retained earnings of 20%. Can we afford to wait five years? It seems clear there will be some sort of capital fund or building program in the next few years. Even if we don't build a new building or renovate an old one, we will have more costs than we have had. Repairs to the heating and air conditioning system and repairs to the parking lot will run around $32,000. If we don't have a building project, then we will have to rent space. This will run in the neighborhood of about $15,000 for 2,000 square feet. There would be the cost to move into that rental space, which would be about $4,000.

McCann: Asked for questions the Board may have about the budget.

Klug: Where are we now with economies that were made in the budget compared with where we were in June when this was last discussed?

Frazier: The biggest place we changed after the Finance Committee Meeting was in the area of the American Philatelist. After that meeting Welch, Lamb, and Frazier did some revisions on the printing and production costs of the magazine. At the same time we added some costs in the audit area. We added $8,000 to auditing costs this year and $4,000 next year for the additional costs to audit the sales books in the Sales Division. At this point that $8,000 figure is overstated. The net effect is that there has been about a $9,000 decrease from the original 2001 to the revised 2001 budget.

Peterson: The audit costs that have gone in there are one time expenses.

Frazier: That will be a recurring expense. That will be an additional cost of the audit every year to audit the sales books. We figured it would be twice the cost this year as it will be in recurring years.

Peterson: The AP cost is also a recurring decrease?

Frazier: Yes.

Welch: It is contingent upon the costs of printing.

Clark: The budget does not reflect the surcharge the Board just approved on foreign members. It will help the budget in a positive way.

Irv Miller: Why is the U.S. Postal Service reimbursement for STAMPSHOW getting less and less?

Lamb: The USPS has been reducing the contribution to STAMPSHOW. We have been negotiating with them in terms of the required costs they impose on us as well. We have not kept pace with the decline in money. This year is going to be a major watershed because the USPS Stamps Division has received a 69% cut in its operating budget. That will be reflected in future shows. We have a meeting later with the USPS representatives about how much we will receive for future shows. Frankly, we are looking at some major restructuring of these shows. The USPS is not sure it can continue to do the youth areas. The USPS is cutting back on its own service areas. Some of this is still confidential and in flux, but there will be a major reduction in their contributions. We have told them we can make it work with these reductions if they will back off the things they are requiring us to do. Some of the contracts they tell us to take are more expensive that we could negotiate ourselves. We are going to continue to have a partnership with the USPS and we are going to continue to have a first class show, but this budget line is going to drop substantially in future years.

Irv Miller: Realized the reason why the Winter Shows did not have the carpeting and the showcases is because the USPS was not contributing anything. Don't they have a substation to sell their stamps anyway?

Lamb: That does not show up in the budget. That is provided by the local post office.

Irv Miller: Don't we get any revenue from that?

Lamb: No, we get no revenue from that. In Portland we had some problems because the local post office did not deliver some of the things they promised in terms of booth and staffing times.

Triggle: In looking at the income from advertising from Hugh Wood, the budget for 1999 was far more than 2000, and 2000 is more than 2001. Are those real figures, or are they flexible?

Frazier: Don't confuse this with the royalties we are receiving from the insurance. This is their share of the advertising of their program, and it is based on 50% of our cost. We had this large initial large outlay when the program began and we are scaling it back.

Triggle: There was about a 3 - 4% drop in membership for 2001, but the real figure for 2000 had to be revised down by 3%. Can we have real confidence that we have turned the corner and that the figure of 50,000 members for 2001 won't also have to be readjusted?

Lamb: Sente has been amazing in estimating the membership income. This is not just the drop in membership. This also reflects that we are reaching the peak years for automatic life memberships. In the next years we will see a substantial drop in member dues because of that.

Youngblood: American Philatelist display advertising is down this year but shows an upturn for next year. What indicators are there that it will indeed meet that goal given the general climate?

Welch: Barb Ellis, who has been our advertising manager for almost 20 years, did the forecast. We lost two full page advertisers in the last ten days. This is our best forecast based on the fact that we don't have any big international shows in the U.S. That always has an upward impact on the amount of advertising we receive. Display advertising is actually doing pretty well.

Hotchner: Thanked the Finance Committee for doing a magnificent job. They have thoroughly reviewed the finances of the Society. That said, Hotchner could not support a dues increase. He does not agree with some of the assumptions regarding what should be counted against what our expenses are. We have a trend that is nettlesome in membership loss. A dues increase will accentuate that. The result is not good for the Society and would not look good for philately in general. We have on the record comments from our prior treasurer that may be overstated to some extent that said in effect that we might never need to raise dues because there is such flexibility in our non-dues income. That needs to be looked at and we need to look at possible areas of reduction. That is where our focus ought to be. We do not need to raise dues now or in the immediate future.

Frazier: Was on two Finance Committee meetings with previous treasurer John Apfelbaum. Frazier did not recall him ever saying that. The idea that we can manipulate money sounds as though we can create money out of thin air. It is a cavalier attitude to say we will never have to increase dues.

Hotchner: Said he believed that was an overstatement.

De Vries: What would happen if we eliminated the $3 discount for early dues payment? Does that encourage people that much?

Lamb: We get members that send in Express Mail on the last day to save that $3. It is a very important incentive. This puts a discipline into the system that is very important to us.

De Vries: Would we lose people if we eliminated the discount? It is not technically an increase.

McCann: We would then be raising the dues.

Lamb: It would be perceived as a dues increase. We are looking at an operating deficit of $141,000. This is misleading to our members. Most of our money has for years been in fixed income. For years we ran at around $166,000 in interest income. We changed investment philosophies and put most of our money in equities. Now the dollar amount shown under "income" is less than $100,000. However we can expect an additional amount - last year it was over $200,000 - to be added as "Unrealized Investment Gains" from the equity investment, but this will not appear on the Statement of Activities until the end of the year.

Morison: There was a question about whether we should be spending our investment income on operating expenses, and maybe it should be kept in a capital account and kept forever. If we did that, what would we spend the money on? What is the protection we are trying to buy by putting the investment income away? If you look at a normal corporation and the way it operates, it would have shareholders. The shareholders in turn would get dividends from the investment income or profit from the corporation. Our shareholders are our members. It is probably appropriate to take a certain percentage of the investment income and plow it back into our operating expenses to provide services to our members. It is also prudent to keep some of that for use at a later time in order to build up the capital. The question is how much? It was stated earlier that about 80% was spent, and perhaps 20% was put back every year. That is at least one way to look at it. Maybe 80% of the capital appreciation could be applied to the budget, and 20% could be reinvested. The Board should decide what percentage of investment income should be paid as a dividend to our membership by allowing that to go to the operating expenses while keeping in mind we should put some of it away for the future. What is the right mix? Lamb raises the question that we don't know what the investment income is going to be in equities. Maybe this ought to be referred back to the Finance Committee to consider this and come back at another meeting. They might want to look at this over a period of time, perhaps three years, not the year you are earning the income but the years preceding and the average of those years.

If you look at the net assets of the long term investments - the net worth of the Society - the net worth of the Society in 1994 was $4.8 million.

McCann: That does not include our building and library and some other assets.

Morison: No, that is just investments. Five years later it had risen to $7.1 million. That shows the financial stability of the corporation and that we are in good shape. We have not set a goal for our investments except to get more. Based on that, Morison questioned whether we should go for an increase in dues at this time.

McCann: Maybe we shouldn't go for a dues increase at this time until we have a lot more information on what income we can expect from our investments and how we want to use those investments. We have not taken that into account. We have only looked at our operating budget and were concerned we weren't breaking even. It is a complex issue. Raising dues at this time is probably not the right thing to do.

Irv Miller: It sounds like APS needs members more than it needs money, and so maybe it is best to keep dues where they are now.

Peterson: The Finance Committee said at the time a dues increase was discussed that some of us had two different hats to wear. One was that of the Finance Committee to address the bottom line question. The other was a Board position to review the philosophical or policy aspects of raising dues. We have heard enough discussion to realize that we do have enough financial stability to be able to support some deficits in the budget. No matter what happens we will be spending some money for building fund construction of something. It will not be a good point to raise dues and then say we will have a building or construction drive.

Motion: To defer consideration of a dues increase. Moved by Peterson. Hotchner seconded.

Flood: The Finance Committee should check with the investment adviser. The rule of thumb in the investment business is that you can figure on equities producing between 8 - 10% a year. See what other institutions such as ours are looking forward to as far as that mix Morison discussed about operating expenses and a capital fund. It will save time.

Youngblood: Looking at the history there is really no dangerous trend in terms of income reducing or our expenses rising rapidly. The only solid reason heard for increasing the dues is "just because."

De Vries: To raise dues at this time would be a major public relations disaster. We are going to decide something about a building tomorrow, whether it is painting new lines in the parking lot all the way up to buying a new office building. Whatever we decide is going to cost money. While the two aren't linked, they will be linked in the public's mind.

Lamb: We could look at this again in Tucson after we have the results of this year's investments. This year is probably not going to be a stellar performance with what the market has done and the fact that our last investment adviser really did not do very well by us. We should have a fix by Tucson on how much we really did make or lose, and we will have another audit statement on the net worth of the Society.