Second Session -- August 26, 1998 Attendees:

Board of Directors: President John Hotchner; Immediate Past President Randy Neil, Vice Presidents: Dr. Peter P. McCann, Patricia Stilwell Walker, Gordon Morison; Secretary Janet Klug; Treasurer John Apfelbaum, Directors-at-Large: Jeanette Knoll Adams, Lloyd de Vries, Ann Triggle, Wayne Youngblood.

Staff: Executive Director Robert E. Lamb, Attorney David Flood, Director of Library Services Gini Horn, Controller Scott Frazier, Director of Sales Tom Horn, and Editor Bill Welch.

Guests: Mary Morison, Bob & Lois de Violini, (full session), Rob Haeseler, Bill Bauer, Steve Luster, Nancy Zielinski Clark, John Lievsay (part of session).

Call to Order:

The second session of the American Philatelic Society's Board of Directors was called to order by President John Hotchner at 9:10 a.m. in the Camino Real room of the Westin Hotel in Santa Clara, California. President Hotchner announced there was pending business from the previous day's agenda that had been discussed but not voted upon. Hotchner re-read Klug's motion:

MOTION: That this Board accept the term limits bylaws proposal passed by the previous Board to present it to the membership as written as soon as possible, in addition to the current Board's alternative proposal and a third option, that there be no change in the present bylaws with regard to term limits. Moved by Klug. Seconded by Triggle. Passed unanimously.

Hotchner had asked a team consisting of Adams, Apfelbaum, McCann and Youngblood to discuss the terms of option 2 in the bylaws proposal that the Board would then be asked to support as its recommendation to the membership.

Adams: We were in agreement that we should change the proposal from where it says 16 years to 12 years so that it reads: "No person shall hold elective office for more than four terms in any consecutive twelve year period with the exception that a person may hold the office of President for two terms in addition to the four terms enumerated above."  

MOTION: That the wording of this bylaws amendment be changed from 16 years to 12 years and be the Board's recommendation to the membership. Moved by Adams. Seconded by Apfelbaum. Passed unanimously.

Hotchner: This amendment will then become the Board's recommendation to the membership.

McCann inquired what percentage of the membership vote is needed to pass the amendment.

Flood responded that only a simple majority of those voting was required.

Life Membership Proposal  

Morison: In the report that has been circulated by the Life Membership Committee it was found that the $440 life membership fee actually overcharges our older members and undercharges our younger members. The recommendation is to approve the proposed bylaw change and submit that bylaw change to the membership in the next ballot.

MOTION: That the proposed bylaw change in life membership be accepted and put on the next ballot. Moved by Morison. Seconded by Adams.

Morison: The recommendation has four points regarding the reasoning why this proposal has been made. The first point is that we are overcharging those who are over 55 and we are undercharging those below 55. The second point is that in view of the 1973 change in bylaws that eliminated free lifetime membership it would seem to be appropriate that our longer service members should not be overcharged and this should be an encouragement to older members with longer service to take out lifetime memberships. The third point is that in keeping with the way dues are set for the annual membership fee that is now a Board responsibility. It is no longer an option in the bylaws. For that reason we did not put the dues structure in the bylaws. The life membership fee should be considered along with the annual membership fee by the Board. The fourth item that should be noted is that we did put in a requirement for advance notification primarily so members may act beforehand. This proposal has been approved by the Finance Committee.

Apfelbaum: The Finance Committee believes this is an excellent proposal.

Hotchner called the question that the board accept the proposed bylaw amentment regarding life membership. The proposal passed unanimously.

MOTION: Contingent upon approval of the bylaws change by the membership, the Board will implement the new lifetime membership dues structure effective, with one exception, at the next calendar membership year after passing. The fee structure would be: Members 65 and up -- $325, members 55 - 64 -- $395, members 40 - 54 -- $455, and members 21 - 39 -- $495. This compares to the current $440 life membership which has some financial liability. The exception noted would be that for the first four months of that year the bylaw is approved we would authorize any existing members who are adversely affected to obtain life membership at the old rate of $440. Moved by Morison. Seconded by Klug.

Hotchner stated if we announce this ahead of time the year 2000 would be the year it would be implemented. The voting process would take place by the end of July in 1999.

Morison: Normally we send out dues notices that offer life membership at the end of October. The dues renewal period extends to the end of March.

Walker: From September through December we could run notification of the impending lifetime membership dues fee structure to give everyone plenty of advance notice.

Klug: The simple way around this is to have an unofficial grace period where lifetime memberships that come in for a three month or so period of time will be accepted at the old rate. There is no need to announce it as such, but accept it as the old rate regardless.

Adams: We can put an effective date on this by saying if the bylaws amendment passes effective a certain date this new rate schedule will kick in. We should take action to show what the rate schedule will be because otherwise people will not vote for the bylaw. May a person under 21 join as a life member?

Lamb: Right now a person under 21 may not join as a life member.

Adams: Then we should state that.

Hotchner: Is there any good reason why this is so?

Lamb: It waspresumably for actuarial purposes.

Apfelbaum: Twenty-one was the age of consent and we are late in changing to 18 with the rest of the world.

Flood: This came about during the time when members had to file a credit application to become a member.

Adams: We should state our policy, whether it be that a member must be 18 or 21 to become a life member.

Apfelbaum: We should consider looking at the bylaw that deals with the age a person must be to become a member.

Hotchner thought the Board should do this, but we don't have enough information now to do so.

Morison said that we can always advertise in advance that lifetime membership applications received before the end of the year even though it is for the following year will be processed at the old rate. It might encourage more people to become life members.

Apfelbaum asked Lamb to come to the Orlando meeting with a bylaws amendment that would change the age of membership from 21 to 18.

Flood: The Board could act upon that now if it so desires.

de Vries: We wanted to do some research, and reasons, and see if there was a credit card problem.

Flood: There was a credit card problem, but people can now get credit cards at age 18.

Apfelbaum: Even if there was a credit card problem there is no reason not to have the minimum age as 18. It is so against everything we are about.

Adams suggested that there would not be many people who would want to become a life member at age 18 to 21 to affect actuarial tables.

Morison amended the wording in the proposal so the highest life membership rate would be for those below the age 40 and not specify a bottom age limit.

Apfelbaum: The point of the motion is that we do discriminate against older members in our life membership scheme.

Gini Horn: Just as a point of reference any time we have raised dues it has increased life memberships. If a person has been thinking of being a life member and the dues go up, they apply for life membership.

Hotchner called the question regarding the dues structure and effective date if the bylaws proposal passes and stated that the issue of changing the membership from 21 to 18 would require an additional bylaws change. This is a separate issue and should be revisited at the Orlando Board meeting. Morison's motion passed unanimously.

MOTION: That we allow full membership to 18-year olds and reduce the age in the bylaws from 21 to 18. Moved by Triggle. Seconded by McCann.

Apfelbaum believed it was the sense of the Board to do this but also thought the age 21 had weaved its way through the bylaws in such a way that whatever proposal we would make would need to be very specific to change everything that needed to be changed. Apfelbaum recommended it be tabled until we had a specific recommendation.

Lamb: Supported that.

Hotchner asked for a straw vote for those Board members who supported reducing the age of membership from 21 to 18. The Board was unanimously in favor of reducing the age of membership.

The motion was tabled until the Orlando Board meeting when the Board would consider a specific bylaws proposal.

Hotchner thanked Morison for chairing the Life Membership Committee and recognized the amount of work that had been done to get the proposal to this point.

Morison: The Finance Committee has been charged with taking another look at the way life membership funds are transferred to the general fund. Presently the transfer is twenty equal installments. The transfer should possibly be the actual annual dues for each life member into the general fund. The Finance Committee is looking at that.

Scott Frazier reported that the life membership dues are transferred into the general fund based upon the number of living life members. It is transferred each month at 1/12 of the annual dues each month. The 1/20th is the amount that is transferred out of that liability account into the net asset account.

Apfelbaum: As a budget matter what Frazier is saying is that it doesn't make a difference. It makes a difference how it affects the assets and liabilities but it doesn't affect the budget.

Budget  

Apfelbaum: The easiest way to look at the budget is to look at the consolidated format page. The rest of the budget is commentary. Everything that appears on all the other pages fits back into the consolidated page. If there are questions about personnel expenses you can find that information by going to the specific pages for personnel. Unless we have specific questions on whether we are spending enough money on education or book acquisitions the only page that is really needed is the consolidated format page. All the information is there.

We are proposing a budget next year of $3.852 million. We are projecting expenses of $3.853 million. We have done extremely well in our investment account. In January of this year the Finance Committee made a decision to move a substantial amount of our assets out of the stock market and into fixed income securities. We were concerned the stock market was too high. Our decision did not really have a great impact, but has kept us pretty stable.

The third item down on the budget is American Philatelist. If we go to 1995 actual we see the income from American Philatelist was $387,000. The 1999 budget the income four years later is $523,000, a 40% increase. If you check expenses, American Philatelist production and distribution the costs for the same period of time went up about 20%. When we talked about color in American Philatelist, the point was made over and over again that it wouldn't pay. Apfelbaum did not know if color is what paid, but there are two decisions this Board can make down the road. One of the things we have gotten people to think about is that dues increases are not the way to raise the revenues of the Society -- selling more services is the way. Cutting expenses is not necessarily the way to balance the bottom line. Increasing revenue is.

We as a Board should seriously consider a proposal to increase American Philatelist by 16 pages. It is something that will probably pay for itself and our members will receive a bigger, more interesting magazine. This is what we all want -- to give our members more for their $22 dues and to make membership in the Society a better value.

Triggle: There are some very large sums listed under "Miscellaneous." Under income, the budget projects $359,000 in miscellaneous income.

Apfelbaum: Whatever amount of money you need to balance your budget you put under" Miscellaneous."

Scott Frazier: Really the Miscellaneous category is a catchall for a lot of things in both income and expenses. Miscellaneous includes income from credit card royalties, advertising in the Handbook of Services, and expenses for the Handbook of Services.

Apfelbaum: Perhaps Frazier could give us a page of those items that are categorized as Miscellaneous.

Frazier: This rolls over from a lot of different pages and covers a lot of different things. We have included in Miscellaneous money that we get from the Insurance Plan from Wood Insurance rolls into that. That is $75,000 for this year and $90,000 for next year. The credit card royalties which I believe we are budgeting at around $40,000 this year are included.

Apfelbaum: The credit card royalty is the money we get from the Affinity Card and is carried over into miscellaneous. Really half of the Miscellaneous income is from Hugh Wood insurance and the credit cards.

Klug: The Hugh Wood insurance payment should be separated out from Miscellaneous.

Apfelbaum: It should. What happens with Miscellaneous is they start out as small numbers and then get big very suddenly.

Klug: $100,000 is a big number. It should not be under Miscellaneous.

Lamb: Historically that is where we carried the insurance payment when it was running about $7,000 a year. Now it is $75,000.

Apfelbaum: What accountants traditionally do is go through a financial statement as Klug has done and say 'we have done this before but now it is a big number so let's make a line item for it.'

Klug: STAMPSHOW is separated out into its own category but there is no category for the Winter Show. Where are those figures for income and expenses?

Scott Frazier: They are all lumped together with STAMPSHOW but Frazier said it would be a good idea to separate the Winter Show from STAMPSHOW.

Triggle: Another area difficult to understand is the various line items for Interoffice Services.

Apfelbaum: What this does is pro rate the overhead by the number of people in the office and depending on the amount of profit you have within the internal office in terms of the ratio determines the interoffice services. When we started doing this 10 years ago Apfelbaum thought it was unnecessary. We do it because it is a part of standard accounting principles, but it is one of those things that doesn't make much difference.

Frazier: It is true the net effect is the same. As an example, Frazier charges the cost of the Accounting Department to other departments so when it all rolls up to the front page it zeros out.

Lamb: There is an advantage to having the overhead split because more and more we are trying to make each department a cost center. Lamb wants the Expertizing Department to pay for itself, the magazine to pay for itself, etc. There are functions performed for those offices that legitimately should be charged against those cost centers and it's only fair that when looking at the cost of the magazine, for example, we look at the services rendered by the accounting department.

Adams: What constitutes miscellaneous expense?

Scott Frazier: What you are seeing as a jump in miscellaneous expenses is the cost of producing the Handbook of Services, an expense that occurs every two years.

Apfelbaum: If the Handbook of Services is a big expense item it should be a separate line item.

Frazier: Besides the Handbook of Services, other expenses in the miscellaneous category include administration of the old pension plan and dissolution of that. Credit card costs are included. There are dues collection costs and some of the interoffice costs are included in miscellaneous expenses.

Apfelbaum: There are excellent things that are happening. We have a substantial amount of investment income. Even in a down market this will continue because a lot of this is interest. We are making great inroads in terms of getting sizable contributions to the Society. In fund raising the biggest donors need to account for about 50% of your donations. It takes a lot of five dollar bills to get to five thousand dollars. We are starting to get big donations where we never did before. A lot of that has to do with the Tiffany Fund, but we are also doing a lot of cultivating of big donors that is necessary to get big contributions.

Triggle: In the Promotions category it was budgeted at $69,000 and there is a revised figure of $127,000.

Lamb: There is increased promotion for membership, but that also is where the advertising for insurance is being placed. Much of that is a reimbursable expense. We are putting the advertising out there and sending a bill to Wood periodically that shows up as income elsewhere.

Apfelbaum inquired if the $75,000 we were getting from the insurance plan was net.

Lamb confirmed it was a net amount. A lot of the advertising is in American Philatelist, some of which we are paying for ourselves.

MOTION: That the Treasurer's report and budget for 1999 be accepted. Moved by Neil. Seconded by Morison.

de Vries: Under the 1998 revised Officers & Committees Expenses there is a lot more than either the 1998 budget or the 1999 budget.

Frazier: This has to do with the Youth Essay Contest.

de Vries inquired if that comes under Officers & Committees.

Lamb replied that it comes under Youth Committee.

Apfelbaum: A lot of things happen and we just don't know where to put it.

Lamb: The first time we did a Youth Essay Contest it was a one time thing. We put it under the Youth Activities because it is a youth program and that shows up under committees. This looks like something that will show up from time to time. You don't want to create a line item for a one time cost because that line carries on and it is impossible to get rid of. If this turns out to be a recurring expense then we probably should give it its own line.

Apfelbaum: When we put forward a budget to this Board it is not supposed to be a question free document. If we gave you all the detail that answers every question you would need to look at the check register and copies of all the bills. When we come out with documents such as these please feel free to ask questions. Call Apfelbaum, Lamb, or Frazier with questions.

Youngblood: It was mentioned that the Society was paying for some advertising in American Philatelist for the insurance program. How much?

Lamb did not know but said he could check that out.

[Note: It is expected to be $8,000 in 1998.]

Apfelbaum said it can't be more than $10,000. It's not really a page a month, and a page is $1,200.

Lamb suspected it was over $10,000 but not much over $10,000. Lamb estimated between $10,000 - $12,000.

[Note: It will be about $34,000 in 1998.]

Hotchner called the question of whether to approve the Treasurer's report and budget for 1999. Motion passed unanimously. American Philatelist on CD-ROM

Bill Welch: An outfit called Digital Publishing Inc. in Reston, Virginia approached APS with a proposal to put American Philatelist from the beginning to the present on CD-ROM and sell it primarily to the membership, but also to anyone else. This proposal is similar to those who do membership handbooks at essentially no cost to the association or the Society. In this case, they would pay us a royalty but they would essentially undertake the risk of doing this. Welch asked the Board for approval to go forward with this proposal if we can negotiate terms that are not disadvantageous to the APS. Digital Publishing probably exaggerates the market for this. In preliminary discussions with them they estimate the project would be composed of 5 or 6 CD-ROMs in the set that would cost between $250 - $300 with a separate CD for each new year's edition. In return they are looking for too much free advertising in the journal, and free booth space at STAMPSHOW. In essence, if we can negotiate this to the point where we are not losing money on it and can break even, it would be a great service to the membership. The other great thing about it is that the problem of an index would be relieved because this searches on a key word basis. Charlie Peterson never completed the third part of the AP Index. Frank Sente has raised concerns about this proposal, and Sente would probably be handling the marketing for this.

MOTION: To accept the Editor's report and move forward with putting American Philatelist on CD-ROM. Moved by Neil. Seconded by Klug.

de Vries was concerned that membership directories would be made available on this CD-ROM and that it could be used for phone sales.

Welch said this would not happen.

de Vries: What happens to the coding or electronic version of American Philatelist if the company who is producing it folds?

Welch: They provide us with two complete sets of the CD-ROM electronically.

de Vries: But if the company were to fold could we take that and have someone else publish that?

Apfelbaum: This is all subject to negotiations.

de Vries: If they fold de Vries would want the rights to revert to APS so that we could publish the CD-ROMs.

Welch: Another concern that has been raised by Ken Lawrence is copyright implications of articles that have appeared in American Philatelist that have been copyrighted by their authors. Welch's view is that this is no different than making bound volumes of the back issues and selling them. We are not putting them on the Internet and we have the right to reprint. Welch did not consider this a reprint.

Youngblood: This is not like a bound volume but is a stand alone product. In our agreement with them we have to consider our own copyright and all the implications connected with that.

Apfelbaum: What is being suggested is still in very elementary stages.

Flood: We may have to change the contracts we have with future authors so that we have the right to publish their articles on CD-ROM.

Hotchner called the question to approve the Editor's report and support in principal moving forward with putting American Philatelist on CD-ROM. Passed unanimously.

Focus Group Issues  

Lamb: We have been looking at the question of the logo for several years. The present logo does not reproduce well. Morison suggested we conduct focus groups to see how membership felt about the logo. We held four focus groups throughout the country. The members were randomly selected. It turned out that statistically it was a very good sample. It was done by Marj Sente who conducts focus groups for Penn State University. It was done at very low cost to us. We were surprised at the results because the members got into many other issues besides the logo. This Board asked this be put on the agenda so we could discuss the implications of the focus group studies. Lamb asked specifically that we talk about what we can do about the logo.

Triggle: Was concerned about the numbers involved in the focus group study so she asked the university political science specialist what percentage of reliability the focus group survey had. The reply was that at best it was no more than 10% viable.

Klug: Asked someone who conducted focus goups if the questions were leading so that they would get a predictable result. It turned out the questions were not leading, but the follow ups were not specific and it could not be determined if they were leading or not. There was a question of how the people were selected to participate in the focus group study because "random" can mean all sorts of different things. It was suggested we throw out the results from the State College focus group because that was too close to national headquarters and the results may have been inadvertently skewed.

Apfelbaum: How many people were interviewed?

Lamb: There were six in each of the groups.

Klug: We could discuss the reliability of the data forever. The important thing for us to discuss is what came out of the focus groups. There were some very interesting statements that were made. For example, a comment made in the Washington D.C. focus group in which four life members were part of a six member panel and one of the participants compared the APS Board to the Nixon White House. If this is what members truly believe, then we have a big problem.

Triggle: Is there any plan to continue doing these focus groups?

Lamb: We have no plans to do anymore focus groups. We are looking for guidance. You asked us to do focus groups and so we did.

Triggle believed it was a good idea to do focus groups but how much reliability can we put on the results?

Neil asked Lamb to characterize where we are with regard to the logo. We have new business cards with a new logo. How did that evolve?

Lamb provided background. Welch suggested APS have a contest to design a new logo. We ran it, and got some very pedestrian proposals from the membership. There were limited numbers and the quality was not very high. About the same time we started to have problems with the current logo. For example, the credit card company wanted to do a T-shirt with the APS logo as a promotion. They took one look at our logo and said it wouldn't work. The design is not graphically appealing or modern. We went to a professional designer, Herb Meyers, who is a life member in New York. He had written to Neil offering to help with a new logo design. Lamb met with Meyers and discussed the logo. Membership did not seem to want big change. The logo needed to be cleaned up, but no radical change. On that basis we received nine designs that were modifications of the existing logo. We brought these to the Board informally. There was one that stood out to everyone. We wanted a design that did not look like a coin, but emphasized that we were a stamp society. What he did was shift the lady, clean it up, take a lot of the detail away, and move the lady off to the side so there is some movement to the design. We have taken the old logo to several printers who said they couldn't reproduce the design well which is why you are seeing the new design being used more on printed documents. The other one doesn't adapt well. The new one has no official status. We've done a few cards at State College to see how it would reproduce. We need to resolve this at the Board level. It was the sense of the last Board that we should not change the old logo. In fact, the old logo is 19th century clip art. It is not a design that is unique to the APS. On the other hand it has a lot of meaning to the membership and it should not be changed offhandedly.

Apfelbaum: People don't always know what they want. The New York Times had a masthead that was considered old-fashioned and fuddy duddy. It is. It is also clip art from the 19th century. They looked into changing it but they always come back to the original. When people see that logo they see the New York Times. It has a sense of reliability. Apfelbaum liked the one that doesn't reproduce well, and liked the fact that it didn't reproduce well. The comment about the logo looking like a coin is non-philatelic. All the stamps of the 19th century have a head inside of an oval on the stamp. That's what this logo is like.

Hotchner: Disagreed. People are reading the New York Times and if New York Times wants to retain its readers by using an old logo, that is fine. To some extent we have the same desire to retain our members, but Hotchner did not think our logo would help us do that. However, our logo is critically important to going outside our current membership and interesting people to become members and to inquire and make them want to look further. Hotchner was not happy with the current logo, particularly with keeping the lady. If there were some way to allow people to keep using that logo while we use something else graphically, Hotchner had no problem with that. We do need to look at something entirely different.

Welch: We have been slipping the new logo design in print from time to time and no one has objected despite the strong response from members who said 'don't change the seal.' Welch has not had any negative comment at all. We have kept the original seal on the official family page opposite the table of contents page. So we are using it in a strictly official way.

Neil suggested a straw vote to see how everyone felt about the logo.

Walker wondered why, when we went to the design firm, we tried to keep the lady. Wasn't it the result of the poll and because we really didn't have anything decent to offer as an alternative that most people said not to change it. Perhaps if we had something jazzy to vote for we wouldn't have gotten that reaction.

Triggle asked why we had a lady in the logo in the first place.

Gini Horn: The lady was clip art. The square around the logo was not added until much later.

Welch: This is the seal for the Society. We do have a logo that says APS in a stylized form. This was done because the seal did not reproduce very well. This may be why we came up with the logo, because it can be shrunk way down even in a one-inch ad and be recognizable.

Klug: Stamp collectors by their very nature are conservative and dislike change so that is why we get the result they don't want the lady changed. The focus group preferred one over the other ones but it did not say which one was preferred. Klug assumed it was the secondary logo the APS has been using with the lady and the stamp in the background.

Lamb confirmed this was the preference of the focus groups.

Klug: This then was the choice of the focus groups. Going through the remaining choices that was the one that also appealed to Klug. It showed forward motion, one of the requisites mentioned by the focus group. It doesn't really change the lady. The lady is still there. Why don't we just go with this one and be done with it?

Morison: Suggested we use this over a period of time and people will become use to it gradually and forget the old seal.

Flood: If the Board likes the new one we should get it registered.

Youngblood suggested we keep the old one as the official seal and the new one as the logo.

Neil: If we register this new logo we are adopting it by default as one of our logos. The Board should go on record about it.

MOTION: That we register the new logo. Moved by Morison. Seconded by Neil.

Flood: We should hold on to the old graphic logo, too, in case we ever need it. Some places may need that stylized lettering.  

Adams: Suggested we have two official logos and one official seal.

Apfelbaum thought we should be covert about it and just slip it in from time to time. We don't need to make a big deal about it.

Klug: If we are going to use this new logo, why not make a big deal out of it? Why not say the APS has a new look and get some press and publicity from this?

Hotchner called the question on the motion to register the new logo. Passed unanimously. Hotchner then asked for a straw vote by the Board on whether we should keep the lady in the logo or seek other possible logos. The vote was unanimous to keep the lady as part of the logo.

Hotchner asked the Board to think about the other issues raised by the focus groups and come back with specific proposals or recommendations to address these concerns. Although we raised questions about the statistical reliability of the focus groups, we have, in speaking with members have to agree that the concerns raised here are valid. Absent specific proposals we really can't talk about these issues, but we do need to deal with them in coming to the Board with proposals.

Morison: Some of these issues will be addressed in our Strategic Planning session.

Hotchner: Took note of Triggle's recommendation to continue focus groups. There are a lot of ways to get members opinions. Focus groups are a good way. We had a discussion in Houston on the future of the Society which Hotchner had distributed to the Board. Lamb asked for guidance on whether we should do more of the focus groups. Hotchner thought we should. We don't necessarily need to contract with professionals. That doesn't make the results anymore valid. To the extent our staff people are willing to do this then we should.

Klug: Agreed, but only if the focus groups were geared to specific issues.

Adams: When we do the town meeting events at stamp shows we will be getting this kind of feedback.

Hotchner: Noted the focus groups stated there was a need for the APS to do more for beginner and youth collectors. We have a concept to look at later that specifically addresses this. Another suggestion was that the APS should develop a stamp collecting kit for beginners. Hotchner did not think this was an area we should get into as there are already commercial products on the market.

Lamb: We in State College have been looking at a lot of programs aimed at beginners. We have split the beginners into two categories: young collectors and beginner adults. These are really two different markets. Too often we have focused on young collectors and missed out on the adults. We are working on a correspondence course for beginner adult collectors which we can offer from the Society. It takes a lot of developmental work which is why it is not here, and Lamb was not sure if it would be ready for the Orlando Board meeting. It is well beyond the drawing board.

Expertizing  

Lamb: Of the 6500 certificates we issued last year only twelve came back for review and of the twelve most of them were questions of condition: whether the gum was disturbed or whether a crease really existed or not. The number that come back for challenging the basic decision are really very few. There is a question of whether we have some obligation to people who get certificates from us. We beieve we have an obligation to do more than just say that it is our opinion and walk away from it. By the same token we think it should make money for us. We have been through thousands of certificates to do an analysis of the financial impact of this proposal and frankly, of the thousands of certificates Lamb looked at, we would not have paid out on any of them. We are tying to get activities at State College on a self-sustaining basis. Many of the offices are already self-sustaining. The Expertizing Department is not yet, but it is very close. The revenue in the Expertizing Department is based on the number of certificates we issue. While we are just about at the point where it is covering its own costs, we are also just about at the point where we need to add an additional staff member to handle the processing. We need a source of revenue for Expertizing that will make it self-supporting.

We have designed a proposal that will protect our customers and it will also help Expertizing. We want to raise the price of certificates a minimum of $5, with more expensive stamps having a larger increase. Below $1000 we will charge $5 more per certificate. We now charge $15 for members and $20 for non members so we are looking at $20 and $25, but with this the customer would get a guarantee for a fixed period of time, either 5 or 10 years. If the customer bought a stamp based on an APS certificate and it turned out to be a faked or altered stamp, we would cover the value of that stamp up to $5000. The way we would fund that would be from the additional $5 which would be put into a certificate guarantee fund. The fund would grow at the rate of about $30,000 per year. The income from the fund would then be used to cover the expenses of the Expertizing Department. This would be an important source of revenue for Expertizing itself. By limiting it to $5,000 we are protected from the catastrophic loss. $5,000 would cover the overwhelming majority of the stamps we see.

Apfelbaum: Believed there was something wrong for taking someone's money for just an opinion only. If someone buys a stamp for $1000 and sends it to us and we certify it is genuine and it later turns out to be fake, then this person gets his $1000 back. What happens if someone has a stamp in his collection and just wants to know if it is genuine or not, how do we establish a fair market value for stamps that haven't been traded?

Lamb: The way the proposal is cast now there has to be an economic loss as a result of this. If a person has a stamp and it turns out our decision was wrong, and this happens one time in 10,000, we don't have an obligation because the person did not incur a financial loss because of our decision. The way this is structured, if a person bought a stamp because it has an APS certificate, then the person incurred a loss.

Walker: If a person had it in his collection and wanted to sell it, and got a certificate that said it was genuine and sold it for $1000, then if the person who bought it got a certificate that said it was not a $1000 stamp then what?

Lamb: We get the stamp. And the person who bought it gets $1000.

Triggle: Does this also work in reverse? Are you saying if a stamp is a fake and a person sells it to someone else at a much lower price, then it is later found to be genuine, will this insurance cover that loss as well?

Apfelbaum: That's not going to happen.

Lamb: We were not going to cover fakes because we don't know how to put a value on them.

Triggle: We are saying that we are covering a certificate of genuineness but isn't the reverse also true?

Apfelbaum: The Germans have always guaranteed their certificates and when they mark a stamp as counterfeit, they literally mark it as counterfeit. They obliterate it. If it later turns out to be genuine a person collects as if it were a genuine stamp.

Lamb: We were only planning to cover genuineness because we didn't know how to fix a valueto fake or counterfeit items.

Hotchner: Although we do a fair amount of no opinions, we have to be certain it's good before we say it's good. Some things, not just by us but by many expertizing services, will be termed not genuine when in fact they may be, but the service is being extra careful.

Adams: The idea of guaranteeing the opinion of volunteers troubles Adams very much. It puts at risk all assets of the Society. There are opportunities for collusion and Adams could not support this proposal.

Flood: We had discussed reinsurance of this program.

Apfelbaum: But we have limited the liability per certificate to $5000.

Flood: If somebody comes in with the right kind of lawsuit you may find the $5000 cap does not cover it.

Apfelbaum: The same holds true with no guarantee. They could make a case you took a fee for an opinion and you aren't backing it up.

Flood suggested we cover this proposal with liability insurance.

Lamb: Liability insurance is not economically feasible because insurance underwriters want a statistically valid risk measurement. There is no risk data that would satisfy them and consequently the rates would be sky high. We would prefer to do it as we have done with the Sales Division. The Sales Division insurance fund has been an important source of revenue. We have limited the liability to $5000 and its hard to see great risk to the resources of the Society with a $5000 loss.

Youngblood was very uncomfortable with this proposal for several reasons. First and foremost because you don't have a buy in from all the experts on the committee. To suddenly say we are guaranteeing these certificates, Youngblood as an expertizer said he would guarantee his own signature on those items he expertized, he was not comfortable with guaranteeing a certificate. It places the expertizer in a position of personal liability, if not financially then certainly professionally. Because of this the APS might lose all of its experts.

Apfelbaum: You aren't that responsible.

Youngblood: Yes and no. We all make mistakes. Youngblood has seen mistakes.

Apfelbaum: But the Society would be well compensated for the guarantee. Forget it from the expert's point of view. Yes they may be incurring some liability. When a stamp collector in this country relies on a paid service for an opinion, Apfelbaum believed the collector deserves more than just an opinion. He has giving us his trust. This is not magic. There are ways to tell whether a stamp is genuine or not. We are right 99.9% of the time. Let's be proud of that and say to people that not only do we certify stamps but we guarantee them. Apfelbaum's own company guarantees every stamp it sells forever. They get back less than $1000 a year. People put the stamps in their collections and forget about them. That is a practical reason to do this.

Lois Evans de Violini: On of the things they asked Evans de Violini as an expert was that she knew when she was doing a certificate that was going to be guaranteed. She accepted that responsibility. Evans de Violini did not think the APS would lose all its experts.

Youngblood: Most collectors already think the certificates they receive are guaranteed. It may reduce the confidence level if we say nobody but us guarantees their certificates. It may help the APS, but it would reduce the confidence level for philately in general. It undermines expertizing services.

Apfelbaum: It should be undermined. It is wrong to take people's money for an opinion and not stand behind it.

Hotchner: It is not our object to undermine anyone but it is our object be a leader in the field. For others to see what we are doing and do likewise would be the sincerest form of flattery.

Neil: Asked Hotchner, who is on the expert panel, what his views were of the proposal.

Hotchner: Approved the proposal, although is a little nervous about it. The proposal set before the Board at this time is not asking for final approval , only for approval in concept and authorization for further development.

de Vries: Stated he did not own a stamp worth having expertized. Asked if we were not now liable for opinions rendered by the Expertizing Service. If we send out a certificate saying a stamp is genuine and someone incurs a loss if it turns out not to be so, are we not still liable to be sued?

Apfelbaum: People just don't sue expertizing committees. The would if they could.

Lamb: We would be in better shape if we had a contract. What we are doing is putting a contract on each certificate.

de Vries: In terms of making the Expertizing department a self sustaining department, we would be putting the $5 extra into a fund. But we wouldn't be able to draw from that fund?

Lamb: We would use the interest that would accrue from the investment. We can't touch the Sales Division insurance fund right now but we can use the interest from it.

de Vries: The Expertizing department would still be several years from being self-sufficient until the insurance fund has enough time to grow and accrue interest.

Lamb: We would hope to get the interest immediately because it would be invested as soon as we get it in.

Evans de Violini: Would the guarantee be for genuineness or would we also be guaranteeing condition?

Lamb: We are guaranteeing genuineness but we are not guaranteeing condition because condition can change. The proposal is very specific about that.

Apfelbaum: Are we guaranteeing gum?

Lamb: We are not guaranteeing gum. That, too, can change. But we can guarantee reperfing.

Youngblood: If we begin issuing a guarantee this is an open invitation for people to sue us.

Flood: There is an arbitration process that must be met first.

Adams: There is a major policy change when we are moving from saying it is our opinion that something is genuine to guaranteeing that something is genuine. We are always suable, but this way we are a lot more suable.

Youngblood: As an expert who looks at a lot of things that have had a lot of alterations, Youngblood has seen things that he feels are genuine but he would not sign off on them if he had to guarantee their genuineness.

McCann: We are only voting to study this further and not to approve it.

Neil: In view of all the present publicity, Ken Lawrence's writing, letters to the editor, and all the bones of contention surrounding the APS Expertizing service this guarantee would raise the credibility of our Expertizing service to do so. Neil did not see the litigation liability. We are a hobby where law suits are almost non-existent. Stamp collectors don't sue.

MOTION: That we establish a guarantee fund and that the Executive Director move to implement guaranteeing APEX certificates. Moved by Apfelbaum. There was no second. Motion withdrawn.

MOTION: That the Board approve in principle this concept and look further into guaranteeing APEX certificates so that it can be presented to the Board at the next meeting in Orlando. The motion included instruction that the expertizers be surveyed for comments per Youngblood's suggestion. Moved by McCann. Seconded by Walker. In favor: Apfelbaum, Walker, Triggle, Morison, McCann, de Vries, Neil. Opposed: Adams, Klug, Youngblood.

Stamp Identification Service  

MOTION: That the proposal to establish a stamp identification service where members could, for a small fee, have stamps identified. Moved by Neil. Seconded by de Vries.

Triggle: Hoped this service would be offered solely at cost as a benefit to our members.

Apfelbaum: We are planning to charge $5 per stamp. This is below cost. Apfelbaum could not imagine it could be done for that.

Lamb said we could do it at that cost because most members won't send in just one stamp. If we only got one stamp from a member we could not do it at that price. We believe most members will send in four or five stamps. We could raise the price if the Board desires.

Youngblood: $5 per stamp won't cover our costs. By offering this service it may cut down on some of the requests Scotts and Linn's receive for identification.

Triggle: One of our goals is to improve member services. Triggle would like to see this offered at no cost to members.

Adams: The stamp identification service is a great idea. We should offer the service to non-members at $10 and this may encourage them to join the APS.

Apfelbaum: We shouldn't offer the service to non-members.

Lamb: We have to offer it to non-members but we have to charge more for non-members. The original proposal was $10 but it was felt that was too much and so we change it to $7 for non-members. We can go back to $10 for non-members.

Triggle: Could we not give each member a certificate with their dues renewal that would entitle them to one free stamp identification per year? It is a service to the membership.

[It was the sense of the board this was not financially viable.]

Hotchner called the question to accept the proposal to establish a stamp identification service, priced at $5 for members and $10 for non-members. Passed unanimously.

(5 minute break was called. Session resumed at 11:00 a.m.)  

Washington 2006 Agreement

McCann:  The Washington 2006 agreement has gone through several degrees of rigidity, ranging from the APS should take total control of the show with regard to the international aspects of the show relating to the FIP to the other extreme which has been expressed by this Board which is: "Why should the APS have anything to do with this show. Their Board should do their own thing." The fact remains they can't. The fact remains that an international show cannot be run in a country unless the national federation of that country will take some responsibility for that show and sponsor it. We tried to find a delicate balance, making sure the APS is in that position of being that representative of the national federation to the outside world -- the FIP and the member countries of the FIP, and yet not get in the same situation with some of the same problems with PACIFIC 97 that we would be held fiscally responsible for those problems. The Board of Vice Presidents have worked back and forth with an agreement that hopefully will achieve this middle of the road balance that the APS would be involved as the national federation sponsoring the show for the FIP, but that Washington 2006 is an independent corporation and would be the group running the show. This agreement has been worked out with Washington 2006. Their attorney has gone through it. Bob Lamb and David Flood have gone through it and made some comments. It has come back to us. Washington 2006 has made one minor change done on an exchange of letters having to do with nominating people to their Board. It is fairly simple and straightforward. If there is anything that needs to be discussed we can do so.

Hotchner: Asked Flood and Lamb if they were satisfied with the agreement. Both said they were.

MOTION: That the Washington 2006 agreement be accepted. Moved by Neil. Seconded by Adams.

Apfelbaum: In the agreement it states we will have three representatives. How many members are on the Board?

McCann: Understood they have 11 Board members. The intent of the agreement is that APS would not have controlling majority of the Board.

Apfelbaum: Was on the Board that negotiated the agreement with PACIFIC 97 in 1984. At the time that group said we shouldn't worry, they'd do whatever we wanted, there would be no problems. We were all friends and trusted them. Unfortunately it didn't turn out that way. Apfelbaum was also involved with Interphil in 1976. Months before that show happened the committee completely fell apart. There would not have been a show that year if Jim DeVoss from the APS had not come in and taken over. We would have been a whole lot better off if APS had done that with PACIFIC 97. Apfelbaum said international shows tend to be glorified ego trips for the people who are involved on the committee. It is at the end of their philatelic careers and they want to go out in a flame of glory. These are people who have never put on a show before. They don't know what they are biting off. They don't know what they are getting into. We need to have the ability to move in and take over if we need to. The agreement mentions material violations but there is no definition of material.

McCann: That is a legal term they inserted into the contract.

Apfelbaum: Did not like it that the contract gave Washington 2006 thirty days to respond to a violation of the contract. We are giving them too much time. At the bottom it says "the decision of such representatives shall be binding upon the parties and conclusive of the matter(s). Should 2006 choose not to abide by the decision of the representative above referenced; then after written notice by APS to 2006 APS may withdraw its support of the Exhibition and that of the FIP to the extent it has the power to do so." That doesn't work the way Apfelbaum desired. What that means is that six months before we've got this train rolling towards the international and if we don't like what they are doing we have the right to pull away. That's not what we are going to do, because we want the international, too. What we want to have happen is that at a certain point in time if we don't like what is happening we have a right to say to Michael Dixon that he is out and we are taking over.

McCann: If we did that then we would have a lot more liability and financial responsibility.

Apfelbaum: Liability did not bother Apfelbaum if we are doing the right thing. We should construct this in such a way where we have more authority.

Flood: Understood the sense of the Board when this was last discussed that we wanted to withdraw ourselves a little from this and let them run their own show.

Apfelbaum: Has seen two internationals in 1997 and in 1976 where the local groups crumbled and had no expertise whatsoever. Just because someone goes to a few internationals does not mean they know how to run one.

Hotchner: This is not a group that has no expertise. This is a group that puts on NAPEX.

Apfelbaum: There is a big difference between NAPEX and an international.

Morison: The same could be said of AMERIPEX. Les Winick had no international experience either, and that was a highly successful show.

Youngblood: Let's assume we are down to November 2005 and things start falling apart. They aren't happy. We aren't happy. What happens?

Hotchner: If their committee is falling apart and they recognize it then they can come to us for help.

Apfelbaum: PACIFIC 97 did not recognize it.

Hotchner: But apparently Philadelphia in 1975 did recognize it. If that is one of the models we are dealing with then at that time by mutual agreement we walk in and save the day. If the committee does not recognize it, how are we going to walk in and save the day? Even if we recognize that is the right thing to do.

Neil: There is a certain amount of trust we have to place in the people running the show. They need the autonomy and the respect they deserve in order to do the Herculean tasks that are required. If we were to go in with the type of clause Apfelbaum is talking about, we are telling that committee that we are not ready to give you that respect. We are not ready to recognize your integrity. This has been a chaffing point with Dixon and Luster from the very beginning when we really were talking about the idea that we have to have the right of veto. They said they couldn't operate under those strictures. They needed some autonomy and respect. We have had problems. Things are going to happen that we can't predict. We are giving this autonomy to one of the best international exhibition organizations we have seen in this century. It is a good, solid group and they deserve our respect.

Hotchner: This group has already done what PACIFIC 97 didn't. They have been to Chicago and talked to the people there what they should and shouldn't be doing, recognizing Chicago's success. We required of them that they consulte with Chicago on this agreement, and the APS also consulted with Chicago on this agreement. Chicago and Washington 2006 are both comfortable with the agreement.

Apfelbaum: They are comfortable because they want something from us. They can't have a show without us. What we offer them is guarantor of last resort. I'm not saying we should micro-manage this show. This Board should have the ability to contractually move in and make changes we need to make. We should be able to appoint the Executive Director.

Hotchner: Then we should run the show.

Flood: If you want to have that kind of control, then it becomes our show. The more we control it, the more liable we are.

Youngblood: Did not want micro-management, but did want a failsafe. If something goes wrong someone should be able to step in and fix it.

Hotchner: The last time we discussed this it was the sense of the Board to not have that kind of control over the show. We are not going to come to 2005 and have this fall apart if we do a proper job of this on both ends of the spectrum. If there is a problem we know about it well ahead of time.

Adams: If this does fall apart in 2005 there is nothing in the agreement that precludes us from coming in and taking over. If they don't want us to do that, then we pull our patronage and away we go.

Klug: Suggested that item 5c in the contract be changed so that beginning in May 2005 (one year out from the show) we receive monthly financial reports instead of quarterly reports. Many of PACIFIC 97's problems might have been avoided if the APS had accurate, timely financial statements.

Flood: Suggested this change be handled through an exchange of letters with Washington 2006.

Hotchner: Asked Klug to formally add this to the proposal.

Adams: Item 3 in the contract that says, " In the event of amy material violation of any of the standards by 2006 as above recited..." Adams could not find standards that had been recited unless this refers to items 1 and 2.

Flood: It should say "hereinafter recited." Somebody changed the original format.

Adams: Asked the Item 3 in contract be changed to "as contained in paragraph 5."

Triggle: Asked that Klug's addition clarify that monthly reports are to be provided beginning a year in advance of Washington 2006.

Apfelbaum: APS should be able to fire the Washington 2006 board if they don't do their job.

Hotchner: Called the question to approve the contract with Washington 2006, with additions made by Klug that APS receive monthly financial reports beginning May 2005, and change by Adams that Item 3 be altered to 'as contained in paragraph 5.' These two changes would be made with an exchange of letters. In favor: Adams, de Vries, Klug, McCann, Morison, Neil, Triggle, Walker, Youngblood. Opposed: Apfelbaum. Motion passed.

Space Requirements

Bill Bauer: The Space Requirements Committee was asked to look at several things: if expansion is necessary, and if so should we do it in State College on our own property or go somewhere else. The Committee concluded that we should stay in State College and if we expand it should be on our own property by addition to our building. Two or three months ago Hotchner had a column in the American Philatelist about some of the ideas that were being kicked around and that received quite a bit of response. The response was overwhelmingly in favor of the ideas Hotchner put forward. There were two or three people who thought we should move to some other location, not surprisingly, closer to where they live. Our conclusions were to stay in State College. A move to any other city would not give us a significant advantage in serving our membership. Yes, we might be closer to perhaps a larger number of our members if we moved to a larger city, but we'd also be further away from others. It doesn't really gain us anything. There would be no identifiable economic gain to move. Probably it would go against us because of increased property taxes wherever we would move to. The cost of property near any major city is exorbitant, particularly the size of property we would want and need. Then there is the cost of physically moving a couple hundred tons of books and other material from one place to another and the disruption to the Society. From that we determined to stay where we are. There is adequate room on the property for expansion.

The major question then became do we really need to expand? The Committee concluded that yes, we do need to expand. The expertizing and reference collection is now at the point where one can hardly move in the room. The same is true with the Education Department. There is no office space available if we add a Youth Department. There is a need in those area, not just in the Library. The Library situation, while critical, is not at crisis yet. However, if any major collection came to us we would be at crisis. There are things we can do within the library to reduce the growth. One of the questions that was raised was could we put all this stuff on CD-ROM and magnetic tape and then we don't need all these books and shelving. That is a grand and glorious dream but Bauer did not expect to see it in his lifetime. There are problems with all these data compression operations not the least insignificant is regardless how good the magnetic tapes and CD-ROMS are the most longevity of any electronic media is surpassed by high-quality paper by a factor of about 10 to one. Another problem with copying things to electronic media is copyright. If it is just a copy there is no problem, but once we start providing this to membership at large you run into a copyright problem. We also have a tremendous volume of material. We could do it at a reasonable cost per year but it would take a very long time to copy all of it to electronic media.

Storage space is a problem also in the present building. Things are stacked in hallways and under desks. All someone has to do is walk into the expertizing area and there are about 30 or 40 large cartons of old certificates stacked on top of each other and under desks.

From that we then recommend that the APS and APRL plan to expand the present building. We have talked with real estate people in the State College area. We hired a consultant, a professor of architecture, to look at the present building and come up with a proposal of what is necessary. What he came up with was an addition of approximately 25,000 square feet. (Bauer showed a floor plan that showed a building addition ). The proposed addition would be two stories. What it does is make the most efficient use of space on our property. It comes up almost to the set back lines required by the local building codes. It does not touch any of the space in front of the building nor does it touch any space in the rear which would be available sometime in the future. The 25,000 square foot addition would provide 2,000 square feet directly to the library. Some of that will be lost because part of that is a renovation to the central core of the building. It would turn the auditorium area into office space for the Expertizing department, and the construction of a modest-sized conference area in what is now the front part of the library. The stacks for the library would be doubled. About 5,000 square feet would be used for conference, meetings, and a display area. There would be room for most if not all of Summer Seminar, SCOPEX, and we could have other large meetings and functions. The remainder of the space, perhaps as much as 15,000 - 18,000 square feet would be available at present for rental. The commercial real estate agent assured us that rentals were needed in the State College area. In the overall area there is about a 1% vacancy rate. In State College proper it is about 4%. That has the advantage then of allowing us to build a larger facility than we need now, but in 10 years down the road when we do need the space it will be available to us. The idea would be to rent with a five year lease and a five year option.

Hotchner: Would the rental revenue cover cost?

Bauer: This we don't know. The expansion would provide for our current needs and provide for expansion well into the future, for at least 20 years into the future. It makes efficient use of the property. It doesn't restrict any further expansion. There is some thought this is an opportune time to expand. Loans are cheap. Construction costs will certainly increase over time. Bud Hennig has expressed some reservations about the overall costs of renting out part of the building and the advisability of getting into a rental situation, particularly with a commercial firm as opposed to a non-profit corporation. These are things to be looked at.

Our primary charge was whether expansion was needed. The answer to that is yes. Where do we go from here? To design and direct the expansion we should contract for an architect. We will need a construction manager and a consultant to assist in leasing or rental activity. We want professional people involved, not amateurs. Having a construction manager will save us money.

Triggle: Did the Committee consider doing a single story expansion?

Bauer: Yes, the Committee did consider that initially and that was our idea. Then we considered the construction costs. The general idea is that it is probably cheaper to build a larger space than not to. We get into problems of tying the structure to the present building. Our existing building can't take a second floor.

Apfelbaum: What are we being asked for today? Is this just a progress report or are we being asked to approve something?

Hotchner: It is a progress report, but Hotchner wished to establish that we act on the committee's recommendation that we stay in State College and we need to have a sense of the Board we agree in theory that we need to expand and set up things like a funding plan.

Apfelbaum: This is the first Apfelbaum has heard of the report. None of us is in the position to vote if we want to go further with this. It is a decision that can't be made in five minutes. A 25,000 square foot building done at a ballpark figure of $100 per square foot would be $2.5 million. That would effectively wipe out our investment endowment for the Society. If the library needs 2,000 square feet and Expertizing needs 2,000 square feet, then why are we talking about building a 25,000 square foot expansion? Every city in the country is littered with development projects that people thought they could rent out and they can't. Capitalism works very well except for commercial real estate. Everyone perceives there is a shortage at the same time, and then everyone builds then the property goes begging. If we need 5,000 square feet we can do one of two things. We can build 5,000 square feet or we can take a couple of departments out of the building and rent cheap space somewhere in State College and move expertizing there, or move education there, or move storage there. We don't necessarily need to have everything in this Mecca at State College.

Flood: Once you start disbursing various aspects out, particularly such as we have where everything has interrelation one to another it will not be efficient.

Hotchner: It is not good member service, either. Part of my commission to the Committee was to look at all these other options.

Apfelbaum: When you appoint committees like this they tend to find what you hope them to find. It was stated that 'hopefully we will need the space in 10 years.' Why will we need more space in the Society if the membership hasn't grown? We say it is a good time to build right now because the interest rates are low. That is true. But the alternative is also true. We can earn 15%-17% on the money we have. This money would be taken out to be put into the building addition which is largely just rental space.

Bauer: What we are looking at is not really a two-story structure. One of the stories is a basement level, which would have to be built anyway, if we put this addition on where it is being suggested. If we only put a single story and not a basement, we would still have to excavate down to put the footings in.

Flood: We should design for a third and fourth floor. There may be a zoning change coming. They don't like the high rises, so it may change our area to something less than four stories. Also, don't rely on whatever your experts tell you about rental space. We might want to do a survey on our own to see what is available.

Bauer: There are a lot of questions that still need to be answered. We also need to really look at the financial picture to see what we can afford.

de Vries: We are holding most of the Summer Seminars in the Nitany Lion Inn at present. This would allow us to hold the Seminars in our own building. It would save us some money.

Apfelbaum: A couple thousand dollars is all.

de Vries: A couple of thousand over a period of several years adds up.

Apfelbaum: It makes no sense to spend $2 million to save $10,000.

MOTION: That it is the Board's decision to keep our headquarters in State College, Pennsylvania. Moved by Neil. Seconded by Youngblood. Passed unanimously.

Welch: The mayor thanks you.

Adams: What are the possible resources available for financing this project?

Apfelbaum: The Society has $4.5 million. Of that about $2 million is really not our money but it is money needed by the Sales Division for people who have put stamps for sale. It is money that has been paid to the Sales Division for circuits that will eventually be paid out to members who sold the stamps. Traditionally what the Finance Committee has said was that $2 million is really not our money is only going to be invested in the most secure funds, currently treasury bills. It is a portion of the other $2.5 million that is composed of the insurance fund, the life membership fund, the Tiffany fund, some of which is invested in stocks and bonds. When we built this building twenty years ago the money that was used to build the building was the money from the Sales Division. The Society took whatever money we had and built the building and paid ourselves rent and paid off the circuits as they came due from the rent. Those of us who were on the Board shortly after that happened were uncomfortable. We did not feel it was proper to spend money that was held in trust for the members. We anticipate we could raise $250,000 to $500,000 in donations for a building addition.

Bauer: Out of the responses Hotchner received there were two that said we should not raise dues to build an addition, there was one who said he would be willing to pay more dues for a building. We are not proposing a dues increase.

Lamb: We are using this $100 a square foot figure and that is valid to a certain extent. Estimates of basement space construction are probably closer to $30 a square foot. We are talking about a figure closer to $2 million.

Bauer: There are other considerations. This is heavy construction. There are also renovations in the older building, some other work around the building, furnishings. We are probably looking at $100,000 - $200,000 additional non-construction costs. There were two suggestions from the library board. The first was that we get together an ad hoc committee who really understands electronic storage media and the possibilities, probabilities, and problems with that. Then we should take a good hard look at what can be done, what should be done, and what shouldn't be done. The second was that we need a firm acquisition policy for the library. We are a victim of our own success. We are all collectors. We collect journals, books, auction catalogs and we decide we don't need them the last thing we want to do is throw them in the trash. So what do we do? We pack them up and send them to State College expecting that ten years from now we want to see a section of the library named for us.

MOTION: That the board accept in principle need for expansion in State College and set up a formal process by which we can evaluate what expansion is needed, how much it will cost, and how much the financing will cost. This will not commit us to expansion. Moved by McCann. Seconded by Neil. In favor: Adams, de Vries, Klug, McCann, Morison, Neil. Triggle, Walker, Youngblood. Opposed: Apfelbaum. Motion passed.

(The Board broke for lunch at noon. The Open Session resumed at 1:15 p.m.)

Youth Proposal  

Lamb: There is big gap within the hobby for support for youth stamp clubs. We see our role as a wholesaler. We don't start clubs, but support clubs that exist. We took a survey last year of how many clubs we could find and the approximate size of those clubs. We propose to set up a program called APS All Star Stamp Clubs (ASSC). ASSC would ask those clubs to pay a small fee, perhaps $5, so there is some charge for participation so it is not done casually. We would produce a newsletter for them and provide resources for the club leaders, and goodies for the members of the club. We've gotten expressions of support from Krause and Scott and others that would help us provide goodies for the clubs. What we would do in State College is provide a help desk for the ASSCs. The cost for this for the remainder of this year would be $16,000. Next year it would cost about $40,000. We have had discussions with the Postal Service and they have led us to believe they would be able to assist next year. Once we launch it we have to be prepared to carry it on our own without the Postal Service. Most of the activity will take place throughout the school year.

MOTION: To approve the proposal to accept the report and establish the APS All Star Stamp Clubs. Moved by Apfelbaum. Seconded by Adams.

de Vries: What would the APS do for clubs that want to start but haven't been formally organized? This proposal is for clubs that have been in existence for at least a year.

Lamb: We should provide some assistance, but there will be a certain amount of people that really don't represent a club but are interested in a freebie of some sort. We are most interested in helping established clubs. We are not really equipped to go out and start clubs.

de Vries: There was no mention in the report about doing mailings to schools or contacting the major teachers unions such as the National Education Association National Federation of Teachers. We should involve the teachers both directly and through their unions.

Lamb: We have not discussed that. Our focus will be with existing clubs.

Hotchner: We have to walk before we run. While there is a value to doing that sort of thing we have to start slowly with what we have to work with now. It is too early to take on that kind of challenge.

de Vries: In issuing things like membership cards, newsletters, philatelic souvenirs to individuals, does that step on JPAs toes?

Hotchner: No, because they are not doing this.

de Vries: Does the $40,000 include salary and benefits for additional staff personnel?

Lamb: Yes, and office expenses.

Apfelbaum: Are we intending to hire one person?

Lamb: The $40,000 is more than enough to cover salary and expenses for an additional staff member. We have some very talented clerical staff in State College. We have two young ladies I know would like to do this and either one would do a great job. We would advertise this to the staff to see who would apply.

de Vries: Would this be a full time position?

Lamb: There would be other duties as well, but initially to get it started someone would have to devote most of their time to this.

Triggle: There are already excellent youth programs being run elsewhere. Betsy Towle does one in Tucson. Cheryl Edgcomb does a lot with youth. Is there some way we can combine with these existing programs and use their support to help us with our program?

Lamb: We plan to encourage people who are doing things and to give them some resources to help them continue.

Triggle: These aren't necessarily clubs, per se. There are groups such as 4H and other areas where people are already working. Can we associate with them?

Hotchner: We ought to find a way to do this. If they want to be associated with us they should be able to do so.

Lamb: It would depend on how developed these groups are. If it is a case of general encouragement of stamp collecting it would be very difficult for us to fit this under the umbrella. If it is a case such as the Knoxville, PA elementary school where Cheryl Edgcomb has encouraged groups to form this would be an ideal target. What we are aiming for is the 450 other clubs throughout the country that have very active teachers or 4H leaders who are doing lots to promote stamp collecting but often it is a very individual effort. We can offer support to these people.

Youngblood: This program has ambitious goals. Youngblood's experience with working with Scouts tells that the minute a leader steps back from the program it fails. We need to find and encourage mentors.

Lamb: That would be very difficult. We would have no way to go to Appleton, Wisconsin to find a youth leader to help with a program there. What we are prepared to do is when a leader steps forward who has a club, we will provide assistance and support that will help make things a little easier for them to do their job. There will be no replacement for the kind of enthusiasm found at the local level.

Hotchner: In the newsletter that is being proposed we need to tell leaders how to replace themselves. You don't wait until you don't want to do it anymore. You start involving people in your program a couple of years ahead. We can disseminate that advice, but we sure can't do it.

Lamb: We took a survey last year of all the youth clubs we could find in the United States. We got the names of the leaders and the institution they represented and the number of members in their clubs. Our first mailing will be to those people in the 450 clubs we know about and invite them to join. We can't coerce them into doing this.

Walker: A program of this type could develop a synergy of its own. If it is successful chapters and adult clubs will become interested and we can network.

Klug: When this is announced to the membership will we be offering members a chance to donate to help support this program? Targeted contribution programs seem so much more successful. People like to give to specific projects and see them grow.

Lamb: The amount of money at this time, while not great, comes at a time when we have other programs such as the building expansion under consideration. These will be much more important funding issues. We are looking at $16,000, which is not to say that isn't a lot of money, but it may not be the kind of thing we want to start a special campaign for. There are companies like Krause and Scott who are willing to help us with favors for the kids. Washington Press might come in and help with this program.

Klug: It would be valuable if members had more ways to contribute to the Society. There are some members who are only interested in helping youth activities. There are some members who are only interested helping the library. If we had earmarked funds specifically for these areas we might be more successful in fund raising.

Apfelbaum: That is the new trend in fund raising.

Lamb: We just don't want to start another major campaign at this time, but there will be opportunities for members to donate to the youth program.

Morison: Inquired about the name of the organization and should it be tied in better with the American Philatelic Society or maybe America's Stamp Club.

Adams: Kids who are in the program could be asked to help with the program.

Youngblood: Whereas this is an important program for the Society's long term growth, there is no financial gain from this. How are we going to justify the expense?

Hotchner: We are doing the right thing by youth.

Welch: Drew the Board's attention to the $40,000 spent each year on the youth program could add 32 extra pages to American Philatelist per month.

Hotchner called the question to accept the report and establish the APS All Star Stamp Clubs. Passed unanimously.

Staggered Elections  

de Vries: If one of two proposals on term limits is passed we could have lots of inexperienced people on the Board. We just had five out of eleven inexperienced people come on the Board at the same time. De Vries felt tentative at first. This proposal is designed to see to it that not everybody on the Board is elected at the same time. As it stands now only two people have to have prior experience: the immediate past president and the president. Everyone else on the Board could be new. It is conceivable we could have nine out of eleven people be brand new on the Board. With term limits there will be more turnover on the Board. There are two ways to implement this. We would have elections every year. While there would be increased costs if we got in the habit of having elections every year it might encourage people to vote. If two or three years go by before there is an election people just sort of forget about it. This way there is always an election coming up and everyone will know that in a certain month they will be voting.

Apfelbaum: What is the cost of running an election?

Lamb: If it is an attachment in the magazine it is around $10,000. If it is a direct mailing it is around $30,000.

de Vries: At $10,000 that is about 20c per member. This may cause a slight increase in participation.

Hotchner: This is a proposal Hotchner made both eight and then four years ago and it went nowhere. There is another alternative and that would be to not run a full alternate every year, but to take four directors and have them serve four year terms, two of them elected on the two year cycle. It is less sweeping but would accomplish the same thing.

Apfelbaum: That means a director is a lame duck the minute he is elected.

de Vries: We aren't just talking about Directors at Large. There are still offices of Secretary, Treasurer, etc. and these could all come on as new Board members. A two year term is better, but with the possibility of greater turnover it puts the voters a little closer to the process.

Hotchner: It would be exceedingly unpopular with members to have us constantly in election mode. An election every year is not what we would want.

de Vries: The objection is to the campaign and the only campaigns have been for the presidency. There has not been a great deal for the other positions.

Hotchner: In the last several elections we have had twice as many candidates for Director as we have had slots available.

de Vries: There has not been an overwhelming campaign for these positions.

Apfelbaum: But there could be. Every year is too often. It makes it look like a circus.

Welch: Remember this isn't just in the magazine one or two months every other year. Next year is election year, and the cycle begins in this December's magazine with a call for nominations. We'll have something in the magazine about it every month until September. If we do it every year there will be something in every magazine relating to an election. Everybody hates the election. They do not look to The American Philatelist for controversy. Readers come to us to escape for awhile. The more heated the election becomes the more they hate it.

McCann: The premise is there is concern about having inexperienced directors coming onto the Board. This year was very unusual in that we had so many new Board members, but McCann was impressed at how well the five new members have done so quickly. There is no problem to be concerned about.

Apfelbaum: It has been a very easy transition.

Youngblood: The genesis of this evolved when we were faced with the original term limits proposal.

Hotchner: Has been on Board a long time and has seen more than one complete turnover on the Board of Directors. It is a problem.

Triggle: Having an election every year would turn people off. It is not something our members would want.

Hotchner called a straw poll of those who thought there was a problem that needed to be fixed by staggering the elections. De Vries was the only yes vote. The proposal was dropped.

Nordia 2001  

Morison: We went on record and all the earlier problems with this show have been rectified. We are well on our way with this show.

[A complete written report was provided to the Board.]

American Philatelist on the Newsstands  

Klug: Back in April an APS member asked Klug to place this proposal on the agenda, which she did. Shortly thereafter Klug was offered and accepted a regular column in The American Philatelist and now felt she was in a conflict of interest situation with regard to this proposal. Klug asked Triggle to speak to this proposal.

Triggle recently spent some time in Britain and noticed that news agents there have three or four stamp magazines on their racks. There are, however, no philatelic magazines on newsstands in this country.

Apfelbaum: Why don't we have The American Philatelist on the newsstands now?

Flood: There is a sales tax problem.

Welch: There are lots of problems. It is very expensive. Welch was deputized by Frank Sente to voice very strong objections to this. Sente feels this would be counterproductive and would result in loss of existing members who could go to a newsstand and buy a copy of The American Philatelist every once in awhile or read it there for free, why belong to the Society. Sente sees this much more as downsizing than upsizing our membership. Welch is concerned about cost and making substantive changes in the content of the magazine.

Apfelbaum: What if we found a distributor that would just pick it up and put it on the newsstand as it is?

Welch: Had no problem with this if we don't fiddle with the content, but Sente would still be opposed from a membership retention aspect. This proposal has come up again and again over the years and it has always been turned town because of concerns about expense. It would make a lot more sense to take the money and staff time and put it into our website than to try to put AP on the newsstands.

Youngblood: There are several downsides to this proposal. It is expensive to get a magazine on the newsstands. I don't see how this could be successful at all. Linn's is trying it and there is not enough data yet to see how well or poorly that is going. The American Philatelist is over the head of many members as it is now. It would not be a successful tool to drawing in new collectors.

Welch: In terms of the ability to sample the product, we can do that on the existing website. We can do a great deal more on the website and have plans to put up at least one article from each issue. This can be done at minimal cost.

Flood: In many states the magazine would be subject to sales tax on the returns. The distributors would pass that back to us. If you figure transportation, mail and sales tax we could incur a big loss.

Triggle: Perhaps we shouldn't think about putting AP as such on the newsstands but perhaps some other specialty magazine that we could target to beginners or intermediate collectors to interest them in philately. Let's not negate the whole subject because it won't work for AP.

Lamb: This is an idea Lamb thought would help the Society and he has spent a lot of time looking into it. When in Germany he could buy a philatelic magazine on the newsstand. It was unattractive and esoteric, but it was the only exposure to stamp collecting he could find. All of the advice Lamb has received has been negative. Lamb spoke with Krause and he said not to do it. It wouldn't work on the newsstand and he was very down on newsstand distributors. Michael Laurence noted three major efforts to sell on newsstands.that failed: Minkus Stamps, Stamp World in the 1970s, and a short-lived publication called Philately. Linn's does not yet know how their newsstand sales are going. We have been taking some steps that would be required for newsstand sales. We have put a cover price on the magazine. We are isolating Society news, and the addition of color all help to make it a more attractive newsstand publication. Lamb is still not persuaded it is a bad thing, but a lot of people are saying not to do it. Let's not kill this idea. It is worth studying some more.

Hotchner: One thing we could do is make The American Philatelist available to libraries.

Welch: Sente would not like that. Members could then read the magazines free so why would they renew their memberships?

Youngblood: If we wanted to test the waters on this could we send some complimentary copies to the newsstands to sell at newsstand prices with the idea they can keep the profit to see how much sell through there is.

Welch: The cover price was also added to remind members what an incredible bargain they receive for their dues money. They pay something like 91c per issue against the cover price of $3.95.

de Vries: There are magazines at Barnes and Noble that are so esoteric. The fact that the magazine contains articles that are above people's heads wouldn't be a problem. Instead of sending them to stamp stores which are a dying breed, we should send the magazines to Barnes and Noble or Borders book stores.

Youngblood: If we want to get 2000 copies out on the newsstands and at a 25% sell through, the net cost is $25,000 to $30,000 a year.

Welch: There is also a chance they wouldn't even take our magazine. There are already thousands of other magazines on the racks.

Morison: How many APs are sold at STAMPSHOW?

Lamb: About a half dozen.

Hotchner: Asked Klug to discuss this further and see if there is another proposal that could be made.

Sales Division Report  

Tom Horn brought a mock up of a new, larger sales book and what it might look like as 8 pages. If we go to 12 pages it adds to the weight. The book is a little bit larger than two of the current books. The postage increase would be about 46c. Oklahoma Philatelic Society was kind enough to send a copy of their large books.

Apfelbaum: Will we have to change the box we mail these in?

Horn: Yes. Oklahoma uses corrugated plastic and it costs about $3.25 per box. The pasteboard boxes we use now work very well for the books we have and they are a better deal from a cost standpoint. This offers an additional service to members. It won't be a replacement for the old books. We would get additional income from selling larger items. It is a good way for us to try it out to see what problems we might encounter.

MOTION: That the Board accept the report and offer larger Sales Division books for larger items. Moved by Apfelbaum. Seconded by Neil. Passed unanimously.

Awards Committee  

Triggle: The Awards Committee suggested we buy bronze Remington bronze sculptures to use as special prizes at international shows. The Committee's first choice was a sculpture called Bronco Buster.

MOTION: That the Board accept the Awards Committee report and instruct the staff to buy Bronco Buster Remington bronze sculptures for prizes at international shows. Moved by Triggle. Seconded by Morison. Passed unanimously.

Board of Vice President By Laws Proposal  

McCann: At the last Board meeting we had a discussion about residency requirements of the Board of Vice Presidents. The bottom line is that there is a perceived problem that the requirements are heavily weighted so that the Board of Vice Presidents will be from the Northeast corridor. McCann previously opposed this proposal because the Vice Presidents need to meet often in person. This doesn't allow much flexibility in getting some slates of Vice Presidents in the future. The basic idea would be to keep 200 mile limit for the Board of Vice Presidents. It makes the groups come together and work together every two months. We could add a slight amount of flexibility if we made an exception that persons on the Board of Vice Presidents lived further apart than 200 miles they would sign an affidavit to commit to meet every two months in person at their own expense. This would give a certain amount of flexibility, particularly to people living on the west coast. It is a fair compromise to add this modification.

MOTION: That an addition be made to the By Law pertaining to the Board of Vice Presidents candidates that candidates living outside the 200 mile limit may seek office as a Board provided they sign an affidavit that each candidate agrees to meet face to face in committee with the other two candidates to conduct Board of Vice Presidents business every eight weeks at no additional cost to the Society. Moved by McCann. Seconded by Triggle.

Apfelbaum: Suppose three people wanted to run under this proposal, they couldn't run in the next election because this will just appear as a bylaws change.

Flood: The bylaws change would have to be effective and voted effective in order to put up a slate. Flood was more comfortable with dropping the mileage restriction and stating simply that the Board of Vice Presidents must meet every eight weeks face to face at no additional cost to the Society.

McCann: If we changed the distance requirements and didn't have something like this in place we'd wind up with a Board of Vice Presidents who would have meetings only four times a year in different parts of the country. It can't be done.

Flood: Was concerned that those within the 200 mile range would get elected and think the requirement to meet every eight weeks would not apply to them. Every Board of Vice Presidents does their own thing in their own way. Flood suggested we drop the geographic requirement in favor of meeting face to face every eight weeks at no additional cost to the Society.

McCann was still more comfortable with meeting requirements.

Walker: If this passes we add this to the bylaws amendments on the ballot.

Hotchner called the question of approving the By Law amendment proposal adding that Board of Vice President candidates living outside the 200 mile limit may seek office as a Board provided they sign an affidavit that each candidate agrees to meet face to face in committee with the other two candidates to conduct Board of Vice Presidents business every eight weeks at no additional cost to the Society. Passed unanimously.

Junior Philatelists of America  

Hotchner: Received e-mail from Nathan Matteson of the JPA saying that H.E. Harris is dropping their support of the H.E. Harris medal for the best youth exhibit at a national show. We were asked if APS would be interested in picking up the H.E. Harris medal. It can't cost a lot of money and having APS associated with this would be good for us and good for them.

MOTION: That President Hotchner pursue further discussion with the JPA with regard to sponsoring the medal for best youth exhibit at national shows. Moved by Neil. Seconded by Apfelbaum.

Youngblood: Suggested we continue calling it the H.E. Harris Award.

Triggle: The criteria for the Harris Award is for the best youth exhibit in the show. That means one youngster gets all the loot. Could we not spread this around a bit?

Walker: Suggested we authorize Hotchner to negotiate with the JPA to find out what the kids want. If they think it would be better to have the awards spread around, then we can suggest something to that effect. If they don't want to spread the awards around, we should do what they want.

Neil withdrew his motion in favor of Walker's suggestion.

de Vries: Suggested APS confirm with H.E. Harris they have withdrawn their support of the youth award before we do anything.

(The Board moved into Executive Session at 2:25. Open session resumed at 2:45 p.m.)

MOTION: To ratify the Ernest Kehr Award nominee and the APS Hall of Fame nominees. Moved by Neil. Seconded by Morison. Passed unanimously.

Adjournment

MOTION: To adjourn. Moved by Apfelbaum. Seconded by Youngblood. Passed unanimously. Meeting adjourned at 2:55 p.m.

Attest:Respectfully submitted:

John M. Hotchner, PresidentJanet Klug, Secretary