Present: Janet Klug, President; Ada Prill, Ken Lawrence, George Fekete, Vice Presidents; Lloyd de Vries, Secretary; Nicholas G. Carter, Treasurer; Ronald Lesher, David Straight, Stephen Washburne, Directors-at-Large; Peter McCann, Immediate Past President. Director-at-Large John Flannery is absent due to illness.

Klug introduces Rick Banks, the APS' new controller.

He says it's his first stamp show.

Klug: "And you are a collector, right?"

Banks says he will be soon.

Also present are Executive Director Robert Lamb, Steve Zwillinger, "our facilitator." She says incoming Director of Administration Rob Haeseler is absent because of the flu.

Executive Director's Report:

Lamb: The most important developments in the past 6 months are personnel changes: Banks and Haeseler, who starts March 1.

Banks has handed out year-end financial statements. He has cleaned them up, and they should be easier to read.

Lamb points out the balance sheet. Banks has added comparisons with last year for perspective. This is a very tentative statement and it will vary from what auditors report. Auditors numbers usually look better; they put in assets APS does not.

Total Net Assets is the key number. APS' TNA declined from $1.67 to $1.54 million, about a $137,000 decline. The Library actually gained half a million dollars. The APS has to work toward making that a positive gain.

Statement of Activities is a kind of the scoresheet for activities. Year-to- date operating net shows that the APS made a small profit of $9,000 compared to a projected loss of $144,000. Reasons: belt-tightening in headquarters and donations to operations. APS still faces a long-term declining income in Sales Division and membership. Internet Sales and Expertizing income is up. Declines in operating income offset by reductions in operating expenses.

Actually, the figures show a $2,000 increase over budget in dues, because the APS did not lose as many members last year as expected. Membership declined 1,357, compared to 1,897 in 2003. The APS lost 540 fewer in 2004. Lamb thinks the APS is stemming the loss a little bit but has to do better.

Expertizing had its third-best year ever. That's an operation that's continuing to perform very well.

Internet sales grew by a little over 1.3%, a good sign, especially with the bad problem in August, and a lost weekend in December. January of 2005 was the best month ever for ISU, selling $124,000

Shows have been profitable, generally speaking. 2004 was the first year that the APS made a profit on both winter and summer shows and covered virtually all of its office expenses. This is due to the excellent management of Director of Shows and Exhibitions Ken Martin. Lamb wants to bring revenue up to cover all office expenses."

The APS has introduced two new programs: One is Quick ID, started in January. Lamb has been really surprised at how well it has done. As of last Friday, 91 items had been submitted by 45 people. It's receiving good reviews, but one member said he would resign because it was a "rip-off to novice collectors." Lamb says he saw an experienced collector in Sandical who used it to save a bad sale on a Washington-Franklin. Problems with this service have been quality of scans. Expertizing Director Mercer Bristow returned one because the scan was illegible.

The second new program is Young Stamp Collectors of America. Color publication is great, but too expensive to send to kids, so the program is getting off to a late start. The APS doesn't want to clog up their computers with large files. Not a smooth transition, despite a very-cooperative Junior Philatelists of America in getting its records and entering them into APS' system. Lamb expects to solve some of the issues by the next quarter.

Lamb is talking to the Bellefonte post office about reopening a contract post office. They want it, but APS says it can't do it as before ($100 per year) for an 8-hour-a-day full-service operation. The agreement now is for 3-4 hours, limited services (e.g., no money orders), and structured at $100 per year to start but reimbursed if the station shows that is bringing new business into the post office. The APS and USPS are getting close to an agreement. Lamb would like to see it.

McCann: They want it?

Lamb: Yes. The Bellefonte post office has gotten an award as fastest growing post office in region, because of the APS ' mail volume (and APS was only there for half the year!), and will get it again, because of APS.

Carter: The APS was getting $8,000 when the postal station was shut down in State College.

Lamb: That was based on a survey Erie (Pa.) did on volume. $100 is what the other postal station started with.

Lamb: He expects positive cash flow on rentals from the library. That's unusual for the second year of operation in any rental property..

On February 9, the steering group for the building authorized the APS/APRL to begin working on buildings 12 and 17. Twelve is Sundman Hall, the educational facility; 17 is the Kramer Gallery, including elevator and stairwell access to the upper floors. It's expected to be finished in 6 months, with a dedication likely for October.

Straight: Thirteen and the patio are not part of this phase?

Lamb: No. Thirteen is the reason the patio is not part of this phase. The APS had thought it would be $50,000, but the architect now says $100,000, and the patio is also more expensive. The APS won't do the patio yet because heavy equipment is needed for 13's construction.

Carter: The Recognition Garden is different than the patio?

Lamb: The APS brought bricks from the garden in State College, plus some have been added, and is looking for a place to put them, to get them out of storage, also to decorate.

If the APRL weren't doing 12 and 17, it would do the Recognition Garden, but it doesn't have the money for 12 & 17 and the Recognition Garden.

Carter: The garden would be somewhere else?

Lamb: Probably in the back.

Lawrence: Regarding traditional sales, is the decline not only in the volume of consignments but also in the number of buyers, or just in the sell side?

Lamb: Across the board; it reflects the decline in membership. He believes the Sales Division could sell more if it got it to the buyers, so he would like to build up quantity just to test that thesis.

Lawrence: Is the decline proportionate? The APS needs to know trend. The APS is treading water, waiting for collectors to figure out what is on eBay and not. It needs to look at long-term prospects, especially if it doesn't reflect membership decline.

Lamb: He thinks the long-term trend is downward, but not an even trend. He thinks Lawrence is right, after the initial reaction, there has been a return of sellers. There's another decline this year in total sales, and the staff is projecting another decline, it's certainly not a growth year, but it is still a profitable operation for the APS and good for the clubs. He would like to keep it open.

Lawrence: Every time there's a postal rate increase, it's disproportionate to the value of the stamps, so the overhead costs to every participant is a larger percentage. There have been all sorts of creative things to hold the line, but with the next rate increase, there will be no more ideas. As long as Sales can make money, the APS should stay with it, but...

Carter: Has some statistics coming up, but he would like to get some metrics as Lawrence suggests. The Sales Division is largely populated by old men selling their collections, other old men buying. The APS has got to handle that market somehow...

Klug and others joke about "old men."

Carter: The APS has to think how to handle that market. Perhaps farm it out?

Lawrence: The APS need to have sales circuit books there for visitors, as Bellefonte becomes a destination.

Washburne: Do the sales divisions make money? His reading of the financials shows losses.

Carter: He will speak to that later.

Washburne: Is there a guess how much of the sales are walk-ins versus mail?

Lamb: A very small percentage is walk-in, most is mail. Sometimes, such as during Summer Seminar, the Sales Division has large crowds. If you look at the figures for last year, there's a loss, but the APS is also taking in a lot of money from the insurance fund. He's not sure why some of the items are "below the line," but the insurance fund reimburses the circuits' cost, and there's about $60,000 below the line that really is, in his opinion, above the line, but it's recorded below the line for historic reasons.

Klug: Asks Carter for more information on percentages.

Carter: He doesn't have metrics.

Moved by Prill to accept the Executive Director's Report; seconded by Lesher; approved unanimously.

Carter: Congratulates Lamb on getting through a very difficult year

Society Attorney's Report:

Eisenstein: No news is good news. There is no litigation pending, nor does she know of any likely to pop up. She has reviewed contracts, and put them together, such as the APS-APRL operating agreement and the lease, the privacy policy, other contracts. Gives advice, particularly to Lamb and Klug. She did NOT have to give advice to the Board of Vice Presidents in the past half year. She compliments them. She is amazed there is only one appeal, so the BVP must be doing something very right in getting people to accept its decisions. No appeals means fewer lawsuits.

She has the Statement of Office ready to sign, moving the APS location officially. She will be registering the YSCA name.

Straight moves to accept the Society Attorney's Report; Fekete seconds; it passes unanimously.

Shows:

Martin recommends Charlotte for Winter 2008. He has heard the city is too cold, but he is open to suggestions that APS can afford. Charlotte had been previously approved for 2002; local people have been asking for quite some time, but there may be completely different people in 2008. Local support important, but it's hard to judge this far out.

Board has also discussed something with the American Numismatic Association. Charlotte says ANA is also looking there at 2008. Martin has contacted the ANA director of shows, but can't tell if they're interested or not. Their board meets in March. They are considering some of the same cities. He suggests the APS leave the date open if the Board approves the city, so it can be adjusted if ANA chooses it, too. If not, the show can be moved to the traditional February dates instead of March. Charlotte won't guarantee a specific date until two years out, just a range of three weekends, because the APS can't guarantee enough rooms. If ANA goes, Charlotte will guarantee a date, because there will be enough rooms guaranteed then.

Klug: The date doesn't conflict with the St. Louis or Garfield-Perry shows?

Martin: That's right. Nashville had an offer, but it was too high for hotel rooms. Nashville came back with a lower offer. There's no push from locals, lukewarm interest. Virginia Beach has pushed hard, but it's the same general area as Norfolk, which dealers don't think that well of. Hotel rates are dirt cheap in February.

Klug: The Doubletree Hotel adjacent to the Virginia Beach convention center is not charitable.

Carter: Why not Charleston?

Martin: It wanted too much money and too many room-nights. He thinks it was 400 room-nights in a single property, about $135-140 a night, 400 rooms per night. The APS is doing about 137 at this hotel, and 100 at Embassy Suites per night. The APS for the winter show has never gotten anywhere close to 400.

Carter: Has Martin considered bundling rooms for dealers?

Martin: The APS is presently offering dealers a rebate of $75 on the booth fee if they take a room for at least 3 nights, either at the Waverly Renaissance or Embassy Suites, and only a third to half the dealers are taking it. It's the first time the APS has done it, and Martin plans to do it again. He increased the booth fees by $50, giving the dealers $75 back, and the majority are still not staying in either of the show hotels. That's per booth, so if a dealer has two booths (regular and dollar), and took two rooms, he or she would have been given rebates for both booths for the two rooms.

Carter: Likes the idea.

Martin: The intent is to continue the rebate for Grand Rapids, whether a dealer stays in the Holiday Inn for $79 a night or the Amway Grand at $108, but it's for a four-night stay.

Carter: Maybe if the APS can get dealers into this habit, the APS can get into some of these cities that require more room nights.

Martin: He's doubtful. Most members will not pay rates of $100-125 a night for a hotel room, whether they're an exhibitor or a booth-holder.

Lamb: The priority for winter shows is to get the dealers, not the hotel rooms.

McCann: The number of dealers here is quite high?

Martin: By far the largest for a winter show.

McCann: Because of Atlanta?

Martin: Yes, possibly because of larger population in area. He thinks that makes dealers more optimistic.

McCann: The winter show idea was to put it in the Sunbelt during the winter. Is there no place in the state of Florida that the APS can afford?

Martin: Yes, but most of the dealers don't want to go there. Dealers were unhappy with the two Orlando shows. Sarasota is in early February, and the APS winter show would disrupt it.

McCann: St. Petersburg, Tampa?

Martin: They're a stone's throw from Sarasota. But dealers feel that collectors in Florida are more interested in disposing of collections than buying. Many don't drive or if they do drive, not in the evening. Florida shows are good for dealers to buy collections but not to sell stamps.

McCann: Sarasota is successful because of the weather.

Martin: But it's only for 29-30 dealers. The problem would be getting 70 more.

Lamb: Martin tries hard to find warm-climate locations.

McCann: Last year in Norfolk was frigid.

Martin: We've run into cold spells in every location. The APS can't predict the weather.

Washburne: Friday in Sarasota was raw and miserable.

Carter: The British are not coming to Atlanta; is it a trend or something else?

Martin: They signed up, then withdrew. One had surgery, and his booth mate then withdrew. One moved to Australia. They push for larger cities, cities with direct flights, and they're not going to do much better than Atlanta for that.

Carter: The reason for coming here is our semi-annual meeting. The show is built around that. Maybe the winter meeting should be in Bellefonte; "If we're going to freeze, it should be free."

Martin: He expects to make money with this show. The winter shows have gotten to the point where they are making money or breaking even. He also wants to know what to do with the winter shows.

Klug: The Board is committed to winter show in principle.

McCann: The Board has a duty as the APS to bring the Society to the members. The APS is criticized as too Northeastern. If the winter show is finances-neutral, it would be good to continue it.

De Vries: The winter show wasn't just to have a meeting.

Prill: She wants to give the dealer viewpoint. They compare room-rates, using Priceline, getting $30-35 for rooms at $100 hotels.

Carter: You can't get these prices until last minute

De Vries: They don't care (general agreement).

Martin: Major numbers cancel at the last minute from the show hotels. It's a big problem. Attendees make reservations to guarantee they have a room, then go on Priceline and find something cheaper a few days before the show. This opens the APS up to possible additional charges if its room commitment is not met and denies other attendees space at the show hotel.

Klug: Dealer Liaison Jim Dempsey is not here yet. Martin recommends Charlotte.

McCann: Thinks Virginia Beach is better. It's not any colder.

Klug: She compares the population bases of the two cities.

Straight: It's not a major airline hub.

Carter moves Charlotte, Seconded by Washburne. In favor: Washburne, Carter, de Vries, Lesher, Straight, Fekete, Lawrence Opposed: Prill, McCann Passes 7-2

Martin: Until contracts are signed, nothing is guaranteed. In Riverside, Calif., the sales manager changed, and the new one wouldn't approve the previous agreement. So the APS is going to different hotel.

Klug: Is Riverside still viable?

Martin: Now with Radisson; the Mission Inn went from $125 to $159 when he went to sign the contract, and the APS refused. It's the first time that's happened. The other hotel is closer to the convention center, but not as fancy, but it has had recent renovation.

Stampshow 2010:

Martin: San Jose wouldn't talk to APS for years, when hotel were getting $250-290 a night in Silicon Valley, but convention center has 30% utilization, so they've changed attitudes. It's probably the best possibility. Sacramento was a possibility, but the local group wants a delay to 2014 for its 50th anniversary. The demographics for Salt Lake City are even worse: There's no headquarters hotel, and APS would have to use a shuttle [to the show site].

Klug: The hotels are too far away.

Martin: It would be similar to Houston in 1998. The main convention center in SLC won't give APS the show. Santa Clara much more expensive, and there is not as much within walking distance. San Jose is trying to get back to having a World Series show, but would probably take off the year if Stampshow 2010 is approved. San Jose appears to be the best package.

Carter: Labor rates?

Martin: It's currently $120/hour in San Jose, comparable to New York City; some say it's higher there. Comparatively, the APS paid $48-60 in Columbus.

Carter: Does the Board have to make decision now? He wants more information. San Jose is too expensive.

McCann: But the rental space is cheaper.

Martin: Stampshow survived in Sacramento with similar labor cost.

Klug: If added to rental costs....?

Martin: The SLC decorator would be $70,000, San Jose $105,000, so it would be $35,000 additional for labor.

Carter: That makes SLC look better.

McCann: But not for others.

Klug: Dealers would hate SLC, much more than they hate Grand Rapids.

Martin: How often should Stampshow go to the West Coast? The APS tends not to get as many dealers. He believes the purpose is to go around to different areas. The question is how often to go to West Coast. He thinks 2010 summer, winter in 2012, summer in 2014. That's the West Coast every two years for one of the shows, rather than every three years for summer shows. He can come up with many alternatives for 2010 that are not in the West, so maybe the Board should put off decision.

Klug: She suggests tabling, looking at some other areas.

Carter: He suggests Pittsburgh or Hartford.

Klug: The decision should be made 4-5 years out, but August is plenty of time.

World Series of Philately Byes:

Martin: ROPEX (Rochester) and NAPEX have asked to skip 2006 because of Washington 2006. NAPEX is there in Washington about the same time, ROPEX is two weeks later, but many of the same people involved, and it is worried people will spend vacation times for Washington 2006, not ROPEX.

Carter: The APS has heard nothing from NOJEX (Northern New Jersey)? It's the same weekend as Washington 2006.

Klug: These are the only two shows that have requested a bye at this time.

Straight moves to grant; Lawrence seconds. Passes unanimously.

Carter: The APS should ask NOJEX.

Accreditation:

Klug: Triggle can't be here, after a fall in her Florida condo.

Airpex (Dayton) wants to be de-accredited, but will continue as local/regional show, but feels it does not have enough people to run it.

Fekete moves to grant, Lesher seconds, passes unanimously.

Philatelic Fiesta (California) wants to be reaccredited for 2005.

Klug: This would be contingent on meeting the goals. Their last full WSP show was three years ago. The vote would be to allow them to begin the reaccreditation process, possibly for 2007.

Straight: Were its problems solved?

Klug: That's what the reaccreditation process is for, but the venue was problem, and that has been solved.

Carter: Where is it?

Klug: San Jose.

McCann: Wants clarification; this is just to start the reaccreditation process?

Washburne: Even if it has the venue, it has problems with its bourse. It's the bourse of a regional show. "There's nothing you can buy."

McCann moves to start the reaccreditation process, Prill seconds, passes unanimously.

Martin: OKPEX had a two-day show this year, lost a big chunk of money, about $1600 a year, but club wants to continue OKPEX, exploring possibilities, including a bourse-only show to finance the WSP show. It seems to be asking for one more year of having a two-day WSP show, to get back to having a three-day show.

Klug: OKPEX was granted a two-day show because of venue problems. Joe Crosby has sent a note about finances. They are planning a spring bourse to finance the WSP show. She recommends approval.

McCann moves to allow OKPEX another year as a two-day show, Straight seconds.

Lawrence: The frame situation does not sound inspiring. If they have trouble getting frames....

Klug: APS would have to qualify approval on OKPEX making its frame numbers.

Lawrence: That needs an evaluation from the Committee on the Accreditation of National Exhibitions and Judges, not them.

McCann: Why not ask Triggle to put a CANEJ member on next jury?

Klug: The motion has been amended to allow OKPEX to continue as a two-day show, but it must make its frame count and have a member of CANEJ on its committee.

Passes unanimously

Martin: FLOREX has talked to Triggle and himself expressing interest in becoming a WSP show.

APS-APRL Operating Agreement:

Lamb: Flannery put a lot of work into this. It has been revised by Lamb, who believes this is a good agreement. He thinks Library board has no problems with it.

Fekete: Is there an extraneous word in lease?

Eisenstein: Yes, and a couple of other housekeeping points: exhibits are mis-numbered.

Klug: The Board is just concentrating on the operating agreement now.

Carter: In the operating agreement, on the first page, "employ and supervise other personnel for the library." The Bylaws of the Library, section 9, say its Trustees employ. The APRL can hire?

Eisenstein: The APRL is agreeing to let APS to run its operations, that the APS executive director will hire its personnel. Just because bylaws say the Trustees CAN, doesn't mean they can't contract with someone else to do it.

Carter: Who has the authority for staffing?

Lamb: The executive director.

Carter: He asks about budgeting; says it's not strong enough on personnel. Thinks it should be stronger.

Lamb: The Board doesn't approve the hiring of APS staff, why in this case?

Carter: Lamb asked for approval for Development.

Lawrence: Carter is getting into management.

Carter: No, it's a budgetary matter.

Lawrence: Staffing and hiring are governed by the budget.

Carter: The five library staffers are paid for by APS. APRL could ask for another staffer.

Lawrence: It goes to the executive director.

Lamb: The APS Board can override in budgeting if doesn't like adding personnel decisions by the executive director. The Library board has responsibility for the Library's operation. In some of the early drafts, it appeared that the APS was trying to take over the APRL. Each organization has its own responsibilities. There are ample safeguards.

McCann: Agrees with Carter: The wording of the operating agreement is too vague on "within the budgets approved by the APRL and the APS." — whose budget? It should be clarified to say "of both organizations."

Eisenstein and Klug say it would be a simple fix.

Lamb: What if it said "and within the budgets approved by the APRL and APS boards?" Because the policies have to be the library's policies.

Lawrence: This is not a change. It's what has been the practice all along.

Carter: That's why you write a contract when you agree.

Klug: The main reason to have the operating agreement is to negate future misunderstandings. The old operating agreement was from the 1980s, and it was terrible.

De Vries: It says not acting as an agent; what about real estate? The APS does act as an agent for APRL. Isn't Wendy Masorti acting as the agent in tenant relations? Would that violate the operating agreement?

Lamb: APS acts on behalf of the APRL in many capacities. For example, Banks does the APRL's budget, Lamb does its management.

Eisenstein: No, it's George Lulos, not Wendy Masorti, who is acting as the APRL's rental agent. It's not a problem. It's employees, not the APS or APRL.

Klug: APS and APRL could act as each other's agent if there's a specific agreement.

Eisenstein: If the employee is working for APRL at that point, it's not a problem.

Lamb: Employees often works for APRL at times.

Fekete: He had same thoughts de Vries did. If there's a contractual dispute with a tenant, how would it be resolved if the APS and APRL disagree?

Lamb: It would be the APRL's decision.

Fekete: But what if APS and APRL disagree?

Eisenstein: The APS has no say. The rental agreements are with APRL.

Lamb: He thinks it's a good agreement, and recommends approval.

McCann: How does the rental aspect, what APS pays.....

Klug: That's the lease.

Fekete moves, Lesher seconds. In favor: Prill, Fekete, de Vries, Carter, Lesher, Straight, Washburne, McCann Opposed: None Abstaining: Lawrence, because he's an APRL trustee.

Straight, also a trustee, says he does not see a conflict for himself.

Lease:

Klug: Page 2, under rent, she doesn't understand first the sentence. Please explain what it means in dollars.

Eisenstein: It's intended to reflect what's happening now. Look at the square footage of the APS portion, look at the entire square footage of the American Philatelic Center. Some areas are used by one or other, some in common, some are vacant. Look at the portion not intended for rental to third parties, the portion the APS is occupying; that's the APS' proportion, then you look at operation and maintenance. Apply that percentage to the cost of operation and maintenance, and that's the rent. APS is paying for its share of operation and maintenance. It includes snow removal, insurance, cleaning, other miscellaneous costs.

Klug: $103,440 is the 2005 figure.

Eisenstein: It allows for expansion if the executive director feels the APS needs more space. That might increase APS' proportion.

Carter: He sees problem. The formula is nice, but the amount the APS is paying is considerably more than the formula would suggest. He says doesn't reconcile with Banks' balance sheet. If you take out the tenants' reimbursement, there are only $26,000 operation and maintenance costs, if you add in the janitor, maybe $50,000. APS has roughly 45% of the space, so APS is paying considerably more. He doesn't object to how much the APS is paying, but it doesn't fit the formula.

Lamb: He recommends approving the lease, letting the Staff looking at the numbers, but the APS is not overpaying on rent.

Banks: APS occupies more space than tenants, so should pay more.

Carter: But then APS is being asked to pay commercial rates. Can pay commercial rates or the formula. The formula in the lease is not the actual rent now.

Eisenstein: She has a few corrections, such as extraneous words. A map for Exhibit B can be added.

Lamb: All of these things are dynamic, they change. (Agreeing with Klug.) The lease can just say "designated common areas."

Lawrence: He doesn't see problems with the part to which Carter objected. It says the costs of operation and maintenance "shall include but not be limited to." That' is exactly the kind of flexibility needed.

Eisenstein: Thinks Carter is saying the amount of rent is not correct.

Lawrence: It's correct with that additional wording.

Carter: What the formula says is about 15% of what APS is actually paying, so the other costs have got to be huge. There's a huge dissonance there.

Lamb: He thinks there's a problem with the numbers here.

Klug asks for a schedule of those costs.

Lamb: Yes. It's hard at a meeting like this to come up with that sort of detail.

Lawrence: This document is not intended to serve that purpose. It's intended to show that tenants are bringing in rents, not costing the APS money, which is an argument opponents of the building had. Greater expenses would only make it look better.

Carter: Disagrees, it would drop the bottom line.

Klug: So the Board will get a new schedule of the expenses for the APS?

Lamb: It wouldn't be new; the staff hasn't done one.

De Vries: Suggests tabling.

Lamb: Wants to approve it to get it to the Library board.

De Vries moves to table, McCann seconds. In favor: Straight, McCann, de Vries, Carter. Opposed: Lawrence, Fekete, Lesher, Washburne. Abstaining: Prill

There is a tie vote.

Klug: When does APRL board next meet?

Lamb: At Stampshow.

Klug: So there is time...

Prill changes vote to in favor of tabling.

Tally is now:

In favor: Straight, McCann, de Vries, Carter, Prill Opposed: Lawrence, Fekete, Lesher, Washburne Motion to table passes.

Straight: The APS Board should get the figures sooner, and can handle this by e-mail or phone. General agreement.

[break]

Treasurer's Report:

Carter: There was a modest operating net in 2004. Reminds that the finance people took the unfunded life memberships out of the Life Membership fund, which amounted to $110,000. The staff has been making a lot of good fiscal decisions.

His figures show the cash income from shows was down $90,000 between 2003 and 2004. The difference was in high labor costs.

De Vries: Is the 2004 figure final?

Lamb: Yes.

Carter: All these numbers are subject to revision, auditing, fine-tuning. He praises Banks for getting up to speed.

Lamb: Labor rates not only reason for disparity in show income.

Carter: The Sales Division is not doing particularly well, but it has the right to the earnings from the insurance fund, it has the right to be reimbursed for the sales of the circuit books, so that then brings it up to $50,000-something, which makes it the largest of the moneymakers, but it is making its money from something other than its direct operations.

If you get rid of the Sales Division, the APS would still get income from the insurance fund. If keeps going down, there may be a financial reason to end the Sales Division.

Fekete: Looked at by itself, that appears to be a trend, but he doesn't see it that way. Says the dip is the result of the Internet Sales Unit, and then traditional sales comes back up. He doesn't think it is conclusive.

Carter: That one weekend in December (with technical problems really cost the Internet Sales Unit:

Expertizing had a nice peak early in the year, but is still below budget. It's doing okay, but on low-value items.

American Philatelist is doing good a job on its budget:

The core overhead was higher than budget. There were some extra costs to moving — new stationery, new forms, but the core overhead ended up coming in at the budget line.

Spending more and more on information services.

Other issue about low earnings is investments. Expected, modestly, to make $30,000 off the general fund, but only made $22,944, 2.94%. "We had a very poor year on our investments." There was about 4% on income on the unrealized capital gains. The reason is the shift several years ago from equities to fixed income, a very safe thing to do, but this year fixed income performed badly; as interest rates have gone up, the value of those securities have gone down. If held to maturity, these securities won't realize a loss. Finance Committee will have to consider ways to increase the rate of return, because that's not good enough.

Library costs are going up about the cost of living:

Straight: That's doing very well, because the costs of books and publications are going up much more than the general cost of living.

Carter: That's because APS is only paying salaries, not acquisition costs.

Carter: There was a transition a few years ago.

Lamb: Rent has gone up the last three years because space increased.

Carter: Yes, there was no increase in the rate per square foot.

Carter: It's getting to point that raising dues any more will be counterproductive.

Carter: There's some good news here. Membership is actually coming back up, since a low point at the end of December 2003. Resignations are much lower now.

Carter: These are actual numbers. The APS is still losing members, but is beginning to come back. There was a terrible time just about when this Board came in

Lawrence: If the graph showed the historic trend curve, and fit the line to it, you would see that the APS is still growing, not declining. What you're really seeing, but can't tell because that line isn't there, is a regression to the mean. There was the hump of the Boomer generation, which artificially inflated the growth for a period of time, and now there is the smoothing out of that effect, and once that is done, the APS will still be on the historic growth.

Carter: Agrees. But these figures do show that membership is coming back up, and that's very good news.

Washburne: Is there an average age chart?

Carter: He used to get that information from former Director of Administration Frank Sente, and hasn't yet been able to get it, and will have to wait until Haeseler starts.

McCann: Thinks the projection Lawrence was talking about would be very important.

Carter: Agrees, will work it in.

McCann: Are you ascribing the improvement to Carter and Klug taking office?

Carter: No, to McCann becoming Immediate Past President. [laughter]

The Finance Committee meeting is at 5 p.m. Friday. One of issues is investments; another is to re-bid the investment management contract.

Zwillinger: Does APS send a letter to people who have been out for a year, asking them to come back?

Lamb: Yes.

Shapiro: Is trend upward because people have reevaluated that they have left and are rejoining?

Carter: There are some reinstatements, but mostly it's a social demographic trend.

Lawrence: The people who resign is because they've gone blind. The snits amount to nothing, it's mostly age. That's why he wants the historic chart. You wouldn't believe how recently it was that APS only had 10-15,000 members. Now APS is losing the top end of that population cohort. It appears to be a decline if you take it from the peak, but historically, APS is growing. The APS membership has always been at the top end of the life expectancy curve.

Lamb: Attributes increase in new members to the $5 cash bounty offered to recruiters, especially for dealers.

Lawrence: Doesn't disagree with Lamb, but he believes that very little that APS does matters. Can manipulate stats, but APS is more tied to historical and economic trends than to whatever APS does to retain and recruit members. That doesn't relieve the APS of obligation to do everything it can, but....

Shapiro: Does APS retain these new members gotten from $5 bounty. The U.S. Stamp Society has tried it, but has a terrible attrition rate after the first year.

Lamb: Doesn't know for sure, but APS' retention rate tends to be good.

Carter: After 3 years, members begin to drop out, but if they are over 65, they stay in until they die. Thinks in April APS will have a pleasant surprise on growth vs. drops.

Washburne: Until about three years ago, 65 and older got free dues.

Lamb: That group peaked last year, but the benefit was discontinued a long time ago.

Carter: Thinks the people getting free dues respond well when asked for donations.

Website Redesign:

Lamb: The Board has asked for this twice. He has gotten two companies to bid for it; a few companies said no thanks, the site was too big. Now he wants authority to spend up to $100,000 for the redesign. The estimates are below that, but the actual costs have a habit of going up. It's going to be a major redesign. He would like to let contract soon. If anyone thinks it's too much, he wants to know now.

Washburne: Didn't the Board approve $50,000?

Lamb: That was for eBay.

McCann: The Website is APS' gateway to world

McCann moves, Straight seconds.

Carter: He would like to see some accounting on this, so we can track it.

Passes unanimously.

Membership Survey:

Lamb: It's been 8-9 years since the last one, and the APS needs it, but it will be $17,000 to do it, and with the Website expense, he thinks the APS should defer this.

Carter: Would it have the same type of questions?

Lamb: Yes. There's very little in it about the Internet. Last time, the APS changed questions a lot, but the survey loses perspective that way.

Straight: The questions shouldn't be changed, but more questions added.

Lawrence: He wants to stress the importance of it, when Stamp Collector no longer exists, Amos/Linn's is no longer spending money to build its circulation, so its declines are not reflecting what people really think. It's important to have the pulse of constituents to look at. Doesn't disagree with the decision to postpone the survey, but he really hopes that as soon as the APS is over the revision of the website, it becomes a top priority.

De Vries: Thinks APS may need the information in order for website, print advertising, and promotional materials to be on target. Without the survey, the APS is working with decade-old information

Prill: This would be put off to when?

Lamb: Next year.

Prill: What about doing a downsized survey without spending so much?

Lamb: It's not the number of people, the cost is in the structuring and computer analysis. The APS tried volunteers, it was too much staff work, so went back to a professional company.

Klug: The sense of the Board is to defer it to next year.

Carter: He hopes there will be some planning in the interim.

Lesher: He suspects a lot of internal discussion needs to take place. There are questions that really need to be answered — such as age issues, and to ignore age in the sample would be a mistake. What does APS really want to know?

Lawrence: Because the only other major stamp hobby publisher has decided not to promote itself any more, he thinks there is virtually no gain for APS to use that to gain new members, because that publisher is not trying to gain new subscribers. So advertising in those media is a waste of APS' money.

McCann: Does Lamb agree?

Lamb: The APS has not advertised in stamp publications in awhile. It's just not worth it.

Postal Stationery Book Sales:

Lamb: He wanted the Board to be aware of this. The group has been helpful, and he would like APS to be helpful to it. He thinks APS can make money from this.

Klug: Is this a pilot program to help other affiliates?

Lamb: Possibly.

Straight: The goal is to generate small amount of income, not just break even?

Lamb: Yes.

Klug: It's a great idea. It's a service to both their members and APS'.

Washburne: There's been a change in the group's executive secretary, so they don't have really anywhere else to turn.

Lawrence: Some books are shipped from the West Coast.

Lamb: The stock was never consolidated. The executive director used to be on the West Coast, and some of the books stayed out there. The next executive director was in Virginia, and some of the books are there. Consolidating the stock is one of group's problems.

Carter: Is the APS talking to other societies? As a consumer, he'd like to see other publications. It's more convenient.

McCann: If this one is set up, others will follow.

Lawrence: Going to encounter buzz-saw feedback from literature dealers?

Lamb: Might, but there aren't many left.

Straight: The society is already selling its books. He doesn't think the bulk of dealers' sales come from society books anyway.

Lesher: The American Revenue Association has two prices. He could see it selling books through APS, reaching more people. He thinks it's win-win situation. He can't imagine literature dealers complaining; they are still going to make their sales.

Klug: This doesn't require board vote.

Lamb: The staff is still dealing with two issues, how to give discount to UPSS members, and what the commission will be.

Washburne: Will it be selling on demand, not buying books in advance?

Lamb: Yes.

Lawrence: Insuring shipments?

Lamb: Yes, but it's not a big cost.

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Lamb: EBay actually requires this, but with as much traffic as the APS site gets, there should have been one anyway. The original draft was by Sente, revised by Eisenstein. Once APS publishes this, it will have to follow it. It has been informal until now.

Fekete: There should be opt-out opportunities. Folks aren't allowed to opt out of offers. The APS allows it in writing, but not on the Web. Members should be able to opt out.

Lamb: He would want some evidence, some proof of request.

Fekete: There should be a place on the site to opt out.

Carter: The cookies paragraph is for future, not being done now.

Lamb: No, not yet.

Eisenstein: Thinks some of it is being done regarding Internet cookies.

Lawrence: Sente could analyze data.

Lamb: Send some e-mails based on sales.

Fekete moves, Washburne seconds. Passes unanimously.

Election Reforms:

Election Reforms - Items for Discussion

1. Tying the process of voting to dues payments to increase the number of members who vote.
   The general consensus is that quality votes are better than quantity. By tying the voting process to dues payment will likely hurt one process or the other. Members may put aside dues payments in order to reflect on the ballot and forget to pay dues in timely manner. Conceivably a candidate may seek to lower dues in his/her statement, which would influence the vote. Name recognition is not a particularly bad thing. Those names that are recognized are seen as those who "do" things for an organization. It should also be recognized that the number of people who vote in an organization is typically a small fraction. Increasing that fraction is a nice goal but we don't want members to vote in haste without thinking about their votes. Voting is a privilege and we want informed voters. Thought should be given to other means of increasing the number of voting members without tying it to another activity.
   
   
2. Posting questions from APS members for candidates to respond to via the APS website.
   Allowing members to pose questions to the candidates via the Internet has an attraction, even though the Internet is not available to every member. Use of a gatekeeper or strict guidelines should be a part of this process. The danger is that it may deteriorate into a chat room atmosphere where instead of questions there are statements or opinions or invectives, especially ones that may not be factual. One Ethics Committee member felt that going this route may create too many problems such as polarization and debates. Just because our country's national elections go this route, is that sufficient justification that a hobby organization do likewise? The candidates should include their "platform" in the article in the AP and members can read those statements when they decide to vote.
   
   
3. Requiring signatures of those sponsoring an advertisement, instead of simply a "committee."
   Many people like to contribute to election campaigns but prefer to do so anonymously, rather than having their name appear in an ad. Voting is typically a private process and many voters prefer not to disclose how they voted. On the other hand it might prevent questionable sources of funding such as a union slush fund or some undesirable (to some people) organization. Another point is that someone needs to take responsibility for an ad and if it was supported by a committee, then the chair person of that committee should be the "owner" of the ad and disclose that relationship. Revealing names of supporters in general may be considered offensive to some. The point is to encourage support of candidates in any way the supporter chooses and not to antagonize people in the process.
   
   
4. Requiring disclosure of sources of funds and in-kind donations along with a statement of expenditures to be posted with APS headquarters for review by members after the election.
   Do we really need this if we feel that only qualified candidates are nominated who are above board and honest? Or is that a naive assumption? Are we really opening ourselves to funding sources from nefarious entities? Would the disclosure here (after the fact) still be viewed as unfavorable by those who do not want their support for specific candidates known to others, i.e. invasion of their privacy?
   
   
5. Requiring that at least one of any group of three candidates for the board of vice presidents has had prior experience on the board of directors.
   The Ethics Committee reached no consensus on this point. Some felt this may be too restrictive, thereby reducing the number of possible candidates for the BVP. Another opinion was that on-the-job learning should be encouraged through mentoring. On the other hand the work of the BVP is extremely important and of a nature where precedence plays a role. From that point of view, it makes sense to have at least one member of the BVP candidates with prior board experience.

   The Ethics Committee recognizes that much of the above is not necessarily ethics but are important questions raised by the Committee of Past Presidents that should be given further thought, and are certainly pertinent to election reform.

   Alan Warren
   Al Kugel
   Deb Nicoll
   Denise Stotts
   Kent Wilson

Klug: This is left over from the last discussion. It was sent to the Ethics Committee for its comments, because there were questions about the ethics of doing some of these things.

1. Klug: The committee recommends not tying voting to dues.

2. Klug: There's no actual recommendation here, but the committee was concerned about monitoring and mudslinging. Klug thinks the concerns are valid.

Straight: Candidates can put e-mail addresses in American Philatelist, for direct contact.

Lawrence: The Virtual Stamp Club can advertise it provides a forum for this kind of thing.

Carter: Thinks this should be a one-on-one. The VSC can get very hot. Should just be individual Q&A. That provides time to answer. Some candidates are not as adept at answering politely or coherently immediately, and need a little time to think about it.

Fekete: Are all candidates connected via e-mail?

Lawrence: They ought to be.

Fekete: Thinks so too.

Straight: That's their choice.

Klug: Says she doesn't know.

Prill: Talking about VSC chat, but there is also a message board where you don't need to answer immediately. The disadvantage of doing it by e-mail, is that only one person sees what the candidate said. In a forum like the VSC, then others can see what the candidate answered.

Carter: Just not comfortable with that. Needs time overnight.

De Vries: Candidate forums at shows also require immediate response. If no online because immediate responses are needed, then there shouldn't be the forums at shows.

Carter: These are different media.

Klug: Reminds the issue is whether the APS website should get involved, not any other websites.

Shapiro: Is mudslinging really an issue? This time there may not be hot issues, but last time, was it really a problem?

Klug: If anyone can post anything in an open forum, there has to be methodology to control.

Lawrence: If you look at things were said about him in 1997....

Lamb: The APS doesn't have capability to do this until the website is redone, so moot for this election.

#3. Klug: The committee seemed to indicate one person should sign the ad, and she believes that goes along with rule that an AP advertiser must be an APS member.

Lamb: Confirms that is the policy.

Lawrence: There's no rule about an ad in First Days. Can set standards for what APS can expect of candidates. He's not proposing that that be the case, but it could be done.

Lamb: It would be hard to take action against candidate who disavows any knowledge.

Lesher: In fact, that was the case in the last campaign.

McCann: He thinks it's too amorphous and doesn't see how you can police it.

Lesher: He is in favor, but sees no recourse if an ad is placed by someone who is unauthorized.

Carter: Can still set a standard.

Carter: Moves to enact #3, Straight seconds.

Eisenstein: Is this to put into Code of Ethics? If so, the whole disciplinary mechanism could come into play.

Carter, Klug: No, in election guidelines only.

Carter, Straight: It's just an expectation.

Washburne: There can be negative ads.

Carter: "We believe ethically..."

Klug: The guidelines are written as a series of ethical statements.

In favor: Straight, Lesher, Carter, de Vries Opposed: Washburne, Prill, Fekete Lawrence abstains Passes 4-3-1

#4 gets no support.

#5. Klug: There is no conclusion here, but it would require change in the bylaws.

Fekete: What if there is no candidate with prior experience among all of them, is there then no election?

Klug: Agrees, probably unenforceable.

Carter: Would be sad commentary if no one on a BVP slate had experience.

Prill: When putting together a slate, she looked for an experienced person, Lawrence, to run with her. Doesn't think it would come to point where a slate couldn't be put together with an experienced person, but doesn't think it should be a part of the bylaws.

Klug: Is there a sense this should not be part of Bylaws?

Yes. Not adopted.

There is one statement that will be added to the election guidelines.

Award For Pacific Explorer Show in Australia:

The previous person handling this passed away, and there's been some confusion. It was found out APS had not taken any action. An answer was need in two days, so Klug went ahead and approved it. She wants Board to approve her action.

Straight moves, McCann seconds, passes unanimously.

Strategic Plan:

Klug: Will probably publish it on website.

Lawrence moves with changes from last night, McCann seconds. Passes unanimously.

McCann: Suggests thanking Luster for his work several years ago.

Lawrence: Hotchner too.

Klug asks for formal resolution thanking Lamb, Zwillinger, the Staff, for the outstanding work they did on the strategic plan.

McCann moves, Carter seconds, passes unanimously

The Board adjourns for a break, then goes into executive session.