October 1, 1989

Governing Board of the American Institute of Physics

Minutes of Meeting

1. Convene – Roll Call

Members Present:
Hans Frauenfelder (Chair), Orson L. Anderson, Robert S. Bauer, Robert T. Beyer, Peter B. Boyce, Nicolaas Bloembergen, Paul L. Carson, Praveen Chaudhari, William L. Duax, Frederick H. Fisher, Kenneth W. Ford (Executive Director), Judy R. Franz, Robert A. Frosch, Thomas E. Graedel, Roderick M. Grant (Secretary), William W. Havens, Jr., John N. Howard, Shirley A. Jackson, Carl Kisslinger, Arlo U. Landolt, Harry Lustig, Eugen Merzbacher, James S. Murday, Jarus W. Quinn, F. Dow Smith, A. F. Spilhaus, Jr., Murray Strasberg, Martin Walt, Gerald Wheeler, Kurt F. Wissbrun, Jerry M. Woodall

Members Absent:
Herwig Kogelnik, James A. Krumhansl, David Lazarus, Robert Resnick, Jean St. Germain, Hugo Steinfink, Jack M. Wilson

Member Society Officers Present:
Joseph E. Greene (AVS), David W. Hoffman (AVS)

Guests:
H. William Koch (Former Executive Director)
Moran, Stahl & Boyer representatives: Shari Barnett, Dennis Donovan, Al Harris

Staff:
Robert E. Baensch, Director of Publishing; Arthur T. Bent, Treasurer; Theresa C. Braun, Director of Human Resources; Darlene Carlin, Director of Journals Publishing (Mon pm); Timothy Ingoldsby, Director of Information Technology; Beverly Fearn Porter, Chair, Long Range Planning Committee (Mon pm); John S. Rigden, Director of Physics Programs; Nathalie D. Wagner, Assistant to the Secretary

(Several Governing Board members were unable to attend the Sunday evening session, due to flight delays relating to conditions at the Detroit airport.)

2. Report of the Secretary

Grant reported that, based on society membership figures received by the Secretary’s office, the AAS will be represented by three Governing Board members effective with the March 1990 Governing Board meeting.

1. Minutes of 31 March-1 April 1989 Meeting

   The minutes of the March 1989 Governing Board meeting were approved as distributed.

2. Report on Status of Proposed Constitutional Amendments

   1. Membership on Executive Committee

      Grant reported that the proposed Constitutional Amendment to increase the size of the Executive Committee from seven to eleven voting members was defeated when both the AAS and ACA voted NO. He requested advice on this matter from members of the Governing Board in June, 1989; no responses have been received to date.

   2. International Associate Category of Membership

      Grant reported that those Member Societies who have reported to date have voted YES on the proposed Constitutional Amendment to add an International Associate Category of Membership. Member Societies have until the March 1990 meeting to respond.

3. Report of the Chair

1. Actions of the Executive Committee Since March 1989

   Frauenfelder noted the list of these actions included with the Agenda.

2. Appointment to the Andrew Gemant Award Committee

   Frauenfelder announced that he had appointed H.H. Barschall as the third member of the Andrew Gemant Award Committee.

3. Introduction of Arthur T. Bent, Treasurer and CFO

   Ford introduced Arthur T. Bent, Treasurer and CFO, who had taken over that position on August 14, 1989 on the retirement of Gilbert.

4. Appointment of Arthur T. Bent as an Institute Officer

   Grant stated that it is appropriate at this time for the Governing Board to exercise its power to appoint Arthur T. Bent as an Officer of the Institute, as provided in the Constitution and Bylaws. The following motion was made by Wheeler, seconded by Walt, and unanimously CARRIED.

   MOVED that Arthur T. Bent be designated an Officer of the Institute, as provided in Article X of the Constitution, and Articles I.2 and II.3/II.5/II.6 of the Bylaws, effective October 2, 1989.

4. Report of the Executive Director: State of the Institute

Ford presented a State of the Institute report. A written report based on his presentation is included with the official minutes as Appendix A and is available from the Secretary's office on request.

5. Space and Location Issues

1. Comments by the Chair and by the Executive Director

   Frauenfelder said space is an emotional issue; we have to look at the problem in the spirit of what is best for physics. It would be an advantage from a business point of view to have AIP in one location to enable everyone to work together. He hopes for a decision at the time of the March 1990 meeting.

2. Report from Moran, Stahl & Boyer (MS&B), Consultants

   Ford introduced the MS&B consultants, Dennis Donovan, Vice President, Shari Barnett, Project Manager, and Al Harris, account executive for this project.

   Donovan said this four-month study was designed to be objective and to find out what is best for AIP in the long term. He will review the MS&B methodology and evaluations; Barnett will review the financial implications; he and Harris will give their conclusions and recommendations.(Note: page references are to "Final Presentation: Location Feasibility and Recommendations, October 1, 1989," which was distributed at the meeting, and sent to all Governing Board members, Member Society presidents, and executive officers following the meeting. Additional information, contained in documents entitled "Summary Statistics" and "Employee Action Estimates", was distributed to society executive offices only.)

   Beginning with the scenarios that were approved by the Governing Board, and working with an AIP internal task force, potential sites for a move away from New York were identified for further review. Using increasingly detailed criteria, a winnowing process reduced their initially long list to three sites in addition to New York: to Austin, TX, Baltimore, and Philadelphia. After a brief site visit, and discussion at the September meeting of the Executive Committee, Austin was eliminated from further consideration. Field work to complete the study was conducted in New York, Baltimore, and Philadelphia.

   Donovan then followed the written report as he reviewed the positive and negative aspects of relocation to single sites in New York/Long Island, Baltimore, and Philadelphia.

   Human Resources Impact

   Next, Donovan reviewed their employee action analysis. Included as a part of their assumptions for moves away from NY/LI, Advertising would remain in NY, and those employees now in DC would remain there. Their model is based on 25 years' experience; it involves the use of weighting factors and mobility indicators contained in employee payroll records. All employee records are analyzed, and professional judgment based on experience with this model is then applied to compute and interpret the final figures. They feel this method allows them to project the rate of attrition with reasonable accuracy. The figures presented in the report are based entirely on this method; they have not surveyed employees.

   1. For the modified base case (NY/LI), they project a rate of attrition, resulting from short distance moves, which is about the same as the current annual turnover rate: 28%.

   2. For Baltimore or Philadelphia, they project a rate of attrition, over the period of the move (about two years), in the range of 40% (exempt; headquarters) to 95% (nonexempt; publishing and clerical).

   Donovan summarized: should there be a move to either Baltimore or Philadelphia, there will be substantial attrition; with proper and aggressive planning it is manageable. To make it so, you have to be ready to commit resources in terms of both money and people. A personnel management program to handle a move has to be tailored to needs of the employees and to the ability of the business to pay. There will be a core of employees who will move and who will serve to educate the new hires. Other strategies, like temporary assignments with incentives, can be utilized to help mitigate the impact of very high attrition.

   The employee-profile/average-salary chart (p.19) demonstrates the mean salary differentials between retention and attrition groups; as might be expected, the retention group has a considerably higher average salary. These data indicate that there could be salary administration problems if the aim is to try to save money in a move to a location with a lower wage structure. This requires cumulative resource planning; it is an issue to be considered before proceeding further.

   Financial Assumptions and Costs

   Barnett addressed the financial assumptions and costs (pp.24-41). Costs associated with the modified base case are for (1) facility acquisition and upfit and (2) employee relocation and training. These figures assume fair market rates in all areas. The move would begin in 1991. This will be the worst year financially: buying, building and/or renovating plus re-training of personnel. Their recommendations are based on whether costs can be recouped through savings in annual operating costs over five years; if so then a move makes sense financially, though financials are by no means the only basis on which a move should take place.

   Boyce asked what is meant by the term "worst case" when describing the basis for the computation of costs. Barnett replied that the figures shown in the report are based on using the high cost estimates for Baltimore and Philadelphia, rather than the lowest cost estimate available for each site. For instance, at the Science Center in Philadelphia the estimated costs to buy and build the shell are $55 per sq ft. Another site in Philadelphia or Baltimore would more likely cost out at ca $100 per sq ft to purchase/build before upfit of approximately $40-$45. This is the figure which was used. In NY, they adjusted the other way: e.g., there is a non-profit building going up in lower Manhattan (near NYU) that will be marketed exclusively to non-profits at an asking price of $250 per sq ft. In her calculations, she used a figure of $150 (LI) – $220 (NYC) per sq ft (including purchase plus upfit). In summary, they find that it is roughly 50% more to buy and refit in NY than in Baltimore or Philadelphia.

   Donovan commented that, after the initial one-time expenditure of $7.3 million (for employee-related expenses), there is projected an annual saving of $6,000 per employee. This magnitude of saving makes an economically compelling argument in favor of relocation. Harris added that an adequate budget for managing employee-related expenses is a very important part of the picture. Every organization has different objectives in terms of what it wants to do with its people. MS&B has proposed a competitive policy to get as many to move with the Institute as possible.

   Beyer and Woodall noted that the space in New York includes the member societies. Presumably none will move. Adjusting for this would change the figures for space needs in Baltimore or Philadelphia, and thus would affect the final figures. Barnett replied that the MS&B figures are in error on this, as they had used the assumption that resident societies would move with AIP. She said that she would correct these tables the following morning.

   Conclusions and Recommendations

   Donovan outlined the MS&B conclusions and recommendations (p.43-44). MS&B feels that a move, whether within the NY area or not, must occur. He thinks all three locations are feasible. Remaining somewhere in NY would be the least disruptive in terms of employee impact and managing during transition; on the other hand it is the most expensive option. They don't see the advantages of proximity between NY/LI lost by relocation to a more distant area; they feel that the benefits of such a relocation outweigh the risks. Baltimore offers the maximum savings and most stable operating environment. Philadelphia permits a better initial staffing situation.

   MS&B recommends relocation of headquarters and publishing to a single site in Baltimore. They suggest that negotiations be conducted in both areas; if Philadelphia comes up with a substantial package, then reconsider the choice of Baltimore. Choose a site on the central business district fringe, rather than suburbs. The move should be staged over a two-year period. Employee practices and other internal procedures should be analyzed prior to the move.

   The next steps are outlined on p.45. Set timetable for final location decision; visit both areas; initiate negotiations; assemble project team; design preliminary implementation plan; finalize property disposition strategy; short list sites in Baltimore and Philadelphia; complete incentive negotiations; agree on final location; negotiate for site/building; select site/building; announce decision; acquire site/building. All this will require assistance from professional consultants; a project team. After site is decided, start work with employees.

   Donovan concluded: this is a conservative report; does AIP want to spend $7-8 million in order to achieve $4-5 million salary savings? A move is do-able, but it must be managed carefully.

(The Sunday evening discussion ended at 10:00 pm.)

9:00 am; Monday, 2 October

2. Space and Location Issues (continued)

   Donovan reviewed the presentation that had been made the evening before for the benefit of members of the Governing Board who had not been able to attend that meeting as a result of air traffic delays.

   Following his review, Barnett apologized for and corrected the error in her calculations which had neglected to account for residual NYC space as a result of MS&B's assumption that resident member organizations would relocate with AIP. She has recalculated the table Summary of Costs (p.28) with the revised assumption that these organizations would relocate to other space in NYC. Using the proposed new non-profit building in downtown NY as an example location, there should be a correction to the stated figures amounting to $300K in recurring costs: the line "Savings over Base Case" (p.28) becomes $3.9M in Baltimore and $3.0M in Philadelphia.

   Lustig stated that one of the scenarios adopted by the Governing Board was that Woodbury would stay; the space crunch was at headquarters. If necessary AIP would buy another building on LI to consolidate its operations there. We are now presented with the accomplished fact that Woodbury would move; what happened?

   Barnett replied that Woodbury is zoned residential; it would require a 15 month to 2 year legal process to get rezoning for light industrial in order to expand or sell that site. After speaking to townspeople, Cushman & Wakefield (real estate consultants) felt it was almost hopeless to get a variance to allow expansion of the facility. Given this fact, MS&B doesn't think retaining the present Woodbury is a viable long term option.

   Ford said that he had informed MS&B that long term considerations make multiple sites in LI (such as Woodbury/Plainview) highly undesirable. He asked them to look toward consolidating operations at a single site.

   Hoffman said that management of a small staff is different from a large staff; there potentially is much greater impact, as there is no redundancy. How would you "manage" a move of a small office staff?

   Harris replied that the key people in the operation have to be given a program responsive to their needs. If the decision is reached to move, you have to establish a budget adequate to manage the move. You must make it as palatable as possible; give constant counseling, home planning assistance, and spouse assistance. Lead the people you want to go with you through the process. Three things are essential: 1) You must have a planning process; 2) you must have a policy in place which is responsive to the employee needs; 3) a budget must be developed. Depending on how generous AIP (or the Member Society) wants to be will determine to some extent whether employees accept a move or not.

   Woodall asked Donovan to summarize what MS&B sees as the impressive advantages in a Baltimore move?

   Donovan said they see the close to $4 million annual savings ($6,800 per employee). The consolidation of AIP activities in fewer locations can be cost-effective. It would be advantageous for all Member Societies to be housed in a single, lower cost location. Long-term labor market stability is advantageous; relocation provides cost-effective space and good recruitability for senior staff.

   Beyer commented that none of this takes into account the substantial losses incurred by Member Societies (now supplied by AIP) who cannot move. This is an important disadvantage of moving.

   Donovan agreed. There are intangibles associated with a move of headquarters away from Member Societies. This has to be judged internally.

3. Information from Member Societies

   Strasberg said that the report presented here has only financial considerations, but addresses no other issues. The concerns of the Member Society are important. How were these considered in the study?

   Donovan and Ford replied that the results of the interviews with Member Societies were used as factors in the winnowing process, but are not itemized herein by society. The themes that emerged led to the focus on three sites.

   Frauenfelder said that these interviews had a different purpose; they were input material for the study. Now we are presented with a different basis for further discussion. We have two basic possibilities: we can choose the modified base case, or we can elect a move to Baltimore or Philadelphia. Input from the societies will be valuable in making the choice.

4. Process for Governing Board Decision on Space

   Woodall noted that Frauenfelder has said we will seek a consensus in making the final choice. He then made a motion that "Any decision regarding a move requires 2/3 majority vote for approval".

   Grant ruled that the motion was out of order, as he knows of no precedent whereby a body may change its rules for a single issue. He said this could only be done through the addition of a Bylaw which would specify those situations under which the Governing Board would be governed by a voting rule different than the normal rules of corporate behavior, which is a majority vote.

   Frauenfelder said that he would like to have a decision which is as close to a unanimous decision as possible. A 50-50 split would be a disaster, and would mean that the problems haven't been worked out. We have to understand the problem as clearly as possible and come to the best solution.

   ###

   (Following a break, which occurred later in the morning session, the following occurred; it is reported here for continuity.)

   Woodall made the following motion, which was seconded by Bauer. Following discussion, reported below, the motion was DEFEATED. The vote was 7 YES, 15 NO, and one abstention.

   MOVED that in order to reflect the desire to achieve a consensus decision in any relocation of AIP, the Bylaws be amended to state that any action on moving any or all of AIP's operations from NYC and LI require an affirmative vote of 2/3 of the members of the Governing Board.

   Grant clarified that "two-thirds of the members of the Governing Board" refers to the full membership of the Governing Board, or 29 votes considering the present size of the Board. He further said that the vote today requires a majority of those present; if it is affirmative, there must be a vote at the next meeting of the board, which vote must be accepted by 2/3 of the entire Board.

   Smith said that this proposed Bylaw change should be defeated; it would not be good precedent to require this large a majority for such actions.

   Lustig said he supported the motion; it reflects the spirit of consensus Frauenfelder has mentioned.

   The discussion indicated that both those who voted for the motion, and those who voted to defeat it, seek a solution to the long term space problem of AIP and the Member Societies which is built on as wide a consensus as possible.

   ###

5. Remarks by Merzbacher on APS/AIP Relations

   Merzbacher's remarks on APS/AIP relations are attached to the official minutes as Appendix B, and may be obtained on request from the Secretary's office.

6. Report by Lustig of APS Task Force and Study

   Lustig reviewed the steps APS has taken to resolve the question of its location and, inevitably, the question of whether AIP and APS will stay together. APS agrees that the Governing Board should take action at the March 1990 meeting.

   The APS President appointed a task force, which met on 31 July. The unanimous conclusions of this task force, which were mentioned by Merzbacher in his remarks, are recommendations which will go to Council in November. The APS task force did not consider moving the APS publishing operations: APS has its editorial offices and key publishing employees at Ridge, across the road from Brookhaven National Lab. There are strong editorial connections with Brookhaven. They had also assumed that AIP would not move its Woodbury location, at least not far. If AIP moves the Woodbury operation anywhere, even to NY City, this might force APS to re-examine the Ridge location and the present arrangement under which AIP produces most of the Physical Review for APS after it is edited at Ridge. The proximity and collaboration between editorial at Ridge and production at Woodbury are very useful and APS would like to see them preserved.

   He reiterated the seven points of the APS task force report:

   1. APS should have equity in its own headquarters.
   2. The headquarters should be readily accessible to the stream of volunteers who work for APS.
   3. Downtown Washington, DC, should be excluded from consideration.
   4. Proximity to academic or industrial physics institutions is required.
   5. APS should investigate New York City and environs for possible relocation.
   6. The possibility of sharing space with other AIP member societies should be explored.
   7. Location near or on a campus is desirable.

   APS sees great value in being close to several academic and/or research institutions. The four senior scientists running the APS office are or have been affiliated with local institutions. Even though the personnel may change, they expect this modus operandi to continue, so they must be near a concentration of strong physics institutions. APS holds many committee meetings every year; it is very convenient for some of their activities to have people come in for a day, without heavy travel time and expense. For the time being, they think they should look at conditions and opportunities in NY and environs. They invite other Member Societies to look with them.

   The APS Executive Secretary and Treasurer were charged by the Task Force to pursue these points. They have done this in three ways. They have talked with NY City representatives, with senior officers of universities (City University, Columbia, and NYU), and with a brokerage firm.

   The NY City Office they contacted was established to encourage non-profits to remain in the city. The inducements for non-profits, if not engaged in manufacturing, include:

   1. Bond issues for building. It is possible to borrow money at about 7-1/2%.
   2. Waiver of transfer tax (4% of purchase price), if the 7-1/2% loan is obtained.

   Other inducements are mainly in manufacturing, and publishing is considered manufacturing; there would be an additional inducement if publishing activities (Ridge or Woodbury) were moved into NYC. (Copies of a study by Fantus Corporation for Alcoholics Anonymous (which has a large publishing operation, and elected to remain in NYC) were available for Governing Board members.) The APS staff attitude is: if it ain't broke, don't fix it. The only real issue for APS, according to Lustig: would it be prohibitive in terms of maintaining and building, to stay in NY?

   APS's main effort was in discussions with a major brokerage firm: Williams & Co., about whom they learned through a recent New York Times article. The article stated that non-profits are now finding it more attractive to locate in NY, and noted several success stories. (Copies of a 26 Sept. 1989 Williams & Co. report prepared for APS containing recent real estate transactions were available for Governing Board members.) Williams estimates the total cost of buying an existing building and renovating it to be $200 per sq ft. Williams' report focused on actual sales, not asking prices. Buildings had recently been sold in very acceptable areas for $140 @ sq ft or less.

   In summary, said Lustig, APS wants to stay in NY, all things being equal for reasons of stability of personnel nearness to established physics departments and industry, and accessibility. They will be deterred from this goal on the basis of prohibitive costs. They would like to stay with AIP, and strongly recommend that AIP do a more thorough study on the specifics of buying and renovating an existing building in NY. This should be done with a competent real estate broker, and the report presented to the Governing Board.

[Coffee Break: 10:30-10:50 a.m.]

7. Information to and Input from Member Societies

   Frauenfelder said that a letter will go to all societies following this meeting. It will contain questions to guide their discussion and response. Obviously it will take more than one month for some to respond.

   Duax said that Carson, who had to leave before this part of the meeting, asked him to read a draft proposal as follows:

   Carson suggests two rounds of input from member societies: (A) Obtain and circulate the responses to specific questions and other comments from all member societies by December 8. (B) After consideration of the society reports provided in December, together with all relevant material previously supplied, the member societies would be asked to offer a further position statement in early February. He suggested specific questions:

   What does your society see as the best resolution to the space problem for the AIP? For your society? What factors dominate your answer to these questions?

   Define what services, facilities, opportunities your society (a) might or (b) would want from AIP under the four possible scenarios:

   1. Relocate in Manhattan and/or Long Island.
   2. Relocate to Philadelphia.
   3. Relocate to Baltimore.
   4. Relocate in Manhattan, leave Long Island intact.

   What new information do you need in order to provide answers and recommendations?

   In addition, he suggested that AIP should provide cost estimates for various supporting services to resident member societies as well as the cost of residency.

   Graedel suggested that AIP has a responsibility to the resident societies, realizing that any move would be difficult. Some form of support for them must occur to help them with the planning and move. At the same time, the societies need to do their own planning to decide what is best for them in both the short and long run.

   Franz agreed that AIP has a responsibility to help, but hiring consultants is not the best way. AIP should ask the societies what we can do to help, not decide for them what they need.

   Ford said he had stated consistently that if AIP moved out of NY, it would provide office space and service to any societies that did not move. Maybe we should do more in providing cost estimates. We could get this information and pass it along to the member societies.

   Havens noted that most of the AIP employees are in publishing; it would be a major upheaval to move publishing to Baltimore. A few years ago it was stated that publishing would remain on LI for the foreseeable future. To proceed, we must hear from the Member Societies, and they must hear from each other. By the time of the March meeting, APS could have two iterations of discussion; some of the other societies don't have as many meetings and could at most have one. He suggested that maybe it is necessary to have a meeting of society officers or representatives to discuss the recommendation of management and reactions of the societies before coming up with a final recommendation for a vote.

   Bauer said that the MS&B report dealt mainly with financial issues. We don't know the details of what the societies want. He would like a management appraisal of what it would mean for AIP to be located in a place away from APS and the other resident societies. Location and communication with headquarters help to integrate the societies. The Board needs a direct management response as to what it would mean if there were no resident societies. It could become disembodied, a bureaucratic business separated from the lifeblood of physics. Another issue, more difficult, is turnover, especially in senior management. It will take the members of the Board to deal with this directly. He is surprised at the idea that we can deal with it as other big businesses have done. What would it mean for individuals to leave AIP, even over a two-year period, with enormously high attrition? We need to know this. He proposed that the senior managers be asked to meet individually with the Governing Board in executive session so as to solicit their comments on the proposed moves. Ford replied that asking division managers this kind of question would subject them to unfair psychological pressure at this time. It is best to rely on statistics, educated guesses, studies of attrition, etc.

   Franz said she thinks we don't need a strong management statement at this point; maybe this would be needed in the second round. Right now we need member society consideration of a new site. We should go through the first stage and get the first iteration on the three options.

   Ford said that management would be prepared to make a recommendation after the meeting. The advantage would be that there would be no ambiguity. They would want to be part of the iteration process; they could later make revisions based on society views. A number of factors, not explicitly taken into account in the MS&B report, enter the picture:

   1. Whether APS makes a commitment to stay in NY would be an important consideration, although it shouldn't be absolute. The coupling is large. AIP should be influenced by this.

   2. Question of consolidation. Officers of AIP think this is an important consideration and would be advantageous. He can discuss why he thinks it is useful for publishing to be with headquarters.

   3. Could a move by AIP produce a much more visible image of physics? This is important and needs to be considered, but it is not part of the MS&B considerations.

   Frauenfelder asked Ford what he sees as the next step.

   Ford said we need to send to every society a copy of the MS&B report as well as a copy of the supporting background material. AIP management needs to formulate a statement of position and a recommendation.

   Frauenfelder said he and Ford will prepare a cover letter summarizing the issues as they see them. A process of iterating the responses will be a part of the timetable developed in the letter. He and Ford will work together while in Detroit (for the Corporate Associates meeting following the Governing Board meeting) and will call on members of the Governing Board for their help and input as needed.

6. Finance and Administration – Report of the Director

1. Financial Statements for Six Months Ended 30 June 1989

   Bent reviewed the Statement of Revenue and Expense for January-June 1989 and the Balance Sheet as of June 1989. These are attached as Appendix C to the official minutes. He noted that this is an AIP statement only; Member Society activity is not depicted.

2. Status of Investments

   A status report on AIP investments was enclosed with the Agenda, and is included with Appendix C of the official minutes.

3. Update on UBIT Proposals

   Bent said that he had no additional information at this time on the status of UBIT proposals before Congress. Spilhaus remarked that it is not clear when or in what manner Congress will act, but it is likely that a UBIT proposal will resurface somewhere, sometime.

4. Report of Audit Committee

   Beyer, reporting for Clark, Chair of the Audit Committee, who could not be present for the meeting, stated that the audit had been completed a month earlier than in previous years. The meeting with Touche Ross representatives had gone well, with no major problems identified.

   Two motions, as recommended by the Audit Committee, were required. The motions, as stated below, were unanimously CARRIED.

   MOVED that the 1988 audit by Touche Ross & Co. be accepted.

   MOVED that Touche Ross & Co. be retained for the 1989 audit.

7. PINET Project

Baensch reported that the first draft of a business plan for PINET had been completed, and would be presented to the PINET Advisory Committee for review at their next meeting.

He reported that a survey sent to 2,000 subscribers of the magazine Computers in Physics had yielded 538 returns and important information about prospective users of PINET. Since the revised system went "live" in early September there have been 300 new users signed up for a total of 500 users registered on the system. He said it was too early to know much about the use of the new system and of the data bases and services it provides.

8. FAMIS System

Ingoldsby began his report by stating that system performance problems continue to plague the development and changeover to the FAMIS system. He gave a progress report on the system, and outlined the nature of the problems and the steps that have been taken to solve or to work around them. He said that the program development phase is complete, and testing of the programs is in progress. Full operation currently is planned to begin in late October. Parallel tests with data processed both on the Univac and on FAMIS will be run until acceptable results are obtained. Representatives from ORACLE and Wang are working to try to identify and solve the system performance problems, but little progress has been noted to date.

Franz asked "what can't you do now that you had planned to do?"

Ingoldsby replied that it is not possible to do "live" queries of the ORACLE database; lookups only can be done, via an indexed file which runs on a smaller Wang computer. The indexed files are updated weekly from the main database.

Havens read from a letter he had received from Judd regarding problems APS members had experienced as a result of problems with the FAMIS system. These included delays in the startup of new subscriptions for 600 APS members (both APS and AIP journals). Ingoldsby acknowledged that there were problems, and responded with an analysis of each of the situations Judd discussed in her letter.

Jackson asked Ingoldsby what options he has to resolve the problems he's outlined.

Ingoldsby said that he is looking in two directions: (1) to move more of the work load off line; to write work-around routines to bypass problem areas, and (2) to consider moving the ORACLE database to another computer platform – a step he would recommend ONLY after significant testing of the proposed hardware/software matchup.

[The Governing Board recessed for lunch at 12:00 noon, and reconvened for its afternoon session at 1:05 pm.]

9. Report of the Director of Publishing

In general the reorganization of Journal Publishing Branches I and II, and new management for Branch III, is working out well. The Manager for the new Book Division II has completed his first three months with better than plan performance. The implementation of the Institute of Physics Books marketing, sales, warehousing, distribution and billing agreement effective since 1 June is on schedule. The new Sales Manager has worked hard to carry out the inventory transfer and order fulfillment procedures within the past two months. Finally, the nonmember subscription lists for the Journal of Rheology have been transferred from John Wiley & Sons. All arrangements have been made to establish the editorial, composition and manufacturing capabilities for the Society of Rheology's journal to be published by AIP as of the January 1990 issue. In summary, it has been three months of implementing the changes and the startup of several new commitments.

1. Computers in Physics

   Editorial content: The September/October issue reflects that all recommendations made by the Editorial Advisory Board during the 16 January meeting have been implemented. The publication has been repositioned effectively as a result of the good teamwork of Dr. Robert B. Borchers and Ben Bacon.

   Circulation: The total circulation number as of July 1988 was 11,055 and end of June 1989 was 13,652. On 10 July, a direct mail campaign was carried out to five lists with a total of 57,000 names and a goal of a minimum 2% response rate or 1,140 additional subscribers by the end of September. Marketing plans include continued space advertising, special offer of "Numerical Recipes" booklet, and exhibits participation for the next three months to collectively reach a circulation goal of about 15,000 by year end.

   Space Advertising: We have been able to land big name hardware advertisers (Apollo and Apple) and software advertisers (Symbolics and Wolfram Research). The September /October issue will have a record number of 24 paid advertising pages within the second year of publication. A new Advertising Media Kit is in preparation to launch a new sales campaign in September.

   Economics: Stringent efforts have been made to reduce as well as contain operating expenses for the start-up publication in its second full year of publication. The financial results through 1989 are:

   	1988 Act.	1989 Bud.	1989 Proj.
   Revenues	$354,122	$526,000	$457,000
   Expenses	1,042,290	1,044,100	789,000
   Income	$(688,168)	(518,000)	(332,000)

2. Books

   We have been able to complete a detailed review of the AIP book publishing programs to determine how we can discontinue the three year cumulative losses of $446K and focus on establishing print quantities that match sales expectations. Sales for the first six months are tracking close to budget for Conference Proceedings; they are somewhat "soft" for Books:

   	6mo Actual	6mo Budget	Variance
   Sales of Conf. Procs.	$405,400	$400,000	+ 5,400
   Sales of Books	108,100	180,000	–71,900
   Total	$513,500	$580,000	–66,500

   Now, we have the challenge of bringing operating expenses and capital investments under control. Since 1 June, all new projects and all titles in production require Cost/Income calculations and a new Project Proposal form to be filled out and signed off.

   Operating Plans have been prepared for Division I (59 pp) and Division II (70 pp). These detailed documents are under review to determine how we can effectively identify priorities and develop books that generate income within the eight defined programs.

3. Book Warehousing and Distribution

   Reaching an agreement with the British Institute of Physics for their Books Program, it became necessary to develop external capabilities for the warehousing and distribution of 300 to 500 book titles. We prepared RFP's for bids submitted by ten candidate companies and reached an agreement in June with the American International Distribution Corporation, Colchester, Vermont (near Burlington). Book orders will be filled faster at lower costs to a broader wholesaler, retailer, and direct customer base.

   All IOP inventory stored at Taylor and Francis in Philadelphia has been transferred to AIDC in Vermont. The AIP and Member Society book inventory is still in the process of being shipped (9 full trailer loads), booked in, sorted, counted and shelved.

   Sales have been recorded and documented in new computer-based format for title, author, and customer information for June and July billings by AIDC. The detailed and multiple format monthly reporting within ten days after the close of each month will provide excellent and timely information for marketing, sales, editorial and financial management. An audit carried out on 17-18 August of the inventory, accounting procedures, and customer services has resulted in full approval of AIDC's capabilities.

4. Soviet Programs

   Translation Program: Maya Flikop has been promoted as the new manager of the AIP Translation Program. She has developed procedures for accelerating the translation and editorial work for the eight AIP journals from a present schedule of about 6 months down to 3 to 4 months. Meetings have been held with Plenum to develop the same accelerated schedule for the 11 journals that Plenum produces for AIP under contract.

   Five problem journals: Preparations have been made for J. T. Scott to go to the Soviet Union in October and meet with both the editors and publishers of the five Translation Journals that are not providing a net income. Discussions will take place to identify editorial, production, and circulation solutions without endangering the overall VAAP agreement.

   Two new Soviet journals: During the fall of 1988, Mezh Kniga offered the English language rights and negotiated agreements for the publication of two journals published by research institutes in the Soviet Union. It was a very competitive and difficult negotiation process; however, AIP was awarded the contracts for "Superconductivity" and "Atmospheric Optics". The past six months have been a tedious process of working with the respective institutes to help them develop their translation, editorial and production capabilities.

   1. Superconductivity: Delays continue to be experienced in the production of the first English issue. However, we now expect shipment of the first issue by the end of August, based on a meeting held in New York with Prof. Ozhogin on 2 August. The only advantage is that we have not invested in the translation and production as we really serve only to edit the manuscripts and then as the subscription agency.

   2. Atmospheric Optics: The first English issue was received in mid-June, which in schedule terms was acceptable. However, the design, composition, and printing are not really acceptable. Action taken: R.E. Baensch met with Prof. E. P. Gordov, the production editor, in Moscow on 6 July; Prof. V. Zuev met with Jarus Quinn and J. T. Scott in Washington on 20 July; and Prof. Gordov will visit AIP for one week from 5-10 September.

   Future goals: Since April 1989, it has been decreed in the Soviet Union that any academic institute is able to negotiate with any Western country commercial or not-for-profit organization directly to establish cooperative agreements that result in hard currency income. Agreements include full expenses-paid visits by Soviet scientists, translations services in payment for computers and instruments – no agreement is too small under the new regulations. There is no longer the restriction of having to work through the official government organizations such as Mezh Kniga and VAAP or government-approved publishing houses such as MIR or Nauka.

   It will be important for us to determine AIP's future role in the Soviet academic information services and publishing community. Our participation in the Moscow International Book Fair will have a very critical role in identifying what influence the current political and economic transition will have on our present agreements. Dramatic changes are taking place rapidly. The Soviet Translation Program represents $1,800,000 net income to AIP for 1989 or 38% of the total net AIP Publishing Program income. We must determine how we can be proactive rather than reactive to what is happening in the Soviet Union.

5. Xyvision System

   Darlene Carlin provided a review of progress made in implementing the first phase of installing the Xyvision system. She also described the steps to be taken over the next six months for acceptance testing of the system and then actual commitments to proceed with the complete Xyvision system.

10. Report of the Director of Physics Programs

1. International Physics Olympiad

   The U.S. Team came home from the competition in Poland with top honors. Steven Gubser, from Englewood, Colorado, was the top competitor and won a gold medal. Jason Jacobs from Baldwin, N.Y. and Derrick Bass from Miami Beach, Florida won bronze medals. James Sarvis, Alexandria, VA received an honorable mention and Jessica Millar, Madison, WI, was recognized as the youngest competitor at the meet. On Friday, 15 September, the U.S. Team went to the White House to meet President George Bush.

2. The Washington Office

   1. New Space for Education Division

      The Education Division is expected to move into new quarters across Florida Avenue from the AGU building later this month or early in October.

   2. Public Information Satellite (see below).

3. AIP Senior Education Fellow

   Jorge Barajas has been invited to serve a second year as the Senior Education Fellow.

4. Gemant and Meggers Awards

   Advertisements are scheduled to appear in Physics Today and AJP inviting nominations for 1990. The deadlines are December 31, 1989 and March 21, 1990 respectively.

5. Visiting Scientist Program in Physics

   The records for this program have been transferred from Washington to New York. For the next year at least, this program will be run out of the Director of Physics Programs Office.

6. IUPP

   The preliminary proposal for IUPP Phase III has been written and reviewed by the IUPP Steering Committee and NSF staff. A final proposal will be sent to NSF later this month.

7. SEER

   We are beginning the second year of this project. This summer a three-week Physics Institute and a one-week Equity Institute were conducted for the elementary school teachers of University City. Sallie Watkins, who has participated in several workshops and institutes for elementary school teachers, said it was the most successful such program she had ever witnessed. During the 1988-89 academic year, a Curriculum Guide which integrates content and equity issues was written for grades K, 1, and 2. This guide will be released on November 17. During the present year a Curriculum Guide will be developed for grades 3, 4, and 5.

8. Public Information Division

   1. Science Report – AIP's Radio Program

      A survey indicates that Science Report is aired by some 546 stations and the program is heard by 2.4 million people per week.

   2. Washington Satellite

      Richard Jones has joined the Public Information Division and will work out of the Washington office. He brings experience as a legislative assistant to two Congressmen and as a Senior Research Associate with Impact Assessment Institute. Jones has developed a working plan for the Public Information Division in Washington.

9. WonderScience

   Rigden reported that the Executive Committee had recommended the following MOTION for consideration by the Governing Board. The motion CARRIED.

   MOVED that, subject to ongoing favorable reviews by the Committee on Physics Education, and the Committee on Physics Programs Policy, WonderScience be approved as an ongoing, regularly budgeted project of AIP.

10. Science Education Resolution

    Grant noted that the Executive Committee had recommended that the Governing Board approve a resolution on science education. He said that Wilson and Jackson had conferred subsequent to the Executive Committee meeting, and suggested a revised wording of the resolution. Grant then made a motion to SUBSTITUTE for the main MOTION, which was seconded by Howard, and CARRIED. The following MOTION was then CARRIED with 3 abstentions:

    MOVED that the AIP Governing Board endorse the concept of an increase in the quantity and quality of science instruction in the middle and high school years, and in particular the study of physics topics throughout those years, e.g. as outlined in "Essential Changes in Secondary Science: Scope, Sequence, and Coordination" by Bill G. Aldridge.

11. Proposed Advisory Committee for Career Placement Division

    Rigden said that [the] Advisory Committee on Education and Employment Statistics and Career Placement had suggested that the Career Placement aspects of the committee's responsibilities be split off and dealt with by a separate advisory committee. He supports this view, as he sees the need for more detailed planning within both of the areas currently covered by this committee. He consulted with Grant, who proposed renaming the existing committee, creating a new committee, and revised charges for both.

    Grant then made each of the following MOTIONS, which were each seconded by Merzbacher, and CARRIED.

    MOVED that the Committee on Education and Employment Statistics and Career Placement be renamed the Committee on Education and Employment Statistics. Revised charge: "This committee provides review, advice, and recommendations concerning education and employment statistics programs at AIP." [Note: the current membership on CES&CP will constitute the initial membership on the renamed committee.]

    MOVED that a Committee on Career Placement be established. Charge: "This committee provides review, advice, and recommendations concerning career placement programs at AIP." [Note: The membership of this committee will consist of six members, each with three-year terms of office, two to be appointed or re-appointed annually.]

11. Report of Long Range Planning Committee: Development of Operational Plans

Porter, chair of the Long Range Planning Committee, reported that the work of the committee this year is focused on the difficult task of translating the general long range plan of the Institute into detailed operational plans division-by-division. She said that this was a real learning experience for most of the division managers, and that, though the results to date vary in quality, many good plans are emerging. 18 separate plans are now available. She invited Governing Board members to request copies if they are interested.

[Coffee Break; 3:15-3:35 pm.]

12. Report on AIP/VAAP Chaos Conference

Ford called attention to the report of the AIP/VAAP Chaos Conference contained in the attachments for this meeting. There was no discussion.

13. Status of Search for Development Director

Ford said that a search for a development officer, authorized in October 1988, and to be housed in the AIP offices in Washington, DC, was proceeding. Several candidates have been identified, and are to be interviewed within a few weeks. Several members of the Committee on Development, and Member Society representatives, will be invited to participate in the interview process. He expects a conclusion of this search in November or early December.

[At this point in time the Governing Board returned to the general discussion of space issues. This was recorded earlier for continuity in the minutes.]

Just prior to the close of the meeting, Koch rose to report that he is working on the history of AIP during his term as Director of the Institute, and asked about its disposition when it is completed.

Ford thanked Koch for his efforts, said that he welcomed this document, and that, in addition to its having a proper place in the archives of the Institute, he would see that it was copied and distributed to the Governing Board.

14. Future Meetings

15. Executive Session

Officers and staff, except Ford, were excused at 4:30 pm so that the Governing Board could meet in Executive Session. The minutes of the Executive Session are reported in the official minutes only.

16. Adjournment

The meeting adjourned at 5:00 pm following the Executive Session.