Executive Committee of the American Institute of Physics
Minutes of Meeting
1. Convene – Roll Call
The meeting was called to order at 10:00 a.m. by Chairman Frauenfelder.
Hans Frauenfelder, Chair
Peter B. Boyce
Kenneth W. Ford, Executive Director
Roderick M. Grant, Secretary
William W. Havens, Jr.
Jack M. Wilson
James A. Purdy
F. Dow Smith
Robert T. Beyer (ASA)
William L. Duax (ACA)
Jerry M. Woodall (AVS)
Thomas E. Graedel (AGU)
Robert E. Baensch, Director of Publishing
Gerald F. Gilbert, Treasurer
Timothy Ingoldsby, Director of Information Technology
Nathalie D. Wagner, Assistant to the Secretary
For clarity in presentation with reference to the printed agenda, events recorded here are not necessarily in the same chronological order in which they appeared.
2. Report of the Secretary
Minutes of 1-2 December 1988 and 16-17 February 1989 Meetings
The minutes of these meetings were approved as corrected.
3. Review of Governing Board Agenda
The agenda for the meeting to follow was reviewed briefly.
Financial Handling Charge for 1990
Gilbert explained that the Constitution provides that each Member Society shall pay a financial handling charge based on the monetary value of business done on behalf of the Society, as defined in the contract, multiplied by a factor, not to exceed one percent. The factor is to be determined annually by the Governing Board. He read the proposed motion.
The following motion was made by Lazarus, seconded by Havens, and unanimously CARRIED.
MOVED that the Executive Committee recommend to the Governing Board that the financial handling charge for 1990 again be set at 5/8 of 1% of business done on behalf of Member Societies.
Unaudited 1988 Financial Statement
Gilbert distributed and reviewed the unaudited 1988 financial statement for the Institute as it will be presented to the Governing Board. It is attached to these minutes as Appendix A.
He called attention to several areas of significant change:
1) The increase in subscription income of about $2,221,000 over 1987 represents an increase in Soviet translation journal subscription income of about $282,000 and an increase of about $1,906,000 in archival journal subscription income. These resulted from price increases in all journals.
2) The 1988 Voluntary Page Charges revenue is about $170,000 more than in 1987, the result of an increase in the number of honored pages published in 1988.
3) The 1988 advertising revenue is about $705,000 more than 1987, resulting from the sale of increased ad pages as well as from an increase in ad rates.
4) Publishing Operations expense increased about $2,282,000, resulting from publication of more journal pages and conference proceedings, and the first complete volume of Computers in Physics, which alone had a net expense of $650,000.
5) General & Administrative Expense increased about $1,149,000 in 1988 over 1987 as a result of the write-off of the Aztech software ($167,400), and the development cost of FAMIS incurred in 1988 ($857,600). This expense will be recouped over a five year period when FAMIS becomes fully operational.
6) Long-term investment income increased by about $407,000 in 1988 over 1987, primarily as a result of the large capital gain realized as a result of the take-over of Kraft by Philip Morris ($315,000). Total Net Revenue rose to $1.8 million in 1988 compared to $1.6 million in 1987.
Gilbert also drew attention to features of the balance sheet:
1) The Institute's Net Equity in Property, Plant, and Equipment, as of 31 December 1988, is $4,984,608. The total book value of Property, Plant and Equipment totals $6,860,375. Total Assets amount to $42,750,234.
2) The Unrestricted, Board-Designated Funds for Special Purposes (Building Fund, Equipment Fund, Physics Programs Fund, and Publication Fund) total $17,851,002 as of 31 December 1988, including the transfer of 1988 net revenue to the Publication Fund as authorized by the Executive Committee. The goals for these Designated Funds now total $30 million.
3) The balances of the ten special purpose Restricted Funds total $1,704,022.
Space and Planning Issues
Ford reviewed his suggestions for actions the Governing Board might take on space issues facing the Institute:
1) Endorse the Executive Committee principles to govern planning.
2) Authorize a search for a DC building, exploring this with other societies.
3) Authorize a detailed study of opportunities in MD/VA/NC, with all needed growth potential.
4) Request expedited action on the Woodbury rezoning question. The Governing Board could request management to come back with more detail and financial data.
He distributed a "confidential" memo that Merzbacher had written on 17 February 1989 with the latter's thoughts about AIP and APS space needs. Merzbacher had given Ford permission to distribute this memo to the Executive Committee and Governing Board at this time. He discussed his rationale for using Research Triangle Park in NC as a model of a possible site for relocating editorial and publishing operations as well as AIP headquarters.
Woodall distributed a handout entitled "Space Wars: a simple strategy for an AIP Victory". It included a letter sent to Frauenfelder, Ford, Gilbert, and Havens, and a brief version of a space plan. He argued that the plan contained in this document would make site selection more voluntary and decouple personnel issues and business issues facing management. He proposed that AIP sell the New York City property and lease back space from the new owners, thus allowing AIP to realize the economic power of the property.
Questions were raised concerning progress in pursuing Woodbury expansion possibilities. It was agreed that this should not be considered further unless we get a rezoning so that the property is treated as commercial and we could deal with it as we see fit over the long term. Gilbert said we need to pursue a meeting with the Taxpayers Association. Otherwise we will make no additional progress toward answering this question.
4. Other Financial Matters
Allocation of 1988 Net Revenue to Designated Funds
Gilbert noted that at each year end net revenues are allocated to Designated Funds. The staff recommends that 100% of the 1988 net revenue be allocated to the Publication Fund. The fund balances as of 12/31/88, including the proposed allocation of 1988 Net Revenue, as of are as follows:
Accumulated Depreciation Fund Balance Building Fund $3,546,485 $3,603,093 Equipment 3,672,634 3,603,093 1988 Expense Physics Programs 2,589,697 1,994,980 Publication Program 20,175,124 8,449,836 Totals $29,983.940 $17,651.002
SPS Bank Account
Gilbert reviewed the need for a separate bank account to cover SPS collections (dues and contributions) which are currently deposited in the Washington, DC, petty cash account. This comingling of funds is impractical and causes operational problems.
The following motion was made by Havens, seconded by Lazarus, and unanimously CARRIED.
MOVED that authorization be given to the Treasurer of the Institute to open an account at Riggs National Bank of Washington, DC, for handling SPS funds.
5. Unit Costs under FAMIS
Ingoldsby discussed a draft statement outlining his understanding of unit cost definitions and the present method of determining costs, number of units, and composition of item counts. He said he had not been able to ascertain the original explanation for establishing the method of determining these costs. He proposed changing the method of calculation.
Gilbert said that the current dues and subscription fulfillment unit costs have a definite rationale, and explained the procedures now in effect. He suggested that a proposal to change the method of calculation should be taken first to the Committee of Society Treasurers for review and comment.
6. Future Meetings
The proposed schedule of future meetings was reviewed, as follows:
EXECUTIVE COMMITIEE AND GOVERNING BOARD MEETINGS
(Schedule as of 1 April 1989)
5-6 June 1989 (5 pm Mon - 4 pm Tues) Executive Committee, NY, NY
7-9 Sept. 1989 (9 am Thurs - 12 noon Sat) Executive Committee, Woods Hole, MA
1 Oct. 1989 (12 noon - 5 pm Sun) Executive Committee, Detroit, MI
1-2 Oct. 1989 (6 pm Sun - 5 pm Mon) Governing Board, Detroit, MI
3-4 Oct. 1989 (Tues, Wed) AIP Corporate Associates, GM Labs, Warren, MI
10-11 Dec. 1989 (5 pm Sun - 4 pm Mon) Executive Committee, NY, NY
22-23 Feb. 1990 (5 pm Thurs - 4 pm Fri) Executive Committee, Washington, DC
29-30 Mar. 1990 (1 pm Thurs - 12 noon Fri) Assembly of Society Officers
30-31 Mar. 1990 (1:30 pm Fri - 12 noon Sat) Governing Board
4-5 June 1990 (5 pm Mon - 4 pm Tues) Executive Committee, NY, NY
7. Other Business
There was no other business.
8. Executive Session
The staff and non-voting participants were excused at 11:35 am.
Ford outlined the search procedure used to find a replacement for Gilbert as Treasurer of AIP. He then presented the candidate he recommended on behalf of management. The following motion was passed for recommendation to the Governing Board.
MOVED that AIP Management be authorized to offer the position of Treasurer of the Institute to John I. Nugent, and that it be recommended to the Governing Board that Nugent be named Treasurer and an Officer of the Institute effective on the data of his employment by AIP.
9. Adjournment and Lunch
The meeting was adjourned at 11:45 a.m., followed by lunch.