MOREnet Council Meeting Minutes - July 30, 2009
TIME: 10:00 a.m.
PLACE: 316 GOB
Thursday, July 30, 2009
Members present: Margaret Conroy, Chair, Gary Allen, Russell Brock, Tim Gallimore, Rita Gulstad, Glenda Hunt, Craig Klimczak, Bill Mitchell, Bert Schulte, Deborah Sutton for Debbie Hughes
Alternates present: Mark Mabe, Waller McGuire, Barbara Reading
MOREnet Staff present: Natasha Angell, Sherry Loyd, Debbie Rodman, Greg Silvey
Chair Margaret Conroy called the MOREnet Council meeting to order. Those who were in attendance are listed above.
Minutes of the June 8, 2009 MOREnet Council Meeting ‚Äì Approval
Chair Conroy asked for amendments to the meeting minutes. Bert Schulte moved to approve the June 8, 2009 minutes as distributed. Rita Gulstad seconded the motion and it passed unanimously.
Plant Fund Policy Update - Endorsement
Debbie Rodman gave an overview of the Plant Fund (PF) Policy and explained the recommendation to have a target amount set for the fund. Current practice is that all contributions into the PF are made from the Shared Network and Affiliate/For-Fee Service (FFS) areas, with contributions reviewed by the Council on an annual basis. Unfortunately these transfers are not sufficient to cover the PF any longer. Staff believes the target amount should be $1.1M per year based on the original asset value of $10.3M. For FY10 fees are sufficient and staff is hopeful that capacity growth in future years will generate enough revenue so member fees will not need to increase. Staff is also recommending that a total project asset purchase amount of $100,000 or more be added to the significant capital expenditure requirement in the existing asset policy.
Gulstad questioned whether a decision to the Program Participation Connection Policy later on the agenda would change this policy decision. Rodman stated that it could, however, a large number of organizations or very large organizations would have to drop their connection for it to have an effect on this policy.
Schulte moved to approve that expenses supported by the PF be limited to those with total project asset purchase of $100,000 or more and that the PF amounts should be primarily targeted to the replacement/upgrade and purchase of assets supporting core services. Craig Klimczak seconded the motion and it passed unanimously.
Rodman further explained that the Shared Network shortfall assessment is the program contribution to the Shared Network activity. Staff is proposing that any overage collected for that purpose be deposited into the PF. In the past, the Shared Network shortfall assessment was only used to collect enough funds for current operating needs and staff believes there is now sufficient need to set aside funds for Shared Network capital equipment replacements.
Klimczak made a motion to table the remaining recommendations until after the Program Participation Connection Policy discussion. Tim Gallimore seconded the motion and it passed unanimously.
Following the Program Participation Connection Policy discussion later in the meeting, Gulstad moved to remove from the table the remaining PF recommended actions. Russell Brock seconded and it passed unanimously.
Klimczak moved to approve the establishment of a target for annual contributions to the PF to be based on the original value of non-program or FFS assets, divided by the useful life of each category of asset. It is understood that annual contributions may vary from this target from year to year. Gulstad seconded the motion and it passed unanimously.
Klimczak moved to approve the recommendation that transfers from Affiliate and FFS activities, and a portion of the proceeds from Shared Network shortfall assessments, be used for annual transfers to the PF, and that final transfers be reported to the Council as part of the final year-end financial review. Gulstad seconded the motion and it passed unanimously.
Tim Gallimore moved that the word shortfall be removed from the policy. Klimczak moved to accept the amendment. Gulstad seconded the motion and it passed unanimously.
Original FY10 Budget - Endorsement
Rodman reported that the net result of the FY10 budget is a decrease in revenues of ($1,232,000), and a decrease in expenses of ($228,000) when compared to the preliminary budget for a net decrease of revenues over expenses of ($1,004,000). An additional transfer of $656,000 to the PF for capital equipment replacement, FY10 ending fund balances are expected to decrease by ($1,660,000).
The budget assumes vacant positions are filled so that line item is actually a savings. Gary Allen stated that the University is under a hiring freeze and there will be no salary increases this year.
There was discussion about the appropriation allocations and how they might be perceived. This discussion was brought about by a percentage being stated for one member group and not the others. The Council would like staff to determine another way of articulating the portions programs pay or to explain them further. In addition, they would like to see the PF accounting and accounts receivable aging for E-rate added into the budget presentations in the future.
Schulte moved to endorse the FY10 budget as presented. Klimczak seconded the motion and it passed unanimously.
FY10 HB3 Appropriation & FY11 Appropriation Requests Update - Information
Greg Silvey gave a quick review of MOREnet's FY10 HB3 appropriations and explained what changes the Governor's veto made in the FY11 appropriations requests. The most significant change to the requests was a one-time equipment request for a core refresh and video equipment.
Gulstad asked if the Council could see the annual or semi-annual report of the depreciation on the capital equipment over a determined percentage so they could better understand the capital expenditure requests.
FY10 Member Fee Update - Information
Silvey reported that TNP and REAL member fees will stay the same in FY10. MERC and Affiliates will change slightly as both program groups are using a new network connectivity fee schedule. They will also be charged for circuit upgrades as they occur rather than using a calendar year end snapshot. The MERC Board also passed a 12% fee increase for their program members. Staff plans to review fee structures late August/early September for FY11.
Executive Director Search Update - Information
Gary Allen reported that good progress has occurred since May on the search process. David Russell, UM System Chief of Staff, is chairing the search committee. Other members are Beth Chancellor, Rita Gulstad, Margaret Cline, Karen Hicklin, Margaret Conroy, Rachel Mutrux and Jeannie Gordon. Over 100 applications were received. Phone interviews and follow-up interviews have occurred. Staff is currently checking references which will be followed by additional interviews over the next few weeks. Hoping for a decision by the end of August.
Stimulus Project Update - Information
The U.S. Department of Agriculture and Department of Commerce released their Notification of Funds Availability (NOFAs) the first week of July. The first round of applications are due August 14. MOREnet and the State have been working on a large scale proposal to build a ‚Äòmiddle mile' fiber network that would cover most of the state; however, continuing with the proposal was unrealistic given the short time frame. Alternately, MOREnet and the State decided to proceed with an informal request for private partners to submit an application with the State for either the 'middle mile' or 'last mile' network projects. Two teams have been created to review the proposals submitted. The State and MOREnet have obtained a law firm and financial consultant, both experienced in this area, to assist in moving the State forward. If a private partner is selected, the State will move forward with Round 1, if not, they will hold off until Round 2. The Governor will have final approval.
For Round 2, Mitchell believes the Department of Commerce Broadband Technologies Program's (BTOP) Public Computing Centers, or Sustainable Broadband Adoption programs would hold particular interest to the MOREnet communities and should be considered.
Program Participation Connection Policy - Discussion
Natasha Angell reviewed the policy and reported that staff recommends that a MOREnet managed connection be required for program participation. The Council then discussed the recommendation.
Schulte moved to approve the recommendation that a MOREnet managed connection is a requirement for program participation. Brock seconded and it passed unanimously.
- October 21, 2009
- December 15, 2009
Adjourned 1:00 p.m.
Respectfully Submitted by Sherry Loyd