MERC

MERC Board of Director’s Meeting

May 25, 2005

Attending: Joel Lareau, Chad Shepard, Mark Mabe, Russell Helm, Nancy Piringer, Bill Giddings, Rita Gulstad, George Rickerson, Bill Mitchell, Greg Wirth, Bob McGlasson, Don Doucette and Sandy Crews

MERC Financial Report and Preliminary HELIX 2005 Financial Statement - Piringer

The financial report provided projects $528,000 in reserve. The HELIX financials are not finalized yet, however, it looks as though approximately $20,000K will be going back into reserves, increasing the reserve balance to around $548,000.

Piringer asked that once the Board elections are complete, that the Board start thinking about whether they would like to contribute dollars to the HELIX 2006 conference.

The electronic voting for Board members for FY06 is still open. There are two candidates for Chair-elect: John Heard and Russell Helm. Piringer encouraged those Board members who have not yet voted to do so by clicking on the "reply" button in the e-mail that they received.

Higher Education External Performance Measures Project Funding - Doucette

The total cost of the Higher Education External Performance Measures Project is $106,000. Under MOREnet's normal cost allocation approach, MERC's share would have been $6,000. Given the current budget situation, the MOREnet Council did not approve continuation for the public library and K-12 portions of the EPM project.

Doucette reminded everyone that MERC had agreed last spring to go forward with the EPM project and have some responsibility for it. He asked if MERC should pay half the cost of $53,000 or more. The remaining balance will be paid by K-12 and public libraries.

Burris suggested that MERC pay $75,000 towards the cost of the project because MERC had benefited the most. Helm seconded. All were in favor.

Burris also suggested using the results of this project as input to create a CD supporting MOREnet to be sent to legislators around the state to help them understand what MOREnet is and the benefit to the tate in terms of economic development. He'd like to include the public libraries and K-12 on the CD to increase the impact.

MOREnet Council Issue - Mitchell

MOREnet's recommendation on how to deal with the HB3 $4.35M cut is to go out soon to the Council. Doucette, on MERC's behalf, should be prepared to make a decision at the upcoming MOREnet Council meeting on June 15, 2005.

HB3 funds are for the backbone, an Internet connection for everybody, tail circuits for K-12 and for public higher education tail circuits up to 45 megabits. A few services are also covered by this bill, one being video.

After some re-bidding in the telecommunications area, Mitchell reported that the shortfall is $2.7M in the Shared Network budget. MOREnet has already implemented actions to lower operating expense by $1M. These actions include eliminating positions, moving MOBIUS into the same building as MOREnet and subleasing their training facility. These actions leave about a $1.7M shortfall. The two principles that apply to what will be taken forward to the Council are that 1) the shortfall should be spread by tail circuit capacity. 2,450 megabits of customer tail circuits. When you divide $1.7M by the megabits your institution has that will give you a pretty good idea of your surcharge - approximately $695 per megabit. The following is a rough breakout of how the short fall for higher education is distributed; Independents: $85,000; 2-year institutions: $141,000; and 4-year institutions: $400,000, of which the University of Missouri is over half, and 2) All MOREnet customers must pay for this $1.7M shortfall.

Mitchell asked the Board to consider this as a non-disclosure discussion as it has not yet to be taken to the Council.

Doucette asked for a sense of the body that the MERC Board supports these two principles: 1) that the short fall be distributed on the basis of the bandwidth capacity to institutions and 2) that the bill go up for everyone. Lareau gave his vote of support on the strategy - looks good and solid.

Doucette feels he can support the board's decision adequately.

MOREnet Services Information Report - Prioritization Discussion - Mitchell

MOREnet was asked by the Council to look at the non-network related services that MOREnet provides. In doing so, usage data was gathered for each of the services. After reviewing the report, each program will come back with a view and then MOREnet staff will work though the discrepancies. Should the service be eliminated? Should it become a fee-for-service? What will the impacts be? These decisions will not be made in time to affect the FY06 budget. Our strategy is that the Council will come back in June to tell us how the customers feel about their priorities, then MOREnet will implement the will of the customers. Mitchell feels the services discussion will continue through FY06.

FFS training is not included in the training numbers on the handout as the customers have already paid for that training; therefore, it is not a decision item.

There was concern over the zeros listed in the Centra training line even though this is not to be a decision item. Doucette understood the concern and will speak to that at the Council meeting if need be.

Mitchell pointed out that the Vangel Customer Satisfaction report and discussions as the state are indicating that the closer MOREnet comes to becoming an ISP, the closer we are to creating the demise of MOREnet.

Doucette doesn't feel that the Council will eliminate services, just have MOREnet do less of something. If he needs to represent MERC on this he will tell them that MERC could probably back off of the low-end training, but that all video services are needed.

Mabe asked what is going to happen when each entity picks their priorities and they're not the same services? Doucette thinks that will heighten the Council's understanding of the difficulty and lead to a discussion.

Wirth brought up that the customers don't know what cutting low-end training will save the organization and indicated that knowing would be helpful. Mitchell replied that there is no way to calculate nor is there a methodology to go through all of the data to figure it out. Better to wait until the services have been identified and then proceed with data collection for those services.

Burris stated that this was his last meeting and that he had to leave early. Before leaving he complimented the Board and Doucette. He is impressed with the way the Board is run and the quality of people who have been on the Board over the years. The level of professionalism has really grown as the organization has grown and become a presence in the State. He thanked everyone for their service on the Board and thanked Don for his chairing and for his work with the MOREnet Council. He thanked Mitchell for his leadership and Piringer for her assistance. Doucette thanked Burris for his participation and contributions.

MOREnet Customer Satisfaction Survey Results - Giddings

A copy of the survey was sent electronically from Piringer yesterday. Giddings asked that the Board remember the survey only asked about customer satisfaction not the "why" behind that. He pointed out that higher education came out lower than the other constituent groups. MOREnet isn't sure why but will be investigating. The 26% return on the survey is statistically very high. Only nine individuals started the survey and didn't finish. Usually a much higher number that does that.

The drivers are listed in the Executive Summary. Three of them are: Security services very high, pricing and conferences. The Stake Holder report has statistical analysis taking in to consideration the size of the groups. MOREnet's overall rating is extremely high. Both Vangel and Amplitude said that isn't unusual but it is unusual to be high consistently throughout the services.

How can we improve where the ratings weren't the highest? Recommendations: can we change our communications (e-mail, RSS, etc.)? No, e-mail should still be the source. We did hear loud and clear that we need to take a look at our website.

Ethernet Bid Status - Niederhelm

The Ethernet contracts have been finalized and orders have been placed for eligible MERC public sites. There will be an estimated 45% savings for these sites by moving them to Ethernet. MOREnet has also begun replacing the original 7204 edge devices at the MERC public sites. Tentative delivery dates for Ethernet is 120 days or less to implement.

MERC Virtual CIO Forum Series - Piringer

Piringer provided a summary of the MERC CIO event topics that have been held since Dec. 2004 with accompanying attendance data. Some new topic requests have been received, and she is working to find subject matter experts. She asked if the Board felt it was valuable for this series to continue and if the information presented was useful. Mabe stated that he felt that they were very informative and value could be gained. Helm agreed but suggested that the dates vary to better accommodate schedules.

Back in October at the IR meeting additional topics were identified.

New topics have been received, and Piringer is working to find speakers.

Other Business and Wrap-up

Doucette asked Rickerson how MOBUIS is dealing with budget cut. Rickerson replied that they are dealing the same way as MOREnet. They have identified some savings and will increase member fees by 36 percent. MOBIUS has only one service so reductions can't be made from service FFS or elimination. The MOBIUS/state partnership is significantly different now.

Meeting adjourned at 11:26 a.m.

Respectively Submitted, Sherry Loyd