March 18, 2010

Foundation for Creative Broadcasting Board of Directors Thursday, March 18, 2010 Child and Family Resources Offices DRAFT Meeting Minutes

I. Call to Order at 5:34pm by Hank Childers.

II. Attendance

Present: Hank Childers, Melanie Morrison, Susan Banes, Andrew Agnew, Cecily Crebbs, Marc Goodman, Lois Grushka, Keith Kanzler, Jamie Manser, Anne Shivers. Absent: Mary Beth Haralovich (excused), Debra Rodriguez (excused), Hardy Smith, Michael Wyman (excused).

The next meeting date is April 15th at 5:30pm at Child and Family Resources.

III. Review and Adopt February 2010 Minutes

Motion by Anne Shivers, seconded by Susan Banes, to approve the February 2010 minutes as presented. Motion carried.

IV. Presentation of Audit of Fiscal Year 2009

Mark Cowley of Regier Carr & Monroe LLP presented the board with his firm’s audit of the finances for the year ending September 30, 2009.

He stated that the audit uncovered no material weaknesses and only a few significant deficiencies (examples include one missing payroll memo for a temporary employee and an incorrect journal entry on a deferred revenue account). Only about $5800 was made in adjustments affecting current year net income. Other significant adjusting journal entries were made to prior year earnings.

Significant changes were made on the balance sheet to reflect changes in the appraisal of the music library and for the previously unpaid property taxes. No cash amounts were involved in the write-down of the music library.

Cowley added that with the write-down, the station currently has a negative net asset amount of $30,089, but this is not a concern because a majority of the station’s liabilities, such as the tower lease, are long-term liabilities over several years and the station has positive cash flow. Susan Banes added that some of the adjustments that had been made in this audit should have been made in years past, but they have now been cleaned up, putting us into compliance and not affecting our cash position.

Banes questioned if a re-appraisal of the house after the installation of the solar panels would help balance the loss to net assets. Cowley agreed that it would.

Cowley concluded his report by stating the station does a good job in collecting on membership pledges; that management cost is low (about 7%), and that expenses in Fiscal Year 2009 and Fiscal Year 2008 were within a few percentage points. Fundraising expenses are high in comparison to percentages experienced by other non-profits but typical of those found in public broadcasting.

Banes inquired about counting the value of donated volunteer services, such as the time spent by on-air programmers. Cowley said that some non-profits express the value of such volunteer service outside of the context of the audit.

Hank Childers summarized the presentation by noting that while we have some deficiencies, there were no material weaknesses. He added that we need to increase our revenue, appraise the property and look at the functional expense allocation.

V. Committee Reports

a) Bylaws (no report)

b) Finance –

Susan Banes reported on the financial reports provided by the station’s accountant. Key points:

Report C: February’s gross profit was $40,514, or almost $17,000 ahead of budget; and expenses were only over by $410 for the month, so we actually report a $2,160 profit versus a budgeted loss of $14,371. The gap on underwriting revenue (versus budget) continues to shrink.

Report D (year-to-date): Gross profit is “on the money” after five months of the fiscal year ($118,444 versus a budget of $118,873, for a difference of only $429). Expenses are about $6,000 under budget, so overall we are doing slightly better than expected at this point in our fiscal year.

Banes requested that Randy Peterson ensure a copy of the annual budget, broken down by months, is provided in the financial statements for the next board meeting.

c) Board Development –

Melanie Morrison reported that she is hoping to schedule a lunch to meet potential candidates for appointment to the board.

d) Personnel (no report) e) Election –

Andrew Agnew indicated the committee is meeting next week to set the schedule for the 2010 election cycle.

f) Development (no report)
g) Strategic Plan Implementation (no report)
h) CAB Development –
Jamie Manser reported that the next CAB meeting is in May. i) Technology (no report)
VI. Volunteer Representative Report

Anne Shivers thanked all of the board members who volunteered during the membership drive and pointed out that there are additional opportunities coming up, including the Street Fair and Solar Rock. Shivers and Randy Peterson have been discussing the scheduling of a volunteer meeting/party for the end of April or early May; no formal date has been set.

VII. General Manager Report

Randy Peterson updated the board on the situation regarding property taxes. When Peterson filed the annual exemption paperwork with the county assessor’s office on February 23rd, he was informed that the station was delinquent on five years of taxes totaling about $30,000. Subsequent investigation with the assessor’s office, the treasurer’s office and the county recorder’s office revealed that the property tax bills – and delinquent tax notices – had been being sent to a post office box (listed as the station’s mailing address by all of the offices) that Peterson noted is not used by the station. It appears to be a post office box listed incorrectly when the house was first purchased in 1986.

Having not received any tax bills in the past several years, the station’s general managers, including Peterson, believed that the station was exempt from this taxation. However, exemption paperwork is required of non-profits on an annual basis (and the renewal of the exemption was most likely being sent to that same post office box).

On February 23rd, Peterson completed payment of the three oldest years of back taxes, forestalling a tax lien sale against the station’s house. This payment totaled $17,778.

About $12,000 is still owed in back taxes for the most recent years, and this amount will be paid soon as cash flow after the membership drive permits.

A lively discussion ensued among board members about the possibility of not having to pay all of the back taxes, fees and penalties owed, but opinions that have been gathered would seem to indicate that this is not likely. The exemption has been filed for the future (a decision is expected in July from the assessor’s office, but Peterson noted that we meet the definition under the law of an agency that should be exempt).

Lois Grushka requested that sufficient documentation of the incident be recorded to prevent a similar problem in the future. Peterson noted that in addition to getting the station’s mailing address corrected with the county departments, he had added the annual filing of the exemption to his list of annual responsibilities.

In concluding the general manager report, Peterson added that the installation of the solar panels was expected to begin in the week of March 22nd, and that he had completed all of the grant filing paperwork with the Arizona Commission on the Arts ahead of schedule. He will now begin the final wrap-up of the CPB grant paperwork due by the end of the month. He also noted that the staff will begin reviewing the resumes received for the position of Programming and Volunteer Coordinator; about 25-30 resumes have been received to date.

IIX. New Business (none) IX. Call To Audience (none) X. Executive Session (none) XI. Adjournment at 6:58pm.