General Manager Valerie Van Isler and the staff at WBAI were commended for their fundraising successes. FY94 was a banner year for the station. The Committee recognized the growth in income and hope this is just the beginning for WBAI.

There will be invreases in CPB--Community Servcice Grants so there will be more room in budgets than anticipated.

Three stations are in defocit for the year, and the organization should anticipate the same in FY95. Pacifica will be looking at financial ruin if it does not take care of the deficit situation now. It is likely that the SCA revenues will be reduced , and the organization will have to make changes more quickly to preserve the network. Pacifica can no longer afford disasters like WPFW. Pacifica reserves are being spent and there is no provision to build them. Some loans made to units may never be able to be repaid. Deficits are a huge drain which prevent Pacifica from being creative and ambitious for ideas for development.

Audience and Program Development must happen very quickly. The Finance committee appreciates that General Managers must cut their budgets and have to raise more money. June Makela thinks that the development model is a great one, but it took too long. Pacifica does not have 2 and a half years to improve its programming and will need to move very quickly.

The Committee recommends that Pacifica employ the following solutions: it . The Finance Committee will take a serious look at centralizing the business function to save money. Also it will examine the central service percentages in order to pay for increased oversight. [emphasis added]

Michael Palmer suggested that Unit Managers think about a 5% reduction in their budgets. They should anticipate no growth budgets and anticipate there is no money for them from the top. Units must begin to share successful programming.

Each budget presented was the result of a two month process which included the General Manager, Business Manager, the Development Director, Sandra Rosas. Pat Scott and Dick Bunce. Development budgets were signed off by Development Directors. Total budgets by General Managers and Sandra Rosas--who gives them final approval.

Unit Reports

KPFA

KPFA continues to be the strongest station. It had a good year and there are no major problems in the budget. There are some new costs; the producer of the morning show, a planned gifts program and some increase in staff. There is major potential to raise more money. KPFA's bottom line showed a small deficit which they are proposing to fund out of a 1993 surplus and some income from their program endowment. The Committee agreed to this plan.

The committee recommends that the budget be approved as presented.

KPFK

The situation has to be watched carefully. Cliff has made cuts in salary and other lines. Enhancement in the development budget inclide a committment by Cliff to transfer extra CSG money to it. If he had to make further cuts--Cliff would have to cut personnel. The committee recommends approval of the budget with any extra funds being allocated to off air renewals first and then premiums.

MOTION: That the KPFK budget be approved as presented. M/S/P Unanimous

WBAI

WBAI had an excellent year in fundraising. Valerie voiced a strong disagreement with the proven income rule. The Committee is standing by the current budget process in order to be consistent with the other units. Grants and CSG will be added to the budget---this will reflect additional income in this budget. Otherwise the budget will be approved as presented in the board booklet. The scheduled payment of debt to Pacifica is not contained in this budget. If there is a surplus left over from FY94--Valerie has committed to pay deferred wages. The Committee wants the next priority to be the 1989 $150,000 SCA loan payment. $111,000 is still owed. Next year the pay down would be payed down by the surplus.

Valerie Van Isler asked for an allocation to give raises to staff for FY95. If this is not approved she thinks they will either grieve or sue.

June Makela insisted that a repeat of the discussion at the Finance Committee meeting would not be appropriate. She suggested that either National leadership meet with Valerie on the issues or that the board simply pass and approve the budget.

Valerie replied that if the budget is approved as she is legally bound to pay deferred salary wages plus she has an obligation to pay an additional 5% wage increase. She had asked that WBAI's proven income be calculated on a October to September schedule. The current schedule is September to August.

The Committe recommendation is that this budget be approved and that this budget must go back to Sandra Rosas and be brought back to the Finance Committee with recommendation on how to allocate the extra CSG money.

The $91,000 revenue asked to be included in planning for FY95 is excluded---the proven income figures will be calculated based on Sept. 93-Aug 94.

June Makela felt that games were being played and registered a very strong criticism about Valerie's behavior toward the committee.

The 5% salary increase for FY94 is added intothe budget. Also there was a deferral of another wage increase which would come from surplus. This wage increase may come from additional money from CSGs or other grants. The FY95 increase to be negotiated with the union is notin the budget.

June complained that the Committee was given misleading information to very clear questions, and that she came out of the meting with a totoally different understanding.

MOTION: That the Executive Committee and the Finance Committee meet to reconsider WBAI's budget.
M/S/P 10 Yes 0 No 2 Abstain

WPFW

The Committee requested a full report about the WPFW crisis from the staff. sandra Rosas will provide financial information and Pat will request a report from David Salniker. WPFW's budget balances because of a $200,000 subsidy from SCA. What is not included is emergency repairs to their building. Gail Christian is optimistic about grant income that could bring the total income up.

Related to small claims agaimst WPFW, Jack O'Dell wants to look into the question of WPFW's legal rights. The station has a lawyer who is helping. Gail's initial mistake was trying to negotiate a lower payment with complainants. The court is unsympathetic.

The board discussed the possibility of legal action.

MOTION: To approve the WPFW budget
M/S/P Unanimous

KPFT

Kpft ended with a deficit if $27,000 in addition to a $37,000 loan from the SCA. These will be booked as loans to KPFT. Garland Ganter has developed a bare bones budget and may need to make more cuts. He will keep a tight rein on spending. Staffing is at 5 full time and another person at full time for six months. Garland is carefully optimistic that the station can turn trends around. It has a new development director and will be working on it's listener support. Garland hopes KPFT can be self-sufficient in 3 years and raise $20,000 more in the next year.

MOTION: To approve KPFT budget as presented.
M/S/P Unanimous

Garland thanked the board and the Finance Committee for the SCA subsidy.

NATIONAL PROGRAMMING

The Committee recommended the approval of the budget. They have concern about how to build revenue for this. The first plan was to bring in grants from national funders, but this did not work. National Programs still needs the SCA subsidy of 150,000. Gail Christiam is not clear how to offset it if it is removed. The dilemma is how to build listener support for the unit. The affiliates are at their limit. National Programs does not have her full attention. Staff costs have gone up and this is not a padded budget. The Committee feels very strongly that National Programs is important and will help to build the network.

MOTION: To approve the National Program budget as presented.
M/S/P Unanimous

ARCHIVE

The Archive has a very lean budget. If Pamela Burton has to make cuts she would have to cut staff. She is hopeful about increasing income--there is sales potential. The committee wants assurance that Gail and Pam talk together about marketing tapes.

MOTION: To approve the Archive budget as presented
M/S/P Unanimous

The Archive will apply for $200,000 from National Endowment for the Humanities grant. They are working on marketing a John Coltrane interview to Rhino Records and are laying the groundwork for more of these kind projects right now. Gail Christiam suggested that the National Office have a feasibility study done to determine the archive's real financial potential.

Pamela is concerned about tape copyright. People need to be more careful about what they think the Archive can sell. The Archive is more conservative than local units. Pamela would like to develop and standardize the process and policies related to tape sales and tape premiums for all units in Pacifica.

NATIONAL OFFICE

Sandra Rosas is very concerned about not being able to balance the budget. The National Office would have ended in a deficit if not for a couple of windfalls. It still has a $75,000 deficit. This is because of a board decision to create the Deputy Director position. Sandra is budgeting this to begin once a new Executive Director is hired. She has raised the Executive Director's salary level. Other increases include staff raises and some new board expenses. Dick Bunce has proposed based on other non-profits practice that the National Office should be funded at 10% of the entire organization's revenue. The Finance Committee met in executive session to discuss this issue. They support having strong national office and need a National Affairs/Deputy Director. They think this should be a priority. The Committee recommends approving the budget with the deficit made up from reserves. The Finance Committee will look at how to fund the office in the coming year. [emphasis added]

Sandra Rosas reported that unless some changes are made, the Board should expect the National Office to come back next year with a deficit budget of $130,000. There is no way that Pacifica can keep going back to the reserve to fund the Mational Office. The solution is to build more income. She told the board that whenever a decision is made like this it effects the organization 5 years from now. Can't look at this decision in a vacuum. She is concerned about using SCA and reserves--to fund the National Office or other units.

MOTION: To approve the National Office Budget as presented.
M/S/P Unanimous

LOOSE ENDS Pacifica needs a new treasurer. Sandra Rosas and Pat Scott will write up a Treasurer job description.

Janis Hazel suggested that the at large recruitment process be used to find a Treasurer.

Sandra does not want to create an investment committee. The oversight of investments is the duty of the Finance Committee. Mike Kryckler will do a review of investments next spring. The investment brokers will be asked to do a report on how well they think they've done. In any case there is not money to invest.

Audience enhancement award budget adjustments will go through the normal process and will come to the Finance Committee for final approval.

At some units paid or inpaid staff on local board are serving as voting members of local Finance Committees. The National Finance Committee considers this a conflict of interest. Staff should not be voting on the budget or financial matters. They may attend Finance meetings.

MOTION: That paid and unpaid staff may serve on local Finance Committees but will be non-voting members.
M/S/P Yes 11 No 0 Abstain 1

Local Advisory Boards will be informed to the Boards decision

The Committee will be discussing creating reserve lines for the next budget year. Thay may require that each unit budget include a 1% set aside next year for an equipment replacement fund. The following year the set aside would be 1.5%, the year after 2%. They recommend that each unit budget 1% for a severance pay pot. Since no unit has a budget line or plan to cover severance, the committee wants to consider the whole question if how to reward people after years of service.

Jack O'Dell wants to receive this recommendation and wants a document to be presented on these reserves in January.

The Finance Committee and Personnel Committee need to talk together on this.

The Committee recommended that by December 1st a complete inventory of all assets of the Foundation with serial numbers be sent to National Finance office to Sandra Rosas. Everyone should keep a copy of the inventory and send the master list to Sandra. A master key or keys for each unit should be sent to Mary Tilson this for insurance purposes. Sandra will write up the guidelines and a form. This inventory will be updated every December 1st.

Every board chair needs to have master keys. One key should be with the Board Chair and one with Mary Tilson in the National Office.

Next year the Committe wants the Chair of each finance committee to sign off on the budget before it comes to Sandra Rosas.

The National Board agreed to the above.

MOTION: That the firm of Getz, Krycler and Jakubovits be authorized to do the annual audit.
M/S/P Unanimous