Smith thanks Committee for their work. Smith asked Russell to lead discussion through document below:

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1 STCA Board Meeting Conference Call February 16, :00PM EST Present: Connie Smith-President, Ron McConnell-Treasurer, Marcia Dawson-Corresponding Sec., Sue Cerka- Recording Sec., Helen Prince-AKC Delegate, Directors: Nancy Aaron, Charlene Gann, Pam Henegar, Jerry Burge, Helen Krisko, Steve Russell, Liz Heywood, Kelli Edell. Absent: Charla Hill-Vice President (excused) Meeting called to order at 9:05 PM EST Topic: Report of STCA Financial Improvement Ad Hoc Committee. Smith thanks Committee for their work. Smith asked Russell to lead discussion through document below: February 14, 2011 STCA Financial Improvements Respectfully submitted by Ad Hoc Committee: Marcia Dawson, Helen Prince, & Steve Russell Background from 2011 Plans: We are operating the Club at a financial loss, and need to take corrective actions necessary to improve the Club s financial position. It s our fiduciary responsibility. Sure the economy has contributed, but we need to more closely manage to a P&L to stop the bleeding. While we may never see a substantial profit, we should become leaner and more efficient so that we at least break even and do not erode the Club s assets. Let s challenge whether it makes sense for us to keep sponsoring activities which are not self-funded. Let s analyze and make adjustments in major elements of income, such as Dues and e-business sales, and expense, such as Bagpiper and Shows. Management Budget Manage to an annual budget for Officers & Committees. In their year-to-date report for the Montgomery Board meeting, Officers, Liaisons and Chairs will provide a detailed financial statement for the year (October to October). The Board uses these reports to set preliminary budgets and provides those to the Chairs assigned at the afterdinner meeting. After the fiscal (calendar) year-end, the Treasurer (per SOP) prepares an annual budget to present at the Winter board meeting (or January conference call, whichever comes first) for the Board to finalize and distribute to committees. Control Treasurer supplies a standard list of budgeted activities causing expense to better control spending. Liaison and Chairs add a financial statement to all of their reports to the Board. Board enforces approving any additional spending projected or requested over the budgeted amounts. Reporting Our policy is to be open and transparent by publishing P&L financial statements to the members monthly via the web and quarterly via the Bagpiper (revised from annually in the Treasurer s SOP). Later, after financial improvements, consider whether quarterly is sufficient. We recommend cutting back a net 25% in budgeted expenses.

Scottish Terrier Club of America Budget (Expenses) 2010 Budget (*) Adjustments 2011 Budget BOARD President 0 0 Vice President/Show Chairman Corresponding Secretary 1,400 1,400 Recording Secretary 6 6

2 Scottish Terrier Club of America Budget (Expenses) 2010 Budget (*) Adjustments 2011 Budget BOARD President 0 0 Vice President/Show Chairman Corresponding Secretary 1,400 1,400 Recording Secretary 6 6 Treasurer 2 2 AKC Delegate 3,000 (1,0) 1,0 Directors (Liaison to Committees) - - Subtotal 5,8 (1,0) 4,3 COMMITTEES Advertising Agility 1 1 Annual Awards Awards Tallies (CDs) 3 (200) 1 Bagpiper (now ~14,000/issue) 56,000 (16,000) 40,000 Banquet Breeder Referral/Public Information Earthdog (more on years hosted) 1,700 (1,5) 1 Gazette Columnist Historian Judges Baskets Judges Education 4,7 (1,2) 3,0 Junior Showmanship Legislative Montgomery Support Team Membership Obedience 0 0 Rally 0 0 Regional Clubs 1 1 Ring Decorations Sunshine Sweeps Show Secretary 2,000 2,000 Trophies 1,0 1,0 Ways & Means 1,0 1,0 Web Technology 3 3 Subtotal 71,600 (19,000) 52,600 TOTAL BUDGET (Expenses) 77,4 (20,0) 56,9-26% (*) Historical Budget, 3-Year Averages

3 Improvements Expense Bagpiper Highest priority! Work with the Bagpiper Editor to make the magazine self-sufficient. Try to keep the quality about the same while reducing costs from 14,000 to 8-10,000 per edition. Realign over the next 6 months (2 issues). Follow the Editors recommendations, including: Competitive bid publishing Separate design from publishing Allocate pages to column writers Limit non-revenue producing pages to equal or less than number of paid Ad pages Increase marketing to sell more Ads Add Business Card Ads (Initiated) Reduce price of B&W Ads to increase volume (Initiated) Limit HTF and RTF to one Ad page/year for funding raising (Initiated) See more on Pam Henegar s proposal In the future, if we are unable to realign costs explore more drastic changes, including: Reduce number of editions per year Cheapen format (cover, spine, paper stock, etc.) Reduce free distribution to Judges Montgomery Show Change venue of Annual Sweepstakes to less costly facility in Montgomery County (Hatboro vs LuLu Temple). (Initiated) Schedule frequency of hosting agility amongst Terriers to spread costs. Schedule frequency of hosting earthdog amongst Terriers to spread costs. Rotating Shows Work with regional clubs to negotiate contracts. Investigate future of rotating concept for the Spring National Specialty before arrangements are made for Perhaps, stationary (like Purina Farms) would allow cheaper multi-year contracts. Trophies Understand what s driving 1,0 in trophy expense (prize, engraving, shipping, ribbons & rosettes, etc.). Increase solicitation to sponsor trophy spending such that we minimize out of pocket expenses. Board Conduct routine business using Teleconferencing (Initiated). Treasurer e-commerce Pass along all e-commerce fees to the consumer. Now, charging 2. per transaction when costs are 3.2% for PayPal credit card fees. Charge % or stepwise scale of fees as S&H. Cover costs of Treasurer s credit card machine, or eliminate and divert to the web site. AKC Delegate Costs vary by Delegate and number/location of meetings attended. However, set the budget closer to actual average expenses over the last 3 years as a reasonable expectation (10 vs 3000). Judges Education Reduce expenses from 4,7 to the 2010 level of 3,0 by: using geographically dispersed co-chairs (Kathi and Tom) to reduce travel expenses; fewer seminars; and an increase in utilization of JED documentation the new web site. (Initiated) Roster Keep producing hardcopy Rosters every 2 years for now, but investigate lower production costs and reduce the number printed to reduce the ~6-8,000 cost. Add an electronic Roster on the web site updated quarterly by the Recording Secretary to begin transition away from hardcopy (member s only viewing). Future Considerations: Choose hardcopy versus online. Charge for hardcopy. Print less frequently once established online. Storage Circulate an inventory in Storage (April Helen/Lori). Consider selling, giving away, or disposing of surplus inventory in order to reduce space requires and avoid additional costs of a larger storage unit. Investigate whether we can relocate to any less costly facilities in the area?

4 Revenue Members Improvements Membership Chair should consider how we can encourage an increase the number of dues paying Members, such as: Work with Lori Kelly to send Flyers to Regional Clubs soliciting their members to join STCA Ask existing members (or subset of members such as the Board) to bring in a new member(s) Ask Breeders to distribute STCA Applications with dogs sold Solicit more Canadian members to better cover North American breeders and exhibitors who participate in our shows. This could be broaden to International (members now total about ), but raises issues with Bagpiper mailing time and cost. Membership Dues Investigate increase membership dues to cover expenses. Leave this for the future after we have implemented financial improvements and have costs under control. [Note: Requires a By-Law change.] Membership Types Whenever Membership Dues are addressed, the Membership Committee could be charged with investigating alternative types of memberships and their financial impact on the Club, such as offering: Correspondence STCA Sales Senior Discount Membership pegged to inflation or social security adjustments in order to retain older members. Lifetime Membership after xx years for a fee (e.g., 0) versus paying annual Membership dues to ease renewals and ensure cash flow. Charge a 10 Mailing Fee for members to receive club correspondence by hardcopy mail instead of electronic mail. (Initiated) Continue to develop, advertise and display STCA merchandise available for sale. (Initiated) Illustrated Guide, Grooming Manual, Handbook, etc. Ways & Means Breeder Referral Judges Education Bagpiper Roster Shows Trophies Consider other outlets for sales of these books, such as consignment to vendors. Increase revenue from retail sales keeping within the revenue limits set by tax status. Sell retail merchandise in STCA Web Shoppe (Initiated) Ways & Means should come to the Board before ordering merchandise. Satisfy demand for popular items, but avoid having a large inventory in stock. Investigate sale prices for overstock, clearance, volume purchases, etc. Solicit and sell donated merchandise (e.g., figurines, Scottie and Show paraphernalia) at Montgomery Sweeps. Don t keep inventory in storage. Dinner auctions. Charge a nominal fee (e.g., 10) to be listed under Breeder Referral contact lists on the STCA web site. First the Board should consider whether the subset of members listed view this as a perk of membership. Charge Judges for seminars held for Judges Education (e.g., 25) to cover room, materials, expenses, etc. Charge members just enough to cover materials (e.g., 5-10). Increase subscription prices to non-members. Ensure price covers publishing cost and profit. Now, 40 bulk and 60 1 st Class. Sell any extra copies of the Roster in inventory (e.g., 5?) as some may want them for vehicles, 2 nd homes, etc. Efforts are needed to attract higher entries as entries and corresponding revenue have fallen over 25% in recent years (from over 200 to under 1). Increase solicitations for sponsoring Trophies so they are break-even, instead of a 1,0 expense. Commercial Affiliate with commercial interests such as Purina Parent Club Partnership Program (PPCPP). (Initiated) Note: Pro Club members submit weight circles from bags of participating Purina brand Dog Foods. Purina tracks these weight circle submissions, and for every 100 of qualifying weight circle points earned by Pro Club members, Purina donates 10 to the participating national parent breed club. Investments Treasurer should investigate re-investing a portion of our cash or equivalent assets in higher earning, but still conservative risk, fixed investments (e.g., Bonds) to increase returns.

5 Russell: From January Board Meeting Plans for year The Committee worked on Financial Improvement Plan. Smith formed an Ad Hoc Committee who, with Board input, filed this report. Report Structure: 1. What we should do to improve management of budget and finances. 2. Proposed Budget for What we might do with Revenue 4. What we might do with Expenses Treasurer s report for 2010 showed a loss, and that we are carrying some assets. Definition of Budget: A plan, estimate, target or expectation for what we are going to spend. If there is deviation from what we have agreed upon that there is communication and it is brought back to board for readjustment. We are already mandated to set a yearly budget and we want to manage to it each year. We would like to approve a budget tonight. Process: What to change Propose that at the end of each Board year (Montgomery meeting) each person includes a financial statement in their report to the Board- their appraisal of income and expenses for managing their portion of the club. We do not get this now. We get a report on activities, not financials. Board can use info as a preliminary budget and provide those to the Chairs assigned at the after-dinner meeting. Board can review and agree/approve Annual Budget in January at the Board meeting or conference call, whichever comes first. SOP s will reflect this change. We would like to approve this action item tonight. The Treasurer s reports include categories or elements of expense. We can provide this same terminology to committees for use in their reports. Since summer the Treasurer has been producing a Statement of Financial Position and it is being posted to the website monthly under Financial Reports. Continue this posting and place report in Bagpiper quarterly-striving for policy of being open and above board regarding financial situation of club. Prince projections for committee budgets are estimates. Reports will help to plan more accurate budgets with a little inflation factored in. Dawson They are educated estimates from studying the past few years of information that we have. Nancy projections and can shift with circumstances. If all chairs provide financial accounting at the end of the year our 2012 Budget will be based on more factual information. In favor of moving forward on suggestions Budget figures based on historical averages with some rounding. Adjustments are what we think we can make now. Most budget entries are incidental costs (supplies). Some committees do not have any expenses. Aaron - Board expenses: rental of meeting room for board meetings should this be in the budget? Discussion: President s amount to include Board Meeting costs. Change to 10. Russell-Presently financial accountability is assigned by Chairman.. The actual reality is that activities drive costs. We may choose to budget by activity not by committee in the future. Activity examples: Rotating, Montgomery. Producing the Membership Roster is a unique/special expense that the Recording Secretary incurs every other year (6,000-8,000). Handbooks are another example. Edell suggests adding a Non-Annual Expense category to the budget on the years these projects occur. There are two things we do not have: Activity based costing around what drives our expensing and P& L statements showing spending and income. We should drive to this direction so that we can see if things break even. We cannot do that for this year. Treasurer s reporting is leading us toward that end. Liz Aren t we having difficulty tracking large expenditures if they are broken up among committees? How can we provide an easier process to come up with P & L figures at the end of a large

6 event such as Montgomery? Russell-Should we pull the committees up under the VP and Show chairman - have a line item for Montgomery, a line item for Rotating? Prince-Committees on this proposed budget do not have an income. Marcia- this presented budget is basically for office supplies. Marcia Can we move toward an activity based budget for next year? Ron As an example, all Officer/Director expenses are posted as supplies or items that they need to do their jobs, i.e. postage & office supplies. The rest of the Treasurer s report is driven by activities. Expenses Page 3: Our largest expenditure is the Bagpiper Per Henegar s report and proposal at Board Meeting we will be splitting design costs from publication costs. There will be transition to get costs down to 8-10,000 per issue from 14,000 per issue. Last three items of this report can be deferred if able to control costs per her proposal. We cannot hold Henegar to the estimates presented. She will have a better idea about costs as this year progresses. Montgomery Show We have taken action to cut costs. We are changing venue for Annual Montgomery Sweepstakes. Rental at Lulu alone is 3300 in savings. Will need to add Non-annual Expense to budget for things such as agility events and earthdog events. Rotating Shows The Show Chairman is more actively involved in negotiating cost with Regional Club. Perhaps consider a stationary site. We are already set for 2011, 12 & 13. Between now and 2014 need a group of people to assess. As Board we need to look at whole concept of Rotating. Dawson- We re having difficulty getting Regional Clubs to agree to hold this show. At one time Regional Clubs competed to hold the Rotating. Ad hoc committee to review this should consist of not just Board Members but other members. Prince-we need to look at how other Parent Clubs handle these types of shows. Liz Do our members know what a serious issue this has become? She suggests that we bring whole issue in a well written article to the Bagpiper and let the membership know about this issue before forming a committee. Do some repetition with an article in each Bagpiper. Assess how they respond they may step up. Aaron It s not only the shows. Most members are pet owners and do not understand the purpose of a show. They don t understand the importance of our breeding programs and that the shows are intended to support the breeding program to bring out the best in the Scottish Terrier. The shows are the only things that are protecting our breeding to determine the best breeding stock. Article in Bagpiper would help. Prince only small amount of Regional Club members are members of STCA. Need to promote more membership in STCA. Jerry- We need to give clubs some positive steps to take for getting involved. Trophies We solicit sponsors for trophies but still have out of pocket expenses for trophies. Many clubs have trophies completely covered by sponsorship. Kelli primary genesis for expense is significant decrease contributions from donors. Expenses have remained constant. Have decreased costs by using solicitation. How to get donations? Sponsor a specific trophy for a set price vs open donations. There may be political ramifications everybody wants the Best of Breed Trophy. Set a minimum price highest bidder. Members could cover the cost of Rosettes or a Ribbon Fund. Booklet about STCA or Pages in Roster about what is the STCA and how it functions. This is another area that we may need to educate the members. Motion to approve proposed STCA budget (expenses) as presented with addition of 1000 to President s budget for Board Meeting expenses and a Non-Annual Budget item of 8,000 for the Membership Roster publication this year. Gann/Burge Yes(12) No(1) Motion accepted. **** Smith continue at this point in this report for next monthly conference call. Next conference call will be on March 16, 2011 At this point Burge left meeting. Motion for all Committee Chairs and Liaisons to submit a concluding financial statement with the reports required at the conclusion of the Board year [for October Meeting]to be followed to all SOP s where

7 applicable and that all Chairs be advised of this addition to their SOP. Russell/ Dawson Yes(12) accepted unanimous. Discussion: Dawson- Corresponding Secretary communicates each year to new Chairs, sending SOPs, letters, contract of agreement and a form for financial responsibilities. SOP will requires that committees report their year to date for the Montgomery meeting. There will be a format and explanation of expectations to these committees to make clear what is expected. Kelli Structure and format for P &L in a standardized form would be helpful. Prince- Need itemized report of expenses by categories. Fiscal year is October to October. Motion to adopt a policy that the Profit and Loss Financial Statement be published monthly via the STCA website, and quarterly via publication in the Bagpiper. Russell/Prince Yes(12) accepted unanimous. Dawson We have been publishing P & L in the Bagpiper quarterly. Treasurer s SOP states only annual will revise to quarterly Motion to approve Hill s absence from this conference call as excused Gann/Prince Yes(12) accepted unanimous. Next conference March 16, 2011 Prince will be absent. Motion to adjourn the meeting Henegar/Dawson Yes(12) accepted unanimous. Meeting adjourned at 10:15 EST Respectfully submitted, Sue Cerka, Recording Secretary

Motion To accept the 2018 National Event Budgets

Motion To accept the 2018 National Event Budgets Motion by: Ron Gulembo, Central Director Seconded by: Steve Ralph, Central Director Motion Made: June 8, 2018 7 days discussion: June 8 June 14, 2018 5