FEDLINK Advisory Council Meeting April 12, 2001 FAC Present: FLICC/FEDLINK Present: Bonnie Klein Lynn McDonald Judy Bullwinkle Susan Tarr Louise LeTendre Anna Bolin Carla Pomager Joe Banks Fred Rettenmaier Cheryl Thomas Carol Bursik, Chair, Budget WG Sheila Riley FAC Absent: Maxine Brown Denise Lomax Proposed agenda: 1. Review FAC agenda 2. Approval of the February 22 FAC Meeting Minutes - FAC 3. FAC Issues and Topics - Bonnie Klein, Chair FEDLINK Membership Meeting, 4/17/01 4. FEDLINK Financials – Susan Tarr, FLIC Executive Director Carol Bursik, Chair, FLIC Budget Working Group Revolving Fund options (Tarr) FY2002 Budget process (Bursik/Tarr) 5. FLICC/FEDLINK Update Issues -Susan Tarr, FLICC Executive Director & Lynn McDonald, FEDLINK Network Coordinator FEDLINK Mission Statement FY2001 Budget status (Joe Banks) OCLC update, including deficits (McDonald) Contracting update, including consortia (McDonald) Training update (McDonald) 6. Committee Reports: FEB report (Klein) Old Business New Business: World Class Library (Louise LeTendre) Next Meeting, Thursday, May 17, 9:00 am –12:00 pm MINUTES. CALL TO ORDER Bonnie Klein called the meeting to order at 9:15 FAC ISSUES AND TOPICS. Bonnie Klein commended the FLICC Forum program. She appreciated and enjoyed the award recipients acceptance speeches. Discussion then turned to the FEDLINK Membership Meeting on April 17, 2001. Ken Nero will report for the Content Management Ad Hoc Task Force. Neither Judy Russell nor Kurt Molholm are available to present the Policy Working Group Report; therefore, it is dropped as a separate agenda item and Susan Tarr will address policy issues during the FLICC/FEDLINK Update. 3. Approval of the February 22 FAC Meeting Minutes: The members approved the minutes as written. 4. FEDLINK FINANCIALS Susan Tarr, FLICC Executive Director, and Carol Bursik, Chair, FLICC Budget Working Group, reported on the projected 2002 FEDLINK operating costs and new interpretations of FEDLINK Revolving Fund authority that impact and change the proposed budget.. Revolving Fund. Susan Tarr presented"The Basic Assumption of FEDLINK's Revolving Fund Implementation Plan Revised April 12, 2001." She discussed the attorneys' opinion of P.L.106-481 Section 103 (d) (2) (a). On April 11, Government Accounting Office (GAO) attorneys verbally gave an opinion different than that of the Library of Congress counsel. FEDLINK is waiting for the GAO written opinion before it finalizes the Revolving Fund implementation plan. GAO said that members are bound by their agency appropriations and fiscal policies. Unless funds are multi-year or no year, annual surplus may not roll over for the member to spend in the next fiscal year. FEDLINK offers and members can always ask for a refund of expired unused funds. However, most members cannot use refunds and find that returning money to the U.S. Treasury is an administrative inconvenience. Members will have the option to authorize FEDLINK to absorb expired unused funds into the revolving fund operating budget. These may then be used to offset membership fees or to support FLICC studies and programs. Revolving fund is the greatest benefit to members with no year funds. However, the revolving fund will allow members to deposit and use year-end money for identified specific requirements such as subscriptions or book orders. Once funds are transferred, they are considered obligated even though FEDLINK may write contracts and delivery orders in the next fiscal year. Interagency Agreement Revisions. Susan Tarr requested feedback from the FAC on the following: 1) Would not having an expiration date on the IAG bother your fiscal officer? FAC members said that they would ask their fund certification officer. 2) Will changes force a review by agency legal counsel? 3) Does it simplify the process to use amendments instead of an annual renew IAG? Other Points. FEDLINK is working on a 5-year business plan as required by no-year fund auditors.. FEDLINK will have to take a loan from LC to operate in the new fiscal year to fund 1st quarter operations. FEDLINK has called for 1997 vendor final invoices. The remaining funds will either be refunded to members or converted to no year funds and applied to the FEDLINK operating fund. FEDLINK will now be able to complete orders over $100,000 in the next fiscal year. FY2002 BUDGET PROCESS. Carol Bursik reported the following: Direct Costs: Personnel: Number of employees down one from FY2000 but benefits percentage went up from 23% to 26.8%. FEDLINK must also budget for $158,000 annual leave account. Capitalization: The plan includes an annual capitalization investment of $250,000 for five years to reach a reserve of $1-1/4 million. Revenue: Three Options: Susan asked for a FAC consensus to give to the Budget Working Group so that they can rethink the revenue side of the proposed budget. The FAC agreed on Option 2 Option 1 No change in fees. $500,000 is added to revenues because under the revolving fund LC will have to pay service charges on OCLC accounts. FEDLINK assumes Direct Pay will decrease with implementation of revolving fund. $680,000 is needed from members' FY97 surplus to cover the deficit. Without using the surplus, FEDLINK would have to raise fees to 9%. Option 2 Lowers the Transfer Pay service charge by1%. The decrease in revenue raises the amount used from member's FY 97 surplus to $1,200,000 Option 3 Lowers the Transfer Pay service charge by 2% and raises the amount used from member's FY97 surplus to $1,700,000. Discussion: Cheryl Thomas asked, "Why not lower fees for direct pay?" Susan answered: that the surplus is from transfer pay so the discount would be offered only to transfer pay members, assuming that 2002 Transfer Pay members were Transfer Pay in 1997. Joe Banks said that the hope is that lower fees will bring in more members and therefore more revenue . Susan Tarr mentioned that if GAO reverses its opinion to allow members to use their surplus and FEDLINK has already budgeted to use the surplus money, then there would be a potential deficit. Susan also said that the LC OGC is looking for language that would allow one-year money to become no year money within the Revolving Fund. Susan will explore the possibility of LC getting a correction to the law to let the members use their prior year monies. It took twelve years to get the law passed so there is not much hope for quick action. Fred Rettenmaier speculated that the final legal opinion might not be given by FY2002, so Option 2 might be the best as a more conservative approach. Bonnie Klein asked if FEDLINK could sustain the lower service fees over the long run. Susan said that FY97 is fairly representative. Remaining balances of 2.2 million for FY97 should be about the same for the next 4 years. If members do not use their surpluses, FEDLINK will use the funds to keep fees low. The group discussed what could be done if more funds from FY97 are available to be brought into the 2002 FEDLINK administrative account than are needed as the budget is written. Carol Bursik asked if FEDLINK could contract for a service and offer it free to all members. Susan Tarr said that they could not because it would appear to augment the member FY2002 resources. However training could be offered at a reduced rate or for free. Lynn McDonald asked if the fees could be updated before the June 2001 vote. Susan Tarr said that the fees must be approved before the fiscal year. Carol Bursik asked if FEDLINK could still spend those extra funds. Susan Tarr said that the Budget Working Group and FAC must approve any expenditure. Cheryl Thomas asked if surplus money could be use to hire new employees such as interns since many FEDLINK staff have or are planning to retire. Susan said that any change to the personnel budget must be approved in advance of the operating fiscal year. Susan Tarr was asked what she and Carol Bursik will present at the Spring Membership Meeting. Susan plans to tell members that fees will not be raised but may be reduced. She suggested that FEDLINK put up a presentation on the web site and send out information on listservs before the June 7th FLICC Quarterly meeting. 5. FLICC/FEDLINK UPDATE ISSUES. FEDLINK Mission Statement. "To serve federal libraries and information centers as their purchasing, training and resource-sharing consortium." Susan Tarr asked if the mission statement developed in 1997 was still relevant and reflected the language found in the new Revolving Fund legislation. Louise LeTendre suggested adding the word "knowledge" to the statement since it is the new buzzword. Susan felt it would be more appropriate to include in the FLICC mission statement . Further discussion was tabled to the next meeting. FY2001 Budget Status. Joe Banks reported that FY2001 revenue is behind last year. The budget needs an additional $919,851. Some bigger customers are having problems transferring their money OCLC, Contracting, and Training Updates. Lynn McDonald suggested since we were short of time that the FAC should read the handouts in the package. She presented these reports at the FEB meeting March 22 and will present similar information at the FEDLINK Spring OCLC User Meeting. Committee Reports To be presented at FLICC membership meeting. Old Business. None. New Business: Discussion of the "World Class Library" introduced by Louise LeTendre is deferred until next month. The meeting adjourned at 12:10 Next Meeting, Thursday, May 17, 9:00 am – 12:00 pm. .