[Ofa_boardplus] OFA XWG Agenda 9/14

Thu Sep 14 13:15:10 PDT 2017

No surprise to anyone that I agree strongly with the perspective offered by Scott.  Operating expenses should be covered by current income, not by reserves.

One quick point about the size of the reserve.  I think the worst case scenario is one in which we find ourselves with a mismatch between income and operating expenses due to a temporary dip in income.  This can happen, for example, if we see an unexpected fall off in membership for some reason, especially if we believe the fall off is temporary.  At least one trade organization of which I am a part experienced this exact scenario; several years of below expected income.  

It's not necessarily true that expenses can be quickly scaled to match income.  If we experience a reduction in income due to the loss of a couple of members we can always think about shedding expenses, but that can be hard to do especially if we think the reduction in income may be temporary.  We don't want to find ourselves in a death spiral with insufficient funds to keep essential services in place while we wait for income to recover. 

So my take on it is that we should have sufficient reserves to tide us over in the case where expenses temporarily outstrip our income due to a loss of income.  My finger-in-the-wind guesstimate is that we would want reserves equal to  one year's operating expenses.

-Paul

>-----Original Message-----
>From: Ofa_boardplus [mailto:ofa_boardplus-bounces at lists.openfabrics.org] On
>Behalf Of Fields, Parks M
>Sent: Thursday, September 14, 2017 12:50 PM
>To: Coulter, Susan K <skc at lanl.gov>
>Cc: ofa_boardplus at lists.openfabrics.org, <ofa_boardplus at lists.openfabrics.org>
>Subject: Re: [Ofa_boardplus] OFA XWG Agenda 9/14
>
>
>>
>>
>> Comments in line …
>>
>>> On Sep 14, 2017, at 12:16 PM, Atchley, Scott <atchleyes at ornl.gov> wrote:
>>>
>>> Hi Susan,
>>>
>>> Here are a few thoughts about the budget, operating reserve, etc.
>>>
>>> 1) The operating budget that we are discussing is only $160-170K/year
>>>
>>> Given that the plugfest dollars are a pass-through and that we incur no
>expenses if the income does not come, I am ignoring this $140K, which is how I
>arrive at a budget of $160-170K.
>>>
>>> 2) We have 2.3 years in reserve
>>>
>>> Clearly, this is too much.
>>
>> Agreed.
>> There has been talk about being fiscally responsible with our reserves - and that
>goes both ways.
>> It could be said that “sitting on” 2.3 years of complete funding is not fiscally
>responsible.
>>
>>> I would be comfortable with 1.0 years in reserve or less. I would even consider
>Jim’s mention of shut-down funds or perhaps 1.5x that value just in case we
>overlooked something.
>>
>> Since we are a different beast, I am leaning towards something slightly less than
>1 year.
>> ( i.e. If all our members jump ship - we would have no operating
>> expenses ) Coming to a sensible decision on the right operating reserves is
>paramount.
>>
>>>
>>> 3) The bulk of the remaining budget is marketing
>>>
>>> What is this used for? Is it really Workshop expenses that should be classified
>as such? If so, the Workshop operates ~$75K in the red and is not break-even.
>>
>> I do not believe it is work shop related - but this is a question for Bill to answer.
>>
>>>
>>> 4) I am opposed to using reserve money to pay operating expenses
>>>
>>> I do not believe in using “one-time” money for on-going expenses. If we hire
>or contract with someone to perform a job (ED or maintainer), that funding
>should come from income from day one.
>
>
>I agree. Reserves are for events that happen outside the norm. EX: a one time
>audit or a penalty of sometime.
>
>
>
>>> If not, it will simply draw down the reserve until it runs out and then you can
>no longer pay the staff/contractors. I would not be comfortable with bringing
>someone on with the expectations that we will raise dues without firm
>commitments from all current members to accept the higher levels. If you have
>that, then simply raise the dues and cover the added costs (i.e. don’t draw down
>the reserve for this).
>>
>> Normally I would agree with you.
>> In this case, the OFA is going through a serious transition.
>> If you read the common literature on organizations whose mission/focus
>changes - most of them do not survive the transition.
>> That is a possibility here.
>> Therefore, it seems important to be willing to work outside the normal
>envelope, but within reasonable boundaries.
>>
>>>
>>> 5) So what is the reserve good for?
>>>
>>> I do not know. New training materials? Upgrading the IOL equipment? Other?
>>
>> Exactly.
>> I like the idea of upgrading IOL equipment.
>> Per my comment above, we should also be willing to consider making a one
>time decision to spend the reserves on these staff positions.
>> Such a decision would be tightly coupled with an agreement on what those
>positions will cost and what that means for membership fee changes >and< a
>majority of the current members expressing support for those higher fees.
>>
>> Again, as I said on the call, it was originally my goal to active the current
>membership so we could continue as an “all volunteer” organization.
>> It has been a slow realization that an all volunteer alliance was a
>> pipe dream.  :) We are now up against a deadline to resolve this issue and, I
>believe, we need to be willing to take some risks to succeed.
>>
>>
>>>
>>> Scott
>>>
>>>> On Sep 13, 2017, at 5:52 PM, Coulter, Susan K <skc at lanl.gov> wrote:
>>>>
>>>>
>>>> Attached is the agenda, minutes from the last XWG, and a preso from the
>conference earlier this year about the IWG/InterOp.
>>>> We will >not< be going through the slides during the XWG, but we will have a
>discussion about the IWG - led by Paul Bowden.
>>>> The preso is included for background in case folks want to check it out
>between now and the call.
>>>>
>>>> Talk to you tomorrow !
>>>>
>>>> <OFAXWGAgenda20170914.docx><OFAXWGMinutes_20170824.pdf><OFA
>>>> Workshop_IWG-and-CANDI_ 2017_0329.pptx>
>>>> ==================================================
>>>> Susan Coulter / HPC-DES
>>>> Network Capability Lead
>>>> (505) 667-8425
>>>> “Once in a while you get shown the light  In the strangest of places
>>>> if you look at it right”  Robert Hunter
>>>> ==================================================
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
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>>>
>>
>> ==================================================
>> Susan Coulter / HPC-DES
>> Network Capability Lead
>> (505) 667-8425
>> “Once in a while you get shown the light
>>    In the strangest of places if you look at it right”  Robert Hunter
>> ==================================================
>>
>>
>>
>>
>>
>>
>>
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