Peri is having some problems logging in and has asked me to post the message below. The only changes I have made to her text was to add Cheryl> to the lines below where I saw that Peri quoted her. Please feel free to contact them directly for verification.
Before responding to Cheryl's questions, I'd like to step back, and look at the larger picture.
The NSS in currently engaged in a process to determine where the NSS Headquarters should be located. The Board is considering 3 proposals, one which keeps the HQ in Huntsville, a second which moves it to Horse Cave Kentucky, and third which moves it to Bloomington Indiana. The Board has committed to reviewing all three proposals this summer in Kerrville, and making a decision at the fall meeting in Birmingham. Until then, it is essential that the Board not jump to premature conclusions or take actions which are prejudicial either for or against any of the proposals.
If you look at the lot map (linked from the NSS business page, as per Wm Shrewsbury's post), you will see that we own a substantial portion of the west end of the block defined by Pulaski Pike, Cave Ave. and Link Ave. Given the potential impact on Shelta Cave of development above it and in adjacent areas, I strongly believe that the NSS should seek to acquire as much of this block as is fiscally reasonable. Lot 87 has frontage on Pulaski Pike, making it desirable as commercial property. While the neighborhood is zoned residential, there is a medical office at Pulaski and Clayton (one block north), and a residential care facility on Link, not to mention the NSS Office itself. The potential for commercial development on Lot 87, which a concomitant impact on Shelta is non-trivial. We had an opportunity to by Lot 87 last year for $22,500. We felt the price was too high, so we passed. It is now available for $12,700, conditional on a fast sale. At $12,700 it is a good buy.
I would prefer to defer this purchase until after the decision on the HQ, but the property may no longer be available then. I believe we should buy it now, but in a way which neither favors or opposes the Huntsville proposal. To do that, we cannot tie to any specific funding source at this time. Hence, my use of the Endowment Fund, rather than the Cave Acquisition Fund or the Headquarters Fund. We will shift the funding around later, after we have determined whether Lot 87 will become part of the cave preserve or part of a new Headquarters complex.
Several years ago, we had the opportunity to buy Lot 91 on Cave Ave. We dithered around about it for so long, that we lost it. It is now a prominent hole in the preserve. I don't want to repeat that mistake.
Which leads us to Cheryl's questions:
Cheryl> why isn't the Cave Acquisition Fund being used to purchase the property, or to pay back the Endowment Fund?
If we use either the Cave Acquisition Fund or the Headquarters Fund for this purchase, we are making a premature commitment to a specific use for the property. I am proposing to take (not borrow) the funds from the Endowment Fund, which can be done by a 2/3 majority of the Board in accordance with Appendix C, Attachment N, of the Board Acts,
6. By a two‑thirds vote the Society's Board of Governors may require the return of any or all of the NSS Endowment Fund
Since the e-mail ballot requires a 2/3 vote, if it passes, we also have the 2/3 required for using the Endowment Fund. If the sum were larger, I would insist that we borrow it, but for this relatively small sum I'd prefer to avoid the additional paperwork and accounting. However, having taken this shortcut, I wanted to include provisions for refunding the money, once we know how we're using the property. I selected a fund raiser, rather than the Cave Acquisition Fund because the Fund is relatively depleted, and I don't want to draw it down further.
Cheryl> The Endowment Fund rules say "The Foundation shall invest funds in the Endowment Fund until the balance of the fund exceeds $500,000." The balance Dec 30 was just over $300K. This seems to mean that we are not yet able to pull money from the Fund without formally borrowing from it.
Not so. This statement is a directive to the Foundation as to how to invest the invest the Endowment Fund (focus on growth rather than income). It does not preclude using the Fund before it reaches its goal. The Board unanimously approved both the FY 08/09 and FY 09/10 budgets, which each draw approximately 5.5% from the Fund. (See Appendix C for a clearer explanation of the investment goals.)
Cheryl> Did the Board consider putting a time frame in the motion for paying back the Endowment Fund...
I don't think it's necessary. There are already a number of quiet pledges toward that end, I believe the money will be raised without major effort or impact on HQ fundraising.
Cheryl> Or has the Board reached an unofficial consensus that the H'ville bid will be selected,
Most definitely not. The Board is making every effort to avoid make a premature decision. The HQ decision is the most important decision that the Board will make in a decade, and we intend to evaluate all of the data, carefully consider the merits of all three proposals, and make fair and well reasoned decision.
Regarding the earnest money. The Board approved FY 09/10 budget allocates $5K from the Cave Acquisition Fund for cave acquisitions. Ray does not need additional Board approval to spend it. After some discussion, we decided it was a suitable short-term source of earnest money, which we needed in advance of the 12 day waiting period for the Board to approve the motion. If the Board approves, then Ray's budget will be restored. If not, then it's a sunk cost, and we'll move some other money around, so as not to have to tap the Cave Acquisition Fund.
Cheryl> Why doesn't the motion propose the use the CA Fund for the total purchase...?
If we buy it with the Cave Acquisition Fund, which is restricted for a specific purpose, the property itself becomes restricted for cave preserve purposes. If we end up wanting it for part of the HQ, we'd have to unrestrict it. That is a complex process, with tax and audit implications. I much prefer to acquire it unrestricted, and then restrict it later, if appropriate.
I hope this addresses the immediate questions. If there are more, please let me know.
Cave Softly and Carry a Long Rope - TAG!