Subject: IASA BCP -02 Reserves - section 2.2 /7 and 5.6

From: "Lynn St.Amour" <[email-masked]>
Date: Mon, 13 Dec 2004 01:45:20 +0100

Bert, Rob,

please find below comments on "reserves".  Thanks again for all your efforts.

>Section 2.2
>7.   The IASA shall

work with ISOC to (?)

>establish a target for a reserve  fund to cover normal operating 
>expenses and  meeting expenses in accordance with prudent  planning, 
>and ISOC shall work with the IASA  to build up and maintain the

s/reserve./reserve as part of ISOC's overall reserve strategy and 
provisioning./

The changes above are to reflect the last known agreement (at least 
from ISOC's perspective it was the last known :-) .  Some additional 
comments below.

>5.6 Operating Reserve
>
>  As an initial guideline and in normal operating circumstances, the 
>IASA should  have an operating reserve for its activities 
>sufficient to cover 6-months of non-meeting  operational expenses, 
>plus twice the recent  average for meeting contract guarantees. 
>However, the IASA shall establish a target for a  reserve fund to 
>cover normal operating expenses  and meeting expenses in accordance 
>with prudent  planning.  Rather than having the IASA attempt to 
>build that  reserve in its separate accounts,

I don't believe this sentence reads properly given we're following a 
divisional accounting model (more appropriately called a cost center 
model?) as the accounts will not be held physically separate. 
Perhaps delete that part and begin the sentence with: "the IASA looks 
to ISOC to build ...." ?

>the IASA looks to  ISOC to build and provide that operational 
>reserve, through whatever mechanisms ISOC deems  appropriate: line 
>of credit, financial reserves,  meeting cancellation insurance, and 
>so forth.  Such reserves do not appear instantaneously; the  goal is 
>to reach this level of reserves within 3  years after the creation 
>of the IASA. Such funds  shall be held in reserve for use by IASA 
>for use  in the event of IETF meeting cancellation or other 
>unexpected fiscal emergencies. These reserves shall  only be spent 
>on IETF support functions.

The penultimate sentence above seems to be redundant, and in any case 
the last two sentences are not in agreement with the earlier ones 
that say it may be held as a line of credit, etc. nor with the notion 
that the IASA would not be holding a separate reserve (2.2 - 7 seems 
to imply the same thing?).   Finally, access to these reserves would 
expect to follow normal IAOC and ISOC approval processes for any 
budget overruns and would not automatically be available for use by 
IASA in the event of meeting cancellations or other emergencies. 
Maybe replace the last two sentences with some variation of "Access 
to these reserves would expect to follow normal IAOC and ISOC 
approval processes for any budget overruns."

Best regards,
Lynn

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