Minutes | Board Finance Committee (BFC) Meeting | 3 March 2016
Published 22 May 2016
BFC Attendees: Cherine Chalaby (Co-Chair), Ron da Silva, Chris Disspain, Asha Hemrajani (Co-Chair), Markus Kummer and George Sadowsky
Other Board Member Attendees: Rinalia Abdul Rahim, Rafael Lito Ibarra, Erika Mann, and Jonne Soininen
ICANN Executive and Staff member Attendees: Susanna Bennett (Chief Operating Officer), Megan Bishop (Board Operations Coordinator), Xavier Calvez (Chief Financial Officer), Samantha Eisner (Associate General Counsel), Melissa King (VP, Board Operations), Ashwin Rangan (Chief Innovation and Information Officer), Amy Stathos (Deputy General Counsel), Theresa Swinehart (Senior Vice President, Multistakeholder Strategy and Strategic Initiatives), and Nicholas Tomasso (VP, Meetings)
The following is a summary of discussions, actions taken and actions identified:
BFC Schedule – The BFC reviewed the FY16 schedule and noted that, per the schedule, this meeting includes: (i) review of and approval to post the FY17 Operating Plan & Budget and the Five-Year Operating Plan for public comment; (ii) discussion and recommendation to the Board regarding Transition project expenditures for the remainder of FY16; and (iii) recommendations to the Board regarding contracting and disbursement for the next several ICANN Public meetings. The BFC further noted that, as set forth in the schedule, ICANN is scheduled to post the draft budget on 5 March 2016, the BFC will be receiving the summary of the public comment period in May, and potential changes to the draft budget may be incorporated in an updated budget, which will then be recommended to the Board for approval in June.
Financials – The BFC reviewed the FY16 Budget and noted that there have been no changes since the review at the last BFC meeting.
Minutes – The BFC approved the Minutes from the 22 January 2016 and 2 February 2016 BFC Meetings.
FY17 Operating Plan & Budget, and Five-Year Operating Plan – The BFC reviewed the updated FY17 Budget, noting that with a baseline excess of US$6 million and multi-year projects costs of US$6 million, the resulting net total is a balanced budget for FY17. The BFC also noted that these figures (as well as the FY16 budget) do not include the Transition project costs for FY16 and FY17. FY16 Transition project costs were funded from the Reserve Fund. Funding for FY17 Transition project costs will necessitate a discussion with the community regarding the funding source. The BFC also reviewed and noted that total FY17 estimated costs for IANA functions is US$9 million, which is broken down amongst three operational communities—US$5.1 million for naming (operated by PTI pursuant to the CWG recommendation), US$1.4 million for numbers, and US$2.5 million for protocol parameters—and includes thirteen different activities. These amounts are already included in the baseline budget. The BFC also reviewed the FY17 revenue assumptions, expense assumptions (including headcount growth), resource utilization, multi-year projects, New gTLD Program forecast, and funds under management. The BFC also reviewed FY17 potential risks and probability of occurrence. The BFC discussed the transition project costs for FY17. Currently there is an expense placeholder envelope of US$6-9 million for these costs, which has not yet been included in the budget. This amount is to include end-of-transition work, staff work on implementing the proposals in collaboration with the working groups (ICG/CWG/CCWG), and Accountability Work Stream 2. The BFC approved the publication of the FY17 Operating Plan & Budget and the Five-Year Operating Plan for public comment. The drafts will be posted on 5 March 2016.
USG Stewardship Transition Project Expenses – Previously, the BFC recommended that the Board approve an interim budget of an additional US$4.5 million to cover the costs incurred and to be incurred from December 2015 through the ICANN55 meeting, which the Board approved. A Project Costs Support Team (PCST) will be established and will be tasked with determining a more specific estimate of costs for the remainder of FY16 and for FY17. While the PCST is reviewing the tasks and projected estimates, additional transition costs will be incurred through the remainder of FY16. The BFC discussed options for the payment of those costs, and agreed to recommend that the Board approve a budget envelope of US$1.5 million (based upon the previous run rate) for costs through the next six weeks, subject to the understanding that the PCST will provide an estimate of costs and any additional funds will be subject to that estimate.
ICANN Public Meeting Venues – Staff presented an overview of the venue selection and estimate of costs for the next several ICANN Public meetings. Staff further explained that the costs associated with these venues are comparable to venues for past ICANN meetings. The BFC discussed the venue costs and agreed to recommend that the Board delegate to the President and CEO, or his designee(s), the authority to enter into contracts, and make expense disbursements pursuant to those contracts, for the venues for the next several ICANN Public meetings.
Funding for Multi-Year Projects – Staff explained that ICANN has several multi-year projects that extend over several years, and have a significant and varying impact on the annual expenses. The BFC then discussed methods to establish a long-term sustainable multi-year funding approach rather than an annual funding approach.
- Staff to incorporate BFC comments into revised version of proposal for multi-year funding approach.