[ARIN-consult] Consultation on Proposed 2018 Fee Schedule Changes

[John Curran]

On 9 Apr 2018, at 7:02 PM, Bill Woodcock <woody at pch.net> wrote:
> 
> This whole conversation feels very much cart-leading-the-horse to me, and it always did while I was on the board, as well…  I’ve handled budgets for dozens of companies over the last thirty, about half-and-half for-profit and non-profit, and in all that time, ARIN is the ONLY one in which the CEO said what he wanted to spend, and everyone else hopped to it to produce that much money.  In EVERY other organization in which I’ve been involved with the finances, the board set a budget target, and the CEO produced a budget which met that target, whatever it might be.  I don’t understand what makes ARIN so fundamentally different from every other organization, that we can’t behave normally.

Bill -

Actually, ARIN isn’t all that different than other organizations, and that’s because we’ve worked
diligently over the last 5 years to establish a more traditional planning and budgeting process
(prior to that time there was not a clear process for setting ARIN objectives or budget priorities)

There is nothing that stops the ARIN Board from setting a two-year budget target that is lower
than previous year's during our August strategy planning session – I will certainly provide a budget
that fits what requirement is provided.  During the 2017 budget planning process, I proposed reducing
expenses for ARIN significantly starting at the beginning of 2018, but the Board (of which you were a
member) provided guidance that in 2018 we would conserve expenses where possible but continue
at present staffing levels, in order to continue the significant progress being made with engineering
deliverables, and look to year-end 2018/early 2019 for more significant reductions in expenses.

> Does the board have some reason to WANT to spend more money this year?  If so, why?

The current two-year budget does incorporate a year-over-year staff reduction at the end of 2018.

As a result, ARIN’s 2019 expenses will be significantly closer to revenues even under the current
fee schedule – i.e. rather than $2.8M USD reduction in reserves, the annual impact to reserves in
2019 and going forward will be about half that (approximately $1.4M USD.)   ARIN’s reserves are
quite sufficient to sustain that burn rate for short-term, but not indefinitely.  One way to address the
remaining misalignment would be to have further reductions in expenses, and that can be done
but obviously would have some impact to the goals and objectives that can be achieved.

The proposed fee increase is another way possible way to address the mismatch, and labelling it
as “wanting to spend more money” is a rather poor characterization given that 2019 has lower
expenses than 2018.   The sole reason I brought the fee increase proposal forth is to address
the other financial priority expressed by the Board during the same budget planning process:
specifically, to balance ARIN revenues and expenses over the long-term.

Thanks,
/John

John Curran
President and CEO
ARIN



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