by Tom Hamilton
The Balloon Federation of America's board of directors met during the recent Albuquerque International Balloon Fiesta. One of the main topics on the agenda concerned the recent controversy with its competition division.
Minutes after convening the October 1 Board meeting, President Rob Schantz called for an executive session. The purpose of the executive session was for the Board to receive a letter from the BFA's outside auditor regarding possible consequences from the competition division disbursing approximately $78,000 of the organization's money last Spring. The executive session lasted nearly four hours.
When the Board reconvened in open session several motions were made. One motion allowed Earl Miller, Southeast region, to change his vote of last May to favor sending BFA members who received the $175 checks a letter asking for the money to be returned.
A motion was made for the BFA Treasurer to become a signatory on competition division financial accounts. Competition division board members present, including the chair and treasurer, objected to any action of this kind. Although it is required by the BFA bylaws, it is not required by the division's. When the dust had settled the BFA Board agreed that the division would have its financial accounts mail monthly statements to the BFA treasurer.
The competition division chairman was presented with a copy of the outside auditor's letter, which detailed the possible fines and consequences of the $78,000 disbursement. The BFA Board once again requested that the division's board help to recover the money. A motion was made by Charlie Sundquist, at-large representative, that if the division did not assist in helping to recover the money that their division status be immediately terminated. The motion failed for lack of a second. The division chair requested time to review the materials. By the October 21 deadline, the division continue to decline to assist the BFA board, citing their position that nothing was wrong with the disbursement.
The BFA Board recognized that a solution needed to be found to the continuing controversy over its relationship with the competition division. Jim Thompson, North Central region, felt that in light of a potential petition from 29 percent of membership and the division's desire to no longer be a part of the BFA, the members should be allowed to decide the issue in a mail vote. The meeting adjourned for the day with Glen Moyer, at-large representative, and David Lowe, competition division chair, being tasked with coming up with the language for the vote.
During the board meeting the next afternoon final language of the mail ballot was negotiated. The ballot is to be mailed to BFA members by November 16 and are due back in the Indianola office within 30 days. The ballot asks the members to vote on one of two choices: Measure A dissolves the division and reorganizes it as a committee, fully accountable to the organization; Measure B authorizes the BFA to contract with an outside entity to conduct sanctioned competition events.
What began as an investigation into the division's disbursement of $78,000 has turned into a hard fought battle for the heart and soul of the BFA. One that will undeniably change its course.
The division, which will be disbanded at year end regardless of the vote outcome, has supported the concept of the BFA contracting with an outside entity. The division's leadership hopes to continue their involvement with an outside entity that the division's board members have reportedly been asked to join.
The fight isn't about "quality competition," rather it is about money. And it isn't prize money, but potential sponsorship money. Potential sponsors want to receive the most exposure they can get. While any organization can set up a series of qualifying competitions that lead to a championship, there is nothing with as much cache as The National Championship. It is worth a lot more. How much more? One newly formed for-profit organization is reportedly shopping around $500,000 to $1,000,000 packages to potential sponsors.
It has been suggested by division members that if the membership approves measure A the BFA will lose the $20,000 per year that the division has been contributing to the general fund to cover their portion of administrative expenses. Will the BFA really have a shortfall once the division ceases to exist?
In 1997 the competition division had revenues of $104,346. Where did that money come from? The main sources are the sanction fees and staff stipends paid to the division by host organizations for the Nationals and Team Nationals, annual task card fees by individual pilots, and pilot entry fees to the Nationals and Team Nationals. Additional fees are collected from sanction events and equipment rentals.
Not reflected on the division's books is money indirectly controlled through negotiated contracts at the Nationals and Team Nationals. This includes, among others, the championship purse, a fee paid to the championship director, room nights, and car rentals for officials assigned by the division.
If measure A passes it is possible that the revenue stream might not be as strong in 1999 as in recent years. Then again, it might be better. In either case, the BFA would still have a healthy income from competition related activities to foster that activity without having to use funds from other sources.
The BFA board has several directors with strong competition backgrounds, in particular Jim Thompson and Alan Yost, that will help to insure a smooth transition to a committee structure. Many BFA members involved in competition have a strong interest in volunteering to make sure that this successful program will continue.
Should measure B pass, then the board of directors will need to develop a Request For Proposal and invite interested parties to submit bids to conduct sanction competition. At this point it is unclear what parameters would be in the RFP since the board has not assigned a committee to examine this option.
Although the pall of an IRS audit over the $78,000 hangs over the BFA, the new board of directors intends to move the organization forward as a cohesive group that works together for all the members. They are committed to improving communication and control over all areas of BFA operations to prevent similar incidents that threaten the BFA's existence from occurring in the future without their knowledge or consent.