Update Regarding Sept 30th, 06 Board Mtg
Resignation of the Executive Director
SSA Executive Director Dennis Wright tendered his resignation during the September, 29th 2006 SSA Executive Committee meeting, and it was accepted by the full Board the following day. Consideration will be given to conducting an Executive Director search after all SSA tax issues have been completely resolved. Until then, Ms. Denise Layton will manage SSA headquarters, with financial matters being directed by Ms. Judy Blalack, SSA’s new Accounting Manager. They will meet at least weekly with the Chairman of the Board and SSA Treasurer via conference call, and the rest of the Excomm will be available to assist Hobbs staff as needed. All SSA member services continue, intact.
Loan from the SSA Foundation to Pay Society Taxes
The levy process initiated against the Society for nonpayment of taxes by the IRS will be suspended if payment in full of approximately $208,000 is made by October 11th, 2006. Additionally, interest will likely be charged later. If taxes are paid by this date, the Society can then begin discussions with the authorities regarding mitigation of penalties. On the other hand, if taxes are not paid by this date, the authorities will proceed with enforced recovery of not only taxes, but also interest and all penalties by seizure. Penalties could double the actual taxes owed. An analogous situation applies to the approximately $56,000 in taxes owed to the State of New Mexico.
The SSA was unable to obtain a commercial loan on terms that it could meet (the only loan that could be found required full repayment within one year), and subsequently the Society reached an agreement in principle with the SSA Foundation to secure a term loan to meet the tax obligations, and a working capital line of credit of $50,000. This agreement, when consummated, will allow the SSA to pay all taxes due prior to the October 11, 2006 deadline.
Within a few days of the loan agreement with the Foundation being signed, more details of the arrangement will be provided to membership.
Helping to Ensure the Foundation Loan Will be Repaid
The SSA Board has approved changes to the Society directed at both its short-term financial survival, as well as its complete and total reorganization. These changes will support repayment of the Foundation loan.
An already instituted Emergency Business Plan Task Force (EBPTF) is comprised of all Excomm members, Secretary Dean Carswell, and Director Al Tyler. This group will utilize financial performance data and projections supplied by the SSA Treasurer and Accounting Manager to make business and operational changes required in the short term to assure the financial stabilization of the SSA until December 31, 2007. At that time this task force will cease to exist, and all Excomm members (besides the new Treasurer, who will have taken office and joined the SSA Board and Excomm for the first time on January 1 st, 2007) will no longer serve as Chairman or Vice Chairmen of the Board. This will require the Board to elect an entirely new Excomm.
The SSA Board voted to task Director Richard Kellerman and SSA member Chip Bearden with choosing two independent SSA members to observe all activities of the EBPTF and the Excomm while the task force is in existence.
Most importantly, the Board also voted to urgently establish a Future Restructuring Task Force (FRTF). Director Rick Sheppe (who will not be a member of this task force) was tasked with populating it with people representing the broadest range of interests within soaring. This task force will present a reorganization proposal to the SSA Board at its fall, 2007 meeting. Changes are to be in place by January 1st, 2008, one day after the EBPTF ceases to exist. It is intended that these changes will create a financially viable organization that, to the greatest extent possible, meets the needs of its membership.
Maximizing Recovery of Allegedly Misappropriated SSA Assets
During its September 29th meeting, the Excomm interviewed and decided to retain the services of a forensic accountant. She will assist the Society in maximizing recovery of misappropriated funds from sources including civil and criminal legal proceedings (already initiated), the Society’s business insurance (the claims process has already begun), recipients of funds, and any other sources that may be identified.
The members of the SSA Executive Committee and the Board of Directors feel that significant progress towards securing the Society’s future was made this past weekend.
C. Dianne Black-Nixon, Chairman of the Board
Jim Skydell, First Vice Chair
Doug Easton, Vice Chair
John Volkober, Vice Chair and Treasurer
Dean Carswell, Secretary