BUSINESS COMMITTEE REPORT 
Prepared for:  April 2006 JCNA Annual General Meeting 
Prepared by:  James C. Hendrix, Business Committee Chairman

OPENING

The Business Committee is charged with analyzing business related details of JCNA, with administering the JCNA Insurance Policies, with coordinating details of a limited audit, negotiating JCNA Editor and Administrative Manager contracts, coordinating the duties of the Administrative Manager and looking over the financial details of JCNA.

Since JCNA’s independence from Jaguar Cars the budget has grown from slightly over $100,000 to approximately $250,000 - $400,000.  This is serious cash flow that requires this organization to have fiscal responsibility to itself and the members of the affiliated clubs.  The Bylaws, Corporate Policies and Corporate Procedures determine how the administration and the finances are handled with input from the Board of Directors.  The Board of Directors is challenged with administration of this responsibility.  Currently, with an Administrative Manager, this administration responsibility is in good hands, the JCNA BOD has made the right decision.

DETAILS

The areas that the Business Committee has been focused on are as follows:

I.	Administrative Manager / Treasurer/ Roster Maintainer.  Nelson Rath continues to handle all 3 duties.  
Recommendation:  Continued analysis concerning the possible implementation of a JCNA office in the future.  

II.	Accrual Accounting 
2005 was the 8th full year of accrual accounting.  We have achieved more knowledge of current financial conditions on a quarterly basis.  This basis continues for 2006.  The treasurer continues to receive inventories from our volunteers for the numbers to be meaningful and to provide an actual useful financial condition.  
 
III.	JCNA Insurance
A)	JCNA created the insurance program in ‘93/94.  This was approved at that year’s AGM.  By consolidating the General Liability Coverage into a group, there was a large cost savings to the individual clubs.  Over the years, the JCNA budget has added additional types of coverage needed for the operation of JCNA and the affiliated clubs.
B)	We have again, along with our broker J.C. Taylor, reviewed the companies that they place our various insurance types with.  These insurance types are:
•	General Liability – provided for JCNA and affiliated clubs.  This is the only coverage the affiliated clubs had when they contracted for their own coverage.
•	Directors and Officers Liability / Publishers Liability –provided for JCNA and affiliated clubs.  This coverage has been extended to the affiliated clubs effective 2003 with the January 2003 dues increase going into effect.  We are working closely with JC Taylor to assure that all companies are being looked at for this coverage and that proper shopping for our needs is taking place.  They are looking into this for many clubs that are in similar positions to us.  This coverage amount has always been $1,000,000 and will remain at that level.
•	Inventory Property/Casualty – for JCNA only.
C)  Under General Liability there was a continuing discussion as to our coverage when non-member participation in competitive events such as concours, rallies and slaloms took place.  JCNA created and implemented a special category named Event Membership.  This is still an excellent way for JCNA to operate.  
D)  Directors and Officers Liability / Publishers Liability Policy.  This policy covers JCNA as well as the affiliated clubs.  Cost per year required a dues increase effective January 2003.  
E)	We increased our insurance coverage amounts in 2002.  This was due to requests from the affiliated clubs.  The coverage for General Liability is:
·	$3mm per Occurrence
·	$4mm General Aggregate
F)	Insurance costs increased due to the addition of the Directors and Officers/Publishers Liability coverage addition for the affiliated clubs. The other coverage types have also increased in cost.  By shopping the insurance companies we do business with, our broker, J.C. Taylor, has kept the costs under some control but our coverage cost is growing.  The program has held initial coverage costs for the original coverage types since the ‘93/94 inception.  We will keep a close eye on cost increases.  We must also watch our membership count.  This affects the dollars available for insurance.   I am concerned as to this count.  
G)	A “certificate of insurance” describing coverage is available if desired.  Contact me at jhendrix@curtispack.com if you would like to receive one.  
H)	Any questions can be directed to me at any time concerning insurance and are encouraged.  Since September I have dealt with 10 situations and have responded with answers.
I)	In 2006/06 JCNA  was confronted with its first insurance claim on the Directors and Officers policy.  Final results are pending.

IV.	JCNA Budget
The budget is based on last year’s actual expenditures of which we see fluctuation with the cost and services provided going up.  Special projects such as the 2005 Challenge Championship are held accountable.  When these situations occur, the Board of Directors look at each specific item and make changes as they see fit.  Changes are suggested for future administrative procedures of the Challenge Championship.
The advantage of our budget process is being able to work off of a previous year’s numbers.  Even though this is the case, JCNA has requested from all committee chairmen and directors a specific budget for their area of responsibility.  This has proven to be enlightening and moved some of the responsibility and accountability to those individuals.  This has allowed us to not only look at what was projected to the budget process but to also determined if the budget was adhered to.  Analysis only needs to take place based on if we don’t have the same expenditures in the current year as the previous year and what new programs have an effect on cost.

V.	JCNA Audit
		 The limited audit of 2004 is complete.  The result indicated the same things that were suggested in the previous audit.  In the past and currently the Board of Directors and Business Committee do not feel that those recommendations needed to be implemented and it was agreed that we will continue to operate as is currently being done.
 2005’s limited audit is scheduled for May 2006.  The firm, R.L. Moore was used again.  They have experience with “not for profit” organizations like JCNA.  
JCNA is a relatively simple organization.  The audit time frame was set up to work around the tax season.  It gives JCNA better focus and service by choosing this time frame.  This year an additional subject of the review was income taxes.  The result is that we need to keep our “not for profit” status.  In order to accomplish this we will continue to look at activities that generate cash flow and will not jeopardize the “not for profit” status with those activities.

VI.	Administrative Manager (AM).  This implementation and addition was presented and approved at the March 2000 AGM.  
JCNA now has a face and clearing house where information is funneled.  The purpose is to consolidate some of the efforts of JCNA into an office environment.  Analysis of this job included many of the clerical duties currently done with the handling of checks as well as the same duties required for roster maintenance.  JCNA has expanded this responsibility into a full time position that handles these items and more details and functions of what JCNA does.   This helps JCNA control its functions easier.  It also helps to identify future areas of attention.  The 888 number is answered here.  By the way it is answered at nearly all hours, very good service.
		JCNA Storage of Historical Items and Information is coordinated by 
	the Administrative Manager.
Additional duties were added into the job of Administration Management in 2002, 2003, 2004 and 2005.  Added for 2005 was the future registration for the Challenge Championships.  
The next area to consider is to look at the procedures of regalia, trophies and publications.  No change is currently anticipated.  We can start to detail what the procedures are with our volunteers to determine the amount of work that would be needed to accomplish each task.  This will define the details now.  It will allow us to plan for a time if volunteers no longer want to do those jobs. 
Backup of records: Back-up of records is done weekly with a CD.  It is placed in a safety deposit box (in Stockyard Bank) that is just for JCNA records.  Nelson has implemented this.
The AM contract is effective through 12-31-06.

VII.	Event Membership
The advantage of this program is to allow the local clubs the option of being able to have joint events with other organizations.  This gives those clubs the ability to extend JCNA insurance coverage to those participating individuals for a day of events.  The additional club participation results in spreading out costs over more participants when rental of facilities becomes a major part of putting on that event.  Event Membership fee is $5.00.
 Remember that if outside non-JCNA members participate in the events noted and are not signed up as an Event Member, the local club bears that liability if there is a problem.  The names need to be turned in to JCNA’s Administrative Manager along with the fee.

VIII.	Multi year plan and JCNA Direction
-	Add an office of JCNA, its own address
-	Continue guiding the financial goals with the Board of Directors
-	Bring the volunteer services into the JCNA office as the job gets too large for them to do.
-	5 – 6500 – 1 person, (we are at this level now)
-	6501 – 12,000 – 2 people
-	12,001 – 18,000 – 3 people
-	etc.
-	Evaluate dues to cover costs.
-    Create profit centers for all activities.
-    Increase membership.
-    Create greater control to the overall JCNA organization cost structure.

IX.	JCNA Storage of Historical Items and Information
In 2002 Jaguar Cars informed JCNA that they would no longer be able to store the historical information and other items they held.  JCNA has contracted for a temperature controlled storage facility with full access.  The transfer of items is complete.

X.	Jaguar Journal – Editor Contract
A contract exists with Mike Cook of Plain English as Editor of the Jaguar Journal.  The contract will continue to be addressed as directed by the Board of Directors.  Editor succession is on the agenda of activities to be looked at with Mike Cook of Plain English participating in this function. Contract term is effective through 3-31-06.  We are intending to have a signed contract prior to the AGM.  This report was written prior to that completion. 

XI.	JCNA Dues - Dues last increased in January of 2003 to $20.00.
History:  JCNA had not increased dues since ’93 when the JCNA Insurance Program went into effect.  This changed the dues from $15.00 to $17.00.  At the March 2000 Annual General Meeting (AGM) the Board of Directors and the Business Committee advised all delegates that this review of dues would be evaluated every year.  JCNA is still a bargain compared to other car clubs that have dues of $22.00 - $40.00.  
The 2003 dues increase stabilized JCNA.  This increase was partially earmarked for insurance coverage to add the affiliated clubs to the Directors & Officers / Publishers Liability policy.  
In 2004 JCNA again became a break even organization with profit from all operations totaling $849.00. Spending could not increase for 2005 or 2006.  This situation was watched closely in 2005.  Anticipated profits from operations and activities had goals to maintain our cost level and to remain a profitable organization.  As a result no dues increase was suggested for 2005 or 2006.
Dues Analysis:  Since 2000 several members of the Business Committee have looked at the financial statements and expenditures of JCNA and have seen nearly all costs increase.  These include:  postage, insurance, Jaguar Journal printing costs (16 originally to 48 pages currently), Administrative Management position addition, committee costs, the Jaguar Journal redesign, special projects created by the BOD and many others.  These costs have been somewhat offset by increases in membership from 3,500 to up to approximately 6,500 members at a high point.
As JCNA grows in size the requirement to continue with the proper administration and services provided also needs to grow.  This requires constant analysis of the dues structure to support this activity.  2001 was a pivotal year and so was 2005.  Many things were going on at the same time, all related to each other.  The results of these and some of the continued related operations could help with the ability to control dues.  Since membership has not increased significantly in the last 3-4 years but cost of operations has increased the result is to look at the dues structure closely to make sure that JCNA does not become a negative cash flow organization.  
When there are profits they have continued to be reinvested by the Board of Directors in JCNA by creating the new look and structure of the Jaguar Journal, the addition of an Administrative Manager and an increase in Insurance coverage to the affiliated clubs.
When there is negative cash flow the shortfall comes from JCNA’s reserves.
For 2005 there was an operations loss of $18,793.00 of which we had been optimistic that a small profit was possible if profits were created from operations.  This has been analyzed and the locations of the loss are known.  Corrective action is also being looked at and implemented.
Dues Recommendation:  For 2006 the dues will remain the same at $20.00.  Action, as a result of the analysis of the loss will be implemented.  For 2007 a dues increase will be $5.00 for a new dues amount of $25.00 per membership.
Future: Yearly analysis will continue to take place.  If warranted, future increases will be recommended and implemented.

XII.	Old Business 
A-JCNA Lifetime Membership
	Background-This form of membership was suggested to be studied
		at the March 2004 AGM submitted by Dave Meck . Dave has 
		been instrumental in the details discussed.  The AGM 
		approved implementation of this form of membership in 
		2005.
	 Membership detail suggestions:  This form of membership will 
		include:  special membership card recognition, change the 
		membership number to designate a lifetime member (LM 
		designation), a unique car badge will be provided with the 
		Lifetime Membership, 2 lapel pins will be provided and the 
		members name is to be periodically published in the Jaguar 
		Journal.  Other recognition items are to be developed by the 
		Membership Committee but approved by the Board of 
		Directors.
	Details- In dealing with this form of membership:  a separate entry 
		field is created in the roster, price model of 20 X plus 
		administrative cost has a break even point of 19 years if 3% 
		is figured for interest and an annual dues increase of 2%, 
		break even point is 26 years if there is no dues increase.  
           Dues cost-Dues of $450.00 is established.  As future dues
		 increases happen and as the cost of first year Lifetime 
		 Memberships costs change these items will affect this 
		 figure.  The projected 2007 dues to $25.00 per 
		 membership will increase this figure to $500.00
	Results-Lifetime Membership is an implemented form of 
		membership as of the March 2005 AGM.
	Status-The car badge production has been quoted from 3 
		suppliers.  The badges will be available mid year 2006. 
	B-Membership
		-JCNA needs to increase membership numbers. 
		-The addition of a Membership Committee is a very important start 
			to addressing the hopeful growth that will occur as a result.

NOTE:  There are special research projects undertaken by the Business 
	Committee or selected members of that committee.  They do not get 
	reported in the general activities of the Business Committee Report.  
	These projects are reported on separately to the Board of Directors.

Submitted by:

James C. Hendrix

Business Committee Roster:
	Jim Hendrix - Chairman
	Knick Curtis
	John Horen
	George Keller
	Mike Ksiazek
	Brock McPherson
	Nelson Rath

cc:  	Sherman Taffel, JCNA Secretary