Board Meeting Minutes; Special AHRMA Meeting 5-10-2023

Carl Anderson (Chairman of the Board), Albert Newmann (Treasurer), Luke Sayer (Secretary), Al Anderberg, Mike Dixon, Greg Tomlinson, Fred Guidi, David Rutherford, Brian Larrabure , Arthur Kowitz , Kelly Shane, Tim Terrell

• Dirt Track Youth Classes (CG)
  • Has support amongst trustees.
  • Youth class structure:
    • See Craig’s presentation.
    • Reviewed and approved by insurance company.
  • Specific – Director’s choice test and learn dirt-track only.
  • Do we believe in giving Richard the ability to run a Director’s choice program. Is this something we are willing to do?
  • KS – first time it’s come up for Dirt Track in KS’s time on the board. It was never about whether insurance would insure youth racers. It was more the long term liability to the organization to trustees current and future and possibly to the members.
    • If a youth gets injured, the statute of limitations gets stayed until they are an adult. E.g., racer injured at 5 years old, 18-19 years later that could sue AHRMA.
    • Problem also, while we are a 501(c)(4) – doesn’t stop a lawsuit naming all the trustees sitting at the time of the lawsuit as well as when the incident takes place.
    • If a huge claim, and insurance company goes bankrupt, they could potentially come after every member of AHRMA for the lawsuit settlement.
    • No benefit of having youth classes when looking at the long-term lawsuit liability
    • KS would be willing to go to 16 to match off-road age limits but not lower.
    • Dirt track should have a long-term strategic plan for growth rather than just bringing in a bunch of kids.
    • There is nothing in the proposal that has a finite term. Must have a sunset date and would have to be renewed with justifiable numbers.
    • This board in 10/2018 adopted a policy that any new class would only be good for a year then would have to be resubmitted.
    • When we added modern classes didn’t really bring in more members, it just moved them around from vintage to modern.
  • LS – disagree –
    • many parents have kids they’d like to bring to the track.
    • would like to see us do it up to the point where it would not adversely affect our insurance cost.
    • Off-road / Road Race – insurance crisis. Doubled for Off-road.
    • Recommends a sunset date and insure it doesn’t increase our insurance otherwise shut it down.
  • CA –
    • Been to a number of Richard’s races – many are partnership events with other clubs that bring in support riders to help us rent the venues.
    • There are adults on 250s, 450s, and very similar youth classes to what are outlined.
    • The difference is that AHRMA is sharing with local association – we don’t get the benefit of entry fees. Our people are not involved in it.
    • Richard wants to bring it to AHRMA promoted events to increase attendance by having adults bring kids – family atmosphere. Didn’t have any issues.
  • TT
    • If we are constantly worrying about lawsuits, we might as well shut down.
    • People can sue over anything.
    • Compare it to MX racing in other organizations – there are lots of kids there.
    • Witnessed that that little kid on the 50cc racing, next thing you know, the father, older siblings, grandfather getting a motorcycle and coming to race some of these events.
    • Gateway to possibly getting more riders involved in the DT program.
    • Sunset program – but set it for the end of 2024 instead of 2023.
    • Tim’s son was interested in vintage off-road racing but feels like he could have gotten his son more interested if he could have started hm before 16.
    • TT sees a lot of positives.
  • AK
    • I thought we were only considering lowering the racing age from 18 to 16.
    • I want to not like this, but over the years older racers stopped going to the track because they couldn’t race with their grandkids.
    • Granted the kids bikes aren’t necessarily vintage but Grandpop is going to bring out his Bultaco.
  • AA
    • Childhood interest kept him interested in vintage racing.
    • Concerned because national organization has potential liability issues.
    • If not promoted by AHRMA it’s not an issue, but if AHRMA promoted we are responsible for the liability.
    • Would like to experiment with it, but need to make sure we are protected.
  • CG
    • Richard is working towards doing 100% AHRMA promoted events, and this is one of the ways he can do that, like we are doing with RR.
    • Keep the entry fees, draw more people.
  • AK
    • Liability protection that the club has is double – not just insurance, but also a waiver. Discussed every year, but AK’s investigation led him to personal injury attorney’s – we should have a double waiver.  If you can’t find your waiver or didn’t get one, you’re in trouble.  Needs to be in the hard boiler plate.
  • DR
    • 2 questions
      • Youth classes proposed would be youth races only? CG yes, youths not permitted to race with adults per our insurance policy.
      • AK’s point. Documentation of waivers is of critical importance. We must get away from paper.  We must start saving our waivers and releases electronically.  We need to make everything electronic to download and save.  Far simpler, far more efficient over boxes and boxes of paper waivers.
      • Share KS concern about liability but also shares Tim’s concerns regarding over-thinking potential lawsuits.
      • Statutes of limitation, enforceability of waivers, etc., varies from state to state, no easy solution to that.
      • D&O insurance has a 2-year tail on it. For an incident that occurs in 2023, coverage on a claims made basis is in place for 2 years thereafter.
    • KS
      • Couple of other things – April 26 EC meeting there was a discussion of the possibility to have youth racing at off-road. Vintage MX and Trials racers expressed that youth racing has no place in off-road.
      • If this is a test case, when does it go to road racing?
      • Kids don’t stay – lot of kids come to the races with their parents, at 16 start racing vintage and by the time thy turn 19 they are gone off to college or wherever.
      • If Richard wants all DT AHRMA promoted, KS doesn’t see how that’s possible. We don’t have the money or the staff to make that happen.
      • People tend to forget our mission statement is to promote Historic and Vintage motorcycles.
      • It might bring more people in but won’t promote what we are all about.
    • AK
      • I thought test case component was merely to lower the racing age from 18 to 16 in Dirt Track, not lowering the age to 5 year olds.
    • AN – would like to discuss a 14-18 age group with Richard.
    • MOTION: KS motioned to defer discussion and vote of youth dirt track to the Laguna Seca meeting.  DR second.
      VOTE: 0 No, 12 Yes, UNANIMOUS

• Membership Pricing
  • Membership pricing adjustment was reviewed and agreed in Phoenix.
  • AN requested to be heard at the beginning.
    • Discussed restructuring the membership pricing – a la carte.
      • Gold, Silver, Bronze – difficult to do during racing season.
      • Basic membership – a la carte add-ons – stair step it based on what they select
        Leave current setup for the events, $95 in competition events.
      • A la carte plan – $75 for base, $10 add AHRMA MAG, $10 add AHRMA Handbook.
      • AN wants to get an announcement out.
      • BL – announcement would say all current paper forms that are out there are void – must go to the website.
        • Lifetime membership form accidentally made available and was completed at an off-road event in 2022.
      • AK – with so many things written in the membership pricing proposal we need to see exactly what we are voting on.
      • LS– alternate solution – deactivate all race event membership – refer them to the membership event.
      • DR – if he understands correctly, to use the stepped method you have to go through ahrma.org.
      • AN – incorrect – if you go through the website, it will take you to the correct event.
      • TT – maybe we put an annotation that the members should go to the membership event to renew?
      • CM (as the membership / component builder)
        • current number of events that have been created for 2023 are far too numerous to dedicate staff labor to modify.
        • No competition events should be touched with such an across-the-board change during the racing season.
        • When the racing season is over, templates for 2024 will be created incorporating the new fees.
      • RR License – $65 value
        • Shelve until Laguna Seca
      • Lifetime membership – not currently available for purchase
        • If we want to make it available, we need to increase pricing.
        • Shelve until Laguna Seca?
      • MOTION: AK motioned to defer Lifetime Membership and RR License to Laguna Seca. KS second
        VOTE: 1 No (LS) / 11 Yes

• The feeling is that we need to come together on something at this meeting.
• Can’t do RR License with Lifetime Membership
• AN – $895 for Lifetime membership –
• AK – you can’t just wait until you are 60 and then purchase a lifetime membership – you need to be a member for at least 3-5 years.
• Proposal was to use the honor system.
• CG – 143 Lifetime members currently – history can easily be checked.
• AK – do lifetime members get the AHRMA MAG and the AHRMA Handbook.
• AN – check in to see if they want a magazine from time to time.
• AN work on policy and procedure on Lifetime membership with Cindy and AK.
• MOTION: AK motion we approve an $895 lifetime membership that includes digital handbook and digital magazine.  AN – second
  VOTE: 0 No, 12 Yes Unanimous

• AHRMA Finances (CG)
  • Q1 2023 In the black
    • Sponsorship income
    • Successful RRR event – significantly more money at Roebling than normal
    • Great Q1
    • Q2 – we will likely be in the red because we need racing activity which produces income.
    • Continued costs for running AHRMA are not being funded by profitable events – there is a funding gap.
    • RR is the big financial influencer.
    • Off-road virtually all in the black.
    • AHRMA has a monthly spend of $50k+ / month, and we need ongoing cash flow to manage our operations.
    • Since Barber in October 2022, we have not had RR events during 7 out of 9 months. This has depleted funding and put our operational cash flow under pressure.
    • Only RRR (February) was included in Q1.
    • Running close to the line – and we have been good at juggling.
    • Can see where we are on a week-to-week basis.
    • Q3 could be in the black depending on the HMP and MPH member participation.
    • NJMP may have better performance, depending on east participation.
    • We have reduced / managed expenses – Al Charles working this carefully.
    • Laguna Seca
      • Improved contract – and operational improvements as well.
      • Reduced expenses – focusing on regional support alongside AHRMA key staff.
      • Gate – spectator revenue. WRLS is working with us to improve our financial outcome on spectator income.
    • Investment accounts
      • ~$165k including benevolent fund.
      • $65k accessible in investment account (for cash withdrawal).
      • Credit line? We need to establish this LOC (line of credit) for use as needed for cash flow.
      • Craig would like direction from trustees on how they would like to proceed.
      • GT – Asked for confirmation that 2^nd lender would underwrite any shortfall at Laguna Seca – BL confirmed that any shortfall would be covered. We have a professional planner that BL is paying for.
      • GT – Whatever stipulations BL has should be on the record for those commitments.
      • BL – formalize at the RR planning committee meeting.
      • LS – clarify $50k+ / month to keep AHRMA lights on. $600k for the year to keep the lights on. $200 per member to keep the lights on.
      • GT – Related to the $30 membership price increase – had it been rolled out with effective communication to our membership it would have been better received. Taking loans against our benevolent account – given the state of our financials, he can’t see how we don’t investigate additional funding; however he doesn’t endorse taking out any other loans or lines of credit until we have a better understanding of what our liabilities are on loans we have currently taken on.  As none of us have seen the loan documentation, how can we be sure what our liabilities are?  Before considering taking loans, lines of credit or drafting off investment accounts he needs to understand better our liabilities and terms of repayment set forth for the current loans.
      • LS – do we have a month over month through the end of the year so we understand where we might be at the end of the year?
      • CG – the plan that was shared in Phoenix.
      • AN – BL and CG costs for Laguna Seca – travel expenses
        • New agreement reduces cost and adds a 4^th day on track.
        • The gate was not effectively managed in 2022, new team being assembled to capture revenue.
        • Laguna only captured ticket sales at a 500-600 range for 2022, by all estimates over 2,000 people were in attendance.
        • Added day with school – on Thursday (didn’t have this in 2022)
        • Expenses $40k in travel expenses last year – reduced by at least half for this year.
        • We have been focused on trying to fix this. CG recognized Brian for all the work he has done on the contract – Cost reduction plus an additional day on the track.
        • CG we are on this, we are working hard, understands GT concerns. 4 events last year that cost us, with High Plains and Thunderhill, New Jersey and Laguna Seca.  Addressing these issues.
        • GT #1 you don’t drive to Vegas if you don’t have enough gas in the tank – in our recent reporting of our finances you left out Daytona, assuming we lost money. Noting that we’ve changed our accounting methodology from the previous methodology.  #2 Related to the loans and the 2022 financials that CG is the shepherd of it has been over a year, and we haven’t seen the documentation yet.  Where do we stand with the 2022 financials? And the reporting and tax submissions? #3 Related to the cost that our RR program required – GT has a lack of confidence related to expense management.  There has been no transparency in RR spend decision making.  Evidenced by the fact that CG as the ED and the previous EC, either they aren’t willing to share the information or are unable to share.  It’s reasonable to understand why there’s so much noise from members on FB related to the financial matters.
        • BL – not the EC’S responsibility to directly manage the different programs. RR planning committee was formed to help the RR director to manage the RR program.  Last year’s program was developed from the 2021 RR planning committee based on the finances available from the previous year. The 2021 financials were a result of the previous Executive Director and the previous RR director.
        • GT – Noting that BL was on the RR committee and was Chairman and AK was treasurer at the time how could you not know the financial implications of the proposed RR schedule? Isn’t the EC ultimately responsible to oversee the ED & RR Director’s spending?  Just own it.   it’s a culmination of the last couple of years of lack of communication to the members and we must realize that some of the folks that were in position at the time, who incurred those liabilities, are still sitting here asking us to incur more debt or take on more loans.
        • BL – The former ECs acted upon the information provided. If you are given bad financial data, you make corresponding financial decisions.
        • AK – the “perceived lack of transparency” is incorrect: profitability of the events was being shared with the board of trustees and in most cases posted on the website.
        • GT –He hasn’t seen it, where’s the 2022 reporting?
        • CG – All of the 2022 event financials were disclosed at the 2022 Barber meeting: #1 Daytona last year was close to breaking even (within -$15K). HMP we were within -$7k of breaking even.  2022 financials have been with our CPA – who was overloaded with client April 15 deadline demands and busy.  Couldn’t get everything done that we needed in the time requested.  They are currently working on it – trying to align with our Quickbooks System.  990 form should be available by June.
        • It will be available and on the website 3-4 months before we had it last year. As it relates to the reporting, every time we have a quarterly meeting AHRMA’s current financial status is shared.  Any financial request will be answered, and CG is happy to respond to any specific request.
        • Have a revised agreement with the first lender – first payment is not due until 2024. 1% interest.  We will use 10% of any remaining revenue at the end of the year to reduce the principle of that loan.  Not depend only on payments.
        • Terms with 2^nd lender that are favorable.
        • Terms of loans have been disclosed to trustees, have been formalized and loans are very favorable to AHRMA.
        • AHRMA is fortunate to have two members who have been exceptionally generous with us.
        • This is the first year CG has been involved in partnering with the RR program.
        • CG we need BoT confirmation that  CG will have the authority to access only the investment account and that CG will be able to establish a credit line to borrow against these funds for short term stop gap funding.
        • AK – are you suggesting borrowing against both accounts or just the investment account?
        • CG just the investment account.
        • AA – assuming there will be some wording that it will be under emergency status only?
        • CG – agreed. Not a fan of borrowing. Doesn’t want to mortgage the future.
        • Today is May 10 – Within 30 days we will have more than $100k due. If we get sufficient entries at HMP and MPH we’ll be good.  If not, we may need to borrow against our investment account.   Then, if we have good attendance we’ll be able to pay it off quickly.  This will be a revolving line of credit – used for cash flow purposes during short term needs.
        • CA requested that a motion be made.
        • MOTION: BL motioned “direct the executive director to provide us with what the cost of a credit line and interest cost will be for consideration”
          KS second
          VOTE: 12 Yes, 0 No – unanimous

CG thanked the board for their contributions.

KS thanked the trustees for doing a meeting and not doing an email vote.

*Providing these special meeting minutes is not a precedent on AHRMA to provide future special meeting minutes which is left to the sole and absolute discretion of the AHRMA Board.