OAH Annual Meeting Hotels and Financial Matters

Lee W. Formwalt

The OAH executive board always meets at the annual meeting and this year was no different. One of the items that often appears on the agenda is the selection of a future meeting site. This spring in Washington, however, it was last year's annual meeting that occupied our attention. The cost of the decision to move the 2005 annual meeting from San Francisco to San José weighed heavily on board members as we considered its impact and that of other revenue shortfalls on next year's budget (FY 2007).

Although many OAH members have a lot of sympathy for hotel workers, the executive board members reminded ourselves that we moved the 2005 meeting in order to have as normal a meeting as possible. We had witnessed the noise and distraction accompanying picket lines in San Francisco when we held our fall board meeting there at the Sir Francis Drake Hotel in 2004. It was inconceivable that this kind of racket and discord would allow for a learned society's scholarly meeting to take place without disruption. The board was also concerned that should we hold our meeting in San Francisco and face a picket line, which the hotel workers' union assured us would occur, many OAH members would not attend. We calculated that the cost of staying in San Francisco under such circumstances would actually be higher than breaking the contract and moving the entire meeting to San José.

The San José meeting was successful—the program was excellent, and members who came to San José were delightfully surprised by all the city had to offer. But the move did entail unbudgeted expenses including attrition charges at two hotels we contracted with but whose rooms we did not fill. There was also the matter of settling with the Hilton San Francisco for breaking the contract, the full penalty for which was $390,000. Last summer we negotiated with Hilton officials and reached a settlement that included a confidentiality clause which severely restricts what we can disclose about the terms of the settlement. What we are allowed to say is that OAH made a cash payment and agreed to sign several more contracts with Hilton for future meetings in 2011 through 2014.

Back in the fall of 2004, the OAH Executive Board voted to require that all future hotel contracts include "labor disputes" in its escape clause. Until that point, our contracts provided that disruptions caused by strikes would annul a hotel contract, but in San Francisco we faced a lockout and then a boycott, neither of them a full-fledged strike. "Labor disputes" in future contract language would allow us to get out of contracts in situations like San Francisco.

During negotiations with Hilton for the contracts required by the settlement, it became clear that Hilton would not sign the final three contracts if they contained the labor disputes clause. This placed the OAH Executive Board between the proverbial rock and a hard place. If we stuck to our guns and refused to budge on the labor disputes clause, the settlement would unravel and we would be facing the $390,000 penalty. If we conceded and removed "labor disputes" from the escape clause, we would be vulnerable to possible San Francisco-like disputes in the future. Several weeks before our deadline for signing the contracts, the board met by conference call and decided that signing the contracts for 2011, 2013, and 2014 without the labor disputes clause was the lesser of two evils.

A major consideration in this decision was that the board felt it could not take actions that would increase further the cost of moving the 2005 meeting. The 2005 fiscal year ended with a substantial deficit, a large portion of which was due to moving the meeting to San José. (Other factors contributing to the deficit included revenue shortfalls for our Magazine of History expansion efforts.) In order to cover these costs, the executive board had to borrow $328,000 from the OAH General Endowment. In our December 2005 conference call, executive board members concluded that we could not jeopardize the settlement and risk having to borrow more funds from the Endowment.

Last month, the consequences of 2005's deficit were evident as the board considered the proposed budget for FY 2007. The board agreed that it would pay back the $328,000 debt to the endowment over a five-year period which means that $66,000 out of each year's budget through FY 2011 will be returned to the Endowment. Also the failure to fully fund the expansion of the OAH Magazine of History with an increase of revenue for that purpose over the last two years will require cutting back its frequency from six to four issues a year. The cost of moving Talking History—OAH's weekly radio program—from Kansas City to Bloomington and producing the program here next year was beyond our means and the executive board decided to suspend production this summer. Finally, two full-time positions whose staff have left or will be leaving will become part-time this summer.

This will not be the first time that OAH has had to pause after some important growth and make a mid-course correction. And it is certainly not the first time we have had to deal with a deficit situation. In fact, in the last two decades of the twentieth century, OAH had as many years with deficits as it had surpluses. Of course, any deficit is a matter of concern and we are taking the necessary measures to keep our spending in line and to increase our revenue. And we are making sure that whatever was borrowed from the Endowment will be repaid. We value too much our members' trust and our own fiduciary responsibility to do otherwise.