ARIN 49 Public Policy and Members Meeting, Day 3 Transcript - Wednesday, 27 April 2022
Hollis Kara: All right. Good morning, everybody. Welcome to the Members Meeting portion of our ARIN 49 meeting.
This will be a quick walk through of a few presentations this morning. But before that, let’s do a few preliminaries.
All right. Once again, I’d like to thank all of our elected volunteers who support the ARIN organization and community for all their hard work. If I could get a round of applause for all those great folks on the Board, Advisory Council and NRO NC.
Thank you. There’s going to be a lot of audience participation here. So don’t get too comfortable.
Last quick reminders, I think we have this drilled down pretty well by now but we’ll do it one more time with feeling.
Chat is open for comments and discussions. I’ve noticed, yesterday we had some great conversation happening in chat. So for the benefit of folks in the room, don’t – I know it says Q&A, but it doesn’t mean it has to be a question.
Drop your comments there with your name and affiliation and we’d love to be able to bring your voices here into the room for folks who are present with us in Nashville so they can hear what you have to say because there was lots of great stuff happening there.
The Virtual Help Desk is up again today if you need it, just for a little bit here this morning. It will be closing at ten. If you don’t need it, just drop in and say hi to Jason anyway. He’s been manning that all week. And we’re appreciative of his support there. And again, that’s in the navigation.
For folks here in the room, we still have the wipes stationed by the mics. If you would like to clean those up before and after use because it’s a nice thing to do. And make sure your devices are muted in the room so we don’t end up with any weird audio loops.
Again, we’ll be having an Open Microphone today. Please remember to adhere to the Standards of Behavior. I appreciate that everyone’s been doing a great job with that this week. And when you come to the microphone, that you open your statement with your name and affiliation. Similarly that you include that information if you are submitting a comment online.
We are recording. We are livestreaming. Slides are up. There have been a few slides that have, slide decks that have been tweaked and processed. There might be slight differences between what you find on the website and what you see projected in the room.
If that happens, don’t worry, we know about it and we’ll get those swapped out when we go through and work on the meeting report over the next few weeks.
Emergency procedures. Hopefully we won’t need those this morning, but the doors are across the hall.
Thank you again to our network sponsor. I won’t jinx us any further by saying more about that; but if I could get a round of applause to AT&T Business for their network support.
And also to our Bronze sponsors, IPv4.Global by Hilco Streambank and IPv4Mall for their support of the meeting.
Our agenda this morning. Okay. This a little bit different. You see these are one of the ones – we’ve cleared the deck for after break. We’ll actually be finishing at the break this morning. We’ll just be doing the Financial Report and Board of Trustees Report, and then hopefully a very lively Open Microphone so we take up enough time that we can get box lunches set for you to take on your adventures for later in the day.
You’ll be seeing the survey when you close out of the meeting today. Don’t worry if you don’t have time to complete it then, we will be emailing that link around.
And I really do value any input, any comment or thought will be considered, I promise you. We go over them in excruciating detail in trying to find ways to improve our meeting.
So, please, any of your thoughts on how this event has gone, whether it’s been as virtual participant or here in Nashville, we appreciate all that feedback.
And before I bring Nancy Carter up to the stage, I want to – sorry, Nancy – I want to address two things. This is our first meeting that we’ve conducted in a full format in a couple of years.
And I wanted to first state my appreciation for the staff here at the Loews Vanderbilt Nashville. They’ve been amazing. That industry has taken such a hit over the last few years, and to be back and to be delivering at such a high level, it’s been just a wonderful thing for our folks here on site.
If I could get a round of applause for the Loews. They’re not in the room, but…
And then to address one more question. So I’ve gotten from a couple of people, wow, the livestream looks great. The way all the integration is going is wonderful. This is amazing. What are you using? Well, for folks in the room, if I could get you to stand up. Work with me. Come on. Stand up. And turn around. What we’re using is this great team that’s up on the riser from Clarity Experiences. If I could get a round of applause for all their hard work.
These folks are amazing. And they’ve worked through so many details to make sure that we can deliver this meeting in the best way possible. And we couldn’t do it without them. So I’m just really thankful for their help. So thank you for helping me thank them.
And with that, Nancy, if you would like to come up.
FINANCIAL REPORT Nancy Carter: Thank you, Hollis. Good morning. Good to see you. As you know, the ARIN Treasurer’s Report is always one of the highlights of this meeting, and I hope that 2022 April meeting version is no exception.
I’m really delighted to be here in Nashville. And Zoom is great. But it’s – I’m sorry to the people are joining us online – but being here in person is fantastic. I can actually see the audience and I can see the reaction of the audience, which makes a huge difference.
When you’re presenting online, you’re talking to a blank screen; it’s very strange.
So I always like to start my presentation by acknowledging that I could not serve as treasurer without the help and support of the ARIN staff and my fellow trustees on the Board of Trustees.
In particular, though, I would like to thank the financial services department for their continued dedication to evolving Financial Reporting and metrics and for their commitment to providing remote financial services over the past two years.
Thank you, and a big shout out to Brian, Ray, Tammy, Tanya, Melissa, Cathleen, Amy and Amaris. Congratulations to all of you for pulling off a flawless year end.
This is a team that makes my job easy and puts the fun in the “funance” committee. So I’m happy to share some of their accomplishments in my presentation.
Oh, I should have done that sooner, shouldn’t I?
Today, I’ll update you on this year’s activities of the Finance Committee; I will then review the 2021 revenues; operating expenses and budget variances; look at ARIN’s financial position; provide highlights of the investment portfolio; and then finally look at the net assets.
The Finance Committee is highly committed to its mandate and takes its role of financial oversight very seriously. The CFO keeps us busy, as you can see by this slide, and as you heard from him yesterday.
Some of the recent highlights include meeting with our investment consultants to review relevant financial market activity and ARIN specific investment activity.
The consultants reported on our achievements against our benchmarks, and we will meet with them again in the next few months to review our investment allocations and determine if any fine tuning is required.
And meeting with our auditor to review the 2021 financial statements. The audit was done in accordance with GAAP and industry standards, and ARIN received a clean audit report and opinion, thanks to the hard work of the Financial Services Department and management.
Those statements were recommended for and received Board approval this past Sunday, as Brian mentioned yesterday, and the auditors were again very complimentary about working with Brian and his team, as well as others in the organization.
This chart shows you total revenues for 2021. Revenues from annual registration fees were $19.2 million in 2021, which is a $500,000 increase over 2020 revenues.
Revenues from initial registration fees were 1.5 million, which is consistent with our 2020 revenues. So our total revenues of 21.5 million for the year were slightly above amounts budgeted.
And just a quick note on revenue growth for 2022. 2022 revenues are budgeted at 26.7 million, compared to a 2021 budget of 21.2 million. This revenue growth in 2022 will allow ARIN to achieve its goal of a balanced budget of revenue and spending.
This chart shows statistics about our resource holders. You can see that the non legacy IPv4 and IPv6 resource holder customer increases continued to occur mostly in small categories. The number of organizations with IPv4 or IPv6 resources grew by 353 since September of last year, an increase of a little more than two percent. Most of that growth occurred in the Small to 3X Small categories as expected.
Total operating expenses.
As I reported back in November during ARIN 48, the budgeted increase in head count has driven an increase in year over year operating expenses.
The total increase in 2021 was 1.7 million. This increase was expected, given budgeted increases in the number of ARIN team members.
Head count increased from an average of 81 in 2020, to an average of 87 in 2021.
As I have reported previously, the pandemic continued to limit the spending in several of our ARIN expense categories, and this resulted in a $1.3 million underbudget variance, which is about five percent below budget.
In total, operating expenses were 23.1 million for 2021, which was below budget, as I noted, but an increase of eight percent over 2020 operating expenses.
So material budget variances for 2021 are depicted on this chart. The largest variance in operating expenses occurred due to the limitations as you would expect on travel and in person outreach activities during the year. These limitations drove a combined budget variance of $1.1 million. This is very similar to what we saw in 2020.
Unanticipated legal fees were responsible for the overbudget position in legal and professional fees. The statement of financial position, or the balance sheet, continues to represent ARIN’s highly liquid financial position.
ARIN has almost $39 million in liquid assets to meet its ongoing operating needs. These are represented by cash, accounts receivable and investments.
So you might be curious about the largest number in the ARIN liability section. Deferred revenues of $10.6 million? No need to worry, according to Brian, our CFO; this is not a liability for future payment.
Instead, this represents revenues that are being billed to customers but have not been yet recognized as revenues.
So why does this happen? It happens because we bill in advance of the resource anniversary date and recognize the revenue equally over 12 months.
You can find out more on this and other significant and exciting economy policies when you read the notes to the ARIN financial statements, which will be posted online. Specifically you want to look at note two.
ARIN investments. So even with the transition to a more conservative investment objective, the investment portfolios increased 11 percent during 2021.
The change from the light green bars to the dark green bars signifies when we made the change in the investment asset mix under our new investment consultant.
As you can see, the market has not been as kind during 2022. Investments are down four percent during the first quarter of this year. We ended the first quarter of this fiscal year with total investments of $33.9 million.
And as I mentioned earlier, the Finance Committee and ARIN staff continued to work very closely with our investment consultants to manage these investments.
This is the net asset chart. Net assets grew to a total of $29.4 million at the end of December 2021. And this was driven by our investment gains. This is $1.9 million, or seven percent more than net assets at the end of 2020.
This favorable net asset position was driven mostly by the impressive investment returns that we experienced in 2021. But also by the lower than budgeted expenses in 2021.
The net asset coverage is illustrated on this chart. This is a metric that I’ve reported on at the last few ARIN Member Meetings. This metric compares ARIN’s net asset position to annual operating expenses.
So despite the increase in net assets and the underbudget operating expenses, we saw a slight decrease in the operating expense coverage ratio at the end of 2021. This is due mostly to the fact that 2021 saw an increase in operating expenses. At the end of 2021, the net asset coverage was 127 percent.
And with that, I turn to my last slide. Thank you so much for your attention. I’m more than happy to answer any questions.
Hollis Kara: Going to give just a moment for the virtual folks, if there are any questions there. Any questions in the room, feel free to approach the microphones. It’s a lively bunch this morning.
Nancy Carter: Very lively.
Hollis Kara: I think we’re good. Thank you, Nancy.
And we’re on to our last report of the meeting from Bill Sandiford, the chair of the ARIN Board of Trustees. And he’ll be speaking to the Board Activity Report.
Board of Trustees Activity Report
Bill Sandiford: Wow, Nancy, tough act to follow. And I don’t have graphs with multiple fancy statistics and changing colors of green and all sorts of stuff like that, but we’ll get through this just fine.
All right. For those who don’t know me, my name is Bill Sandiford. I’m the ARIN Board Chair, who took over from Paul Andersen, who is still here with us, last fall. So this is my first time delivering Board Activity Report. It’s actually a pretty short one. So we’re going to get through it relatively quickly.
The Board takes a number of steps every year. A lot of these things are some routine things, but we often end up with questions about them. So we’ll go through them. The one that was not routine this year is that after a long process that involved a lot of consultation and feedback, we adopted a new membership structure.
There’s been a lot of discussion about that. But we believe that it’s setting ARIN and its membership structure on a correct path moving forward.
The rest of them is a lot of routine stuff. Every year we typically have to authorize the Treasurer to take actions outside of an approved budget year. That’s for stuff like this conference.
These conferences are often planned and contracts signed many, many years in advance. Or at least in advance of the current budget that’s approved. So the Treasurer has to be authorized for that.
Other routine things that we did were approving large financial matters, things like leases, agreements for new equipment. We went through some other routine things like updating standing rules and ensuring proper election of Board officers and election officers and that sort of stuff.
We seated Board committees, and this year there was a bunch of new committees to seat. We’ve really updated our committee structure. We’ve had a Governance Working Group that’s done a lot of work in that area.
In fact, if the three of you could please stand up, our Governance Working Group. These folks, Nancy, Catherine and Peter, did a lot of work in this area. And certainly myself and everyone else really recognizes them, the work they did, in improving our governance structure.
And, of course, we do other things like just confirming results of election and stuff like that, that’s very statutory and stuff that has to get done.
Continuing on, we’ve moved forward with processes where we approved proposed amendments to the bylaws which triggered the consultations that everybody has seen over the last part of 2021 and into the first part of 2022.
Things that involve potential changes to the way we conduct ourselves and our election processes and our voting systems and the size of the Board.
We also approved a measure over the last year that made it mandatory for all Board, Advisory Council and NRO NC members to participate in sexual harassment prevention training. We think this is continuing to move ARIN in the right direction of best practices, not only for the staff, which the team has done a great job of already, but also for our large group of volunteers as well, too.
Appointments this year. The only major appointment was myself was appointed as our NRO EC Board observer, replacing the former chairman, Paul Andersen.
There were a few policies that we had to ratify over the course of the last year. Special use of IPv4 space for out of scope purposes, and we updated the end user reference so that it would match with the fee schedule.
That’s all I have for today. But as always, more than happy and willing to take any questions that you might have.
Hollis Kara: All right. The microphones are open, both virtual and here in the room. If you have any questions for Bill about the work of the Board, now would be the time to get those in.
Bill Sandiford: All right.
Hollis Kara: It appears there are no questions.
Bill Sandiford: If they have any, they can bring them up at the open microphone as well, too.
Hollis Kara: That’s true.
And John is going to join us on stage and we’ll head into Open Mic.
Bill Sandiford: All right, everybody, as discussed, at the end of each day we have an Open Microphone session. And those open microphones are now open, both online and here in the room.
If you have any questions, please feel free to approach the mic or get them into the Q&A section of the remote participation.
Hollis Kara: Questions, comments, go backs, anything about anything, random thoughts, ruminations.
Bill Sandiford: I had a random thought, John. I was sharing this with Hollis yesterday. We were sitting at the lunch tables, and we thought that maybe a good topic for the lunch tables going forward was to take you and I as a table with the topic Ask Me Anything.
John Curran: Okay. Done. I did a Reddit AMA; it was very popular. But happy to do a lunch table one as well.
Hollis Kara: We’ll add that to the list for Hollywood.
Bill Sandiford: Perfect.
Not seeing anybody storming the microphone. Oh, we have an online comment.
Beverly Hicks: Andrew DeLaCruz, Lumen. Back in March of 2020, Policy ARIN-2017 12 and ARIN 2018 5 were implemented, and we lost the ability to create POCs, Org IDs on behalf of customers.
Now that some time has gone by, could staff check and perhaps report back at the next meeting if it has affected the quantity or rate of entries into Whois since then and has that type of submission shifted?
John Curran: We will make sure we research that and report back at the next meeting regarding the effects of Whois. We’ve got that. Thank you.
Bill Sandiford: Rear microphone.
Leif Sawyer: Leif Sawyer, ARIN Advisory Council chair. In case you missed it on Monday, elections for the Advisory Council will be held later this year. Nominations will be opening in June.
And if you are interested in joining the Advisory Council and helping to shepherd policies into the future, reach out. Participate on the PPML and make yourself visible. Thank you.
Bill Sandiford: All right. We’ll give it another moment or so here. Any other online – maybe. Yes.
Beverly Hicks: Wendy Leedy, AWS. I just want to say thank you to the entire ARIN team for hosting such a great meeting. The virtual portion has been amazing. Thank you so much.
Bill Sandiford: Wonderful. Thank you.
John Curran: I apologize if she’s one of the people who I spoke too loudly in, when I was speaking, invoking people back into the room.
Bill Sandiford: Hot mic moment.
John Curran: Apparently amplified beyond belief.
Bill Sandiford: All right, guys. Last call. Seeing none in the room, getting no indication of anymore online, we will close the Open Microphone session.
On behalf of myself and the Board, and I’m sure John and the staff, I’d like to thank everyone for their participation. It was really great to see a lot of faces again that we haven’t seen in a number of years and look forward to continuing that into the fall.
John Curran: Thank you. Wonderful. Thank you, everyone. That concludes our Open Mic. I’ll turn it over to Hollis for closing announcements.
Hollis Kara: All right. I sincerely doubt box lunches are ready at this point, but hopefully we’ll have them out in a little while, if you want to drop back by to get them.
Don’t worry, they won’t go to waste. If anything’s left here, we’re making sure to get that delivered to a local food pantry for distribution so it’s not wasted.
Open microphones are done. I get to be John. Hi, I’m John Curran. No, I’m not John Curran.
All right. Thank you, everyone. So glad to have you here with us this week. It’s been just a pleasure to be back in person and to be seeing such robust participation virtually.
I would be remiss not to give a last shout out to my ace producer, Beverly Hicks, back on the riser, and Melissa Goodwin, my meeting planner, who – they’ve just done tremendous work this week. Thank you Beverly and Melissa.
And also thank you to our network sponsor. See, I didn’t break it by saying it was going to be okay. Thank you, AT&T Business. Can I get a round of applause?
And also our Bronze sponsors, IPv4.Global Hilco Streambank and IPv4Mall. We are very grateful for your support of the meeting. So thank you to them as well.
Beverly Hicks: Before you go into that, can we also get a round of applause for our unbelievable emcee for the last three days?
Hollis Kara: Thanks, you guys. This has been a little bit more fun than I expected it to be. So I think we’re going to keep this train rolling. You’ll have to put up with me in Hollywood.
And with that, please do mark your calendars and be with us for ARIN 50, which will be a golden celebration, in Hollywood, in October, later this year, back-to-back with NANOG.
And if you have a great story from your time with ARIN over the years, attending meetings, interactions, anything cool that we might be able to use, please do either scan the QR Code – I think there’s a sign still outside, or that link is going to start popping up in all kinds of places. Submit something for us. We’d love to include it in our promotions and whatnot as we run up on those events.
And please, please, please, I beseech you, to complete the meeting survey and tell us what you liked, what you didn’t, and what you think we should do next time.
And with that, I am going to call a very early close to ARIN 49. I thank everyone for their time and attention over the last two and hmm days, and I hope everyone enjoys the rest of their day.
And for those traveling that you have a safe trip home, and we’ll see you in the fall.
Thank you so much.
(Meeting adjourned at 9:27 A.M.)