[CWG-Stewardship] [community-finance] FY17 Budget update: Section 4 on IANA Stewardship

Fri Jun 24 20:22:24 UTC 2016

Michele, Chuck, and everyone,

I have inserted my comments below, after Chuck’s.

Thank you.

Best,
Xavier

Xavier Calvez
ICANN
CFO
12025 Waterfront Drive, Suite 300
Los Angeles, CA 90094
Office     : +1 (310) 301 5838
Mobile   : +1 (805) 312 0052
Fax                          : +1 (310) 957-2348

From: Charles Gomes <cgomes at verisign.com>
Date: Thursday, June 23, 2016 at 4:59 PM
To: Michele Neylon - Blacknight <michele at blacknight.com>, Xavier Calvez <xavier.calvez at icann.org>, "community-finance at icann.org" <community-finance at icann.org>, "cwg-stewardship at icann.org" <cwg-stewardship at icann.org>
Cc: Executive Team <executive-team at icann.org>, BFC <fin-comm at icann.org>
Subject: RE: [community-finance] FY17 Budget update: Section 4 on IANA Stewardship

Without any intention to detract from Michele’s main questions, I inserted a few comments below that I think are important to keep in mind.

Chuck

From: community-finance-bounces at icann.org [mailto:community-finance-bounces at icann.org] On Behalf Of Michele Neylon - Blacknight
Sent: Thursday, June 23, 2016 9:26 AM
To: Xavier J. Calvez; community-finance at icann.org; cwg-stewardship at icann.org
Cc: Executive Team; BFC
Subject: Re: [community-finance] FY17 Budget update: Section 4 on IANA Stewardship

Xavier

Just reading over this and a few comments / concerns.

It sounds like this expenditure is being viewed as a fait accompli and it’s really case of moving things around to work out how it will be funded, which seems a bit backwards. How can you agree on the expenditure for a project without knowing how you will fund it?
[Chuck Gomes] Don’t we know how it will be funded, i.e., via reserves?  What we don’t know is whether the reserves will be restored and how, as Michele notes below.
[Xavier Calvez] The FY17 Budget that is intended for approval assumes that the expenditures will be funded by the Reserve Fund, as a temporary measure, until a community consultation on the ultimate mode of funding has been completed in short order. In addition, the expenses estimates included in the budget, which have been produced by the Project Cost Support Team (PCST) created in Marrakech, have been submitted by the co-chairs of the CCWG to the Chartering Organizations for their approbation.

The reserves are already depleted and there doesn’t appear to be any firm plan on how those reserves will be restored, unless I missed something. Yet the expenditure keeps growing.
[Chuck Gomes] As I understand the word ‘depleted’, I don’t think that it is accurate to say that the reserves are depleted.  In my mind, that would mean there are no reserves left.  As I am sure Michele knows, that is not the case.  But it is true that they have been significantly reduced.  There also appears to be sufficient reserves to cover future unbudgeted expenses and still have a sizable balance in the reserves, albeit a lot less than the currently targeted level of one year of operating expenses.
[Xavier Calvez] total expenses over 3 years (FY15/16/17) will have been $37m, and will make the Reserve Fund go from about $88m to $51m. The Reserve Fund has currently a target level of 12 months of operating expenses. Using the FY16 budget, the target level should be $113m as a result, and the gap between balance and target would be then of $62m, if nothing is done about replenishment. Separately, the Board has been working on the Reserve Fund rationale, target level and governance, including definition an approach to replenishment.

The legal fees are again ridiculously high. How does ICANN select vendors for these kind of services? Is there a tender process? Is there an RFP?
[Chuck Gomes] Note that the CWG Stewardship via its client committee and the CCWG Accountability via its mechanisms selected the two external legal firms.  That doesn’t mean that any existing tender processes shouldn’t have applied but I am pretty sure that time constraints were an issue.
[Xavier Calvez] The selection of the legal firms that have provided independent legal advice since last year has happened on the basis of a comparative evaluation process using proposals received from firms who were requested to make a proposal. Those firms were selected on the basis of their experience and apparent competence. The evaluation and decision processes were conducted by a client committee including ICANN staff and community members.

Regards

Michele

--
Mr Michele Neylon
Blacknight Solutions
Hosting, Colocation & Domains
http://www.blacknight.host/
http://blog.blacknight.com/
http://ceo.hosting/
Intl. +353 (0) 59  9183072
Direct Dial: +353 (0)59 9183090
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From: <community-finance-bounces at icann.org<mailto:community-finance-bounces at icann.org>> on behalf of "xavier.calvez at icann.org<mailto:xavier.calvez at icann.org>" <xavier.calvez at icann.org<mailto:xavier.calvez at icann.org>>
Date: Monday 20 June 2016 at 03:07
To: "community-finance at icann.org<mailto:community-finance at icann.org>" <community-finance at icann.org<mailto:community-finance at icann.org>>, "cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>" <cwg-stewardship at icann.org<mailto:cwg-stewardship at icann.org>>
Cc: Executive Team <executive-team at icann.org<mailto:executive-team at icann.org>>, BFC <fin-comm at icann.org<mailto:fin-comm at icann.org>>
Subject: [community-finance] FY17 Budget update: Section 4 on IANA Stewardship

Dear all,
Please find attached an extract from the final FY17 Budget document relative to the IANA Stewardship transition (Section 4), currently under review, prior to Board consideration for approval in Helsinki.
You may remember that the Draft budget document submitted for public comment did not include information on the FY17 expenses for this project. The Project Cost Support Team created in Marrakech has been working with the BFC, the CCWG, CWG, ICG co-chairs and involved staff to estimate the draft project’s expenses for FY17. These draft estimates have been included in the attached section (total $8.8m, page 3/10).
Though offered late in the process, as these estimates are under review, your comments and questions on this section are welcome.

Thank you.

Best,
Xavier

Xavier Calvez
ICANN
CFO
12025 Waterfront Drive, Suite 300
Los Angeles, CA 90094
Office     : +1 (310) 301 5838
Mobile   : +1 (805) 312 0052
Fax                          : +1 (310) 957-2348

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