[ALAC] ALAC Statement on Reserve Fund

[Alan Greenberg]

Thanks Judith. I look forward to the discussion.

I note that ongoing sources of funding for the reserve is not major 
issue. Once it is topped up, we are not likely to see any major 
increases in the ICANN budget in the near future, and what there may 
be is decreases. But to the exten that the annual budget does go up, 
the operational budget should be able to fund a return-to-reserve 
(RTR) to keep the reserve at a reasonable level (just a swe did a $5m 
RTR this year).

In terms of the order, a use of Auction funds is ***FAR*** more 
likely than the other two!

The remaining funds from the last round, currently at about $100m, 
currently is held in reserve pending potential costs (such as 
litigation). It is not at all related to the Auction Proceeds.

Alan

At 28/11/2017 03:23 PM, Judith Hellerstein wrote:
>Hi Alan and Sebastien,
>
>Thank you for posting this comment and I look forward to the 
>discussion.  I too agree that the ALAC needs to strongly support 
>having an adequate reserve fund, however, I think we should identify 
>more than 2 sources for funds as the Auction proceeds is a one time 
>possibility and the problems with the reserves need something that 
>is a more concrete and longer term option.  I would like to see more 
>suggestions for sources of funding.  I would also prefer that we 
>switch around the order of the sources of possible funds to put 
>Auction Proceeds as the last item and a levy on any future new GTLDs 
>as the first item on the list.
>Also I was a bit confused by your statement in that Auction Proceeds 
>is the surplus from the last round of gtlds but in this sentence it 
>looks to be a different item.
>
>Best,
>
>Judith
>
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>On 11/28/2017 2:26 PM, Alan Greenberg wrote:
>>See https://community.icann.org/pages/viewpage.action?pageId=71602968.
>>
>>Sebastien identified a number of important issues related to the 
>>reserve fund, following discussion with him, I have drafted the 
>>following short statement (also posted to the Wiki). As the PC 
>>closes on Thursday, and I believe it is essential that we make a 
>>strong statement, I would like to discuss this on the ALAC call in a few hours.
>>
>>Alan
>>
>>----------------
>>
>>The ALAC strongly supports having the Reserve Fund at the level of 
>>12 months expenses, and higher if there is a practical way of 
>>achieving that without unduly impacting ICANN's ability to provide 
>>necessary services, ensure the current and ongoing security, 
>>stability and resiliency of the DNS, and adequately support its ACs and SOs.
>>
>>Since the Reserve Fund level is clearly tightly coupled to the 
>>level of ICANN operational expenses, any discussion of the reserve 
>>should have included a recent history and projection of ICANN 
>>operational expenses along with the employee/contractor levels and 
>>the Reserve Fund levels over the same period.
>>
>>At whatever level the Reserve Fund target is set, ICANN must 
>>publish a plan on how and when this will be achieved. Given that 
>>the proposed target level(s) are significantly above the current 
>>Reserve Fund level, and it is unrealistic to believe that we will 
>>sustain or exceed this year's return-to-reserve of $5m, ICANN 
>>should expeditiously investigate alternative methods of building 
>>the reserve to ensure ICANN's future stability. Sources such as the 
>>Auction Proceeds, the surplus from the last round of new gTLD, or a 
>>levy on any future new gTLD fees should be considered.
>>
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>
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