Date: Thu, 28 Mar 2024 08:06:06 +0000 (UTC) Message-ID: <1813763217.14200.1711613166465@community1.lax.icann.org> Subject: Exported From Confluence MIME-Version: 1.0 Content-Type: multipart/related; boundary="----=_Part_14199_1626725611.1711613166465" ------=_Part_14199_1626725611.1711613166465 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable Content-Location: file:///C:/exported.html
The final version to be submitted, if the draft is ratified, will be= placed here by upon completion of the vote.
The final draft version to be voted upon by the ALAC will be placed = here before the vote is to begin.
The ALAC strongly supports having the Reserve Fund at the level of 12 mo= nths expenses, and higher if there is a practical way of achieving that wit= hout unduly impacting ICANN=E2=80=99s 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 inclu= ded a recent history and projection of ICANN operational expenses along wit= h 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 p= lan on how and when this will be achieved. Given that the proposed target l= evel(s) are significantly above the current Reserve Fund level, and it is u= nrealistic to believe that we will sustain or exceed this year=E2=80=99s re= turn-to-reserve of $5m, ICANN should expeditiously investigate alternative = methods of building the reserve to ensure ICANN=E2=80=99s future stability.=
The first draft submitted will be placed here before the call for co= mments begins.
A draft-draft regarding =E2=80=9CICANN Reserve =
Fund
Public Comment on Rationale and Target Level=E2=80=9D
The document is = https://www.icann.org/en/system/files/files/draft-reserve-fund-12oct17-en.p= df
Historic ICANN Reserve Fund
Goal of the Reserved Fund
=E2=80=9CICANN decided therefore to set up a Reserve Fund in 2007 in ord= er to reduce its dependence on the timing of fee collections, as well as to= provide it with sufficient financial resources to enable it to defend its = multi-stakeholder governance model against possible litigation.=E2=80=9D
The current target level
=E2=80=9CA Target Level equivalent to =E2=80=9Ca minimum of 12 months of= operating expenses=E2=80=9D was also established for the Reserve Fund.=E2= =80=9D
No formal decision but an implicit acceptance by the ICANN Board over th= e time since 2007.
2012 Benchmarking of non-for-profit organizations
Risks covered
Level of the Reserved Fund
A fraction/multiple of operating expenses from 3 months to 2 years.
New ICANN Reserve Fund Project
ICANN Board undertakes a new Reserve Fund Project (10 Board members supp= orted by ICANN=E2=80=99s executives).
5 scenarii are considered.
All take into account the following =E2=80=9Clist of possible Consequent= ial Events for which the Reserve Fund is considered to be an expected sourc= e of funding includes, but not limited to, the following:
Comments (possible events)
[I add number before each item for ease of comment]
Considering factors specifically related to ICANN=E2=80=99s operational = and risk profile as well [as] factors related to market trends, ICANN Organ= ization estimated the cost of each of the
Consequential Events and
5 scenarii were taken into account and quantified
The proposal target is between scenario 3 ($135m) and scenario 4 ($198m)= .
Comments (scenarii)
To study and to compare ICANN scenarii and benchmark, it could have been= useful to get some additional data like:
It could have been useful to have more information about the Shut down s= cenario.
If ICANN have to shut down, can we really see a new need for operational= funds, and other expenses aside to shut down ICANN?
If ICANN just needs the fund to shut down the organization it is almost = the same level that scenario 3 =E2=80=93 medium.
=3D=3D> First conclusion: Target level $135m to $140m.
Target level and link with Opex
It always seems difficult in an evolving environment and not stabilized = organization to link the Reserve Fund target with the Opex.
=3D=3D> Second conclusion: Define the target with a number.
ICANN needs also to setup a target date to complete the replenishment of= the Reserve Fund.
=3D=3D> Third conclusion: Define a target date.
To be sure that it is still the good target a review of the situation of= the Reserve Fund must be undertake every 5 years or after each important u= se of the Reserve Fund.
=3D=3D> Forth conclusion: Review regularly amount and date targets=E2= =80=99.
Comments (general)
The multi-stakeholder part of the ICANN structure seems not to have been= taken into account in this project. Part of the work is done at =E2=80=9Cn= o or small cost=E2=80=9D by community members.
How it can be taken into account needs to be studied in more depth?