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 [to avoid the situation faced in San Francsico in 2005]. 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.