Finance & Legal minutes: 2010-04-22

Minutes:

Minutes of F&L Meeting

4-22-10



Present: Aaron, Mary, Amy

Guest: Rod



1. Buildings Maintenance Rollover Fund: follow up from 4-19-10 Comty
meeting



Several action steps came out of the Buildings Maintenance Rollover Fund
(BMRF) discussion at the 4-19-10 Comty Meeting:



MONKEY #1: Given our existing agreements/practices around the BMRF and
rebates, Finops should cover the $5000 overage in the Buildings Maintenance
line for 2009 using funds from the BMRF.



MONKEY #2: Rod will draft a short document defining the rollover funds he
is familiar with in GO’s budget. F&L will then vet this description with
committees, check in with Finops, then bring to a community meeting for
approval. We want to have written definitions for these funds.



MONKEY #3: Discuss big picture aspects of our budget design with the
external reviewer to learn about evidence-based best practices in condos
finance.



We want to determine whether we need to redesign our budget system
specifically with regard to rollover funds/rebates. How should we design our
system that best guards the interests of GO and also helps households to
predict their finances?



Our existing agreement about rebating unspent money at the end of each year
has led to the practice of creating rollover funds to protect pots of money
that we need to allow to accumulate to replace items (e.g. the Truck) or as
a cushion against bad years (e.g. Buildings Maintenance Rollover Fund). This
may be making our accounting system more complex than is desirable. Some
alternatives might include carrying forward all unspent money from one year
to the next to be able to lower our association fees, or creating a single
contingency fund that carries forward each year (to reduce complexity).



A tangential idea is to hold back on disbursing rebates until the subsequent
calendar year (e.g. for 2009, rebate in January 2011, and so on), to allow
the dust to settle, without rushing. Some businesses do this.


A related issue is how we treat our line items. We used the analogy of
“buckets” of money to help visualize this. Should individual line items be
treated as:



1) fixed amounts, independent of other committee line items (“line-item
buckets”)

2) treated as bundles of line items (committee budgets), with flexibility
within each bundle (committee buckets)

3) or should we treat the whole budget as the main thing, so we can move
money from a place to another when overspending occurs. (one big bucket)



We need time to talk about these big-picture questions on the community
level, but need expert advice first. Either do research ourselves or get an
expert to tell us what the evidence-based best practices are. First step
will be to talk with the outside reviewer about this.



2. Fire Suppression Issue



The concerns around the Buildings Maintenance Rollover Fund were fueled in
part by fears about the costs of fixing the Fire Suppression system, leaks,
etc.



MONKEY: Buildings (Rod/Mac) will write up a proposal for handling fire
suppression problem.



3. Lien



We may need to place one lien. Still waiting for final word on this.



MONKEY: Aaron will contact Cher for instructions on how to do this.



4. External Review



We want to support Elph in moving forward with this. Next step is to get a
third bid. He has two.



MONKEY: Mary will ask Elph to send her the e-mail he used to get the two
bids he has, find out if he has any leads on a third company, and work on
finding the third option.



5. Next meeting



Monday, May 10 at 8 pm at Mary’s house.
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