Finance & Legal minutes: 2010-12-15

Minutes:

Minutes of Finance & Legal Committee Meeting

December 15, 2010



Present: Aaron, Carl, Peter, Amy,

Guest: Mary





1. Reserve Study - final steps



Carl and Aaron are meeting with Dale on Monday 12/20 to go over the
spreadsheet to calculate individual unit monthly reserve fund payments.



MONKEY: Aaron will send an e-mail to Paul Conahan about this. Carl will
send the documentation showing the percentage increases the community agreed
on over the 25 year reserve period so Paul can generate a final study.



MONKEY: Aaron and Carl will review the books to determine what the exact
starting balance is for the Reserve Fund, and Carl will make sure that the
balance of the rollover fund accrued for the truck is transferred into the
Reserve Fund. They will come up with the amount for each household’s
monthly payments starting in January and notify households.



2. GO Condo Association insurance - considering three bids



Amy and Elph met with two insurance brokers (Finns Insurance and
Hopkins-Thomas & Blair, and C&M Insurance Services Inc.) and with Barb
Young, our current agent for State Farm. Peter was able to join us for the
meeting with Finns.



The bid from C&M (provider: Michigan Miller Insurance) was comparable to
State Farm. However, their liability coverage was less than State Farm’s,
so if we asked them to match it, their rate might end up being higher. They
also look at a 4-year history of claims vs. a 3-year history, which is more
typical, according to Barb Young at State Farm. This means that after you
place a claim, your premium goes up, and it takes 4 years before the rate
goes back down again instead of 3 years.



The bid from Finns (provider: Travelers Insurance) was less than our current
premium with State Farm, but some of the coverages were less extensive than
State Farm’s.


Our premium with State Farm went up when we made a claim a couple of years
ago. We are on track to have the premium drop back down after 3 years (in
2012). Elph and Amy concluded that it makes sense to stay with State Farm:
besides the coming rate reduction, we know that State Farm is easy to deal
with and we work directly with the State Farm agent instead of a middleman
who represents multiple companies. When we have a claim, we work directly
with Barb Young, whereas with the other companies, we call an 800 number.


Everyone in the group was comfortable with staying with State Farm, but felt
that it was a good thing that we had done due diligence in comparing our
policy with others. (Thanks to Willie for suggesting it.)


We discussed moving the start date for our policy to January. If we do
this, we’ll know what the next year’s rate will be 30 to 45 days in advance,
which would inform our budget process (the number would come rather late in
our budget process, but would still be more timely than our current start
date in July). If we do this, our premium will drop in January 2012 instead
of July 2012. And depending on how things shake out with the insurance
policy on the shared garage with TS, we may encourage TS to move to a
January start as well, to align with GO. (They also work with Barb Young at
State Farm.)



We have asked Barb to find out whether we can have a separate policy for the
shared garage. That would make things extremely simple in terms of sharing
expenses with TS. If not, we’ll need to make an agreement with TS about
how the insurance is handled.



MONKEY: Amy will follow up on this. Also she will ask whether it makes
more sense to move to a January start date in 2011 or in 2012.



3. F&L leftover funds from this year – discussion



There are a few thousand dollars left in F&L funds for 2010. We had hoped
to get Keast started on the Master Deed changes before the end of 2010 and
had planned to use some of these funds for this purpose. We will ask the
community to allow F&L to roll this over into 2011, and if there is money
left over, it would be rebated for 2011.



MONKEY: Request time on the January community meeting agenda to make this
proposal.



Carl wants to carefully review the 2008, 2009, 2010 books to understand
where things stand with rebates. Rebates have not been made from the
operating budget for any of these years, in part because of the significant
amount of money owed to the community in unpaid association fees.



Carl proposed that instead of holding these arrears against the members’
rebates, that the arrearages be held against rollover funds instead. He
needs to verify what the current balance is of rollover funds to make sure
this makes sense.



The community already agreed on a rebate for 2009. The community did not
discuss or decide about a rebate in 2008, so perhaps this should be folded
in with 2009. But for 2010, we should come back with the proposal that Carl
is outlining, and get the community’s agreement before moving forward. Carl
thinks he will be ready for this around February or March, when he expects
to be ready to present a report on the overall “state of the budget.”



4. Late Association Fee policy

We have an agreement about charging late fees for late payments, but we
don’t always enforce it. The primary gap between policy and action is when
people submit their payments between the 20th and the 31st. Carl
recommends that we change the policy to allow for this.



MONKEY: Carl will draft an e-mail to the community to remind people of the
policy.



5. Next steps on Master Deed issues



MONKEY: Aaron will ask Keast whether the Book of Agreements could legally
stand in place of amendments to the Master Deed.



There are three issues on the table that Aaron sent to Keast. We also need
to ask Keast about the shared garage with TS and how this should be
recorded.



5. Documents Organizer – we still need to check in with Gail.



6. Update on Annual Review bids and next steps



We are going to hold off until the second half of 2011 when Carl has
finished with his review of the books for the past few years. Then he will
be able to discuss the books knowledgeably with the reviewer.



The person who does our taxes is willing to do the review for about $1000.
The firm that does Sunward’s reviews asked $1800 plus $140/hr for questions.
The third bid was about $3000. One firm declined to do the review.



This will be a review and not an audit. It’s a part of good financial
practice to do this and it’s required in our Bylaws or Master Deed. We want
advice on how we are doing and how we can do better.



7. F&L Stack (document)



We reviewed this again.



MONKEY: Amy will make the new updates and then post on the wiki and send
out the link to Talk.



8. CH loan rebate



We discussed the recent e-mail exchange between Adi and Carl. An in-person
conversation would likely clear up misunderstandings.



9. Household in arrears - discussion of next steps



A payment was made in November, but the most recent payment agreement has
been broken, so no agreement currently exists. Carl plans to talk with the
household after the holidays about a new payment plan.



The unit in foreclosure is also in arrears but we expect to be paid by the
bank when the redemption period is up.



11. Sprinkler issues in Building 10 and CH.



MONKEY: Amy will ask Barb Young at State Farm what would happen from an
insurance point of view if we deliberately turned systems off and left them
off for a period of time.
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