Finance & Legal minutes: 2015-04-13

Minutes:

F&L Meeting minutes

4-13-15



Present: Becky G., Becky H., Keith, Debbi, Mary, Sarah, Amy



1. Preparations for 4/20 Community meeting – facilitators Mary & Sarah
joined us

Ø Decide who presents which proposal

Ø Discuss how much time for each

Ø Define goals for facilitation

Ø Inform Gail G. who presents each and how much time for each



*A. B&B proposal – for DECISION*

Becky G. will present

This is the second time this proposal has come forward and we would like to
make a decision.

25 mins



This proposal basically says that short-term rentals are not permitted at
GO until such time as there is a community agreement that reassures members
that there are no liability or property damage risks, and that other
concerns have been addressed (frequent strangers on campus, etc.).



Changes to the proposal document:

- Background – defines short-term as any rental less than 30 days – a
hotel-like commercial activity in which the renter is a not an Associate
Member and has no intention of becoming one

- If anyone brings forward a proposal about how to allow B&Bs in the
future, it should be written to replace this proposal. It will need to
address other potential concerns such as safety, community norms, etc.

- Becky G. will add information about the status of Meg’s two
short-term rentals in the Background of the proposal



This topic was prompted by and is time-sensitive because our neighbor Meg
has two short-term rentals planned, one via Airbnb from April 30 to May 3
and the other outside of Airbnb to our former neighbors the Oppenheimers
from May 14 to 26. There are strong concerns about the lack of liability
and property damage protection for GO. While the chances of an incident
leading to an accident and to GOCA being sued are slim, they are real, and
in the worst case scenario could result in total financial ruin for GOCA
and also for all individual households.



Considerable research has been done by F&L members and with the help of our
neighbor Yi-Miau. We’ve learned that commercial insurance policies
covering GOCA’s risk simply don’t exist. However, we’ve also learned that
Airbnb recently launched additional insurance coverage for the condo
associations in which many of their hosts operate. One of our most
knowledgeable neighbors regarding legal matters, Dale, reviewed Airbnb’s
policy and was satisfied that GOCA would be well protected by this provided
the Airbnb listing describes GOCA’s facilities.



We are asking Yi-Miau to find out whether Meg needs to cancel, repost, and
rebook the April 30 rental or whether she can just amend the listing so
that GOCA is protected. We are also asking Yi-Miau to find out what
language is needed in the posting to ensure GOCA’s protection.



Then, we need to have a conversation with Meg to communicate how serious a
situation this is and what she needs to do to address it.

· Becky G. will call Meg and arrange for her and Becky H. to meet and
talk with her. Becky G. will put information in writing for Meg, and we
will ask Meg to provide written documentation of what she does to meet our
requirements.

· Meg: either amend or rebook the existing booking to include GO
amenities using recommended language.

· We aren’t sure whether she needs to purchase the extra
insurance. Becky H. thinks it was included. Amy will ask Yi-Miau to ask
Airbnb this question as well.

· Meg will also need to book the Oppenheimers’ rental via Airbnb so
that we can have the Airbnb coverage.

· We would like both rental parties also to sign waivers of liability
as a backup precaution.

· We are asking Yi-Miau to find out if there is boilerplate we can use
to describe our facilities. We need to provide Meg with some language.
“Including but not limited to” would be a useful phrase to use.

· Deadline for Meg: If she does not provide proof that GOCA is
covered by the Airbnb policy, we will call Airbnb and contact the
Oppenheimbers and cancel the rentals. We have the authority to do
this. Unfortunately, this would hurt Meg’s rating as a host. It would be
possible to work with Airbnb to mitigate this harm.

· These changes need to be done by the end of Friday 4/17 so that we
can report to the community on Monday 4/20 that the risk has been addressed.

· Make it clear that this is the only time Meg can do short-term
rentals until there’s a new community agreement.

· [Side note: Mary found a webpage stating that landlord insurance
policy is recommended for Airbnb hosts, but this is outside F&L’s purview.]



We heard that someone at Sunward was doing a B&B – maybe only in the past?
– Mary wrote to someone there to ask for info about this.



Assuming the proposal passes, we should put information in the New Member
packet stating that short-term rentals are currently not allowed, but could
be if someone brings forward a proposal that is consensed by the community.



*B. Proposal on how we pay back the foreclosed households*



Presenter: Debbi

Intro/discussion: surfacing concerns and clarifying questions

How long? 35 mins



The Community agreed that money should be repaid to the two households who
purchased their units after foreclosures and have made payments on their
units’ Common House Assessments when they were not legally bound to do
so. At the March 16 Community meeting, the community asked F&L to
recommend how to repay this money.



The CH Assessment Background doc will go out with the proposal. It has
been updated.



We considered a scenario in which we refund the payments that have been
made to date (totaling $3107.92) using $500 that we would request from the
Critical Needs Fund, plus withdrawals in varying amounts from our largest
savings accounts.



We would then pay back the future amounts owed by these units (a total of
$5643.20) via the operating budget over 3 years, at a rate of $4.24 per
household per month for 3 years.



Mary suggested an alternative to this scenario. Since we are repaying
funds we borrowed from the Reserve Fund, perhaps we could simply not
reimburse the Reserve for the above amounts (totaling approximately $9,000).



How could we do that? Based on a new understanding (not a new fact, but
something we did not realize before) about how the Reserve Fund is
structured, we’ve learned that there is a significant “threshold margin,”
a.k.a. “safety buffer” in the Reserve fund. Great Oak’s safety buffer was
based on a calculation of $2000 per household x 37 households, or $74,000
extra in the Reserve account that is there in case expenditures are higher
than we planned, etc. Every five years, we recalculate the Reserve Fund,
and this threshold is restored. So we would allow this buffer fund to
absorb the $9000 non-repayment, and either in the 2015 Reserve study or the
2020 Reserve study, we’d plan to regrow the buffer to $74,000 or whatever
the best practice is at that time. (A subsequent conversation suggested
that best practice today may be to set aside a lower amount per household.)



Mary and Keith will talk with Paul Conahan about this idea. (Since the
meeting, conversations have been ongoing about the pros and cons of this
idea and the proposal will likely evolve by the time of the 4/20 meeting.)



2. Matters arising



• Sarah Ross requested direction on writing a lease for a new house-sharing
tenant

In reviewing our Bylaws, F&L found out that we are supposed to review
leases. Since we are short on time tonight, we will discuss Sarah’s
request at our next meeting. We think it would be wise in future to review
leases in the timely fashion that the Bylaws require. We are wondering if
there is a difference between renting out an entire unit vs. a home share
(renting a room in a unit).



• Parkland Plaza grass cutting – We were contacted by THE Linda Smith (of
ScioView fame), who serves as the ad hoc secretary for the Parkland Plaza
business association, to ask if we would make a $65/year contribution for
cutting the grass at the entrance to Parkland Plaza from Jackson, by the
sign. It is not a governmental responsibility. We found out that
Touchstone has been paying it, and in fact, we paid toward this 3 times in
the past over several years. We agreed to pay it out of the F&L Operating
line item.



3. Check-in on Reserve study



We received a draft from Paul Conahan – Mary and Keith spent a lot of time
digging into it over the weekend.



We decided to add a 15 min presentation to the agenda for 4/20. Mary will
share good news about the Reserve and explain the process we will be
following in the coming months. She’ll describe what we have received from
Paul Conahan, and what the next steps will be. The topic will come before
the community twice: first to discuss what’s in the Reserve, and what
should be added or removed, and second to agree how we’re going to pay for
it (if our current practice needs to change).



4. Set alternate date for F&L meeting that conflicts with Memorial Day



Becky H., Becky G., and Amy could make an F&L meeting on Memorial Day. We
need to check with Keith and Debbi. Amy will put this on the agenda for
our next meeting.



5. Upcoming Proposals



The “Big” proposal on CH Assessment will come forward for Intro &
Discussion on May 6. We arranged for Becky G. to be assigned this
Alternative Meeting date and plan to use it as a business meeting.



The “Big” proposal will suggest that we allow the 11 remaining households
with CH Assessment payments to continue paying on a monthly basis after
June 30, but at a lower interest rate. We need to include our
recommendation about who pays for recording the Special Assessment Liens
that our attorney recommended.



We also want to bring forward a proposal to make a general agreement that
GOCA can issue special assessments. Debbi figured out that Michigan Condo
law covers us in this regard, but it would be better to follow Keast’s
advice and establish an explicit community agreement that we can make
special assessments.



We discussed the order of the agenda for Monday, and the length of each
item, as well as the presenters.



After the meeting, Amy wrote to Gail Graham to share the draft agenda,
presenters, and time needed for each item.



She also told Gail that we may ask to swap the June alternative meeting
date with the June business meeting, leaving that second meeting in June as
a pressure valve in case (heaven forbid) we need to go to a fourth meeting
with the “big” proposal. We're not saying this will happen! We just think
it’s a good option to have.



6. Accounts Receivable - tabled due to lack of time.

7. Next regular meeting: 4/27 at 7 pm



We agreed to meet until 8:30 pm routinely until we have made it through the
flurry of proposals about the CH Assessment and possibly about the
Reserve. We recalled that the Audit will be our next big project.
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