Finance & Legal minutes: 2015-04-27

Minutes:

Minutes of F&L Meeting

4-27-15



Present: Becky G., Becky H., Debbi, Amy, Elph

Keith joined us after a Reserve Study meeting at Mary’s





1. Airbnb rentals update



Becky G. reported that liability waivers have been signed by both rental
parties coming to Meg’s unit in the next few weeks. The Airbnb listing for
the first rental has been changed to reflect the rental context at Great
Oak Cohousing, so we will have insurance coverage for liability and damage.
The Oppenheimers will also book via Airbnb.





2. Preparations for 5/6 Community meeting



Elph is facilitating solo at the May 6 alternative meeting that F&L
arranged to convert to a business meeting. He joined us so he could get up
to speed on the proposals that will be presented. We will need to issue a
huge plea to get people to come so we can make a decision. We will end
early!



Amy will send Elph the titles of the proposals and the amount of time
needed for each.



a. Proposal for handling monies still outstanding on the Common House
Special Assessment



Coming back for a DECISION. 20 minutes. Debbi will present.



We talked about the change from 8% to 3% interest. Elph had expressed
concern at the April 20 community meeting, but was satisfied with F&L’s
rationale for reducing it. No changes had been requested at that meeting.



b. Proposal for Covering the Common House Special Assessment Shortfall
Arising From Past Foreclosure Sales



INTRO/DISCUSSION. 30 minutes. Debbi will present, with Becky G. in a
supporting role.



Great Oak has decided to pay back two households for the amount of money
they have paid toward their units’ CH Special Assessments since they
purchased their units following foreclosures. Since GOCA did not provide
certain details about the CH Special Assessments to the banks at the time
of foreclosure, by law these households are not required to pay for the
Special Assessments since the foreclosure. The community agreed that it
wants to repay the households for ethical and communitarian reasons even
though we are not legally obliged to do so. In addition to paying back
this money, the two units’ future Special Assessment amounts owed also need
to be covered.



We talked about various scenarios for how to pay for this obligation.



At our last meeting, we discussed a draft proposal that would take a
proportional amount of funds from our larger savings accounts to pay back
the affected households, and then for the amount owed going forward, create
a line item in the operating budget, sharing the cost equally across all
households, including the two foreclosed units.



Mary and Keith had suggested an alternative, namely, that we use some of
the “threshold” or “cushion” funds in the Reserve to cover this expense.
Paul Conahan has told us that our cushion is larger than is typical in many
other communities, so it seemed like we could spend this down on a one-time
basis without harm to the community. At our last meeting, we decided to
move forward with this idea, but subsequent conversations with Dale
convinced us to drop this idea. F&L has been trying to clean up “creative”
practices implemented in the past. This would be another such example. It
is not best practice to use Reserve funds for this type of expense. We
agreed that our goal is to use best practices and we therefore abandoned
this idea.



We agreed that taking money out of our savings accounts to cover unrelated
expenses was another “creative” practice, so we set aside that idea as well.



We talked about spreading out the operating budget hit for longer to make
the amount per month smaller.



We decided that it would be simpler and cleaner – in short, best practice
-- to place a Special Assessment to cover this expense. Could be spread
out over 5 years. We would put this as a separate line item on monthly
statements and include the end date.



How about a special assessment that enables everyone to pay it off all at
once or monthly with no interest (because interest is already included)?
No, because it makes it harder to communicate clearly when units are sold.



Debbi will revise the proposal accordingly.



We have to pay back the households either with a credit or a check. We
prefer a credit because one of the two households is in arrears and this
will help reduce the arrears. Becky will consult with Len and Susan about
how the credits will be issued.



At the May 18 community meeting, we’ll bring back this proposal, hopefully
for a decision, as well as a piece about the Reserve Fund if Mary and Keith
are ready.



c. Proposal for a General agreement that GOCA can issue special
assessments



We thought we needed to do this in a hurry but we’ve since learned that we
don’t. Postpone.



3. Accounts receivable / Liens



Becky H. will talk with Debbi about what’s involved in reminding/checking
in with people who are in arrears. Debbi would like to hand off this
responsibility if possible.



Becky and Debbi will meet soon to come up with the broken-out numbers
requested by Keast for the liens that we need to place on the households on
arrears. We need to make sure Meals has followed the procedures detailed
in a community agreement about meals balances in arrears. Someone who is a
current Meals committee member needs to send a check request to the
bookkeeper so that Meals is reimbursed for the arrears and the debt is
transferred to the household’s GOCA arrears. We can then include this in
the lien.



CH Office in arrears: We have received one check from Matthew Cooke for
$200. He has until April 30 to make another payment. Elph sent him a
reminder while we were meeting. Matthew actually owes us $206 per month,
so he should pay that or he’ll get a late fee. He had said he was going to
pay a large amount toward his debt.



4. Matters arising



• Bookkeeping item: Becky has a spreadsheet that someone created in the
past that defines how much people need to pay off their CH Assessment
debt. She recently noticed that the amounts Len recorded in Quicken are
different. Becky will meet with Len to find out how the discrepancy
occurred. The discrepancy is not large.



• Willie sent F&L a message about late fees. He feels strongly that when
imposed on arrears in small amounts, the $25 late fee is unreasonable and
not in the spirit of community, and he would like to see it changed. He
cited the UM Credit Union’s policy as an example that is less punitive.



Bookkeeper Becky G. said that she has talked with Willie about this in the
past. Becky and our earlier bookkeeper, Kathy Boblitt, feel that the late
fee actually works very well as a stick to get people to pay up. If we
didn’t have it, we would have a plethora of small amounts in arrears
because there would be no incentive to pay them off. In addition to
bending over backwards to remind the entire community in general and
individual households in particular about their association dues each
month, the bookkeepers also have been very accommodating of people who
contact them to acknowledge a mistake and to ask for a waiver. Things
generally can be worked out if people ask. This is very much in the spirit
of community.



In addition, other options exist. People who are worried about missing
small expenses over and above their regular association fee amounts (such
as truck or guest room usage) are welcome to place a small credit on their
account (say, $25 or $50) which would cover these small charges with no
problem.



If Willie still feels that a change is needed, he is welcome to bring a
proposal forward to the community. F&L does not feel that it is needed.



Amy will invite Willie to come to a future F&L meeting so we can talk more
about this in person.



• Leases – we now have a standard lease for when entire units are rented
out, i.e. the landlord is not living in the unit with the renter(s). We
don’t have a standard lease for home shares (Sarah Ross’s situation). We
will talk about this at a later meeting. And what do we do about the
landlords who have renters but don’t have leases? This is required by our
Bylaws. We should tell these landlords what the Bylaws say and tell them
what is common practice, but we should not be giving counsel.



• Reserve study - Keith reported that he has several tasks to do, then
he’ll send the information to Paul Conahan. Paul will make changes to the
Reserve study and give us another draft to send to the community. Then the
community will follow a 3-step process: 1) agree about the criteria for
what belongs in the Reserve; 2) based on 1, agree about what specific items
at GO should be in the Reserve; and 3) agree on how we’re going to pay for
it.



• Insurance issues (landlord insurance) - postponed



5. Future meetings: May 13, skip May 27 for the Memorial Day holiday,
June 10



At Debbi’s request, we agreed to move future F&L meetings to second and
fourth Wednesdays. Amy signed out the CH Sitting Room for these and
cancelled the existing reservations for Mondays.
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