Finance & Legal minutes: 2015-06-24

Agenda:

Liens update
CH Assessment

Minutes:

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


1. Liens update

After three trips, the liens on households with significant arrears are
properly notarized. Becky H. will take them to the County Register of
Deeds this week.


2. CH Assessment

a. Any new bookkeeping updates? No news.

b. Special Assessment liens: 9 households are still paying their CH
Special Assessment loans. Three of these households have said they may pay
off their balances. Becky sent them the amount needed to pay in full if
they decide to do so. Amy will start working on the Special Assessment
Liens based on information received from David Keast. Debbi will help
identify the legal descriptions of each property.


c. Request from Adi and Heather: Adi emailed F&L to say that he and
Heather request that GO credit their GO account for the amount of their CH
Assessment, which they paid in full in 2004, equivalent to the amount still
owed by the 9 households (approximately $3000). They would then pay this
amount back to the GO Reserve at 3% interest. They argue that special
assessments legally must be offered equally to every household, and that
each time GO's CH Assessment payment plan has been adjusted since 2004, it
is like a new assessment, and every household therefore should be able to
participate in the terms. In their view, borrowing money at 3% is a
better rate than their mortgage, and GO's Reserve Fund will also benefit
from earning 3% -- more than it currently earns. They further argue that it
would not cost GO anything to credit their account, and that all GO
households should be able to do the same.

The F&L Committee disagrees with this interpretation. The original
assessment in 2004 was offered equally to all households, and
the subsequent changes in terms were made expressly to help neighbors
whose financial circumstances prevented them from paying in full. The
title of the most recent community agreement, on May 6, 2015, was "Proposal
for handling monies *still outstanding *on the Common House Special
Assessment" (our emphasis). The community did not agree to a new special
assessment. This agreement stipulates the rules governing the payment plan
for the CH Special Assessment; it is NOT a loan. No one is borrowing money.


We also disagree that it would not cost GO anything to credit their
account. It would require taking money out of the Reserve, placing it
in the GO operating account where it would not be available for community
use, and would require a special, one-off bookkeeping effort to set this
up.

A few months ago Adi shared a draft proposal, along these same lines, to
credit all the households who had paid in full, and then to have
all households pay back the Reserve at 3% (or a rate to be determined). At
the time, F&L declined to pursue this proposal for reasons similar to
those given above, and because we felt that this move would create
significant risk to the community. It would require moving a large amount
of money out of the Reserve into the GOCA operating account to cover the
credits, making those Reserve funds unavailable for their intended purpose.
It would also require paperwork and expense to record 37 instead of 9
Special Assessment liens. We are a small community with limited resources
operating primarily on volunteer workers doing tasks in their spare time.
There was no reason to go to the effort involved in this proposal when we
were able to create and agree upon a simpler alternative.

It's our view that Adi and Heather have misunderstood the purpose and
spirit of the Community's agreement, which was to help neighbors whose
finances are tight and, therefore, needed to continue to pay monthly. Nor
do we think that it is a good use of GO's money to ask our attorney to
weigh in on this matter.

The F&L Committee and bookkeeper have their hands full with other projects
vital to the community's financial health. Pursuing this request any
further is not a good use of our time.



3. Next steps with Reserve Study

A proposal regarding criteria for inclusion in the Reserve was brought
forward at the last GO business meeting. This proposal will come back for
a decision at the July 20 meeting.

Keith has drafted a second proposal defining the items that should be added
to the new Reserve study and those items that should be removed, based on
the criteria in the first proposal. Keith will work with Mary to finalize
this proposal. We will request time on the July 20 agenda for the second
proposal, which is dependent on the first proposal passing. If the first
proposal does not pass, we will need to delay the second proposal.

The final piece will be a third proposal on how we will pay into the
Reserve going forward.


4. Jobs for next season

a. Bookkeeper

Becky G. announced at a recent meeting that she would like to step down as
bookkeeper but is willing to stay on to train an apprentice and to counsel
the new person for a while after that.

She recommended that we reexamine the role and responsibilities of the
bookkeeper and consider ways to divide the responsibilities so that it's
less of a burden for one person, and so that more people know in detail
what is happening with GO's finances. We will discuss best practices with
the auditors.

The suggestion was recently made that we hire out more of the work to a
professional. However, there are many things that an external person might
not know to do. For example, we currently check in with households who have
small overages before charging them with late fees. We touch base with
committees when check requests come in that have been charged to the wrong
account.

Keith is interested in learning more about the job and will ask Becky to
explain the responsibilities.

Debbi will talk with Becky G. to see what she thinks about the idea of
splitting out the check writer and reporting functions.

In the past, Becky G. has recommended that the community pay for more
training for our volunteer bookkeepers. Keith noted that he might have
access to QuickBooks training via his job at the IRS.

Becky said that key areas of stress for the bookkeeper include the feeling
that there aren't enough people in the community who understand the
finances to provide support or catch errors. There has also been an
ongoing struggle with a member who frequently challenges our bookkeeping
practices, even when we've received counsel from our CPA, and makes the
bookkeeper feel that she is suspected of wrongdoing.


b. Convener: Amy will continue for another season to complete a year
of service.


c. Counted members: Becky H., Debbi, and Keith will continue as
counted members (if Keith doesn't become the bookkeeper's apprentice)


d. Check depositor: Becky H will ask Kathy (later confirmed that she
will continue)


e. Amy will check in with Syndallas about her work on the garages.



5. Community Scavenger Hunt questions

Q: In the early years of GO there was a subcommittee of F&L (or was it
Membership?). What was it?

Q: By what date each month should you pay your association fee?

Q: Should you check your statement balance before paying your association
fee?

Q: Did you know people can pay extra on their association fees to have a
credit balance so they're less likely to get hit with a late fee for small
overages?


6. Any other accounts receivable items?

- Becky H. talked to one of the households that is seriously in
arrears. The household is planning to regularly pay a monthly sum larger
than what is owed, to pay down the arrears.


- Becky will take a crack at editing one of our existing payment
agreement documents. We will discuss at our next meeting.


7. Audit - researching audit firms: Becky G. will research costs after
some personal deadlines. We have the names of two firms from Len Pytlak
and a third from Paul Conahan (which does Sunward's audits).


8. Next meeting: Wednesday, July 8, 7:00 pm