Finance & Legal minutes: 2019-05-14

Minutes:

Minutes of 5-14-19 F&L Meeting

Present: Becky G., Amy, Sharon, Becky H.
Absent: Debbi


1. 2018 tax return
The 2018 return is very similar to the 2017. We do not owe any taxes, and
we’ll still have a credit next year. Tax preparation cost $470.

2. Bookkeeping updates
a. Insurance renewal
Becky G. has been working very hard on this. She shared a spreadsheet
comparing insurance options. Goodman Venegas (GV) has recommended that we
stay with Travelers for the truck, and Philadelphia for the volunteer
workers.

However, GV also recommended that we get a quote from State Farm again.
They are getting a quote from Citizens/Hanover, so we can compare it to
State Farm and Michigan Millers (MM). The MM quote was so high that GV
didn’t send it to Becky, other than to say that it was $5K more than last
year. Our premium would have gone from $12,000 up to $17,000. GV said
that they can’t in good faith recommend this. The reason it went up was
that MM decided that we had to move to a different package. Ann from GV
had the same feeling as Becky G., that MM just doesn’t want our business
anymore. MM announced the premium increase just two days before our policy
was due, two months after telling us that there would not be any changes.
This is obviously not good customer service.

Ann wanted to understand why we left State Farm in the first place. The
truck was a focus of Great Oak’s questions at the time, and we were also
worried about coverage for volunteer workers. Ann recommended that we stay
with Travelers for the truck, and Philadelphia for the volunteer workers,
as these policies address those problems.

Becky has been talking with Susan Rosales, a State Farm agent located on
Michigan Avenue in Saline. Becky met with her for an hour, then Susan came
here to GO and took photos. Susan needed the square footage of every unit
and building, and she went ahead and pulled it from the assessor’s office
website herself, instead of relying on our numbers. Becky also sent her a
lot of information about how we calculated our reserve. This changed the
replacement value of GO to $7M, whereas GV had us at $8.2M. We think that
Susan’s basis is more accurate than GV’s. We were probably paying a lot
more because MM and Citizens had our value too high.

Susan recommends that we have a $10K deductible rather than $5K. She’s
willing to come talk to F&L or the community about why a $10K deductible
would be good. We currently have a $5K deductible, and we have saved $10K
to cover two instances in a year. Susan would be happy to talk with us
about how we could come up with a second deductible if we ever needed to.

A State Farm policy covering our buildings, directors, and officers would
cost $11,600 vs. the $10,190 we paid last year to MM. The SF umbrella
policy is significantly less than MM’s last year for the same coverage,
from $720 down to $215.

The estimated premium from Citizens is just under $14K, more than what we
were paying MM before, but still under the MM increase.

The umbrella policy would be carried by State Farm. It would cover
anything the truck policy wouldn’t cover, even though they don’t hold the
truck policy.

Both Ann and Susan have better information about our sprinklers and walls
between our units than before. Susan gave us a discount for this.

Becky has had extremely good experiences with State Farm. She admits she
is biased because of two positive experiences working with them on very
difficult situations, and she has found their online system for making
claims to be very good. Sharon said she has also had good experiences with
State Farm.

All present agreed that the State Farm option looks good, keeping the truck
and volunteer coverage with the companies offered by GV.

Thanks to Becky for all the work!!!

b. Arrears
One household is well over the threshold for placing a lien. They told us
that they will pay the April and May dues within the month of May, which
will get them back below $1000. In June we’ll have a conversation about a
payment plan for the rest. We will need to stop waiving late fees unless
they agree to a payment plan.

c. Monthly reports are late going out because of all the work Becky
has been doing on insurance.

3. Basement Egress proposal

Becky drafted a proposal. She divided it into 3 parts, which could be 3
separate proposals or 3 sections of one proposal. Part 1 could stand
alone: an agreement that we allow primary basement egress as long as the
specified conditions are met. Part 2, about how we’ll accomplish the
construction of pathways and stairs, is a one-time action, so also seems
like it could stand alone. The third component is about how we will
maintain the new elements.

This proposal could be approached like the operating budget, where we start
by finding all the areas of agreement, then focusing in on the sticking
points.

There are no dollar amounts in this proposal yet for two reasons. Becky G.
is asking Reid from Hollowell to give us a rough quote for the job,
ballpark only. He’s coming out to do some bids for Grounds anyway.

The other reason is that we could consider seeking agreement in principle,
then have the discussion about money be between different bids. Determining
the materials, design, etc. is outside F&L’s purview. It may need to be up
to Grounds to get the quotes etc.

However, we have the feeling that some neighbors would not want to agree
to anything unless they know the approximate cost.

The community agreed at the last meeting that the costs should be split
between the landowner/homeowners and the community. If we say that there’s
primary access to basement walkout apartments, then the Association is
responsible for that access. So it may be that the whole community should
pay for the reserve costs, as they will be for GCEs. We hypothetically
imagined that if we built a new building on the South Lawn, for instance,
the cost of the sidewalks would go into the project budget, but GO would
share the reserve costs just as we do for the pedways and unit sidewalks
elsewhere.

Becky doesn’t see any way to make this project happen this year unless we
take a loan from the Reserve. We do not want to take loans from
individuals.

Becky could ask Paul Conahan, our reserve fund specialist: we’re thinking
about doing a major project. We’re thinking about taking a loan from the
Reserve, is that kosher?

In the meantime, our attorney Rick said we should either safely allow (by
building safe pathways) or forbid basement primary egress. We probably
should have the conversation with Anne & Bennie, and Jennifer, that they
must allow the tenants to use their front door for primary egress until the
safe pathway project is done.

A special assessment is another option. If we take out a reserve loan, it
would be a special assessment to pay it back. We could treat it like the
workshop loan, and make it a fixed expense in the operating budget, spread
over years. Billing people for the full amount all at once would not be
good.

We will bring this forward on May 20 for an initial discussion, and let
people know we’re trying to get financial information for section 2. We
could try to get agreement in principle about sections 1 and 3.

Adding another sidewalk and stairs will increase our work, but we noted
that its likely to be only one job, and renters over the years have made
substantial contributions to our work system and to our community life.

Sharon will ask Bennie if he would do the legwork to find out what the code
is for primary pathways to apartments. Can it be gravel? Permeable
pavers?

Becky and Sharon will present together. Elph and Jillian are the
facilitators. Becky and Sharon will reach out to E&J to prepare.

We will also need a visual to show people the specific areas we are talking
about. Sharon will prepare a drawing.

We think that GO will need to pay for the individual sidewalks from the
door to the sidewalk, because GO pays for sidewalks to primary access to
front doors. Becky G. will check in with Debbi about this.

Becky G. will try to send out the proposal on Saturday morning if possible,
and Sharon and Becky will try to meet with Elph and Jillian prior to then.

Ultimately the Work Committee will be responsible for any work inequalities
that arise. Grounds will be overseeing the building of stairs and
pathways. Buildings Committee may also have criteria, e.g. making sure
water is channeled away

4. Polly & Drew’s roof - Amy will verify with Mary that we understand
exactly what Buildings wants F&L to ask our lawyer to do. We reviewed the
documentation Buildings has sent us and discussed it.

5. Progress on Priority items
a. Master Deed & Bylaws - Debbi not here
b. Reserve Study – time to follow up with Mary on this
c. Basement egress issue – #3 above.
d. Truck Proposal – Amy to share proposal with Grounds
e. Calendar of routine tasks – underway!
f. Landlord leases – awaiting decision on basement egress item
g. Unit modifications/Documenting build-outs (Master Deed, insurance,
Buildings/ARC process) – the MD part has already been discussed in a
plenary conversation.

6. Ongoing items
a. CH Com re: CH Leases and proof of insurance - received proof of
insurance for Melisa’s office. Awaiting Syndallas’s.
b. Water sensors / Insurance discounts - pending decision about
insurance. According to State Farm, this
technology is so new that the underwriters haven’t caught up with it yet.
They do not currently give a discount on account of the sensors. In a few
years this may be possible.

7. Matters arising
a. We’ve heard that there are 2 canoes down by the pond that are not locked
up. This is an attractive nuisance that could endanger children. School
will be out soon. Oars should not be stored down there. Becky H. will send
a message to the three communities about this.
b. We talked about people entering the wetlands from Little Lake. A large
new path has sprung up. We speculate that people from the Health Center are
going for walks there. Grounds could put up a sign that says “Under Repair
- do not enter” -- until the area has grown back up again, nature doing the
repair. Amy will write to Grounds about this path, and also about our
concerns that the pallets leading to the wetlands below the north patio are
very dangerous and should be removed immediately. She’ll also ask Grounds
to follow up on the canoe issue.

Cooler doc:
https://docs.google.com/document/d/1_dmnNJmHmrwwFIfnscnRbPK-_8_kmahfFsOTn_fEvTY/edit
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