Finance & Legal minutes: 2020-11-11

Minutes:

11-11-20 F&L Meeting Minutes

Present: Sharon, Becky G., Becky H., Amy
Guest: Willie


New Monkeys:
* Becky G., Willie, Mary, and maybe Debbi will talk through the draft
Building Modification Agreement before sending to lawyer
* Becky G.: Ask attorney to review draft of Willie’s Building Modification
Agreement for review.
* Becky G.: If Willie & Katie sell before 10 years, GO or the new owner
will need to cover things for a transitional period - get attorney input.
* Becky G.: Update GOCA insurance policy once we have valuation of Willie
& Katie’s addition from the builder
* Willie will take a stab at a draft announcement about Buildings
Modification Agreement, Becky G. to edit
* Becky G. will find generic version of Buildings Modification Agreement
and send to Willie and Mary
* Becky H. will send an email with a blind bcc to everyone who has fallen
behind on their association fees.


1. Building Modification Agreement
Lawyer recommended that we state details that we agree on. Willie wrote a
first pass, something to react to. Mary King has already reviewed it
initially. Willie shared the draft. He will send out the link.


BG:
We will file this with the county clerk. Needs name, address, etc. at the
top.
Since Rick is filing it, we should ask him to review this.
Changes proposed:
Important legally to note that this is an expansion vertically, not
expanding into LCE. This will be important if people in the future want to
expand their unit footprint. This also justifies why we don’t need to
change the site plan.
Who pays for what:
Warranty does not transfer to new owner if Willie and Katie sell
If W&K sell before 10 years, GO or the new owner will need to cover
things for a transitional period - get Rick’s input.
Willie laid out several scenarios and how the responsibility would fall
Materials in the expansion: how are these treated? Things that are not
typically replaced. There are things GO is responsible for but which may
not fall into the reserve. E.g. drywall, electrical lines. Repairs to
these would come out of GO’s funds, but likely out of operating, not
reserve.
Could say that W&K would be responsible for any electrical or HVAC in
the addition up to 15 years. We can’t collect more for these for the
reserve.
MONKEY: BG, Willie, Mary, and maybe Debbi will talk this through
before sending to lawyer
Worst case scenario: What if the whole building burns down? Does
Association policy cover the replacement? Yes, we will update our
insurance when we have the valuation of the new addition.
Does this need to be resolved and agreed upon before builders start? In
an ideal world, yes, signed before construction. But making it happen
quickly could be challenging. Becky has time to work on this. Debbi is
good with legal aspects. Don’t know about Mary’s availability.
What does F&L or Buildings need to do to communicate this work to the
community?
Announcement that this has happened, community protected
Precedent
Emphasize Buildings Modification Form need, and going forward. If we
have a form, share it also.
MONKEY: Willie will take a stab at a draft announcement about
Buildings Modification Agreement, Becky G. to edit
MONKEY: Becky G. will find generic version and send to Willie and
Mary
Wasn’t one done with Terrence & Emily when did their sidewalk
differently? Rick reviewed it.
Buildings is empowered. The Buildings Modification Agreement doc will be
vetted by the lawyer, for best practices of condos, plus what we as a
community want.
Look for letter Nov. 4

2. Monkey Review - none!

3. Annual Budget Process - up for decision on 11/16/20
* Unlikely that BG will know what 2019 budget surplus is


4. Jobs for Winter 2021 season (Jan-Apr)
* Remove budget jobs
* We discussed continuing roles
* Continue meeting 1x month, unless Debbi would like our help in support of
getting the Master Deed finished- consider expanding back to 2
meetings/month, increase hours, to get it done
* We’ll continue meeting on Wednesdays though not good for Sharon in March
and April when she’s teaching for 6 weeks. Tentatively meeting: Jan 13,
Feb 10, Mar 10, Apr 14


5. Bookkeeping updates
Arrears
A number of people are a month behind. One person’s bank ended her
autopayment without telling her. We waived the late fee. Contacted
another person today. Talked through the others, to decide how to follow
up. MONKEY: Becky H. will send a blind bcc to everyone who has fallen
behind on their association fees.

Taxes and Audit update
Note from BG: Our first 2 audits went smoothly. This one, however, has had
serious problems. First, Covid has delayed everything. Then the audit firm
moved, then updated/crashed their computers. All of these added to the
delay, but the bigger issues are listed below.


Nicole is the woman doing most of the audit work with us this year, with
Maureen as her supervisor. After doing a portion of the work, I received a
call from Maureen about 3 weeks ago. They discovered that the ending
numbers for 2018 did not match the starting numbers for 2019 and all work
on the audit had to stop until this was figured out. It has been a very
long 3 weeks, but here are the highlights:


*We discovered that Susan from Ann Arbor CPA stopped doing the
reconciliations in Oct, even though she was supposed to be doing them.
*Susan didn’t really train anyone before going on maternity leave.
*Susan is no longer employed with Ann Arbor CPA, and it appears she was let
go for performance issues.
*Shaz from Ann Arbor CPA has stepped in, and completed all the
reconciliations for us and the auditors—at no additional cost because we
already paid for this service.
*The auditors were able to send me the list of which accounts didn’t match
up last week.
*It only took me 1 hour to figure out what caused the discrepancies. I
made a few mistakes,* which in theory Susan should have caught, but didn’t.
The last mistake was Susan’s. All of these could have been avoided if we
had locked 2018’s records. Maureen and I have talked, and this is the
number one policy change we need to implement immediately. As soon as 2019
is completed, I will lock all prior years.
*At this point, we are just waiting on Nicole to verify my findings and
then to complete the audit and taxes.
*Maureen and Nicole have both indicated that because this has taken so much
extra time, it will cost more this year. They have not given me any
indication yet on how much. I am prepared to push back a little on them,
because checking the ending/beginning balances should have been the first
thing they did. We also have cause to go after Ann Arbor CPA because the
lack of reconciliations absolutely contributed to the delay, and one of the
mistakes was clearly theirs.


We as a committee will need to discuss how we should approach Ann Arbor
CPA. Initially, Shaz seems much sharper and more skilled than Susan, but I
don’t know how much of this slacking off of Susan’s was just her, and how
much was the culture of the firm since Len left. Maureen shared that one of
the other cohousing groups that used to use Susan now uses Maureen’s firm.
But I’ll be honest, having the same firm doing our bookkeeping, taxes and
audit seems like a bad idea to me. It lacks the checks and balances we’ve
been trying to instill.


Do we need to change firms? Or did they correct the problem by getting rid
of Susan? Or could we provide BG with interview questions with the boss so
BG can make sure this doesn’t happen again?
What internal controls do they have?
Check him out, for his attitude, etc.
Relationship with Chaz, what are expectations?
$120/mo to send out statements, add late fees, and reconcile statements -
just 2 hours worth of work, maybe 3
Talk to owner, Susan gone, ask for checks and balances, try out for another
year
Wait until the final bill from the audit to talk to the owner.
We hire CPAs to catch our mistakes. They can make mistakes, too. This is
why we have the auditors.
Once audit is complete and taxes filed, circle back and decide how to
approach the other firm. Depends in part how much they charge us.
Reasonable to hit the accounting firm for it or some of it.


6. Ongoing items
Check-in on MD and Bylaws - no update today

COVID Questions from Steering
i) Liability waiver question
Attorney Rick Delonis response: “I think that the typical cautions and
“warning” signs (to wear a mask, keep a social distance, etc) would be
sufficient. I don’t see the need for a signed waiver. “
ii) Insurance question
BG reported that our insurance agent said we just have to follow the
current state mandated guidelines, and suggested posting them on the CH
doors.

7. Matters arising
If people from 2 different households meet in the offices, do we need the
renters to sign a release? No - Rick answered this question. We’ve shared
the rules with the renters - masks are required.
Should we require or provide air-filters in the offices? We have them in
the building. If an office retner wants to have their own, that’s up to
them
Provide a clean bathroom? - Bathrooms ARE being cleaned
Keep fans on in bathrooms.


8. Next meeting - December 16
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