Finance & Legal minutes: 2008-12-24

Minutes:

Finance & Legal
12/22/08 8 pm

Attendance: Elph, Dale, special guest Amy H


Agenda items:
Concerns about association fees
Review financial report


Association fees
Amy--Spoke with Jim Crowfoot from Sunward about their experience
around foreclosure and association fees. They now have a process in
place that if a household is behind a certain number of months, the
association places a lien on their unit. This makes it possible to
recover fees if the unit is foreclosed.
Separately, they have developed a standard lease so that there is
consistency among renters, especially around work commitments.
We discussed the need to help households proactively, rather than
when they are in default.

Elph also had brought these concerns up recently. Three areas to
look at: 1) more consequences ("sticks"), 2) carrot--incentives for
timeliness (when behind), 3) creative financial assistance (separate
from community finances), such as bridge loans, etc.
Example of a carrot we currently have--if you keep to a financial
plan, late fees are removed.
We have 4-5 households with a payment plan at the moment, but often
they have a problem meeting their commitment. Currently, seems it
seems like these agreements don't help us a lot. Should there be
changes in the consequences over time?
Are we concerned about a household going into foreclosure and the
community losing that money? Yes, though that is just one element.
Would a lien indirectly work against us, by negatively impacting a
household's credit rating and therefore ability to pay? There might
be some impact.
Concern over the "cultural" issue that places the association fee is
a lower priority for some households (e.g., cable, etc.).
How much money do we need to allocate for potential loss? We haven't
had any to date. (But we might need to have a line item for bad
debt!)

Currently, we have a late fee (which can be waived), and after a few
months we try to get people to make and follow a payment plan. But
we don't have a procedure in place for what happens when folks do not
follow a plan.

An alternative approach:

1 month--late fee, note about resources (Caring Committee)
2 months--plan required (zero balance in 6 months), late fee if no in
place, visit from F&L person, point to resources (information and
financial support) in GO and outside (debt counselor); GO financial
support might be dependant on counseling
3 months behind--lien + late fee unless plan in place and being met;
lien is an action from the board; note that having the community know
might produce more support than punitive action.
4 months and beyond--a community problem

F&L is empowered, but certain actions (or inactions) need to be taken
at the board level.

Dale will type up a proposal.



Reviewing the financial report

AR looks better than in a while.

We'll probably have a healthy rebate, even with the Building
budget--many of the rest of the expenses will be paid by the
insurance company.

No conclusions yet from Buildings on the fire suppression system.

We will continue to collect expenses for reimbursements made in
December up through January, so some expense categories may have a
spike in December.



TS CH finances

Continue to discuss on email.



Truck driving

Does not seem to be any ambiguity in our policies. At some point, we
might want to increase the personal rate for truck use to cover a
potential accident that would increase our insurance premiums (a kind
of self-insurance).


End at 9:05 pm.