Finance & Legal minutes: 2009-11-02

Minutes:

Minutes of Finance & Legal Meeting
Monday, Nov 2, 2009 - 7pm

Present:
Aaron, Elph, Amy

Agenda:

1. Late Association Fees policy (decision and next steps)

Elph and Amy didn't make a decision at the last meeting because of low attendance. Aaron moved that we pass the policy as written in its most recent version, and all agreed.

MONKEY: Elph will send the final policy to talk and to Willie to be recorded in the Book of Agreements (done).

[Note: Subsequent to the meeting, we learned that F&L was not empowered to make this policy decision unilaterally. We will need to bring this back to the community for approval.]

2. Consideration of annual review/audit; decisions related to F&L budget for 2010

Aaron informed Rod yesterday that F&L would like to change the Professional Fees line in the budget proposal from $500 to $2000 to allow for an audit in addition to tax preparation.

3. Reserve Study - update

There has been a thread on e-mail about the Reserve Study, and discussion at Steering yesterday.

Q: Who decides when and how much can be spent outside of the Reserve Schedule?
A: The Reserve schedule dictates when money should be spent, based on the predicted life span of the items it covers. Outside of this,
F&L makes decisions about any variance, in consultation with our Reserve Fund company. This is because F&L is responsible for the Reserve Fund. A recent example was the painting expense over the summer. The gold stain failed sooner than the Reserve plan predicted and Buildings asked to spend Reserve funds on this. F&L discussed this at length within the committee, discussed it with Reserve fund expert, got clear at a community meeting what the needs were, and ultimately decided to move ahead because it was possible in this particular case to adjust the Reserve schedule. We were able to do this by extending the life of the colored upper story paint in the Reserve schedule, thereby freeing up funds we could use to do the gold paint now. In other words, we did a line-item revision of the Reserve fund schedule. We "found" money by extending the life of the colored paint.

Q: What happens when something comes up for which we completely misplanned the timeline and we can't redo the line item as we did with paint?
A: Special assessment.

Q: Is there give and take for each line item, an acceptable deviation?
A: We asked Paul Conahan, our Reserve fund specialist, this question once, but Elph didn't recall the answer. In any case, we wouldn't spend from the Reserve Fund without consulting our Reserve Fund company.

The Reserve fund is not a savings account -- it's a projected budget -- a budget of gaining as opposed to spending, and each line item is vetted through a process of decision points. 1) Does the element cost more than $2000? 2) Is it a long-lived item? (Our threshold is 3 years). 3) What is the industry standard cost for each element? There's an industry standard book that can be consulted for this information. Some items don't fit the criteria to be included. We can't change our minds on how to spend the Reserve Fund easily. Sometimes the money isn't there yet.

Q: If a committee feels that Paul made a mistake, e.g. our roofs deteriorate a lot faster than we expected, it would be possible to look closely at other line items and revise them, to free up the needed funds?
A: Yes, but we'd certainly want professional input on these changes.

MONKEY: Elph sent out the location of the reserve fund information on the website to Talk (again -- previously he sent it on October 6).

Rod suggested a process in which we feed potential Reserve Fund items from GO Committees to Paul for consideration, Paul will evaluate them and give us a first round of feedback, we'll ask more questions, and then get more details. Elph is collecting items for this list - please send any new items, modifications, etc. to Elph for inclusion. The brainstorm at the recent Buildings Com meeting was very helpful.


4. F&L jobs for next work season

Convener: Aaron
Counted members: Amy -- and we sent a message to Emily to see if she'd like to continue.
Steering Rep: Amy

[Subsequent to the meeting, we learned that Emily will not continue on F&L, and that Cher will join.]

Note: Elph has been attending meetings this season even though he is not getting work credit. He is the Bookkeeper, and has extensive institutional memory and information that we need very much. Thanks to Elph for attending and sharing his knowledge.

MONKEY: Aaron will send the jobs information to the Work Committee.

5. Other?

Amy will ask Sarah (Steering Convener) to invite former Affordability members and current Caring members to come to the next Steering meeting to talk about providing financial information/support to households having financial difficulties.

Long ago, Elph made contact with a group called RSF Financial Services Fund that does safe but socially conscious investing. However, the State of Michigan would not allow us to do invest with them. Now Michigan has changed its rules, so we could now invest with RSF if we want. Elph has made contact with RSF again to get information about their investment options. This would allow us to invest our money in ways that align with our community vision.

6. Next meeting: Monday, November 23, 8 PM. Agenda: preparing Late Association Fee policy to come back before the community, review Master Deed and Bylaws, and other agreements; figure out actual steps to placing a lien, etc.