Finance & Legal minutes: 2009-11-23

Minutes:

Minutes of F&L Meeting for 11/23/09

Present: Aaron, Cher, Elph, Amy

1. Late Assoc Fee Proposal

We need to to finalize a version of this document to bring to cmty for approval now that we know we are not empowered to create the policy at the committee level.

a) Discussion about whether late fees continue to accrue after a lien is placed.

MONKEY: Cher is going to call Scio Township Office to find out if there are any laws about this; also what the steps are to placing a lien and what it costs. Any relevant information will be incorporated into the proposal.

b) Discussion about community concerns regarding the proposed 5% late fee.

We discussed the scenario of 5% charged per month on balances ad infinitum versus a flat fee of $25 for the first month, $50 for the second month, $75 for the third month, then capped such that every succeeding month is $75. This would be equivalent to capping the 5% increase at 6 months. In comparison to the 5% approach, this flat fee rate goes up more rapidly at first, then levels off. This would address the concerns about 5% being outrageous as an APR and yet also serves as a disincentive for people to keep racking up debt. Another comparison is that a late fee for an overdrawn check is $30.

We agreed to go with the $25/50/75-then-capped scenario.

c) Concern that comty may not recall existing agreement about the possibility of postponing Association fees in an emergency.

Agreed to amend the proposal language in the Background section to say: (second sentence): The "Temporary Postponement of Association Fees in an Emergency" Agreement of 10-21-2004 allows partial or full postponement of association fees for up to three months...." (insert complete sentence)

MONKEY: Aaron will contact Gail to request time on the comty agenda for December 14. (Elph and Amy are facilitating.) We talked about getting the proposal out well in advance on e-mail and hard copy.

2. Prep for Late Assoc Fees policy going into effect

As a practical matter, when a household pays in "dribs and drabs" (e.g. an inconsistent amount, say, $5 one month, $500 the next, etc.) we need to be able to calculate how many months behind they are. We'll do this by dividing the balance by the regular monthly amount. Or we can look at Quickbooks to see how many months behind they are in the automatically-calculated Accounts Receivable spreadsheet. If a family is paying according to an agreement, then misses a payment, we look at their total balance due when they miss a payment and figure out the late fee owed on this basis.

3. Straightening out bookkeeping and empowerment issues

a) Bookkeeping issues. Elph spent 15 hours reviewing the comty's books on recent weekend and found that we have a number of financial arrangements that are complex to track, that could and perhaps should be simplified and/or better documented (e.g. workshop loan, CH/garage loans, contingency funds, truck reserve fund). We agreed that it would be in the comty's interests to have the financial review as soon as possible and to ask for the professional reviewer's recommendations on these items.

MONKEY: Elph already has the names of Sunward's and the Ann Arbor Summer Festival's reviewers; both organizations are happy with their work. Elph is seeking a third firm for comparison.

b) Empowerment issues. Now that we know that F&L is not an empowered committee, we are unclear about what we can and can't do in the financial realm without community approval. An example is: what if we find a better deal for our checking account? Do we have to bring a proposal to the community for approval to move to a new credit union or bank? It could take up to two months to get approval, plus someone has to write a proposal, get time on the agenda, etc. Another example: if a financial review brings recommendations for changing certain fin ops practices, F&L should be able to make changes to address those recommendations, it would seem, without bringing each one before the community. Clearly there needs to be some level of financial operation that does not need to go through the proposal process, and we need to identify the threshold above which decisions enter the policy realm and community approval IS needed.

MONKEY: Cher is going to take a run at revising the Finance and Legal Committee Mandate to reflect these types of distinctions, for discussion at a future F&L meeting, and then be brought before the community for approval.

4. Discussion of reviewing Bylaws and other legal docs: Tabled until the next meeting.

5. Reserve Fund - Strategies for community education - Tabled until the next meeting.

6. Monkey/s

a. Asking Steering to support the creation/reviving of a body to help families facing lien

MONKEY: Amy will contact Steering Convener Sarah to ask for reps from Caring and Affordability to attend the next Steering meeting (Dec. 6) to discuss this.

7. Other

Elph read us a section of Michigan Condominium Law stating that the books of a Condo Association shall be open to all owners at convenient times (and to have regular reviews of our books). He sent us a link to try out that would enable us to view GO's QuickBooks reports. We have heard repeated calls for transparency in our books, and this would address those wishes as well as the law.

The reports are in standard accounting forms such as a Balance Sheet, Accounts Receivable, etc. We agreed that it would be good to provide GOers with an educational session on how to read these documents, and to answer questions. The user name and password could be provided at this session. Any GOer has the legal right to see the books at any time, but it might prevent confusion if we get the review done first and implement any recommendations made in the review, before offering the info session to members.

8. Adjourn

Next meeting TBA (GO Comty Meeting on 12/14 conflicts with regular meeting time)