All-Community Meeting Minutes, Sunday October 27, 2024, 3:00-4:30 p.m.
Topics:: insurance effect on budget, pay-or-play, Halloween
Present: Ben (fac), Renae, Lynda, Scott, Michael, Emilie, Tobi, Laura, Robin, Chelsea (unit #19), Joe, Kay (notes), Cheryl, Jorge, Coleman, Stephen, Vicky, Alex, Cyd, Vinnie
Event: Halloween party, Saturday 5:30; sign-up to bring taco ingredients.
Action Items
Jorge will confirm the amount of this year's premiums with bookkeeper.
Ben will send out links to our insurance policies and the pay-or-play agreement.
Insurance
Insurance companies everywhere have been paying increasing claims due to catastrophic events fed by climate change, and insurance companies nationwide are increasing premiums. [Even if a state hasn't itself had catastrophes, many companies operate nationwide and all of them are affected by the cost of re-insurance, which is often from international companies. --Kay]
Ben talked through various scenarios with our insurance agent.. The potential savings in premiums weren't much, for much less coverage. The agency primarily sells American Family policies, but they've recently gotten permission to also sell another company's.
We budgeted $18,000 for insurance for 2024, our agent said we’ve actually paid $34,000 this year, and our premium is going up next year to $44,000 ($16k of which is earthquake insurance). [Numbers corrected by Ben 10/30/24, thank you. Part of the increase was adding a policy that provides the extra necessary to do covered repairs/replacements to current code, as often required; regular insurance pays to put it back the way it was, but such repairs aren't grandfathered under code like the original.]
So far the next budget looks like a 25% increase in condo fees, mostly from insurance. We would still have a 3.5% increase without it. Each year we increase the amount going into the reserve, which is where the lion's share of our budget goes. Maintenance costs are also going up; for instance, stucco repair bids are much higher than we'd anticipated.
We made three claims in past years due to water damage (#5 broken pipe damaging kitchen & common house upstairs toilet; Ben is inquiring about the third). Claims stay on our record for seven years. None would have been made under our current $25K deductible.
The earthquake coverage deductible is 5% of the value of the building. The owner of the specific unit is responsible to pay this, or it is split among owners if multiple units in the building are damaged. Example: A duplex is about $700K; 5% of that is $35K. You can get your own insurance to cover the deductible but not separate coverage for a particular building; earthquake insurance is everybody or nobody; If we cancel the insurance & an earthquake causes damage, owners are still responsible for their mortgages on units they maybe can't live in. The concern isn't just shaking but also liquefaction; a tilted foundation can make an otherwise undamaged building uninhabitable. [Insurance policy premiums take the building construction into consideration. Most of our buildings are SIP construction, which is less prone to earthquake damage than many others. --Kay]
Scott asked for a copy of our insurance to look at. His employer manages condos & negotiates condo insurance all the time.
Condo law is flexible about what the association is required to pay for. We could "save money" by making owners responsible for maintenance & replacement the association currently pays for. OTOH, this simply shifts costs while losing economies of scale, and risks owners deferring maintenance leading to higher expenses down the road [which is why the association chooses to do or help with some maintenance that properly speaking is the owners' responsibility].
Management's duties. (In response to a question.) Management is responsible for maintenance, legal, and financial matters. [It can delegate the actual work, such as when the community has an active Maintenance committee or when we hire a book-keeper. But it's still responsible. -- Kay] Per Scott, the first duty of an HOA board is to enhance the marketability of the property. An individual home owner can let their property go to ruin; Management has a duty to the community not to allow that. In short-term exigencies Management can impose policies, but longer-term, policy changes require community consent. In the interest of community-building, the community's Management often defers to the community even in areas that condo law & the CCR give it power. [In practice, Management sometimes becomes the Committee of Last Resort in any areas where no committee is active. If you feel management is intruding in matters it shouldn't, take responsibility for those areas. --Kay]
Budget
Book-keeper has gotten books done up to July and expects to be through September soon; we'll have a better idea of where we stand on actuals once she's done that.
Requesting everyone to get creative about ways to raise money or cut costs, while keeping the things that make us cohousing. We can't really budget based on creativity unless it's proved out. We didn't put fund-raising in last year's budget; it has worked well enough to include it in the budget this coming year, but it's a drop in the bucket. [Fund-raising was comparatively simple because it only impacts the people willing to work on it. Actions affecting people who it isn't their idea can't be done by fiat. Many ways of raising money or cutting costs will require persuasion, discussion, and a proposal. If you are serious, be prepared to advocate. --Kay]
Pay or Play
Management (or its designee) will send out invoices soon for hours not reported this year. If you believe your invoice is incorrect, you can talk to Management about the work you did. If you need time to pay it can be arranged.
Ben says the consensed policy doesn't allow for donating hours to people outside the worker's unit. It's been happening in practice. Shared responsibility for the work is part of the rationale for pay or play, and a few people doing enough work to donate to everyone else doesn't achieve that. Need to clarify this and add language to the official agreement. [My recollection from discussions at the time of the agreement's passage is that (1) for units occupied by families, any work done by any unit resident counted towards the unit's total, no 'donation' necessary; units with room-mates had to work out their own agreement on who was responsible; and donations to another unit might be allowed in special circumstances, such as someone being temporarily disabled. But of course things that everyone thinks are too obvious to need stating -- or that people who disagree choose not to bring up -- at the time a proposal is discussed are exactly what doesn't end up in the actual language of the agreement. -- Kay]
Wonder whether increasing pay-or-play requirements would help much. Many people are already doing way more than the current minimum; some who aren't will just meet the new minimum. OTOH motivating even a few more people to do more might lighten the overall load.
The upcoming budget proposal doesn't include any changes in pay-or-play. It will be discussed separately at some point in the future.
Halloween Event
Straw poll -- interested in having an event for Halloween? Most of those present say yes. Which day & which time? Saturday starting around 5:00 . Emily will plan some kids activities, probably not face painting. Return to standard time Sunday. Sunset 6:30. Tacos -- Emily will send out a link to a google-doc signup sheet.
Note: As note-taker, I am trying to accurately record information and ideas expressed by others present, and thus I often contribute less myself. For this reason, I reserve the right to add comments to the notes where I think these may provide additional background or an additional viewpoint, but I try to make it clear these were not stated in the meeting.
Emailed 10/30/2024.
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