Event:2016/10/06 Delegates

Weekly Omni Delegates' Meeting - 06 October 2016 - 7pm-9pm

Agenda

 * Introductions, Meeting Roles, and Delegates Count [10 minutes]
 * Announcements [10 minutes]
 * Bans [5 minutes]
 * Working Group Report-Backs [15 minuntes]
 * Proposal/Discussion: Buy the Building: [45 minutes]

Introductions
Introduce yourself: Name; Preferred Pronoun; Affiliation
 * Jose: CSC
 * Laura
 * Jenny: Sudo, Agua Viva
 * Jorge: Interested in joining, may be Sudo, finding out about Omni
 * Vienna - from Malaysian human rights org, got into omni from sudo cryptoparty, interested in helping people launch social cooperatives
 * Ken: CCL delegate
 * Steve: BAPS delegate
 * Marcus - ABDC delegate
 * Robb - sudo delegate
 * Helen: FNB delegate
 * Lynn - Commons working group
 * Lori - GWS Delegate
 * Mary Ann - CSC Delegate
 * Joe - FNB - remote
 * Marc - CCL, Sudo

Meeting Roles

 * Facilitator/s: Jose
 * Explanation of hand signals: "deaf applause", "raised hand", "point of process", "direct response"(wildcard), etc.
 * Stacktaker: Lori
 * Timekeeper: Jorge
 * Notetaker/s: Jenny, Laura, Marcus
 * URL of this pad: https://pad.riseup.net/p/omninom
 * Vibe Reader: Marcus
 * Next meeting's facilitator(s): Lynn

Delegates

 * ABDC: Marcus
 * BAPS: Steve
 * CCL: Ken
 * CSC: Mary Ann
 * FNB: Helen
 * GWS: Lori
 * LL: Liz (late!) >_<
 * Sudo:Robb
 * TIL: inactive
 * YES:
 * Quorum: 8/9 collectives, quorum yes!

Announcements (10 mins)

 * Steve: My class on the structures of racialization in the US has started. Mondays at 7pm, everyone invited
 * Lori: Hope everyone comes to the documentary on Occupy Oakland on Sunday,7pm
 * In support of the Haiti Action Committee and Oscar Grant Committee work (Love Not Blood)https://www.facebook.com/events/1812777649004737/
 * We also working on organizing a Chelsea Manning birthday party in December. Let me know if you are intersted in helping.
 * Lynn** trash pick up day, 11am, Tuesday. Lynn will verify that Ed can bring his truck that day.
 * Jenny: Tuesday 10/11 4pm Press conference and rally at CHP Headquarters 3601 Telegraph to call out CHP on the hit and run murder of Diallo Neal - https://www.facebook.com/events/752612198212216/
 * Marcus - ABDC has decided to pull out of the Omni - JUST KIDDING! *everyone agrees that is fucked up :P* lol

Bans (5 mins)
Add to list of people asked to leave
 * None
 * safer-hackerspaces mailing list -

Building & permits
Meetings: Mondays at 8pm
 * Laura, started assault on the rodent issue, their are traps around, is there anything we all need to know.
 * Robb: we need sheet metal flashing to patch holes.
 * Ken put out some traps the other day.
 * Laura: Appreciate if people can spare an additional 15 min just to help straighten up and clean the building
 * This group needs help; https://omnicommons.org/lists/listinfo/building
 * This group needs help; https://omnicommons.org/lists/listinfo/building

Commons
Meetings: Second and Fourth Thursdays at 7pm
 * Lynn there is alot of requests. We need more people to staff these requests, be there the day of the event.
 * Ken where do you announce the need.
 * Wiki page about being an event point person - https://omnicommons.org/mediawiki/index.php?title=Responsibilities_of_and_Guidelines_for_event_Point_Person(s)
 * Marcus: Would it be helpful to create guideline or flyers to join this team and post them in the building. ** resounding yes **
 * This group needs help:
 * https://omnicommons.org/lists/listinfo/commons
 * https://omnicommons.org/lists/listinfo/booking

Communications

 * No October newsletter yet, perhaps create one weekend 15/16
 * Send items for the OCtober newsletter to Jenny

Finance
Meetings: Currently conjoined with Fundraising (Mondays at 6pm)
 * Jenny: We have a little over 7k in our bank acct right now. We are paid up for Ocotber. We'll be getting 6K more in loans form Sudoers. This should get us through the purchase including the appraisal. People threw down when I talked about it at my birthday. We owe now about $105,000 to community members, to be repaid when we buy the building and receive the $1m loan.

Proposal: Rep Omni at PLACE event on October 15th (Saturday)

 * All day from 3-11 - networking and tabling etc w/ Project Nuevo Mundo
 * More info: https://numundo.org/ also for the FB event https://www.facebook.com/events/1652794058367479/
 * Looking for volunteers to help with staffing an Omni table
 * Jenny: Can probably help table. Leave flyers, stickers etc in bin upstairs Treatment Room
 * Jose: I might be able to
 * Joe: I can do some of that time also.
 * Awesome!

Fundraising/Buy the Building
Meetings: Mondays at 6:00pm
 * See below proposal

Proposal: Buy the Building
Preliminary presentation, submitted 10/6 via the Fundraising Working Group: The Situation:
 * 1) We have an anonymous benefactor willing to donate $1million toward the purchase of the building, and lend us the other $1 million at market rate with a balloon payment due in 5 years (at which point we refinance). This reduces our monthly expenses from ~$17K to about $10K. Current income is around $11,500, giving us an extra $1.5K monthly to work with while putting away $1K/month to a Capital Reserve Fund, retaining our returned $27K security deposit as an Operating Expenses Reserve Fund. All community loans will be folded into the big loan, meaning we can pay back all friendly lenders as soon as the deal closes.
 * Full Pro Forma: https://docs.google.com/spreadsheets/d/1rvkMc5lmd8PovoViNLdvlrv0tSyvrH7iB0SmGqaFec8/edit#gid=1281242457
 * 2) However, there are extensive complications re: the donation being given to Omni, and so we came up with two main alternative options:
 * Option A - is 2 loans, one at market rate due in 5 years, one at ~2% where donor will donate back and principal due in 2020 amortized over 30 years.... assumption is the donor's leadership could shift and try to collect
 * Option B: Share ownership w/ an Omni member collective that is a 501c3, with a TIC agreement between the two nonprofits about sharing the space and income / expenses
 * 3) Unfortunately, the benefactor does need the donation to actually be a donation, so Option A is not available. The Fundraising WG leans toward Sudo Room as receiving the donation, and writing up a TIC agreement between the two orgs.

Proposal:
 * The Delegates of the Omni Commons agree to purchase the building and share ownership with Sudo Room, with the understanding that future proposals will address the terms of co-ownership and allow for amendments and blocks on aspects of the contract so as to be agreeable to and address all member collectives' needs and concerns. Upon consensus of this proposal, the Fundraising WG will: inform our landlord that we intend to pull our option to buy, at which point we will open escrow; the donor will donate $1 million to Sudo Room, who will then proceed to donate it to the escrow fund; and the donor would put the $1 million loan money into escrow.

via Jesse:

"Dear All:

I've heard back from the donor / lender and there is good news and bad news.

The bad news is that the two loan idea won't work for them. We knew this was a possibility. The donation will be in the form of appreciated stock which confers a tax advantage, so it has to be a donation (all at one point) rather than a loan subject to later, gradual donation.

The good news is that we have already discussed the broad outlines of a two non-profit solution -- I think we called it Option B at our recent meeting -- so I suggest we move forward with that. Please email me back if you have any comments or concerns.

Here is what I think needs to happen for Option B to work:

1. We need to identify the non-profit that will get the $1 million donation. I have suggested to the donor that it be the Sudo Room and I'm waiting to hear back from them about that idea. You (both Omni and Sudo Room and all the other groups that compose Omni) should agree that it is okay for it to be Sudo Room. As we discussed at the meeting, there is a risk that having Sudo Room be a co-owner could introduce a level of in-equality between the groups that compose Omni. My suggestion to at least partially address that is that Sudo Room and Omni sign a TIC agreement that would spell out each party's rights with respect to the building.

2. I will prepare a proposed TIC agreement between Omni and Sudo Room. We need to figure out the timeline for this happening. One option would be to immediately move forward with the donation and purchase and work on the TIC agreement while in that process. I think there would be around a month before close of escrow which is plenty of time. Another (slower but more cautious) option would be to first agree on the TIC agreement terms and then when that is done, exercise the option to purchase the building. Let me know which you prefer.

3. If we want to move forward more quickly, then we should confirm that the donor/lender will donate to Sudo Room, get the donor/lender to to approve the 5.5% promissory note, and then exercise the option to purchase the building. Once you give notice to John, we will open an escrow to purchase the building, the donor would donate the money to Sudo Room, and the donor would put the loan money into escrow.

4. Here's a preliminary list of items to include in the TIC agreement. We can refine this via email and perhaps in another meeting:

--language giving Sudo Room the right to use (and rent to third parties) particular areas at Omni and giving Omni the right to use (and rent to third parties) other areas. Each organization would have a right to keep rents received for their area. The exclusive use areas should be roughly 50%/50%.

--language defining common areas at the property and giving both parties the right to use common areas. This may be a safety value for each group getting 50% exclusive use areas because you could decide to make quite a bit of the building common areas. At the very least, the roof, exterior walls, structural elements, and commonly used access routes will be common areas.

--language setting up standards for rental of the space to third parties. My suggestion is that neither party would have to get the other's consent before renting the party's exclusive space, but each party would have to include particular items in the leases and there would be some reasonable limitations on the types of uses. For rental of the common areas, each party would receive 50% of the income and each group would have to agree to those rentals.

--many TIC agreements make both parties jointly responsible for paying to maintain common areas and make all decision making about the common areas joint, but give each co-owner exclusive rights to alter their own areas, and make each party liable to pay for such alterations. I think this would make sense in this context depending on what we define as common vs. exclusive use areas.

--the agreement would make each party 50% liable for property taxes, utilities and insurance. The agreement would require the parties to purchase insurance. The agreement would contain language saying what would happen if either party failed to pay their share. There may be a way on a practical level to make the money work out so that Sudo Room's obligation to pay 50% of expenses is offset by the amount of money Sudo Room receives from rental of common areas and exclusive use areas, with an aim that Sudo room doesn't pay more (or less) than they are now paying for the space they are currently using. You will have to look at the numbers and figure out if this will work. From my perspective, if each group pays 1/2 for the building, each should get a right to use and benefit from 1/2 of the building, and you wouldn't want to have an agreement that gave one group greater rights or income because the IRS could see that as a donation from one group to the other. As we discussed, non-profits can donate to other non-profits, but you can't make an arrangement where a large donation from a donor is laundered by one non-profit for another.

--the agreement would require each party to offer their share in the building to the other before seeking partition (forced sale) of the property. There would be a formula for determining fair market value. The agreement would include a right of first refusal for either party to purchase the other party's share before any share could be sold to third parties. We could include language making dissolution (or other inactivity) of either group trigger a right of the other group to purchase that group's share.

--We could include language giving Omni a right to purchase Sudo Room's share if you like.

There may be other provisions we could include that I haven't thought of but those would be standard.

Let me know if you want to discuss this and let me know how you want to proceed."

Discussion

 * MaryAnn: Option to create a new nonprofit that would accept the gift, Jesse was going to research
 * Not a matter of the sum being donated, a matter of the sum being earmarked (explicitly or implicitly)
 * Jenny: Another option for fairness could be to split that million donation between say, FNB and sudo, making it more equitably distributed power & liability-wise
 * Marc: I think Sudo room is easy to use beccause all of the members would be in favor of repurposing the org as an 'Omni 2'. We could even spin off another organization that would do what Sudo does now. We could even transition the building over to the Omni over time. IOW Omni could slowly buy the building from Sudo.
 * Make a transfer every month of income that would slowly buy the building.
 * Ken: As far as the specific proposal, at what point could we make this happen?
 * Jenny: Sudo's next meeting to decide would be the 19th, Omni's the 20th, we could open escrow the next day
 * Marc: Should we have weekly Omni meetings starting now?
 * Jenny: Good idea, we've done it before
 * Robb: Get a committee together to talk about this; sudo folks are into it, don't expect it to be blocked. also interested in making A/V event production crew an open source school on A/V, helping to render that income charitable
 * Ken- our regular meeting is every Tuesday. I sent this proposal out already, but I wont be able to answer all the questions people will have
 * Laura: Folks need to agree to the concept of one of the Omni 501c3s sharing ownership with the Omni. Then we will negotiate the specifics of the TIC agreement between Omni and the other 501c3 member collective.
 * Joe: I did not understand why the Omni itself can not get the donation and own the building by itself.
 * Laura: IRS regulations that are too complicated to write out here. Ask in person.
 * Because the donor has previously donated to the Omni and you cannot donate a second time and have it count towards the 33% charitable donation requirement for 501(c)(3)s, so we would have a million dollar non-charitable donation which first of all does not work for the donor since they need it to count as charitable and second of all would mean that we'd have to get $333,333 worth of charitable donations over the next four years or be shut down by the IRS.
 * Steve: Any overlap in the board of both?
 * Jenny: The only overlap is myself - I'd resign from the board of Sudo
 * Steve: IN the tic would there be a schedule for the process of Omni buying out Sudo's share?
 * yes
 * Jenny: Timeline: Faster if we decide now to split ownership and work out the TIC agreement after; the only financial pressure is Omni being able to continue paying rent up until that point. We can make it through December with current flow, thanks to another $15K in community loans this past week.
 * Mary Ann: My concern was that in a TIC agreement, one of the tenants can force a sale of the building. I asked Jesse what kind of clause can be put in the agreement to protect us from that. Jesse said he would add a clause that the other tenant would have the right of 1st refusal.
 * Marc: We should maybe have another agreement among the principle groups that limits what we can do with the building.
 * Steve: Schedule needed by which Omni would buy out sudo room
 * Lori: The whole question of converting into a land trust - is that still an option?
 * Laura: it could be an option except that negotiations with an outside organization would take much longer.
 * Marc: we need to set it up so that the income generating elements of the Omni belong to the OMni.
 * every time sudo pays an omni bill, omni donates their portion to sudo and essentially buys a portion of the building
 * jenny: jesse pointed out that this doesn't work, as both orgs would need to generate income from the building equitably, and sudo donating their share to omni is essentially laundering.
 * Joe: Jesse suggested that the exclusive areas could be kept at a minimum and most areas be common. So I would think Ballroom would be common in his scheme.
 * Helen: Where does that leave other collectives?
 * Laura: Marc pointed out a way to balance the power of sudo - eg sudo that has the building does things the Omni does, such as event rentals and fiscal sponsorship, and spins up another organization for its current membership.
 * joe: Won't split ownership make record keeping and rentals pretty complicated?
 * Laura: Yes, The accounting nightmare that this will mean is the main drawback to this plan
 * Joe: Right, and nightmares heighten tensions and disagreements.
 * Jose: IRS regulations - in terms of concern around what it would mean that another collective would own 50%, think of all possible language you could think you'd want to have included, and how we can do this in the most equitable way
 * Laura: Could you run this by your CPA friend and see what she says? - Yes
 * Mary Ann: Can we ask Jesse about side letters/agreements between Omni and sudo? A bit different than a TIC agreemeent - side agreements, less official
 * Jenny: The following folks are also sudo members: Patrik (CCL), Niki / David (BAPS), Liz (LibLens), Robb (FNB/LibLens)... we could stack the sudo board with folks who primarily rep other collectives but are also sudo members
 * Helen: So sudo has to decide if they want to do this. Delegates from all orgs have to talk about it and decide. Structure/timetable?
 * Laura: If the Delegates want to have people from finance/fundraising WG to come to their meetings and better answer questions, let us know
 * Straw poll consensus on holding weekly informational meetings every Thursday 6-7pm
 * Joe: I'm for weekly updates
 * Robb: Let's make a week from now a target date for updates on what each collectives have discussed, update from Finance WG on progress w agreements.
 * Joe: Thank you finance for doing all this work. Brava/o
 * <33

Upcoming Meetings

 * Next Finance/Fundraising meeting is Monday at 6pm
 * CCL's next meeting is Tuesday the 11th @ 7
 * Jenny will try to attend but has the press conf/rally til 6 - can someone else do it?
 * FNBs is the first Wednesday of November - Jenny will send Helen a summary of the proposal
 * Chiapas' next meeting is the Second Sunday in November, but Mary Ann & Jose can bring it up in a conference call
 * GWS can do a meeting by Skype
 * Jenny: perhaps with Mary Ann?
 * LibLens is every Sunday at 7pm - Jenny can attend
 * BAPS is October 26th - can discuss over email?
 * ABDC - Marcus can talk to the membership

= Action Items =
 * All - send an update to the discuss list by next Thursday
 * Jesse / Fundraising WG - research possibility of creating another 501c3 to hold the building
 * All - reach out to fundraising@omnicommons.org if you'd like someone from the working group to come to your collective's meeting, or otherwise tell folks they can attend Fundraising on Monday at 6 or the next informational meeting next Thursday at 6.

Previously
Weekly Omni Delegates Meeting - 15 Sep 2016 Weekly Omni Delegates Meeting - 01 Sep 2016 Weekly Omni Delegates Meeting - 18 Aug 2016

= End of Meeting =
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