Cambridge Cooperative Club Trust
2010 Annual Report for the Trustees, Beneficiaries, Club Members and other Stakeholders
Prepared by Grey Lee, Trustee, 22/12/10
2010: The Year in Review
Major Capital Improvements! Increased Membership! Significant Debt!
The year 2010 was an important year in the ongoing evolution of the Cambridge Cooperative Club Trust. Some highlights include:
-Transitions in the Trustees
-Our Club Members’ most recent Retreat
-Our Cooperative House’s 47th Birthday Party
-A major upgrade to our Heating System
-A completely re-built New Roof
-Comprehensive Insulation in the total building envelope
-Admission of an 11th Club Member
-Rectified IRS Reporting issues
-Rectifying Zoning and Boarding House issues
Financial Summary
We started the year with approximately $62k in the Trust’s bank account. We are on target to conclude the year with about $17,000 in accumulated savings.
Our balance sheet has approximately $1.1M in assets, mostly in the form of the clubhouse, and $82,000 in debt, with just over $1M in equity.
The Club has a checking account which handles the various household expenses of the resident Members. The Trust’s account is used to pay for things that are beyond the realm of the collective household and are in a sense the responsibilities of a long-term manager or ownership entity, which is in this case, the Trust, which is administered on behalf of the Trustees by the Members of the Club through their system of consensus-based group process in meetings, committees and ad-hoc groups. See “Administrative Summary” below.
Regular Trust expenses included: insurance, municipal taxes, fire&safety, repairs, and appliances. We carry a standard homeowners’ insurance policy through MetLife. We do pay municipal taxes to the City of Cambridge, although we are an IRS-designated tax-exempt entity. Our fire&safety expenses pertain to an automated fire alarm system and 12 fire extinguishers throughout the house. Repairs this year, outside of the major project, related to the back deck, some windows and doors, and a few plumbing calls. We did spend over $1500 to fix the restaurant-quality oven and range in the kitchen.
Major expenses this year included: contracting for a new roof and insulation, a new heating system, paying for 2009’s structural work, legal fees, and loan repayments. Each of these expenditures is described in greater detail below.
Because of the expected major renovation expenses, we embarked on a process to secure a $150,000 line of credit from the Cooperative Fund of New England. By the end of 2010, we had borrowed approximately $82,000 of these funds. This ten-year note is secured against a mortgage on the Clubhouse (64 Wendell Street) and extracts 7% in interest each year. It is a ten-year note.
Also in consideration of the major renovations, which constitute extensive deferred maintenance and at the same time capital improvements going forward, the Members agreed to increase the monthly assessed contribution to the Trust per room from $350 to $385 effective with the academic calendar. In the past four years, we have been raising this contribution approximately $25/year; thus this increase was more significant than other years ($35). The Members have been satisfied in their deliberations that the sum is responsible considering the long-term interest of the Trust of which they are beneficiaries, and respects the ongoing mission of the Trust to provide, through the clubhouse, a type of affordable housing for students and working people in Cambridge. The rooms continue to be approximately 60% average Cambridge rental rates and 40% the averages in the Harvard Square area.
Considering the many expenses we incurred, tempered by the draw on our line of credit, we will end the year with approximately $17,000. We will need at least this amount going into 2011 in order to maintain reasonable balances with respect to expenditures scheduled for the spring – solar panels, exterior painting and carpentry. The Trust does have the accompanying account of the Club (the resident housemates’ pooled money for tenant expenses) to lean on if there is an unexpected major expense, and a number of the household members have also offered to be underwriters to the Trust and Club in such an unlikely situation.
We do continue to hold a note, due in 2013, from the Boston Community Cooperatives, the umbrella organization of another Cooperative, the “Seed Pod” in Dorchester, to the tune of $10,000, which provides the trust interest at 4% as a gesture of solidarity with the cooperative movement in Massachusetts.
In summary, our financial situation is positive, robust, with some risk but secure. We will carry significant debt into the new year, and we will add to this in 2011, however, it will be under 15% of our total assets and well within our cash flow projections in terms of our ability to carry the loan.
Transitions in the Trustees
2010 marked a major transition on the Trust of various Trustees departing and two new trustees joining.
Departing were:
Jennifer Patton
Timothy Allen
James Risbey
Paul Hollings
Patricia O’Malley
Continuing to serve as a Trustee was:
Nurul Kabir (Litu)
Joining the Trust were current Club Members:
Daniel Friedman
Gregory S. Lee (Grey)
Thank you to all the service of our former and continuing Trustees! Thank you for participating in the transition which has enabled various administrative issues to be more efficiently resolved.
The Loan
The loan has been provided to the Trust as a line of credit through the Cooperative Fund of New England (CFNE), a fellow cooperative and non-profit entity devoted to supporting the cooperative movement. We had approached various commercial banks but were rebuffed. The CFNE did not require leases by the resident members, and were willing to work with us in a way no commercial bank or other approached lending institution would. The CFNE did require a 7% rate for a 10-year note; we are satisfied that this is reasonable given our circumstances. This Annual Report is one of the stipulations of the Loan agreement.
Our Club Members’ most recent Retreat
In February, the Club organized a retreat to spend time as a whole in a non-house location. We rented a small house on Cape Cod Bay in Plymouth, MA, for a weekend. We spent time eating and socializing and had some organized games. During the one full day, we spent time in a work-shop setting teaching each other about facilitation and group process and to articulate a values statement and vision statement for the Club. It was a great weekend; some photos are on our website. We hope to continue with off-site retreats each year going forward.
Our Cooperative House’s 47th Birthday Party
In April, the house hosted neighbors, alumni and friends to a 47th Birthday Party. It was a great gathering to hear stories from “the old days” and reconnect with the broader CCC community. We have some photos of the event on our website.
A major upgrade to our Heating System
Following the plans for the renovation project, we pursued a contract with Village Plumbing to re-vamp our heating system. We took out the three boilers (one for each floor) and the old hot water heater, and replaced them with one super efficient system made by Buderus, with an instantaneous heating domestic hot water tank. We are still using natural gas, but we will use less to keep the house heated. The old radiators were retrofitted to the new system, with individual hydrostatic controls. We are experiencing some issues with fine-tuning the system to meet our needs, as of December, the basement and lower floors seem to be hotter than usual, and some of the bedrooms are not comfortable. The heating bill also was higher than one year ago for October, though we had the roof off for some portion of that time, but we are working with the plumber to resolve the situation. [Update: as of late December, the plumber had returned and tuned the system to distribute at a lower temperature, making the system more efficient but still getting heat to the rooms, and the basement is back to a more normal temperature.]
A completely re-built new Roof
On October and into November, we hired Boston Home Improvements and Joe Squillante Roofing to re-build our roof. This was following the plan created last year by architect Garth Goldstein. The old membrane, insulation and sheathing was removed; the rafters were augmented by new “lvl” (laminated veneer lumber) rafters; new cladding, insulation and a new 20-year warranted membrane were all installed. The old chimneys and plenum vents were eliminated – we will expect fewer squirrel coop members and without the chimneys, less heat will leave the house and there are fewer places for the roof to fail over time. We are re-using the bricks to expand the back yard patio a bit. The chimneys were no longer necessary as the new heating system vents to the side of the house. While we were at it, we re-did the somewhat rotten old crown molding which really looks a lot better. The new roof has a great new pitch to a new drain, and a new access hatch. The place is now ready for some solar panels!
Comprehensive Insulation in the total building envelope
Working with Accelerate Energy, we analyzed the insulation needs of the whole house. They performed work to enhance the insulation of the roof, achieving an R-40 rating. They air-sealed the entire envelope and re-insulated the exterior walls. Also, they insulated the rim-joists between the foundation and the lowest portion of the exterior walls.
Admission of an 11th Club Member
In August, as we deliberated over admitting a new member for one room which was being vacated by a member, we found ourselves in an interesting situation. We had come down to two very good candidates, representing various key desired traits in members. It was hard to choose between them. Someone said “I wish we could just admit them both to become members” and then some creativity came out. We decided to combine the office with the guest room, since both those rooms get intermittent and not often conflicting use. So we would have one more bedroom available for membership. Then we admitted the two candidates and now have 11 active club members in the clubhouse.
Rectified IRS Reporting issues
The IRS requires periodic reporting for 501c3 organizations, such as ourselves. In the past, because the Trust has received less than $25,000 per year, we only file a small postcard indicating that indeed we continue to be below the threshold. In recent years, we have begun bringing in more than that amount of money, and we will need to report our income with a full IRS Form 990 statement. We engaged the services of an associate of one of the Trustees, a lawyer and accountant named Habib Rahman, to help us with the accounting and filing. So far, it appears the IRS is satisfied with our paperwork.
Rectifying Zoning and Boarding House issues
As the Club has grown in strength and administrative capacity, the work of running the Club and Trust has coalesced into some standing committees. The Finance Committee has taken on a couple of old issues. One that came up suddenly due to a leak during the roof work which resulted in a visit of the fire department which then called the City’s Inspectional Services to take a look at the house is the issue of our status as a lodging house in a residential zone of Cambridge. With the help of our architect, Garth Goldstein, we have been able to track down some historical documents that indicate we are grandfathered to the zoning of the time of our founding, since our use as a lodging house has been continuous since 1963.
Administrative Summary
What is the role of the Trustees?
The Trustees have the long-term interest of the Trust as their responsibility, which the Trust can continue with its intended purpose indefinitely. In practical ways, they are responsible for various legal and administrative duties such as the IRS filing, interacting the City in response to “landlord” issues, and handling and ensuring the loan is responsibly addressed.
Who is taking care of the clubhouse?
The Club Members, through their “Living Space” Committee (formerly known as “Physical Plant”) have a long list of maintenance issues and the housemates make decisions as to how to prioritize, who should take responsibility, and what to contract out versus handle with in-house volunteer labor. Grey Lee is in the process of making a full-house “manifest” of maintenance and physical plant issues to use as a reference going forward.
How are decisions made?
Any decision is made through the consensus-group process where all the members of the Club must come to agreement on any change to the status quo. Every two weeks a facilitator runs “House Meeting” where there is a series of regular issues to tend to and then specific issues of that fortnight, as supplied by the members. There are no votes and there is no hierarchy of decision-making. Members work to help each other see different points of view and to learn how to work in a consensus decision making milieu. It has been working well for many years.
Club Issues
We have continued to improve the financial management of the Club in addition to the Trust. We now have two active housemates working on the monthly accounting work. We have improved the monthly dues chart to make it clearer to see how and where we are spending money. Our “house shoppers” whose chore it is to shop weekly for food and sundries are organizing a recording system so we can see what we are spending money on in terms of food, in general categories, and to ensure we are getting the best value for our shopping money. We also improved the reimbursement system so it is easier to see how people are recording their expenditures on behalf of the Club. We have tried to tighten this up considering the financial stresses the increase in base dues has made on each member; by reducing Club expenses, while maintaining our standards, the overall cost of membership will stabilize.
House Philanthropy
Each month, one member of the Club designates a charity of their choice to receive the Club’s Monthly Philanthropic Gift of $100 given collectively by the housemates. It is an opportunity for each member to share with the others a cause they are concerned about, and educate each other about various types of charities.
Some of the past recipients include:
Jan Manthan
Fistula Foundation
Marion Institute
Braille Books
Etc…
You can read more about each of the recipients on our website.
The Bigger House
The Clubhouse is not just the current members. Each year we host a series of guests and subletters who add vital new energy and enthusiasm to the house. We have also hosted some Couchsurfers in the interest of global direct diplomacy and cultural exchange. Our house dinners are famous for the diversity of gathering and the many entertaining stories traded among guests and housemates. Some of the lovely people who have stayed with us for lengths of time in 2010 include: Marta Federe, Francois Ferron, Laura Campbell, Ana Traynin, Isaac Hopewell, Nancy Resteghini, and Lexi Boye-Doyle. You can read a little more about them or at least see some photos at our website.
Going Forward!
The coming year of 2011 will see a few more enhancements to the Cambridge Cooperative Club Trust:
-The solar panels
-Repainting the exterior
-Fixing various carpentry issues on the front porch and rear entryway
The Club has agreed to produce a series of community education events. In 2010 we hosted discussions on Marine Conservation and on Cooperative Diversity Enrichment. More will be scheduled in 2011.
Another issue is our insurance situation – which is related to our lodging house status – and the fire alarm. Over the years, the alarm has caused us a lot of grief in false-alarms, including the issue with Inspectional Services. It does not communicate to the fire department at any rate, nor do the emergency lights function, and so, it probably needs re-commissioning and perhaps a dramatic overhaul. We are seeking to lower our insurance premiums as well.
We will be continuing to look into our status in the eyes of the City as a lodging house and as a non-profit entity. We may have to do some more work with our bank to ensure we can efficiently access our funds, enabling non-trustees to handle some of the accounts, specifically, the Club account.
Thank you to all our stakeholders, especially our neighbors who continue to be interested and supportive of our Club. Special thanks in 2010 go to Garth Goldstein for shepherding the Roof Project and various other bits of city legal issues. Also thanks to Fred Meyer who has been supportive with crucial information regarding the founding documents of the house and other city legal issues.
Thank you again,
The Members of the Cambridge Cooperative Club Trust
Bridget Molloy
Derin Korman
Dan Friedman
Eric Anderson
Garga Chatterjee
Grey Lee
Nancy Wells
Laura Hopps
Laura Resteghini
Ratasha Huff
Paul Siemering
