STANDING RULES

Section 8: Finances

8.1 Accounting Centralization
1. 1. The Member Resources Administrator collects rent from a locked drop box in each house on the sixth day of each month, or the next workday if the sixth falls on a weekend.
2. 2. Late payments are only accepted in the office. The Accounting Administrator will charge late fees in accordance with the Membership Contract.
3. 3. Treasurers are required to come to the office on the sixth of each month, or the next workday if the sixth falls on a weekend, to receipt rent and make deposits to the central ICC operations account.
4. 4. Treasurers are responsible for paying discretionary bills, receipting rent, and turning in house receipts. If a treasurer does not fulfill his/her responsibilities, the Accounting Administrator will notify the House Trustee and deduct $50.00 per month from the house discretionary funds.
5. 5. Discretionary bills mailed to the office are sent to treasurers in house mail. The Accounting Administrator pays all other bills.
8.2 Member Payment Plans (passed 4/2007, effective 6/1/07) - An approved payment plan is a tool that indicates when and how much a member will be paying ICC if they are unable to pay on time. This is used as a tool to protect members from the accumulation of excessive debt.
1. 1. If a payment plan is set up by the 5th of the first month's missed rent, all late fees will be waived. Otherwise, late fees will be assessed as per policy.
2. 2. Without a payment plan, the eviction process will begin in accordance with this timeline:
  1. 2.1. By the 7th of the month after the first missed rent a Notice of Debt to ICC will be released.
  2. 2.2. If the member has not set up a payment plan by the 21st, a Notice to Vacate will be issued.
  3. 2.3. The member has 72 hours from receipt of the notice to vacate to either vacate or establish an acceptable payment plan with the office.
3. 3. Approval of payment plan is dependant upon:
  1. 3.1. Demonstrated source of income.
  2. 3.2. A plan that reduces debt by 50% after 6 weeks, and by 100% (to $0) after 3 months.
    1. 1. Rent that will be accrued throughout the duration of the Payment Plan must also be included when the plan is created.
    2. 2. If the member's contract ends before 3 months, this timeline will be adjusted proportionally.
4. 4. Deviations from payment plan:
  1. 4.1. If a member defaults on their payment plan without notifying the General Administrator, a notice to vacate will be sent.
  2. 4.2. GA discretion may be used for minor changes unless these changes violate 3.2.
  3. 4.3. The following guidelines will be used for unapproved deviations:
    1. 1. 1st change – $30 fine
    2. 2. 2nd change - notice to vacate
5. 5. Regardless of changes made, the payment plan may not extend beyond 3 months except under authority of FiCom or the Board.
8.3 Credit Card Policy - Members using credit cards will be charged an additional 3% to the total amount charged. FiCom will determine the fee based on service charges to ICC.
8.4 Returned Check Policy - A $20.00 administrative fee is charged for a bounced check or for stopping payment on a check to ICC. All late fees will apply retroactively to the receipt date of the check. A returned check will NOT be re-submitted to the issuer's bank. Those who bounce a check will not be allowed to write checks to ICC and must pay by money order, cashier's check, or credit card. After six months of on time payment a member may request that staff review the member's account and waive this requirement.
8.5 Late notice policy - Debt notices are issued no more than twice a month to all members owing over $40. Members will be given a minimum of five business days to respond before additional debt notices are issued.
8.6 Security Deposit Policy - The required security deposit shall increase to $175 and shall apply to all new member contracts as of June 1, 2000.
8.7 Resolution to Dispose of Unclaimed Property (updated 06/23/2006 - passed on 12/07/2005)
1. 1. The University of Texas Inter-Cooperative Council (ICC) will make every effort to return pet and security deposits to members within 30 days of completion of the member's check-out form including an itemized list of any deductions for damage caused by negligence, carelessness, accidents, or abuse.
2. 2. ICC staff will attempt to contact members to complete check-out forms or return their outstanding deposits for two years from the end of the contract between ICC and the member. At that time unclaimed deposits will be disposed of according to Texas Law by funding scholarships for rural Texans. ICC will remit a check to the Hispanic Scholarship Consortium (HSC) to fund scholarships for rural Texans to attend college. ICC will provide a list of members whose unclaimed property is being transferred to the HSC and retain the list for our records. Scholarships will be given to eligible applicants from Bastrop and Burnet Counties according to the evaluation process used by the HSC.
8.8 Return Policy for Positive Account Balances - Any positive balance remaining on a member's account at move-out time must be added to the deposit return check. If a former member that is owed a refund cannot be found, then the Member Resources Administrator or Accounting Administrator should notify the Membership Officer of the house the former member resided at in an effort to find the former member and refund the balance owed to him or her. Revenues collected from bad debts pursued by the office will go back to the houses at which they were incurred
8.9 Last Month's Rent Prepayment (12/04/01) - A pre-payment of $240 for last month's rent in addition to membership fees and security deposit is required. This prepayment of last month's rent is designed to protect ICC against bad debt. Effective starting with FY 02-03 contracts. Payment plans for the prepayment of last month's rent are allowed in three $80 installments.
8.10 Initial payments for New Members - Members who move into ICC within 3 weeks of signing an ICC contract must pay using a money order, cashier's check or credit card. (Effective 06/06/02)
1. 1. Note: First month's rent is still due on the date the contract begins per ICC policy.
8.11 Missing Receipt Policy (updated 06/23/2006 - passed by BOD on 10/12/2005)
1. 1. There will be a $25 fine to the house and a $25 fine to the person who used the check for each house check written that is turned in without an adequate supporting document or receipt. Both fines will be paid to ICC. The Accounting Administrator will notify the house treasurer and trustee of the fine.
2. 2. Adequate documentation is:
  1. 2.1. store receipt
  2. 2.2. store receipt of item being reimbursed (if a reimbursement)
  3. 2.3. billing statement (ex: cable, newspaper)
  4. 2.4. donation acknowledgement (if a donation)
  5. 2.5. voided check (for a house check not being used)
  6. 2.6. detailed handwritten invoice when buying an item belonging to a member or other individual (describe item: brand, features, condition. Include cost of similar new item if purchased from a store)
  7. 2.7. calculation of food payment to members (include dates the member is absent from house)
  8. 2.8. OK from Accounting Administrator for items not on this list
8.12 Late Fee Policy - The Accounting Administrator will charge late fees in accordance with the membership contract except in the following cases in which late fees are waved:
1. 1. If a member's balance is less than $40
2. 2. If an international student does not pay on time their first or second month, comes in promptly after reasonable notification, and requests their fees be waved
3. 3. If a member provides documentation of financial aid in the first month of the semester. (only one month waived per semester)
4. 4. If a staff member confirms a member was given misleading information and the member comes in promptly after reasonable notification.
5. 5. If documentation from a bank is provided showing that the bank made an error causing a member to pay late or bounce a check.
6. 6. Certain family emergencies (see list where GA has the ability to cancel contracts)
8.13 Savings and Reserves Policy
1. 1. ICC has three long-term savings funds:
  1. 1.1. Emergency Fund, for financial emergencies, funded by 1.5% of rental income each year.
  2. 1.2. Renovation Fund, for physical improvements to ICC's properties, funded by 1.5% of rental income each year.
  3. 1.3. Expansion Fund, to buy or build new co-ops, funded by the Membership Fee charged to new members, interest, and gain on property sales.
2. 2. Administration and Review
  1. 2.1. The Accounting Administrator will provide a report to the Board of Directors at the beginning of each semester about accumulated savings and the Savings Policy. This policy shall be completely re-evaluated by the Board in the year 2007 and every five years thereafter.
  2. 2.2. Modifications to this policy require a 2/3 vote by the Board. No such changes shall be made in haste, bad faith, or without the long-term health and survival of the ICC co-op system in mind.
  3. 2.3. All these funds must satisfy requirements from our lenders that we maintain a certain amount of cash savings. Total savings must never fall below the amount required by lenders.
  4. 2.4. All savings accounts shall be physically segregated from operations accounts with the exception of summer cash fiow savings except as needed for cash flow.
  5. 2.5. ICC shall not deposit more than the FDIC insured amount at any one bank. All Emergency Fund money below the floor ($700 x the number of beds in ICC) shall be kept in federally-insured accounts. Savings above the floor may be placed in money market fund accounts that are offered by banks and brokerage houses. (Money market funds are not insured instruments of the federal government.) The Board is prohibited from investing any fund money in any manner other than stated above. Putting our money in risky investments circumvents the whole point of having an Emergency Fund.
  6. 2.6. Cash transfers and deposits for savings funds are made as cash becomes available throughout the year. These transfers shall not be required in the summer and early fall when ICC is traditionally short on cash. All fund money earned must be deposited into funds by the end of the fiscal year it is earned. No fund money shall remain untransferred or undeposited at the end of any fiscal year in which it was earned, except for minor adjustments or small transfers made at the beginning of a new fiscal year for earnings to the fund in the prior year.
  7. 2.7. In the event of a major corporate fiscal emergency as defined in the Emergency Fund section, the board may vote to transfer money from the Renovation Fund or Expansion Fund to the Emergency Fund.
8.14 Emergency Fund (amended 10-25-04) - This is our rainy day fund, and is funded by 1.5% of rental income each year.
1. 1. Mandatory Budgeting, the Building of the Fund, and Policy Oversight - The board of directors is required to budget 1.5% of estimated annual gross income from rent (before discounts) for the building of an Emergency Fund, until the fund total reaches the ceiling (17% of budgeted Gross Room and Board which is Potential Room Board Less Budgeted Vacancies)
2. 2. In the event that ICC's actual gross income for any fiscal year is less than the budgeted gross income, every effort will be made by the Board and management to build the Emergency Fund as originally budgeted anyway. If the Board determines that the budgeted amount cannot be transferred, then the Accounting Administrator shall transfer 1.5% of actual annual gross income to the Emergency Fund.
3. 3. In the event that ICC's actual gross income for any fiscal year exceeds the budgeted gross income, every effort shall be made by the Board and management to build the Emergency Fund according to the budgeted percentage of actual gross income for that fiscal year.
4. 4. In the event of a real estate market slump that causes a decline in area rental rates and/or property values, the Board may temporarily reduce or suspend the requirements to build the Emergency Fund. The reduction or the suspension of fund building may be approved for only one year at a time, and for no more than three consecutive years. If the Board reduces or suspends fund-building for two or more consecutive years, the Board must have a financial review by an objective professional advisor (defined below) prior to voting, each year after the first reduction. After any reduction or suspension of fund-building, the building of the fund shall automatically resume, in the next fiscal year, at a rate of 1.5% of gross rental income.
  1. 4.1. Objective professional advisors are persons who are reasonably familiar with the recent history and ongoing operations of ICC, and who have no personal or professional interest in the spending of fund money. Such professionals include attorneys, Certified Public Accountants, staff members of NASCO (North American Students of Cooperation), managers of other NASCO student housing co-ops, and/or other professionals with similar business management expertise.
8.15 Loan Repayment, Funds borrowed for operations must be repaid in the same year - During the summer and early fall, when ICC is traditionally low on cash, the Board may borrow from the fund to cover operational expenses. This money must be fully reimbursed by the end of the current fiscal year. Besides this provision, no corporate budgets may plan for the spending of fund money, except to make emergency or short-term loans, according to the rules set out below.
8.16 Emergency Loans - In the event of a major corporate fiscal emergency the Board may make an emergency loan from the Emergency Fund to Operations to ensure the ongoing survival of ICC, according to the following rules:
1. 1. An emergency includes: serious or unusual damage to property or loss of property and/or its use due to fire, collapse, explosion, storm, flood, vandalism, theft or other occurrences; significant loss of corporate income due to unexpected high vacancy rates; loan default by ICC or a threat of foreclosure on property or seizure of assets; major lawsuits against ICC; unusual or dangerous circumstances necessitating the temporary or long-term closure, sale of, or loss of leasehold on any house; negative or insufficient cash flow for more than three months resulting in the inability to pay lien holders, taxing authorities, property insurers, utility companies, payroll, or other important vendors or providers of goods or services necessary to the continuing operation of ICC; a general collapse of the local or national economy; other major threats or risks to current and/or future corporate security or survival.
2. 2. An emergency loan must be paid back within 10 years. If possible, ICC will make interest payments at the rate currently being earned by the fund account. (Rate is set annually during budgeting.) Prior to making an emergency loan, the Accounting Administrator must present the Board a report addressing the state and history of the Emergency Fund, and the budgetary impact on making an emergency loan. A repayment schedule must accompany any proposal to make an emergency loan.
3. 3. An emergency loan should be withdrawn in multiple, small increments when possible.
8.17 Short-Term Loans - The board, when advised by an objective professional advisor, may consider making short-term loans to the Operating Fund, according to the following rules:
1. 1. The Board can make a short-term loan for a dollar amount and with a repayment schedule similar to that available from an outside lending source. Short-term loans may not cause the fund to fall below the floor (12% of budgeted Gross Room board which is Potential room Board Less Budgeted Vacancies).
2. 2. Short-term loans must be used for the purchase of additional property or fixed assets, and/or the financing of significant property renovations, property additions, or purchases of equipment. Assets to be purchased or property renovations must have a reasonably expected useful life to ICC of at least 10 years.
3. 3. Money borrowed from the Emergency Fund, plus the amount of lost interest, at the rate then currently being earned by the fund account, shall be repaid from operating income within a maximum of five years. The Board will make every effort to repay the short-term loan within three years, especially for loans of $50,000 or less. Interest paid on the short-term loan shall be placed in the Expansion Fund as interest income. Short-term loan proposals must be accompanied by a clear statement defining the need, a thorough background of efforts to address the need without a short-term loan, bids and projections on the costs and timelines of projects to be done or purchases and a proposed schedule of repayment.
4. 4. All short-term loan proposals must be reviewed by the Financial Committee. The committee will thoroughly research the proposed need, expenditures, and repayment of the short-term loan, and will make a recommendation to the Board. The Board has the sole authority for approval of any loans made from the Emergency Fund.
8.18 Reaching the Ceiling - Once the ceiling has been reached, the board is no longer required to continue building the Emergency Fund, though it may choose to do so anyway. Funds above the ceiling may be loaned to other co-ops (as described below) or transferred into the Renovation Fund or the Expansion Fund. Fund money may never be loaned to any individual or entity outside ICC, except that fund money in excess of the ceiling may be loaned to legally recognized cooperative organizations. Such loans shall be considered on a case-by-case basis according to normal and reasonable guidelines of any professional lender. Procedures for approval of a such a loan are the same as those for intra-ICC short-term loans.
8.19 Renovation Fund - This fund is for major renovations and other improvements to our properties. It's funded by 1.5% of our gross rental income each year.
1. 1. Future boards shall budget 1.5% of estimated annual gross rental income for the building of the Renovation Fund (RF). Also, interest gained from the fund will be placed in the Renovation Fund.
2. 2. The purpose of the RF is to improve, enhance, restore, retrofit, and rehabilitate properties held by ICC.
3. 3. Only projects whose cost exceeds $20,000 are eligible for RF funding. Smaller projects should be funded through the operating budget.
4. 4. RF-funded projects must extend and increase the life of a property or significantly increase the habitability and marketability of the property.
8.20 Expansion Fund - This fund is to buy or build buildings for new ICC co-ops, or for additions that increase the number of beds in ICC. It's funded mostly by the Membership Fee paid by new members.
1. 1. All income derived from membership fees, expansion fund interest, and gain on property sales will be placed in the Expansion Fund.
2. 2. Expansion Fund money may be spent only when authorized by the board of directors, and only for:
  1. 2.1. Acquisition of new property or buildings to be used for co-op housing (including down payments, closing costs, realtor fees, property inspection and evaluation fees, and contingency fees);
  2. 2.2. Major conversion of existing structures when such conversion is intended to increase available space for member occupancy (e.g., new additions, wings, annexes, stories, or rooms on existing property);
  3. 2.3. or Capital improvements on existing structures when conversion is intended to increase occupancy by greatly improving marketability of the property (e.g., kitchen additions, accessibility for wheelchairs and other physical challenges, etc.).
8.21 Facilities Reserves Replacement Fund- This fund is designed to provide a planning solution for the replacement of the items listed in the "Systems and Equipment" section given the erratic nature of the actual lifepsan of the systems and equipment.
1. 1. Annual savings to be minimum of 1% of gross oom and board and will accrue on a monthly basis. Interest also gained in the fund will be placed into the Facilities Reserves Replacement Fund.
8.22 House Food Allotment and Advance Policy: Member food allotments to Houses will be withheld if the members rent is not paid on time, and the creation of a standardized loan policy to provide for the houses for food money if 20% or more of the members fail to pay their rent on time.
1. 1. Member's who fail to pay their rent on time (by the 5th of the month) will have their food allotments to the house withheld.
2. 2. When a member does pay, his food money will be given to the house at the next official distribution of house funds (typically 2/3rd at the beginning of the month after rent has been collected and 1/3rd on the 21st).
3. 3. If a member established a payment plan before rent is due, the Accounting Administrator will give to the house a food allotment proportionate to the amount paid by the 5th.
4. 4. Should a house have 20% or more of its members fail to rent on time the house may apply for an advance.
  1. 4.1. The advance may not exceed the sum totally of food allotments withheld from the house.
  2. 4.2. The application must be signed by the house Treasurer and Trustee.
  3. 4.3. Applications must be made by the 10th of the month, and funds will be distributed on the 11th of the month.
5. 5. ICC will grant all advance applications if the above conditions are met, however, ICC will never loan out more than 5% of current balance of the central fund.
6. 6. If multiple houses request more funds in advance than ICC can accommodate, then the sum advanced money – amounting to 5% ICC cash surplus - will be distributed proportionately, according to the number of members living in each house.
7. 7. ICC will collect payments on house advances from members as they pay their rent. However if a member has failed to pay rent and ended their contract or been evicted, then ICC will recoup funds from this advance from house accounts.
  1. 7.1. This will be done over a 3 month period in equal amounts.