Ain't No Perfect Storm

Sporadically, over the past few days, members received an All Members Meeting information package. The meeting to be held on April 15th has one purpose in mind: To pass By-Law No. 31 - The Financial Solvency By-law. The reason for this by-law is because the co-op is in a financial crisis, i.e. huge vacancy rate losses, member arrears creating a cash flow problem, depleted Capital Reserves, overdrawn subsidy funds, lack of trust in successive Boards and a somewhat tainted social environment.

There are two options, paraphrased below:

Option 1:

1. Suspend the By-laws for three (3) years;

2. Elect/appoint a new Board with three (3) non-resident members and two (2) resident members. Non-resident members will not receive compensation for their time or expertise, other than expenses.

3. The co-op, with the help of expert intervention, will financially restructure itself and hopefully improve upon the social environment.

4. Additional funding will be provided to the co-op for repairs and improvements.


Option 2:

1. Elect a seven (7) member internal Board.

2. The Agency will not approve additional funding.

3. Without funding, the Co-op will go into Receivership.


The Agency and CHASEO do not support the election of an internal Board.


If the co-op does not approve the resolution, subsidy funding will be suspended by CMHC.

A blind process will be utilized under the new by-law, so that Board members will not know the identity of the member(s) being discussed. Co-op Board members will not have access to the Co-op office, member files, etc. Members will still be able to participate in social activities like Spring and Fall clean-ups.

The non-resident members will be reduced over the three (3) year period to be replaced by resident members as the co-op stabilizes itself. This type of resolution has been used in other co-ops in financial distress and has proven to be successful.

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It was not by mere accident that the co-op ended up in this situation. Capital Reserves were spent without The Agency or CMHC's approval; there was absolutely no tracking of expenditures, minutes, documents and files have gone missing, some units were completely renovated, while others members were forced to live in substandard conditions. Ottawa has a 1.4% vacancy rate and our units are below market rent, so why did units in acceptable condition sit empty for years? The only All Members Meeting held ten (10) months after the election was a mandatory one to approve the 2007 Audited Statements. Committees became extinct over the past few years; information updates were sporadic and incomplete.

Needless-to-say, I was quite astounded today to see a memo in my mailbox from the ex-Treasurer asking members if they'd be interested in joining a Finance Committee. Isn't this a bit late? Isn't it a tad ironic that ex-Board members are not assuming any responsibility for their actions, but are rising up out of the ashes to become the saviours of the co-op? What opportunistic timing! Are we going to vote for this resolution, or are we going to run the co-op completely into the ground? Should we vote for this resolution, members who have served on the Board of Directors over the last three (3) years should definitely not be allowed to serve on the new Interim Board.