News & Notes 633:Funds and Assets Management Committee (FAMC) December 2015 Report

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633 icon.jpg   News & Notes 633
23 January 2016

Funds and Assets Management Committee (FAMC) December 2015 Report

Regular members: Anandi (Auroville Board of Services), David (Forest Group), Jeff (Farm Group), Matriprasad (Auroville Council), Michael (Auroville Unity Fund), Ranjith (Working Committee), Rathinam (Budget Coordination Committee), Sauro (L'avenir d'Auroville), Sonja (Housing Service), and Ulli (Auroville Board of Commerce).
Temporarily out of station: Chali (Sri Aurobindo International Institute of Educational Research)
Other attendance: Mr. Srinivasmurty (Finance & Administrative Officer, Auroville Foundation; currently Secretary-in-Charge) is attending infrequently.

Corrigendum: In November we reported, inaccurately: … 38 % of the total cost for the first year are available. It should have been stated: ... 38 % of the total cost of the project is available.

Trust & unit topics

The Auroville Board of Services (ABS) recommended, and FAMC approved, Quiet Healing Center new executive appointment of Samrat. The current executives are Guy and Dodo.

Previously FAMC decided to review the situation of the Auromode Apartments in January 2016. There is the question of where to register the apartments. FAMC requested the ABS, Auroville Board of Commerce (ABC), and Guest Facilities Coordination Group (GFCG) to share their views of the following options:

A. To join the Guest House Trust as an individual guest house;
B. To register as a guest house under the Auromode Trust;
C. To register under an eventual new form of Hospitality trust, or;
D. another option, which may be suggested.

FAMC await a reply from the ABC; ABS and GFCG have responded.

FAMC received a strong objection to the Mohanam Cultural and Heritage Centre proposal from the ABC. The FAMC wrote back to the ABC that their concerns need to be addressed to L'avenir (re: site application), and directly with the Mohanam team.

FAMC have asked the Budget Coordination Committee (BCC) to comment on a proposal to the many Auroville restaurants and eateries, concerning the regular contribution to the City Services. The FAMC await their response before contacting the units directly.

Harini asked if the FAMC had any specific inquiry which she could look at during the 2014-15 balance sheet review. The FAMC appreciated very much Harini's offer and requested her to look at:

  1. Percentage of Profit over Turnover, the lowest and the highest, to see what type of units have a good potential and which ones are not profitable at all;
  2. Units that have grown over the last 3 years and show big potential for development;
  3. Units that do not contribute to Auroville over the years;
  4. Units with big liabilities/loans or liabilities/loans that have grown in the last two years.

A note will be included about the importance that expenses are noted correctly, not as 'contributions'.

Finance topics

FAMC thoughtfully considered and subsequently approved a request concerning implementation of the Windarra arbitration decision. A loan, shared by the parties, of Rs. 3 lakhs is to be repaid within 5 years.

FAMC expressed its appreciation for the detailed work presented in the Unity Fund Annual Report 2014-15. After a careful review and considered discussion FAMC requested more details concerning income from Aurovilian sources (1. Income from commercial units; 2. Income from service units; 3. Income from guest houses; 4. Aurovilian individual contributions; 5. Aurovilian donations for housing; 6. Income from guest contributions; 7. Donations for land; 8. Donations for Matrimandir; 9. Donations for projects/activities) and inquired how the income generated from interest is allocated (some to City Services) and some held in reserve.

FAMC approved an advance / credit line to Dodo and Cristina to start the construction of a housing asset in the Center Guest House compound. The FAMC view this as housing for the executives of Center Guest House. Upon transfer of the stewarded housing asset in Petite Ferme the advance will be returned.

Land topics

FAMC met with Land Board (LB) members in early December to discuss: land exchange negotiations, and beach land.

Housing topics

In early December the FAMC met with Suhasini and Hemant about Humanscapes. 'Phase 1' will provide 36 beds for young people. The Housing Service (HS) is the 'client' and the present idea is to have the residents be 'tenants' not stewards, who will make a monthly contribution. The 'tenant' eligibility criteria have already been worked out by the HS. The criteria will be sent to the FAMC for review and comments. FAMC thanked Hemant and Suhasini for their hard work and perseverance.

FAMC sent a “Housing Cooperative Trust” proposal to the HS/Housing Board (HB). Their members expressed strong support for the idea however at present they did not feel they have the requisite knowledge to move it forward. They asked the FAMC for assistance. It was then agreed to form a subgroup to transform the proposal into an implementable plan. Several knowledgeable Aurovilians have been invited to participate and FAMC await their respective replies. There will be more information on this in the coming months.

Other topics

The FAMC and Working Committee (WCom) met and discussed:

  1. Crowd funding: all funds should be channelled through the Unity Fund;
  2. Blue Basket outside activity using Auroville land: review lease agreement;
  3. Waste water at Maitreye 1 and 2: it was reported that L'avenir d'Auroville (L'avenir) has the funding from the Government of India (GoI) grant and will initiate the centralised waste water facilities this and the next financial year. L'avenir needs one more month to complete the plan.

FAMC received a request from the Assisted Living Home project holders for a 'green light' to continue. FAMC stated to the project holders, “The FAMC has serious concerns regarding the quantum of presently guaranteed funding for the project. […] It is essential that before any construction is started, there is a minimum of 40% of the final project cost being actually deposited in the project account as well as realistic projection for the source of the balance 60% in accordance with the construction timeline.” In addition, the FAMC asked the HS/HB for a financial commitment in support of three Aurovilians to relocate into the Assisted Living Home. HS/HB have committed to some financial support.

In response to a request from Lyle who posed questions and raised objections, the FAMC reviewed the process for approval of the latest Entry Policy. FAMC noted the Entry Policy is a legal document and the Entry Service as a subgroup of the WCom. The policy needs the full approval of the Residents Assembly (RA) according to a process approved by the RA, and cannot go for a so-called “test year”. It was clarified that the Housing Policy is approved by the FAMC of which Housing Service/Housing Board is a subgroup. The FAMC replied to Lyle with a copy to the WCom and the Auroville Council.

The BCC made a request to the FAMC for documentation concerning an Aurovilian with enough personal resources who should not receive / take financial support from Auroville. The FAMC responded to the BCC stating, “Although members confirmed that it has always been the understanding that maintenances are given only when there is a need for it, not as a direct compensation for the work, maintenance guidelines detailing the criteria, conditions and procedure for receiving maintenance have never been formulated and approved by the community. In view of the importance of this guideline [we are] of the view that a process in collaboration with the Council and RAS should be initiated to arrive at a community supported decision, confirming the community-wide support for this guideline or come up with a modified guideline as per community process.”

Kireet requested that part of the Gaia Guest House contribution could be used for his erosion control works. FAMC requested the BCC to consider providing a budget for this critically-needed work; that funds do not come from the guest house. The BCC subsequently granted Rs. 2 lakhs for this work. Thank you BCC.

Chandresh made a proposal to the FAMC concerning the annual payment of house tax which would entail the total amount being divided equally by all housing stewards. After a healthy discussion the FAMC decided to write to the BCC, “[We] request that the BCC create a budget to pay the total house tax, beginning in 2016. Our aim is to move away, step by step, from stewards 'acting' like owners. In our view, stewards no longer being required to pay a house tax will be one such step [in] that direction.” FAMC await the BCC reply.

The project holders of the new Archives building requested immediate release of GoI approved funds. There was a process question which FAMC was requested to comment upon. After a detailed discussion the FAMC wrote to SAIIER, “We view the tender requirement based on the work to be done by a single contractor, not the entire project cost. Therefore we recommend to SAIIER to accept the current contractor work at Rs. 62 lakhs for which no tender is required, and to release the funds allocated by the GB in October.”

Following up from previous reports

In September the ABC submitted a proposed “ABC Maintenance Guidelines” document for the FAMC members' review and feedback. After some written exchanges between the FAMC and the ABC support group, it was agreed to strongly recommend that all Aurovilian maintenances be channelled through the Maintenance Fund in the Financial Service, especially since many units already do so. The other point emphasized was concerning visa-related travel expenses which should not be 'expensed' but taken from profits (after usual contribution) only. The clarifications the ABC stated it would make, should be sure to be made. FAMC sent its final comments to the ABC.

In September FAMC discussed succession planning: how to transfer executive responsibility, and the need to develop plans for succession of current executives. There was a call-out to create a study group and several individuals responded. In December, upon further reflection, it was agreed to ask different work sectors to explore and document succession planning that addresses the sector's unique needs. FAMC contacted ABC, ABS, BCC, Farm group, Forest Group, and the School Board with an invitation to work on succession planning as a priority and to submit a proposal by end-January, beginning-February 2016. The individuals who volunteered to be part of the study group may be requested to review the proposals all together and create a common framework following the emerging themes, while retaining flexibility for the diverse needs of the different work areas.

In October it was reported that the FAMC gave its support to this move and it was agreed to recommend to Sumark Construction executives, and the Auroville Service Trust trustees that with effect from the beginning of the next financial year, 1 April 2016, the unit can be moved to Kattida Kalai Trust. In December Sumark executives expressed their openness to moving to Kattida Kalai Trust.

In October FAMC reported that Buildaur had not repaid its Rs. 15 lakhs loan by August 2015 as promised. FAMC wrote to Buildaur reminding them of their agreement. At the end of November Buildaur submitted a loan repayment reschedule. In December the FAMC replied to the executives that it did not appreciate the change in terms of the earlier agreement. However the revised schedule was accepted. It was noted no further extension would be available.

In October it was reported that Muna, relocating from Happiness with Christine and Benito, wrote to the FAMC about fencing the plot of land which was allocated to the family and is located near Dana. In December Muna provided estimates for new housing and infrastructure. FAMC will honour the agreement signed with them in March 2014 providing Rs. 25 lakhs for new construction. In addition, FAMC will not ask them to repay a Rs. 6 lakhs advance. Financial Service has been informed about fund to be released to them.