[HCoop-Discuss] Financial situation

[Justin S. Leitgeb]

After the string of emails today and the IRC chat that we had over the 
financial situation of the Coop, I wanted to summarize the most 
important issues that I felt have been raised.  In addition, I wanted to 
propose a solution that is similar to much of what has been discussed 
and is one that I would like to see implemented immediately.

First, I see it as a serious problem that the Coop has no money for 
repairs and upgrades.  In the new setup, if one of our machines dies it 
is uncertain how the Coop would respond or survive.  At best, it would 
be left to individual wealthy members to bail us out as they saw fit.  
At worst, the Coop would dissolve.

Second, there is an uncertain situation where the Coop is in debt to 
Adam because he has been paying for the Peer 1 hosting costs 
out-of-pocket (currently the debt is about $4000).  Although Adam seems 
to be uncertain about how or if he will have members pay him back, this 
dependence and ambiguity is exactly the sort of thing that in my opinion 
the Cooperative should be trying to avoid.  Although I am deeply 
grateful to Adam for having helped us out in this situation, in the 
future this could lead to members imposing conditions on an organization 
that is supposed to be democratic.

Because of the above points, I think that HCoop is currently in a poor 
situation financially and administratively.  Technically, however, there 
is a lot of promise in the new server configuration that the board and 
the volunteer system administrators have been spending long hours on.  I 
think that one of the most important things that we can do now to ensure 
that we remain strong as a cooperative as we go through these technical 
changes is to implement a system whereby a certain amount every month is 
set aside, either to repay our debt to Adam or to save for repairs and 
maintenance.  This is necessary to ensure that the organization 
continues to be democratic and sustainable.

Although it is clear that we must focus the majority of our energy on 
the user migration to the Peer 1 network in order to avoid wasting 
unnecessary resources, I think that we can make a simple change to the 
way that we collect dues in order to resolve the issues mentioned 
above.  Specifically, we should stop charging a deceptively low amount 
to users that does not take into consideration the outstanding loan from 
Adam and the need for the Coop to maintain reserve funds.  One possible 
solution to this would be to add an extra "hosting cost" of $150 per 
month to the costs that we divide between users.  This could be used to 
repay the loan from Adam or to maintain a fund for repairs and upgrades 
that the Coop needs.  It would be used by the discretion of the board 
based on their votes.  I think that this is a rather straight-forward 
step that can be taken immediately to address some of the most critical  
issues faced by HCoop.  Finally, I would like to propose that we 
minimize ambiguity in future loans or donations to the Coop by accepting 
these funds with predetermined conditions into a fund maintained by the 
board.

Currently there are a lot of technical and administrative changes 
occurring in the Coop as we rapidly expand.  I am looking forward to 
supporting technically and administratively as I have been in the past 
with these changes.  I am also hoping to see the board respond to the 
two issues summarized in this email by a vote in the near future.

Thanks to all who participated in this discussion today, and everyone 
who has been putting in lots of time during an exciting transitional 
period for HCoop.


Justin