Save CTC

What's Happening

Oct 12 2023

note: the below text was originally distributed by concerned CTC members at the Emergency Townhall Meeting on 2023 October 12th from 5:30-6:30PM in the Kitchen of the CTC community building.

What is the CTC?

• CTC is a cooperative aimed at providing affordable housing to students at the University of Minnesota. Besides housing, it maintains related properties and offers services and programs for its memebers, acting within the legal framework of Minnesota regarding cooperatives.
• CTC operates democratically and non-profitably, aiming to offer affordable housing, member participation activities, and educational experiences for its members.
• The Board of Directors oversees CTC’s business affairs, acting within the bounds of the Articles of Incoporation, the Bylaws, and any directives from members (Article 5, Section A).

In light of potential violations, what has the current board done?

• The current board of directors stand accused of breaching the Management Agreement, CTC Bylaws, Robert’s Rules, and the University’s Regulation. Additionally, they have initiated the termination of the agreement with the University (Article XII). Specific areas of concern include Article VI, Section 5/B, Article 1 Section 1, Article 5, Article 6, Section 6.1, Section 6.2, Section 6.4, and Section 6.5.
• Failed to inform the community and reluctant to release the board minutes for September in a timely manner or represent the best interest of the community as a whole. The actions of the board were done so behind closed doors and hidden from the coop intentionally.
• The current board of directors is under the thread of being accused of labor rights violations and discrimination. based on the Board’s Minutes and public statements from the former staff, chairs, members, and witnesses, there’s evidence suggesting that the former executive director might have encountered various labor malpractices and misconduct. The current board did not contact legal counsel for the act of terminating the executive director, is unaware of the legal repercussions of their actions, and turned down education of Robert’s Rules and by Laws by the former Executive Direct, previous board chair’s Ryan Johnson and Tanner Deeds, and their reasons for termination of the ED were a personal vendetta without just cause. Provided is a statement from the Human Resources Director, Arlene Vernon during a board approved, positive review of the former executive director.

Potential Threats to Our Community Cooperative System

1. Termination of University Agreement (Article XII) and Ending Cooperative Non-Profit Housing Status.

a. The University has been planning a significant reconstruction of the CTC site for some time. b. These violations could offer them the perfect justification to legally terminate the cooperative and transition to profit-based housing.

2. Potential Lawsuit and Large Legal Expenses and Compensation and Exponential Rent Increase, Ending the Agreement with the University

• The former Executive Director is seeking legal advice.
• If she sues the board, CTC will face high legal costs.
• Legal fees might boost rent by 50-100% annually during litigation.
• Such an increase risks CTC’s affordable housing status and its university agreement.
• The lawsuit may favor the Executive Director with potential damages in the high thousands or millions.
• Without funds, the University might end the CTC agreement and start is planned reconstruction.

Violations of the Management Agreement, Bylaws, Robert’s Rules, University Regulations - Termination of the Agreement with University (Article XII), Violation of Article VI, Section 5/B, Article 1 Section 1, Article 5, Article 6, Section 6.1, Section 6.2, Section 6.4, Section 6.5

• 1. Violation of Robert’s Rules of Order Newly Revised (Article XII), governance of all meetings of members, all members of the Board of Directors, and all other proceedings of CTC

  • a. Agendas must be set up in advance
    • i. New topics cannot be introduced spontaneously during a meeting.
    • ii. Matters introduced without prior notice can be postponed to the next month’s meeting.
    • iii. Violating this procedure is against the statuses of the University of Minnesota
    • iv. This protocol aligns with Robert’s Rules of Order the importance of creating an agenda (or order of business) in advance of a meeting is emphasized so that members have adequate notice of the matters to be discussed and can prepare accordingly.
  • b. Roles and Transitions, Resignation Process
    • i. Momentary or temporary transitions in the position of the chair and vice-char can crate ambiguity and violate the principles of Robert’s Rules, especially if these transitions are not done with clear procedures and documentation.
    • ii. For the sake of clarity and to avoid any future misunderstandings, such resignations and their acceptance should be explicitly reflected in the meeting minutes. This board minutes show they failed it multiple times.

• 2. Invalid Dismissal of the Executive Director, - Violation of Article VI, Section 5/B

  • a. From the minutes, there were a total of 7 directors present at the time of the vote. For a motion to pass with 75% of the directors in favor:
    • i. 0.75 × 7 = 5.25
    • ii. This means you would need 6 votes in favor (rounding up to the nearest whole number) for the motion to pass with 75% approval among the 7 directors.
  • b. Given the vote data: “Four (4) votes in favor. One (1) objection. Two (2) abstains.”
    • This is approximately 57% approval, which does not meet the 75% threshold.
    • To reach the 75% threshold, you’d need 2 of the members who abstained to change their votes to “in favor”.
    • The requirement is 75% of all voting members/directors, then abstentions would effectively work against achieving the needed threshold.
    • A board member highlighted this invalid voting over ignoring abstentions. Instead of consulting the legal consular, the chair counseled Google and rules out abstention in counting. However, according to CTC bylaws and Robert’s Rules of Order Newly Revised, then abstentions would effectively work against achieving the needed threshold.
    • The motion to dismiss the Executive Director would not pass based on 75% affirmative vote requirement, as outlined in the bylaws.$
    • The dismissal taken based on invalid voting can be deemed illegitimate or unlawful, especially and it violates bylaws, Article VI, Section 5/B. Thus it makes the entire process of hiring a new Executive Director, illegitimate and unlawful, invalid Enactment:

• 3. Violations in Hiring an Interim Director, Management Agreement - Article 1 Section 1, Article 5, Article 6, Section 6.1, Section 6.2, Section 6.4, Section 6.5.

  • a. Conflict of Interest and Management Responsibilities:
    • i. Under the “Overview of Management Responsibilities” in Article 1, Section 1.3, the Co-op is responsible for employing Co-op staff.
    • ii. Hiring family members, especially in circumstances where a board executive member is involved in both dismissing an incumbent and hiring a family member, could present a conflict of interest, compromising the integrity and fairness of the hiring process.
    • iii. During the hiring process, two board members, interviewing from the Applied Economics department, close friends of the applying Executive Director, were appointed under the Vice -chair’s leadership. This scenarios potentially compromises hiring integrity and fairness.
  • b. Operational Rules and Policies:
    • i. As per Article 5, the Co-op agrees to enforce reasonable rules and regulations for the operation and management of CTC Housing.
    • ii. There are established protocols for hiring and dismissal, and these were not followed due to the vice chair’s personal interests, it would be a violation.
  • c. Co-op Staffing: Article 6 focuses on the Co-op’s staffing responsibilities. The specific sections that could be pertinent include:
    • i. Section 6.1 (necessary Personnel): While the Co-op is responsible for hiring and mananging personnel, the process should be transparent and free from conflicts of interest.
    • ii. Section 6.2 (Non-discrimination Compliance): If the hiring was influenced by personal relationships rather than merit, it could be seen as discriminatory or biased.
    • iii. Section 6.4 (Co-op General Manager): This section states that in the event of a vacancy in the general manager position, the Co-op should appoint someone within 30 days. However, the process should be done without conflicts of interest.
    • iv. Section 6.5 (Co-op Action regarding Employment Issues): The Co-op is expected to handle employment issues through appropriate channels and committees, ensuring transparency and fairness.
    • v. Co-op Board Training Program: Under Section 6.6, the Co-op Board is required to undergo training which includes understanding the legal obligations of the Co-op to residents and employees. This could be interpreted as an expectation for board members to act ethically and avoid conflicts of interests.
  • d. Resident and Labour Privacy Rights
    • i. An individual holds an executive role in a non-profit organization, while their close relatives serves as the board’s vice chair. Both of them reside in the same community cooperative, which presents potential risks to the privacy rights of other residents.
      • 1. Positions of Influence: Individual holds an executive position in a non-profit organization. A close relative of this individual is the board vice chair of the same organization.
      • 2. Community and Family Ties: Both the executive and the board vice chair are the residents of the same community cooperative.
      • 3. Privacy Concerns: Their dual roles in the non-profit and shared residence raise concerns about the potential breaches in privacy rights for other cooperative residents.
    • ii. Federal and State Regulations
      • 1. HIPAA: Protects health-related information
      • 2. FCRA: Governs consumer reports ensuring accuracy and privacy.
      • 3. Minnesota Government Data Practices Act: Governs the management of government data in alignment with Minnesota Statuses, Chapter 13
      • 4. Protection of Personal Data: Personal information (e.g., financial, health, family) is not released without consent, unless legally mandated.
    • e. In summary, The Co-ops hiring of an Interim Director, guided by Articles 1, 5, and 6, and many others, appears compromised due to the Vice-chair’s personal ties and involvement of close associates, sparking concerns about transparency, potential bias, and compliance with operational rules; these actions, juxtaposed against federal, state, university, and CTC laws and regulations, magnify potential breaches and heighten privacy concerns for cooperative residents.

Violation of Labor Rights, Lawsuit and Legal Fees, Exponential Increase of Rent and Termination of the Cooperative Agreement

• Based on the Board’s Minutes, public board minutes and statements and from the former staff, chairs, members, and witnesses, the former executive director appears to have been subjected to various labor law malpractices and misconducts.
• The former Executive Director is in the process of legal consultation; therefore, she has declined our attempt to contact her.
• If the former Executive Director sues the current board of directors, the CTC will be compelled to allocate its large financial resources to a years-long, expensive legal defense.
  • Legal fees would force the CTC to increases the rent exponentially, form 50% to 100% every year, as long as the lawsuit continues.
  • If that happens, the CTC would face losing its status of affordability, which would end its agreement with the university.
• The lawsuit will likely end in favor the Executive Director, who would be awarded by the court hundreds of thousands of dollars, if not millions.
• In this case, the CTC has no budget, but the University would likely terminate the cooperative agreement, take over the housing, and begin its reconstruction plan, which they had been seeking.
• Currently, hundreds of CTC’s residents are compelled to seek alternative housing, which is two to three times more expensive than their cooperative housing.
• What are the possible violations?
  • Invalid Dismissal of the Executive Director (Violation of Article VI, Section 5/B)
  • Violation of Robert’s Rules of Order Newly Revised (Article XII)
  • Violation in Hiring a Interim Director (Management Agreement Article 1 Section 1, Article 5, Article 6, Section 6.1, Section 6.2, Section 6.4, Section 6.5.
  • Sudden Dismissal of the Executive Director without just cause or legal counsel and community involvement.
  • Unprofessional Conduct, threats to dissenting opinions
  • Communication and Decision-making
  • Allegation over Labour and Sexist Discrimination
  • Intimidation and Retaliation
  • Bypassing Established Procedures