Neualtenburg Responsible Money Management, as passed Mar 6 2005

Here is the revised copy of the bill passed today regarding handling of funds for Neualtenburg. It reflects my re-writing of them to reflect the groups revisions. If anything departs from the approved intentions, just post them following, and I can revise this post.


Bill: passed March 6, 2005 …………………….
Responsible Neualtenburg money management.

(1) To establish a Finance Committee of the Neualtenburg city, composed of three members of the Representative Assembly, the GuildMeister, and one other Guild member. The committee will hold the responsibility for all funds of the city and will collect all revenues and pay all expenses that apply to the city government. The committee will establish various money accounts which in its opinion will enable it to responsibly and transparently manage these funds. Every month, and/or at other intervals that may be requested by the RA, the Finance Committee will provide a complete public report of: (1) The income and expenses for the given month and year, with breakdowns so that the RA and the citizens at large can see the profitability of the casino, rentals, vender sales, etc and (2) the overall state of the city’s financial health (as shown in its balance sheet, which is a statement of how much the city owns and how much it owes). The committee will perform its financial duties as consistently as possible (given the limited financial tools available to Second Life residents) in accordance with general accounting procedures, so that any citizen who understands those procedures can have a clear understanding of Neualtenburg financial activities. And, in fact, the committee will attempt to present its reports in such a way that even non “accounting-enabled” citizens will have a clear sense of how the money is being used.

(2) That the members of the Finance Committee serve limited terms, which end each time a new set of RA members assume their positions after an election. That the 3 RA members of the committee be appointed as the first order of business of the new RA body, and that the Guild member other than the Guildmeister be appointed by the Guildmeister at the same time. This proposal makes no specific limit on the number of sequential terms a Finance Committee member may serve. It is urged, however, that the members be changed with some frequency for the sake of healthy financial management.

(3) That until such time as the owners of Second Life provide the residents with better tools for the management of group finances, the members of the Finance Committee shall determine among themselves, as their first order of business, the members who will establish “alts” solely for the purpose of holding the various accounts needed to fulfill the charges in paragraph (1). That all members of the committee shall have the passwords of all alt/accounts established by the committee. And that upon new members assuming their positions on the committee after the appointments as described in Section 2, that the credit card designations on each of the alts be changed by the new members to connect with the RL individual assuming that account responsibility.

(4) That the first configuration of this committee be as follows. From the RA, the members proposed are Talen Morgan, Roberta Dalek, and Sudane Erato. The Guild should be represented by acting Guildmeister Catfart Grayson and by another Guild member chosen by him. That the committee establish three alt/accounts at its beginning. The first, by Catfart Grayson, to handle all transactions regarding property rentals and vender sales. The second, by Talen Morgan, to handle all transactions relating to the casino. And the third, by Sudane Erato, to receive net revenues from the other two accounts and to be responsible for the general financial obligations of Neualtenburg; principally the purchase of a new sim and the payment of monthly tier for it.

(5) An example of how the accounts will work is the casino account. The account will be “funded” (have money put into it) by volunteers willing to advance the dollars needed to start up the casino. Careful record will be kept. From that funding, the start-up expenses (new machines, kick-off party, etc) will be paid. As the casino operates, hopefully, the balance in that account will grow. After one month, record will be made of the increase in the amount of the account. That increase is the “gross profit” of the casino. Half of that amount will be paid back to the “funders” (with interest, if that is decided upon), and the other half will be paid to the general city account. Hopefully, before many months, the funders are paid back, and all gross profit is paid to the general city account. All these transactions are recorded, and they become the basis for the financial reporting of the city. The other two accounts will work in similar ways, each depending on the needs which it must serve.

(6) That it be an article of policy that “free and clear” donations to the city be discouraged, particularly as the city manages to achieve financial stability. Donations, unless clearly defined, can contort the free exercise of speech and opinion. While the author of this proposal profoundly appreciates the generous donations that many have made to sustain Neualtenburg up until the present day, so that the experiment could even hope to survive, it is proposed that such donations be gradually phased out. Neualtenburg is an economic and political entity. Gifts potentially represent a “conflict of interest”, and should be carefully limited.

(7) That in the light of paragraph (6) an attempt be made to list and identify the donors and amounts of funds given so far to Neualtenburg, to the extent possible, and that these amounts be entered into the financial records of the city as money owed. And that the RA determine whether and if interest should be due on money owed.

( That if the Finance Committee, in the opinion of the majority of members of the RA, should fail to perform its responsibilities as defined in this bill, that by 2/3 vote the RA can recall the three RA members, with the provision that the credit card designations of any accounts held by removed RA memebers of the committee be replaced by new ones designated by the RA.

We have discovered that this won't work. (Unfortunately) The process by which a new "holder" of the alt opens up the account page of the alt to change the credit card information inappropriately compromises the personal information of the previous "holder". (Not the credit card number itself, but the name and address of the RL credit card holder).

This leaves the proposal back pretty much in its original form. This will work OK, so long as the committee members, who all share the passwords of all the accounts, agree not to snoop into the account details of the alts which are "held" by others on the committee. But it raises the problem addressed in the original form of the bill (/103/97/37444/1.html), which is the US$100 that the Lindens charge for transferring the ownership of an island to a new owner. Since the main account alt will be the "owner" of the island, this is not a practical solution.

Perhaps, as in the original form of the bill, someone can negotiate a better arrangement with the Lindens for the transfer of ownership. Or, perhaps, some other solution can be suggested.

Sudane

Stupid question time as I've never created an alt. Do I have to set up a new account? I sort of assumed that I could create a new character on my existing account.

No, it's just a new account, Catfart.

The reason why LL calls them "alts" is because they consider all accounts created with the same credit card as belonging to the same person (and thus limit it to 5 accounts per credit card).

But the process of creating an alt is the same as creating a completely new account

As to Sudane's comment... I have thought about the issue of "revealing" RL identity when changing owners, and there is no easy way out of it, except by violating ToS (ie. provide fake data - note that Visa will still be able to get your real data from the card number, it's just LL that forbids entering untruthful data on your account).

Sudane, the question of the US$100 when changing accounts is not the major problem. As long as the three alts are shared by the 5 people of the Finance Committee, they will all be able to access the RL information of the account. The problem starts from the day the alts are created.

This basically means involving the Lindens - unfortunately, since we know how queasy they are in interfering. On the other hand, since Haney has left SL, we also need a replacement Linden to act as contact. Unless anybody has a great idea on how to deal with this, I think that we will have no other choice but to talk to the Lindens about our problems

*sigh* Of course, that's right. As this issue has developed, I have felt that perhaps there were two levels of compromised privacy, and that we could tread the fine line between them. In day-to-day operation, the only reason one Finance Committee member might have to look at another member's alt is to load that alt and confirm the dollar amounts and transaction details. That's an entirely in-world process (as far as I understand it), and in principle could be simple and routine.

But in order to transfer the alt to another person, the new person would visit the off-world "My Account" of that avatar at the SecondLife site, and access the credit card page. This is an entirely different process. Although the actual cc number is hidden on that page, none of the other info about the card-holder is.

So, I have felt that perhaps by mutual agreement and respect (until the Lindens can provide the residents with better money management tools), Finance members could simply agree not to visit the credit card page. Accessing the off-world "My Account" would have nothing to do with the responsibilities. And people would on good faith not do that.

It was just a hope. It is surely not a great way to set up this system, but it does, in my opinion at least, provide a way to do so without the involvement of the Lindens.

Sudane

Hmm, this is the reason I think we should be putting together our requirements for a Group to be able to have a separate monety functions and to hold money in its own right. If LL want large group projects to survive past the founding memberthey need to do something about this problem.

Well I was going for a sensible name honest. But then I saw the surname Pacer and couldnt resist.

Can someone give me an invite to the group please.

Cat

See if you can rouse Talen. The other officers are MIA, tho I got an email the other day from Ulrika saying she would check out the forum and do what she could.

I will definitely log in tonight. I'll send Ford an invitation and give out some more Officer titles.

~Ulrika~

thnx Ulrika.

How's your bump?

I added Gwyneth and Sudane to the list of officers and invited Ford. It's the first time I've logged in in weeks! We should probably come up with a policy which gives Officer titles to the top four RA members right after an election. Also, Kendra and I are moderators in the forum but we should add more users to that list as well.

The little critter is doing fine, as far as we know. I just had blood drawn today and will be scheduled for my next appointment this week. Not a lot going on right now, although this weekend I had to finally go out and get some maternity clothes, as I'm having trouble zipping my skirts. I got a really fun pair of pants that have a shiny synthetic look to them -- I call them my space pants. Because the outfits have an obvious maternity look to them I can wear some neat things I couldn't normally get away with.

Who knows, in a couple of months I could be running around in moon boots and a purple mumu, loving it.

~Ulrika~

OK. I did a very bad job or reading this. I had trouble getting through it because it was a bit long and in legalese. I meant to come back to it but never did.

Speaking as a member of the SC, I have a problem with parts of this bill as they are possibly unconstitutional. Article II Section 1 of the constitution states:
The constitution goes on to say that the RA is responsible for revenue bills but the SC can veto them if they want.

Quick primer for those who aren't up to speed on the government. We have three branches, the Representative, the Artisanal, and the Philosophic. The Representative branch is run by the Representative Assembly (RA), an elected body. The Artisanal branch is run by the Artisanal Collective (AC), a productive hierarchy. The Philosophic branch is run by the Scientific Council (SC), a selected body. Each branch has it's own roles and responsibilities as defined in the constitution. The goal is to balance power between each branch.

The first section in red is the piece that is unconstitutional. The Guild should be in complete control of the finances. The next section should be unnecessary. The guild should build vendors, rental boxes, and casino games that automatically send a report to our online vendor tool, so anyone can check the system at any time. With the online vendor tool, we can see which rental units and casino games are brining in the most money with the click of a button. Artisans building these items will have to work with me to get the snippet of code that allows them to report to our server. It's really easy.

Again the RA can't be part of the treasury, they can only pass bills (casino creation or creation of rental units). Also the Guild should be able to run the treasury as they see fit keeping or changing members as they wish.

The red sections here are unconstitutional, as they dictate how the treasury should be run, which fall under the responsibility of the Guild.

Again members of the RA can't be involved with the treasury or define how it's structured.

This paragraph here contains good content! It's exactly what the RA should be deciding: how to make money and where the percentages go. Catfart should review this and decide if he likes the percentages. If he doesn't he can veto and send it back to the RA.

The red part is unconstitutional as it defines how the treasury will work. Also we should integrate the casino into the online vendor info page so we can track the assets in real time. We will probably have to purchase custom games. I can prepare an LSL function that we can give to folks to integrate into their games.

This needs clarification. I need to know if you're talking about land-tier contributions as donations, payments in money (L$ or US$), or time in the form of work. More importantly, I then need to know if you're talking about donations to the city such as money which is donated to Uma or work which contributes to the city without pay or if you're talking specifically about gifts to individuals.

I think here you're requiring self sufficiency and suggesting a repayment for all contributions. I'm on board for that. However, does this includes time spent creating structures, time spent on websites, and time spent creating documents? If so, we need to decide on an equivalent hourly wage.

Again, the RA cannot control or disband the treasury or Guild. However, the constitution states that "the RA can seek impeachment of members of the Artisanal branch for failing to support the city fiscally."

With that said, as a member of the SC, I'll have to recommend that this bill be sent back to the RA for a revision. How do other members of the SC feel about this?

~Ulrika~

I happily offer to re-write this bill, should it be determined unconstitutional by the SC. Perhaps the SC can come to a final official conclusion about that, and pass it back to the RA for revision.

I suggest that, consistent with the constitution, several issues must be dealt with should this matter go back to the RA (from which it has never really left, owing to problems with implementing a shared financial responsibility).

First, it seems appropriate that the RA should require (in the interest of all the citizens of the city) a level of effective and transparent financial management by whomever performs these services. Therefore, while according to the constitution the RA does not run the treasury, it can certainly specify conditons for the running of that activity which it may feel in the interest of all Neualtenburg citizens.

Second, it seems appropriate that the RA should expect that an actual system be established. Should it become evident that no such system be in development, it seems reasonable that in the interests of all Neualtenburg citizens some provision for such management be established, and perhaps held in caretaker status until the Guild demonstrates its intention and ability to take on this activity by themselves.

Third, I would suggest that such a system must not be operated only by those in a position to provide funds to the city, whether by donations or by buying bonds, but must be operated in a shared and rotating fashion by persons of any financial class (i.e. those with funds to donate/invest and those without such funds). That there be a clear, inevitable process by which direct responsibility for funds be changed from person to person.

Sudane

The active voting Scientific Council (SC) is just Kathy and myself (Gwyn can't vote because she's El Presidente). I'm going to officially recommend a rewrite due to constitutional conflicts, which should be sufficient (50%). However, if you require Kathy's input, we can wait. It dawned on me a few days ago that the most valuable thing the SC can do right now is to help define the scope of powers for each branch as they start to exercise power in the new government.

The Representative Assembly (RA) does not have the absolute right to specify the conditions for running the treasury under any condition. As originally envisioned, the Artisanal Collective (AC) has control of the budget and the right to veto all budget-related bills from the RA. This was modeled after most modern democracies, where democratically elected bodies do not have the power to directly affect monetary policies.

The RA cannot take responsibility for the AC's responsibilities! The constitution clearly defines boundaries between the branches.

I recommend that if you are motivated to create a monetary policy and budget for the city, that you post it as a recommendation to the AC, or resign your post from the RA and become a member of the AC with the sole purpose of leading the treasury. If you changed branches, as a member of the AC, I would certainly support you efforts! You could become the Alan Greenspan of Neualtenburg.

I just don't see how rotating "bank" avatars will help us. If you're talking about rotating private-sim "credit-card" avatars, I'm not interested in giving up my privacy or paying US$100 for every avatar exchange until we're profitable. I understand that rotating payees would be the equitable thing to do but it will burden us all with bureaucratic and financial overheads.

We should write up a description of competing payment paradigms for the "bank" and "credit-card" avatars, discuss the pros and cons, and vote on which one would best serve us.

~Ulrika~

I have to say that my glance at this section:

"Section 7 - Powers of the RA

In regards to the Artisanal branch:
- The RA sets taxation rate and the city budget."


was too cursory, and led me to some false assumptions about responsibilities relating to money. I guess I assumed that the word "budget" was more general than it really is.

Ulrika appears to be correct. This section:


"Section 1 - Artisanal Collective

The Artisanal Collective (AC) is group of productive citizens
who provide revenue through sales and infrastructure support.
Its governmental role is to act as treasury and its service role
is to provide goods and infrastructure."


seems to clearly put the AC in charge of producing, contributing, safe-keeping and dispersing the money according to the budget the RA passes.

I stand corrected. I withdraw my previous imprimatur.

And the competing paradigms - with discussion attached - would be presented to the AC for consideration (and a vote, if that how they wanted to make this decision) - right?

And then, if the AC decides on the rotating avatars (interesting visual) then the whole thing comes back to the SC where we will decide if it violates the TOS clause of the Preamble?

Yes. That sounds like the right process!

Now I just have to write that post...

~Ulrika~