Land price and sales issues (non-profit?)

[Jamie Palisades]

We'll have one more report to post, on the current CDS land sales situation, at the end of the term, shortly.

The following comments are cross-posted over here, from the Executive Branch thread at http://forums.slcds.info/viewtopic.php? ... 192#p14192 -- because other people can add comments here, if they wish. And I have added a few more details here.

The economy: The land market in SL is still shaky and unpredictable. We've made great progress in keeping CDS mostly fully rented out -- if you know the vacancy rate at other places, you'd know we are well ahead of the pack in retention. Estates who show their "yellow map" land for sale are full of yellow; some of the ones that don't, simply are hiding big vacancies.

Lowering CDS' cost would be a good idea. In my view, CDS should strongly consider going nonprofit (and thus significantly cutting our costs) for all CDS sims. That would allow the RA *both* to lower tier rents *and* to collect a higher net margin.

CDS rental tier prices: Our covenants also are not well coordinated, and our price-per-prim varies widely from sim to sim. Fixing the latter requires RA action. I think that the best thing for CDS probably would be to have the same number of prims cost the same monthly rent, in any CDS sim. However, that project would require significant calculation work, and resetting many rent payment boxes.

Rent payment systems: We have two incompatible rent systems in place: the old CDS and old AA ones. Neither of them really are a close fit, so far, to our laws and needs. Most people would like to be able to pay multiple months, or shorter periods. The current systems are not all yet set up to be accessible by backup officers, if one person leaves or is incapacitated; also, so far as I can tell, neither is yet set up to permit easy reporting. Also, there's some resistance, annoyance & administrative hassle to changing or coordinating them. Our rent collectors (estate owners) are volunteers too, who deserve easy-to-use systems. This second topic is continued in a separate thread here: http://forums.slcds.info/viewtopic.php?f=8&t=2680

Regards JP

[Sudane Erato]

I'd like to expand a bit on two of Jamie's comments. I'll use two posts to keep them clear.

At this time, our tier fees for the original CDS sims, in US dollars per month, are as follows:

Neufreistadt 195
Colonia Nova 195
Alpine Meadow 295
Locus Amoenus 295
Monastery 95
TOTAL 1075

Neufreistadt, Colonia Nova and Monastery benefit from a tier status known as "grandfathering", meaning that these sims were purchased before the current tier amounts went in effect, and thus are still being paid for at the earlier monthly rate. Only Alpine Meadow and Locus Amoenus cost us the full current monthly rate.

If we convert to a non-profit, as the AA sims already have, we would lose the "grand-fathered" tier status and convert to the current monthly tier rates for non profits. These would be:

Neufreistadt 147.50
Colonia Nova 147.50
Alpine Meadow 147.50
Locus Amoenus 147.50
Monastery 87.50
TOTAL 677.50

So, this would be a savings of almost $400/month. Yes, that's a good savings, and well worth considering.

But I should note three downsides.

1. We would lose forever the option to go back to our current "grandfathered" pricing. If we reverted to normal tier payments, the monthly tier fee would be US$1305.

2. With non-profit status, all tier must be paid *at the beginning* of the six month period for which it applies. In our case, we would need to pay US$4065 now for our tier fees from now (February) through July. While our existing fund is fairly healthy, I haven't done the calculations, but we may or may not be able to manage this. In essence, this means that funds which we now hold ourself for our own contingencies would be transferred to Linden Lab in expense payments. That amount would slowly get built up again from our own tier collections, until July, when it would all disappear again.

3. A non profit corporation is a "real life (RL)" organization, requiring RL people signing on and requiring RL reporting and administration. Rose has successfully organized this for the ownership of the AA sims, and, indeed, the corporation which she has created might well become the owner of the original CDS sims as well. But I think we have not yet fully dealt with the many issues of financial accountability that maintaining this RL corp presents. Not to mention the governance issues, which are outside my area of knowledge.

Hope that helps clarify the issues for going non profit.

Sudane..........................

[Sudane Erato]

This is my other comment on Jamie's notes in the first post.

We do indeed have two "rent payment systems" in place. One is our old, rather simplistic system which I administer for the original CDS sims. The other is the commercially available Hippo system which is used in the AA sims.

Jamie long ago proposed converting our entire system to the newer and more flexible Hippo system. I've agreed that the system bears checking out, as it has a huge amount of flexibility, potentially giving residents many more options for paying their tier than the old system in place in the old CDS sims. As Jamie notes, this would be quite a job, but if the merits are clear, and the plan of implementation is clear, then its something we should do. However, there are two points that need to be considered.

1. The old system we use now in the original CDS sims is "resident based". There is one payment box for each resident, and that payment box provides each resident with a complete listing of all their holdings in the CDS, along with the ability to make a single monthly payment for all of them. Many people have more than one parcel in the 5 sims, and of those people many have 4 or 6 or 8. One box provides access to all of them, and the one box permits payment for all of them.

The Hippo system, on the other hand, is *intended* as a "parcel based" system. It's designer intended that a box would be located on each parcel for which payments would be made. If you owned one parcel, you would make payment to one box. If you owned 4 parcels, there would be 4 boxes to pay. Now, while this is the intention of the design, it's true that Rose has set up the system so that the boxes are centrally located and so that more than one parcel is paid via a payment to each box. However, doing this requires more hands-on administration than the designer intended, and also defeats many of the features of the system available if the box were located on the parcel it services.

I've studied the Hippo system closely, and I do think it bears some very strong consideration. Our old system is VERY limited (it was custom built for me by a friend of mine who I paid for her services in doing so). The Hippo system can perhaps address many of the limitations of the old system, but we need to be careful in installing a new system that creates more problems than it solves.

2. The other concern is that "citizenship" in the CDS community has so far been rather loosely defined as those who pay tier for the community's land. With the old payment system, those who pay tier are clearly known, and until recently have been available on a publically posted listing. Using the Hippo system may make that harder to define. The real problem is that the definition of citizenship itself is not clear, which is a problem that the RA must address. I would say that until it does so, and produces a clear and unambiguous definition of citizenship in the CDS, that the next stage implementation of tier payment system should be put on hold. When such a clear definition finally exists, the payment system must be tailored to it.

Sudane........................

[Sonja Strom]

Sudane, were you ever reimbursed for your expenditure to get the system set up for the original CDS sims?

In Arosa we are using the Hippo System, and I am fairly knowledgeable about it if anybody has questions about how it functions.

[Jamie Palisades]

Sudane's post above on the price issues is just great, and exposes the issues very nicely.
Exactly the stuff the next RA will need to think about.
Bear in mind, for NOW, we have been blessed that one of our original founders, who happens to her own huge estate (SLNE), has been willing to do all this for us. In other words, the entire system works securely for CDS because, and only because, we trust Sudane personally. (Well, OK, her and the other CDS person with who she shared the Rudeen password as a backup.)
So long as they do not die or leave SL, and we trust them, everything's fine.

In contrast, if we went to a organizational owner, you'd need to trust that foundation (or company or whatever). And someone in it probably would be required to disclose their RL identity, just because that's needed to secure nonprofit status. Or maybe not -- look at Gwyneth, for example, who is an anonymous avatar, but is associated with a real world company with real mail addresses.

Good set of questions for the next RA. Regards JP

[Rose Springvale]

A few clarifying notes, as it appears there is still some confusion on how things happen in the AA sims.
1. There is a box for each parcel that is usable as a home or business. If you go to the AA tier boxes, there is one for each parcel. The only time i've combined parcels are when extra prims were purchased. I think that is the same as in CDS.

2. The central system was set up because of a preference of the sim founder to be more like CDS. I own land in several different SL estates. I personally much prefer a system that is ON the parcel, and have proposed moving the AA tier boxes to the parcels. This has three benefits:

a) when a parcel is sold, there is no specialty work required to transfer the tier box. The new owner simply pays it. With a central system, new textures with avatar names must be created and applied. I think that is true for Sudanes' system as well. A parcelized system also helps cut down on volunteer time... some people can't seem to remember where the tier boxes are located, month after month.

b) Grouping together that many tier boxes, for more than one sim, causes a script load on the sim. Spreading them around the sims events the load out and increases the user experience for everyone in the sim.

c) Citizens are able to clearly tell what they pay for what land. The CDS system gives us a list, once a month when we pay. If we want to sell a parcel in the interrim, it requires looking up the information...which requires knowing your parcel numbers. As many of us have learned lately, parcel numbers on many parcels no longer show up on the land tab. That means you have to find the parcel on the map then find the parcel on the master parcel list all to know how much you pay for each one. The hippo system gives that information on touch, and can be set to retain the privacy of the parcel owner.... i.e., you can find out what you pay, but your neighbor would have to go through the system. This helps people plan finances.

3. one other benefit of the hippo system that CDS does not presently enjoy is the ability to account for the exact number of days for which we pay. CDS lets us pay anytime in a 21 day window, for the month we pay in. But it is VERY confusing... if i pay on the 15th of February, i've paid for February. If i sell the land on the 20th... who owes what when? And if i don't pay, then when am i in default? If we want to have grace periods, that can be built into a system. But having people remain on land for weeks after they have stopped paying tier, seems wrong to me, and leads me to 4.

4. Group ownership is a problem in CDS. It is a problem to determine who is a "citizen" because they pay tier, and it is a problem to divide up payments. Theoretically, group members must physically enter the sims and pay their CDS tier box a minimum of 100 L, and then are considereed citizens. Theoretically, they would have had to have owned land individually before becoming a group member, but then can have citizenship forever as long as they make that trek to pay that 100 L. This system has been used and abused in many ways in CDS, and it is time to get rid of it. Since all people have to do to get around it is sell land back and forth to each other after creating a group, it is truly a loophole to citizenship. On the other hand, regardless of contribution, we do not recognize citizenship from people who don't pay for land. Technically, this includes anyone who "rents" from a landowner, or whose vendors appear in a shop and who may very well have a great impact on the financial health of a sim.
Not to preach too loudly in favor of Hippo, because it does have drawbacks, but groups can be designated in the system. This would eliminate the problem of people coming and going from groups during say, election times.

5. Prepayments are not allowed under the CDS system. That works fine when the time period for which the sim pays its tier to LL coincides with the time the parcel owners pay theirs. CDS chose this route to assure that people would at least make an appearance in the sim where they owned land every month. It was adopted during a period of time when we had very few events, RA meetings could be conducted with 3 people, and our community was stagnant in growth. Not only do we have many more things for people to "log in" for, we also have the complication of the prepayment of tier required by LL for non profit sims. Al Andalus began with a requirement that citizens pay 6 months in advance, as that was what was required by LL. For many reasons, the initial tier payments were spent on development of the sims, and after the initial payments, AA went to a payment system that mirrored the rest of second life. For several tier cycles, I advanced the tier from personal funds, and prepayments by the AA residents repaid those advances. When CDS too over, it was credited with over 1000 Usd in prepayments made by the AA citizens, which eased the financial requirements from CDS to pay the tier that was due. Continued pre payments by AA citizens continues to keep the amount from our CDS treasury from being overwhelmed by large tier payments with no reserve from which to pay. Many of our citizens pay several months in advance, and we've not had an issue with citizens not putting in an appearance in the sim... they are part of the project because they want to be, not because of any requirement to show up. I think most of our sims have developed the same kind of citizenry, and their needs/desires to pay in advance should be respected.

happy to answer any questions.
Rose
(edited to fix outline numbering.)

[Sudane Erato]

I TOTALLY agree with Rose that if we decide to use the Hippo system, they make a great deal more sense to be located on the parcels to which they apply. They are really designed for maximum features this way.

Sudane.................