UCLRG Status 6/12/09
I missed my guess on the number of signatures we would have with the petitions. I counted the Yudof signatures and got 506, 100 more than I expected. Thanks to everyone that helped make the petitions a success. The packages have been delivered, but I have not had any feedback yet.
We havenÕt scheduled our next meeting with the UC Lawyers yet. We plan to do so before the July 16 RegentÕs meeting. Our petitions have been delivered to President Yudof. We are waiting for a response.
With John GaramendiÕs help we are trying to get on the agenda of the July 16 RegentÕs meeting to present our case. Manuel Perry is spearheading the operation and is working with UCLRG and a number of retired UC managers to develop the material. Now that most of the interested parties are talking to each other I think we can present a united front and possibly set up a steering committee to help guide our efforts.
So far, we have restricted membership to retirees with computer skills and email addresses for ease of communication. We have about 550 retirees on our email list at the moment. Chuck Meier put a notice of our activity in the Livermore Retiree Group newsletter. We picked up a few names from that, but not as many as I hoped. I duplicated the petition signature pages for President Yudof and Donna Dare Carvalho has volunteered to add the information to our member database. We would like to add those retirees without email to our member list. If we do that, we will probably need to charge a membership fee so we can afford mailings. A formal member would also have voting rights. Those retirees without formal membership, as well as interested parties who are not retirees would be associate members. Please tell me what you think.
John Holzrichter has been seeking top legal talent for us for some time. Working with very senior members of the legal profession in the San Francisco area and by using a specialist in finding appropriate law firms for certain types of litigation (thank you to Mr. Paul Gordon) we have identified a nationally ranked law firm with the expertise we need. We will begin taking up a collection to defray legal costs soon. To encourage your contributions, please look at the credentials of the firm we are trying to recruit. There website is www.stemberfeinstein.com. They are examining our situation to see if they believe we have a cause of action and, if so, whether they are willing to pursue it.
Finding an interested and capable law firm is the good news. The bad news is that good law firms donÕt come cheap. That means we will have to ask for donations and see if we can raise enough funds for legal action. Out initial goal will be to raise $100,000. That looks like a scary number but I think we can achieve it.
The question is what size of contribution should we ask for. One way to look at the question is to look at the increase in our medical costs this year to set a reasonable number. Another way is to look at the size of our group, the likelihood of individuals contributing and our goal to set an amount.
My wife and I have Kaiser coverage. The monthly premium only went up a few dollars, but my drug co-payments doubled and my doctor co-payments went up 50%. Note that the co-pays are insidious. Every dollar moved from monthly payments to co-payments is a dollar I used to pay 20% of and now pay 100% of. Assuming about the same number of co-payments this year as last, our medical costs went up about $1000 this year. According to LLNS, Kaiser is the lowest cost option they offer so asking for $1,000 per couple, for those that can afford it is not out of line. Paradoxically single retirees are more likely to be able to contribute more than paired retirees.
I have about 550 people on my mailing list at the moment. Of those, some cannot afford to contribute and some are unwilling to contribute. Based on the response from the 250 retirees that filled out my database form, there should be about 300 willing to contribute. If we can get an average of $350 from those 300, we will exceed our goal.
I realize some of you canÕt afford to give the amount your medical costs increased this year; so donÕt give any more than you can afford. Small contribution adds up, so give what you can. If some of you can give more than this yearÕs increase, please do so to make up for some of the ones that canÕt. Note that the IRS gift limit is $13,000 per individual so that is an upper limit for a single retiree. A couple can each give $13,000.
Once a contribution is made, it is very unlikely that it will be refunded or repaid so donÕt donate money you canÕt afford to loose. The nature of our case makes it very unlikely that we can recover legal costs or damages if we prevail. The other side of the coin is that UC is very unlikely to recover legal costs or damages if they prevail.
We will not know if we are tax-exempt until after the IRS makes its decision, which may take a long time. If we do become tax-exempt, we will be unable to return excess funds to the donors on termination because we would be required to pass any funds we hold to another tax-exempt organization. If we do get tax-exempt status our contributors can correct their 2009 tax returns to get back the income tax attributable to their donations. For me, it is academic since I havenÕt had enough deductions to exceed the standard deduction for years.
Given the constraints, I suggest we do not think about donations but about gifts. We will collect gifts, which are not tax deductible for you, to build an initial war chest. We will pay the costs of creating and maintaining UCLRG and our legal costs out of the gifts. Officer positions will be unpaid to keep costs down. We will not contract for more legal services than we have funds to cover.
If we prevail early, either by convincing UC that they should take us back or our lawyers convincing UC that it will loose if we take legal action, we will return any excess funds to our gift givers. If it looks like a long-term legal battle, we will apply for tax-exempt status.
We will set up an Unincorporated Association to collect the donations. Both the San Jose and Oakland police use unincorporated Associations to manage their member organizations so we are in good company. Setup requires, as a minimum, we perform steps 1 Š 6 and we should also perform steps 7 Š 11 below:
1. Establish an Employer Taxpayer Identification Number.
2. Open a Bank account.
3. Write Articles of Association. I have plagiarized the least obnoxious parts of the Articles of several animal legal defense funds operated by University Law Schools.
4. Select officers (President, Vice President, Secretary, Treasurer)
5. Register with the state of California (within 30 days of creation)
6. Apply to IRS as a tax-exempt organization (within 27 months of creation.)
7. Open a Paypal account for ease of contribution. Paypal skims $.30 plus 2.9% for each credit card transaction.
8. Purchase a domain name so we can have a reasonable URL for our web site, probably UCLRG.com since .con is cheaper than. org.
9. Purchase website hosting so we can have a better website and more email functionality.
10. Build a website.
11. Get an officer liability policy.
Items 1 Š 4 must be completed before we start collecting. At this time, Item 1 is complete, and items 3 and 4 are in progress. If there is an experienced website builder willing to help build the website please let me know.
We have two volunteers for officers so far. I have volunteered for President and Barbara Sokoloski has volunteered for Treasurer. Most of you probably do not know Barbara, but I worked with her for some time in Computations and recommend her for the office. If there are other volunteers for any of the offices, let me know. Candidates will be self-nominating so we know they are willing to serve. If there are two or more candidates for President, we will have some sort of election and the winner gets the job of filling the other offices along with a number of other headaches.