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GLQC Capital Challenge 2009 will be January 11-14th at The Westin Savannah Harbor  Golf Resort & Spa.  Sponsorship opportunities will be announced soon.  Make sure you mark it on your calendar now, you won't want to miss it!

The GLQC Board of Directors created Bylaws for our organization when the organization was first formed.  We then made our first amendment 2 years ago when we were applying for non-profit status with the IRS to meet their requirements.  When we made the 1st amendment, an accountant provided bylaws that met the IRS rules, but didn't reflect our organization the way the original version did.  Therefore, our current board has worked over the past several months with a hired attorney to change our bylaws to reflect how our organization is actually operated.  We are now presenting the Second Amended and Restated Bylaws of Georgia Lender's Quality Circle, Inc. to our membership for a vote.  The bylaws will be approved once we have at least 10% of our membership vote and a decision is made based on a majority vote.  A majority vote is achieved when more than half of the votes are received for one proposition (for or against).  Within our bylaws, you will also see that plurality votes sometimes come into play.  A plurality vote is the largest number of votes for a proposition or candidate.  The proposition or candidate receiving the largest number of votes has plurality.  Here is an example of how plurality voting would come into play when voting for board members:
 
Assume that 10 people are nominated for 7 director positions and that, after the members vote, the percentage of votes cast in favor of each nominee looks like this:
 
Nominee 1: 70%
Nominee 2: 66%
Nominee 3: 52%
Nominee 4: 49%
Nominee 5: 40%
Nominee 6: 35%
Nominee 7: 20%
Nominee 8: 18%
Nominee 9: 10%
Nominee 10: 4%
 
Under our majority vote, Nominees 1, 2, and 3 would become directors.  Then we would need to hold a runoff election among Nominees 4-10 for the remaining four seats.  If less than four nominees receive a majority vote, then we would need to hold another runoff for the remaining seats.  This process would continue until we get a majority vote for all seven directors.  As you can see, electing directors this way can be overly cumbersome and costly.
 
But if directors are elected by plurality vote, then in the above example, Nominees 1-7 would become directors and the process is finished.  Plurality is simpler and ensures a quick determination of who the directors are.
 
We thought this may create some confusion and wanted to clarify it upfront.  However, if you have further questions, please do not hesitate to contact Adrienne Sipe at asipe@msl.com.  The link to vote is at the top of the article. Remember that the member is the institution and each institution has one voting contact that represents it.  Only the voting contact is allowed to vote and that person may want to consult with the other contacts from their institution to have their vote represent everyone involved.  When you log in, if you click on Members Only, then My Membership, the Institution Information section will list who the voting contact is for your institution.

Even if solving global warming and the decline in the Atlantic swordfish population haven't made your to-do list this week, the SBA's new lending requirements include some environmental considerations worthy of your attention. The revised SOP 50-10 provisions create several new environmental lending requirements and clarify the type of environmental investigation that will be appropriate for each loan.

The $25,000 loan value threshold has been eliminated. Some level of environmental investigation - Lender Questionnaire, Questionnaire with Records Search, Transaction Screen, or Phase I - will now be required on all commercial property offered as security. Of these four options, the Questionnaire with Records Search is new to the 2008 SOP. It combines a lender's site inspection with an electronic database (ordered via internet) which identifies hazardous waste generators, regulated underground tanks, previously reported contamination sites and potentially threatening issues on the site and nearby properties . A database report will never declare that a property is clean, but will instead rate it as high risk or low risk depending upon the number and proximity of regulated sites (including the subject property) in the area. The SOP specifies that the Records Search must be ordered as a supplement to the lender questionnaire if the loan amount exceeds $150,000.

Replacing the more nebulous Phase I requirements of the prior SOP, the new practice provides a list of specific industries (by NAICS Code) that are designated as "environmentally sensitive." If the current, or any previous on-site business is associated with a designated code, a Phase I is required, regardless of the loan amount. Some of these categories are predictable, such as gas stations and most types of manufacturing. Others - including golf courses, RV parks, and certain medical care centers - are less intuitively obvious. The specific requirements for Transaction Screen and Phase I reports have not changed dramatically, except that the new practice specifies that each comply with the requirements of the American Society of Testing Materials (ASTM,) a private agency which adopted standards for each in the 1990s. Most reputable environmental firms certify compliance with these standards in their reports. Noticeably absence from the new SOP, however, is the provision that a Phase II (that is, soil and/or groundwater testing) could be used in place of a Phase I to avoid unnecessary expense. The implication is that a current Phase I will now be required on suspect properties regardless of whether a Phase II report is in hand. Also, the new SOP implements mandatory testing requirements for certain "special use facilities," such as lead testing at child care centers and soil/groundwater testing at dry cleaners that have used chlorinated solvents for more than five years.

On its face, the new SOP also appears to allow the SBA more flexibility in approving disbursement on contaminated properties, including a specific provision for the use of indemnification agreements as mitigating factors in the disbursement determination and an acknowledgment that the SBA will recognize and promote the use of Brownfields protection. Brownfields is a program for providing limited liability protection for purchasers (and lenders) to facilitate the sale of contaminated properties.

The most onerous changes in the new SOP's environmental requirements are those relating to gas stations. A Phase I assessment is required for all stations more than one year old and Phase II testing (including groundwater testing) is required on all gas stations more than five years old. The SOP includes specific provisions for equipment testing and leak detection and, with very narrow exceptions, the SBA will require a third-party indemnification agreement to be executed for the sale of any gas station or former gas station, regardless of the determined presence or absence of contamination. The indemnification agreement form is included within the SOP and is non-negotiable. Like all new government requirements, the effects of this and other provisions of the 2008 SOP will be clear only as it is implemented over time.

Chris Fonzi is a principal with Logic Environmental, Inc. of Duluth, Georgia.