December 7 Board meeting: Part 4 Penny wise, pound foolish

SCA agreed to pay $55,000 to settle dispute over $4,400 delinquent dues

In his President’s report, Rex reported the Release and Settlement of A-14-702071-C.  SCA agreed to pay Citi Mortgage  $55,000 as full and final settlement of all claims in a case where the homeowner defaulted and so the fight was between SCA and a bank. This is an example of how the Board is very wasteful by not avoiding problems or solving them when they are small. The excessive use of attorneys is a core failing of this Board under Rex.

Rex stated that Citi insisted on confidentiality and so he could not comment further. I seriously doubt that because what I’m going to tell you is in the public record. I happen to be familiar with this case from before I went on the Board. I learned nothing about it as a Board member because I was forced to recuse myself from ANY SCA collection matter “so as to prevent even the appearance of impropriety” regardless of whether it had any bearing on my quiet title case whatsoever.

Long story short.

In 2014, SCA’s agent RRFS refused to accept Citi ’s tender of the $825 super-priority portion of SCA’s lien for delinquent assessments claiming it was less than the full super-priority amount due. After four years of nonpayment of assessments ($275/quarter x 16 quarters = $4,400), RRFS claimed Citi owed $17,591.81. Citi paid it under protest, and RRFS cancelled the SCA foreclosure sale. Citi filed to get $16,766.81 back from RRFS that the NV Supreme Court said it was unlawful to force Citi to pay more than $825, the amount that has “super-priority” over the bank’s loan.

The Court ruled in Citi ’s favor against SCA, a year ago, stating:

…(SCA’s) position ignores the question presented in this action, whether a homeowners’ association can force a first-security lienholder, or agent acting on its behalf, to satisfy the entirety of its lien, rather than pay the super-priority piece to protect its secured interest. The Court concludes it cannot.

Even though this overcharging was done by SCA’s former agent’s, SCA was on the hook for it since RRFS was acting on SCA’s behalf. I don’t know why SCA even stayed in the fight. Why didn’t they make RRFS pay it and get out of the litigation years ago? Anyway, SCA deposited $5,000 with the court last December toward the $16,766.81 the Court ordered SCA to pay Citi . Then,  Citi demanded $51,000+ in attorney fees and court costs.

Bottom line:

SCA owners are on the hook for $55,000 to settle with a bank over the misdeeds SCA’s former agent in collecting delinquent assessments of less than $5,000.

  • Wouldn’t writing off $3,575 in delinquent assessments have made more sense?
  • Or even better, shouldn’t SCA handle assessment collection in house rather than being on the hook for the wrongdoing of unscrupulous attorneys and debt collectors?
  • Can you see any risk SCA homeowners face by my telling you about all this?
  • Can you see any way I would profit by sharing this information with owners?

I guess you can see that the real risk is to the attorney’s profits. That’s why attorney Clarkson (SCA’s current legal counsel and debt collector) insisted that I be forced to recuse myself from all SCA collection issues even if they are not remotely connected to my quiet title action. 

Cost of collections and fraud by SCA agents are other reasons SCA needs to be (better) self-managed.

Here is another reason SCA needed to go to self-management that Tom didn’t mention and probably isn’t even aware of. FSR was actually unfairly profiting from failing to pay SCA asset enhancement fees and new owner set up fees when there was a foreclosure. This happened twice with my late fiance’s house so it’s a better than even bet that this scam was done when other houses were snatched for a few dollars of delinquent assessments.

October Financial Report

This issue is also connected to a good reason why SCA needs to be self-managed, but also needs to have better control over its agents and managers.

The CFO reported that the revenue from Asset Enhancement Fees are $103,268 over budget. SCA gets 1/3 of 1% of the sale price when a home is sold, and other fees associated with home sales are up a similar amount. This is due to an increase in the number of sales reported to SCA which is, in small part, due to SCA’s former agents not crediting SCA with these fees upon sale of foreclosed properties. Title to my late fiance’s house was transferred three times in country property records, and FSR twice failed to record that SCA was paid any of those fees as if two of those three sales never happened. Those two incidences can’t be the only times that SCA was shorted fees due to us.

I mention this not just because it’s something nobody else would notice, but SCA’s way of handling collections is flawed and when I offered evidence of it, I was seriously and wrongfully attacked. I reported this problem to Lori Martin and Rex Weddle before I decided to run for the Board and they refused to even talk to me about it, let alone assess the degree of loss to SCA. I included it in my court filings in the quiet title case, and our current attorney (who is also SCA’s debt collector) used it as a bogus justification for kicking me off the Board (putting matters before the Board from which I could make a profit) rather than looking at how SCA was getting ripped off by our agents who are supposed to be fiduciaries.

CFO Jim also reported that there are 45 cases in collections with $77,000 outstanding. This is a small amount, a fraction of the nearly $9 million in annual assessment revenue, but it is a completely unsatisfactory level of accounting and reporting to prevent problems. This level of Board control/owner oversight is insufficient to prevent possible mismanagement, theft or fraud by SCA agents.

Turning collections over to attorneys when there is only a budgeted projection of having to write off $12,000 in 2018 is a gross waste of money. It is truly fighting fire with Napalm, and then making owners pay for all the collateral damage.

 

December 7 Board meeting wrap-up: Part 3 Board owner communications

Suggestion: timing of first owner comment period

Tim Stibbins suggested that the first owner comment period should be after the President’s report because Rex does not put his remarks in writing in the draft Board book. (I say this suggestion would enhance protection of owners’ rights. Rex frequently self-servingly biases his President’s report to obfuscate that he personally usurps and/or abdicates the authority of the Board, e.g., to create false legitimacy for executive session actions or to conceal them instead of noting such actions properly in minutes.)

Rex unhelpfully suggested that maybe owner comments should be after the GM’s report since hers wasn’t in the draft Board book either. Tim said fine, but that was less important, and then the matter was dropped. (Do you think any action will be taken on this request?)

Board Communications Task Force Report

Rex appointed two Board members (and no owners) to propose solutions to poor Board-owner communications. This is like appointing two members from Anthem Council to propose solutions to communication problems between SCA and Anthem Council. Not involving all stakeholders in the development of shared solutions is a core failing of this Board under Rex.  

Anthem Council  – November 16 meeting

No report.

When they kicked me off the Board, they also kicked me off as SCA’s representative to the Anthem Council even though there is no requirement that SCA’s rep be a Board member. (Jean Capillupo was leaving the at-large seat on Anthem Council in which she served even though she was n longer on the SCA Board).

For whatever reason, my replacement did not file a report to the Board about what happened at the November 16 Anthem Council meeting.

December 7 Board meeting wrap up: Part 1

It was my birthday and I had a golf clinic at 3:30, but I dragged myself there and listened to the audio of the part I missed. Spoiler alert – there is no recommendation on the restaurant and the Board does not blame itself for anything wrong: nothing wrong with the transition to self-management; FAS eviction was all Favil West’s fault, and the $85,000 spent so far on the recall was all the fault of the petitioners.

Owner Comments: $10K for medical equipment

Roger Cooper, SCA owner since 1999 commented on item 12g, the Community Service group’s recommendation for “Approval of an expenditure up to $10,000 to purchase durable medical equipment” (to replace what was previously provided by the Foundation Assisting Seniors (FAS).

Accurately assessing that this is a drop in the bucket of the cost of replacing what FAS was providing free, Roger said that this medical equipment request of $10,000 was just the beginning of a bottomless pit.

Emile Girard had a lot to say (loudly) about this item both at the first comment period and when the item came up on the agenda. Emile highly complimented the Board and the CSG for their good works while he stridently blamed Favil West for everything except the weather: Favil didn’t negotiate to stop FAS’ eviction, even sending out a postcard about service interruption was vindictive and revenge.

Emile apologized for his emotional rant, but Rex welcomed his attack on Favil in a way that was a far cry from Rex’ oft-stated policy to stop speakers from making personal comments about other owners. (Rex certainly stopped me cold when an innocuous comment of mine included a unit owner by name.) Emile is certainly entitled to his opinion, but the meeting chair is not entitled to allow personal attacks when he agrees with them and shut owners up if he doesn’t.

Rex even passed along an untrue rumor stating that FAS was moving out of the area, but I am informed by a FAS Board member that FAS has rented a space not too far from Von’s.

Construction Defect Litigation

Construction defect lawsuit on Liberty Center is in mediation. There was one session in November and there will be others until it goes to trial in 2019. (Rex’s comment that SCA has not changed any of our demands disturbed me a little bit as an odd choice of information tidbit to share with the members. It leaves the impression that he personally approaches mediation with a “my way or the highway” attitude which is the antithesis of the good faith needed to achieve a win-win solution.)

Surplus Funds

I don’t even want to get into the issue about surplus funds, but they changed the minimum acceptable equity level from $500,000 to $250,000 as recommended by the Finance Committee. It’s not my issue, but it might be of concern to owners on fixed incomes who would like the Board to refund the excess to owners or reducing the assessments going forward rather than collecting more than is needed for annual operating costs.

Recall Costs

CFO Jim Orlick reported that the costs for the recall through November approximate $85,000, and I would like to report that I consider that expenditure an egregious failure of the Board’s duty of care to the membership.

It is an beyond disingenuous for Rex, the GM and the attorney to pretend that these expenditures were made in the best interest of the membership. They ordered these unbudgeted payments in violation of NRS, SCA bylaws, the Board Policy Manual the SCA Election & Voting Manual and prevented the Election Committee from performing their chartered duties as volunteers. They should be held accountable for it.

Director Comment Period is awash in self-righteous indignation

Bob Burch spoke at length about his opinion of the recall which he said was because of the Foundation, the vendor issue with the Clubs, and poor communication on less visible issues. He said the recall was caused by a “perfect storm”. He offered a semi-apology to the Clubs for not informing them of the insurance and business license changes, which he then negated by saying that vendors should have business licenses and insurance is a real problem for HOAs. He did not seem to see the real issue as being the autocratic change of practices without prior notice or negotiation with those affected.

Bob’s main point about the FAS eviction was that it didn’t have to happen that way, but still, that it was all FAS’ fault because the Board had bent over backward to be fair. Other people see it quite differently. Please see Favil West’s response that I posted on my campaign website last March. Also, a resident’s answer to refute Bob’s claims published on the AnthemToday blog is worth reading to set the record straight.

Bob read some incendiary passages from  blogs, and tried to elicit sympathy from the audience about how beleaguered Board members are being subjected to such horrible, unwarranted abuse by malcontents.  

Bob echoed Rex’ concerns about how tragic all this abuse of Board members was because it meant that there wouldn’t be qualified people applying for the Board. This is failing to see how the Board is pushing good people away.

What they are really saying is that the petitions to recall four Board members constituted abuse. Such abuse would make qualified people not want to run. Maybe, but more importantly, Bob and his cohorts are doing everything they can to get people who don’t agree with them not to run. 

Totally backward. Qualified people don’t want to serve because of the way the Board treats Directors that don’t “go along to get along”. Who wants to serve on a Board where a majority can just kick a political rival off based on unproven allegations? 

I have spoken to three women who would be excellent on the Board, and they all said they wouldn’t run because they didn’t want to be treated the way I was treated.  

“It’s just not worth it. At my age, I don’t want to deal with it.”

“They are a bunch of ‘good ole boys’ who won’t listen to anyone with good ideas.”

“They’re just on a power trip.”

“I haven’t got thick enough skin to take it.”

Bob, you really need to stop whining about all the abuse that you and the other Directors take after what you and your buddies on the Board did to me.

You, the other male Board members and the attorney ambushed me and accused, berated and attacked me for an hour and a half in July 27 executive session and refused to have an open hearing I requested.

It’s that type of bullying of a person who is supposed to be an equal Director is what drives qualified owners away from wanting to serve on the Board.

But then, I guess you guys already figured that out.

 

 

December 7 Board meeting items of interest

The last SCA Board meeting of the year is tomorrow at 1:30 PM. I’d like to point out a few things that you might not notice immediately, but which are important to for owners to know the full story.

Click here for full agenda.          Click here for draft Board Book.

Financial Report for October

Two things mar an otherwise brilliant job of bean counting:

  1. How much are we paying for who to do what?     SCA is now an employer with 80 employees costing $3.5 million -over 40% of operating budget, there should be a clearer accounting of cost of staffing by budget objective. The Board cannot hold the GM properly accountable nor can the owners be protected from such failures as excessive management compensation or featherbedding, if the accounting obfuscates these facts. And, more importantly, the Board is not holding itself properly accountable to the owners by letting the GM hide what SCA employees (particularly managers) are being paid and what they are being paid for.
  2. Since Adam Clarkson became SCA Legal Counsel on May 1, there have been $185,010 expended for legal fees which was 411% 0f the $45,000 budgeted for legal fees over half a year. This is the same attorney
    • who told the Board the GM did not need its authorization to expend SCA funds for unbudgeted purposes.
    • who does SCA’s debt collection function in the least cost-effective and most draconian way available.
    • who, along with the GM, is responsible for additional unnecessary expenses of at least $73,000 for the recall election which were STRONGLY objected to by the proponents of the recall.
    • who is being paid $325/hour to cause or allow the Board to take unlawful actions against political opponents of the GM and certain members of the Board.

 

Election and Voting Manual Revisions

Reviewing policies on voting may be really boring, but it is important to protect homeowner control over who represents us on the Board. There has to be a sound, uniformly administered system in place to prevent ANY election interference from tampering with ballots, abuse of power, or even unfair communications.

The largest HOA board election rigging scandal in Southern Nevada involved primarily attorneys who were supposed to be neutral outsiders who stacked HOA Boards to channel construction defects litigation.  This Election and Voting Manual is intended to ensure that the SCA homeowners actually control who sits on the Board and that those Board members actually work SOLELY for the benefit of the homeowners.

Yet, it doesn’t matter what is in this or any other SCA policy manual if the Board doesn’t follow SCA’s own rules or if it allows the GM and/or the attorney to manipulate the process in favor or against certain owners.

Cherry-picking which laws to follow is a slippery slope

There are several areas where our election process is not in conformity with NRS or the SCA Bylaws. For example, SCA Board does not have a nominating committee as required by SCA bylaws 3.4a below. While there may be good reasons to not want to have such a committee, this is an example of how problematic it is to simply disregard a provision. The bylaws must be uniformly enforced and not simply disregarded. The narrow exception is when the bylaws explicitly conflict with a mandate in a Federal or state law.

Filling Board vacancies after a director is removed.

The final clause of SCA bylaws 3.6. requires a vote by the unit owner to fill a Board vacancy caused by a Board member being removed.

“Upon removal of a director, a successor shall be elected by the Owners entitled to elect the director so removed to fill the vacancy for the remainder of the term of such director.”

The proposed change to the Election Manual, below in green, apparently attempts to justify retroactively how Jim Coleman was appointed, but even the new provision doesn’t allow for an appointment to be made without any notice to owners, any candidate nominations, or the required vote of owners.

Note that there is nothing in either the existing nor the proposed versions of the Election Manual that gives the Board legal cover for what they actually did to remove me nor what they did to replace me nor what they might be contemplating to do in the next election (keep me off the ballot).

  • How they removed me from the Board by simply declaring my position vacant is not authorized in NRS 116, NRS 82, SCA governing documents or any existing or proposed Board policy.
  • By extension, that also means that there is no legal means by which the GM, the Board or the attorney could refuse to allow me to be a candidate for, or to serve on, the Board should I choose to run again.
  • Also, note that this manual includes the NRS provisions which the Board President and GM violated by using the Spirit to publish their one-sided argument regarding the recall without permitting equal time and access to the opposition. Complaints of these violations are currently being investigated by NRED.

These proposed changes don’t describe what the Board actually did nor do they conform to the bylaws. The Board is simply pretending they have the authority to act against laws and policies “upon the advice of Counsel”. We’ll see.

Complaints to the Election Committee are not fairly handled

The Election Committee complaint process is to informal and allows for problems at both ends of the spectrum. On one end of the spectrum, informal complaints may be submitted without evidence or substance which could just waste the committee’s time .

On the other end, there is substantial risk of unequal treatment occurring, or even being merely perceived, if there isn’t a good enough procedure defining accountability, investigation, documentation and notice requirements. It’s sloppy management, and it reduces the community’s trust of the election process. It also allows interference in the independence and neutrality of the Election Committee.

In the proposed draft, there is still no standard format for resolving complaints, no required documentation to be maintained in the official SCA record, and no notice of the disposition formally given to the complainant.

I recommend the process defined in the SCA CC&Rs and utilized by the Covenants Committee would be a good model for the Election Committee to employ to fairly investigate and document complaints regarding Board elections.


Board Communications Task Force

In June, I proposed a resolution to improve Board-owner communications , but couldn’t even get a second to the motion. Now, five months later, nothing has been done to increase transparency or meaningful utilization of owner expertise in governance.

Rex appointed a couple of Directors to be a Board Communications “task force” (with no owner involvement)  and here are their recommendations:

Here’s what should be done immediately:
  1.  Either use SCA-TV to video broadcast Board meetings live or use some service like GoToMeeting.com to make the Board meetings accessible online in real time and interactive.
  2. Take the password off the website.
  3. Make the eblast mailing list opt-out instead of opt-in
  4. Follow the lead of Sun City Summerlin’s new GM in attitude.
  5. Stop using Board work groups that withhold information from owners.
  6. Expand the committee structure to utilize expertise of residents and have meaningful owner oversight and influence in governance.

Item 15B “Self-Management” is listed as New Business to be presented by Tom Nissen rather than the GM. The paragraph above the total back-up in the Board book to let owners know what the Self-Management item is about.

This raises a lot of questions about the Board’s failure to protect homeowners by hiring a GM without ANY of the defined terms and conditions of employment required in a management agreement.

  • Why is a Board member making a presentation on the transition?
  • Why doesn’t the GM whose compensation is $100,000 greater than other GMs at comparable Sun Cities like Summerlin make the presentation?
  • Why hasn’t the GM been held accountable for the development of the complete policy framework needed to protect SCA from legitimate risks and potential liability associated with becoming an employer or
  • Why hasn’t the GM held accountable for AT LEAST having written plans and timetables for getting the job done?
  • How will the Board – let alone the owners  – even know if the job is done right and on time?
  • Why did the Board let the GM unlawfully conceal SCA records on the transition to self-management from one Board member in violation of our bylaws 6.4c when this information should have been easily available to any unit owner?

After the Board meeting, I’ll let you know if any of these questions have been answered. Or if there are just new ones.

October 26 SCA Board meeting wrap-up

Here are a few highlights from the October 26 SCA Board meeting that will give you a perspective that the Board tries to suppress.

GM Compensation is a really big concern
Rex made the almost off-hand comment during the President’s report that the BOD discussed “GM performance” in executive session, but gave no further details. My next post will be about GM compensation since my trying to get the board to handle GM compensation correctly is one of the main reasons they kicked me off the Board.  The issue of GM compensation is really important because seeing how the Board mis-handled it will show you that the real threat to SCA owners is the GM and the attorney duping the Board into handing over our wallets – not that my service on the Board was going to change the outcome of quiet title litigation.

Foundation Assisting Seniors
Rex noted the Foundation Assisting Seniors was being ordered evicted as the court agreed that no SCA Board in the past would have had the authority to transfer that space to FAS in perpetuity. (I thought it had been transferred to FAS by Del Webb before the entire property was taken over by the Association, but I could be wrong.) Rex said that Sandy would make a recommendation about the use of the space.

Restaurant Consultant RFP is Out
Sandy will be hiring a consultant according to some unknown RFP for some unknown amount of unbudgeted money to give us the answer to the question “Just what’s it gonna take to have a successful restaurant”. You already know how I feel about her spending unbudgeted funds to pay a consultant to answer the wrong question after she’s left a major amenity out of service the entire time she’s been on the job.

Opinions about the recall proponents destroying our property values
Rex broke his silence about the recall in the paternalistic tone I find so grating, reprimanding the small cadre of negative proponents of the recall who have defined SCA’s character over the years with their history of unwarranted vitriolic attacks. These “people” will force a death knell to volunteerism, and these malcontents are responsible for SCA’s negative reputation and the destruction of our property values. The attorney says their rhetoric is actionable defamation even if the most horrible attacks have been “scrubbed” from their online posts.

In my view, Rex should be more introspective. Rex seems blind to his own personal contribution to the community schism and to sustaining the unhealthy divide. But then, there were more comments on the subject at different points on the agenda.

Apparently some helpful soul decided that it would be good for the community cohesiveness to incite Art with 54 pages of diatribe from some unnamed blog. Art was predictably upset by it, stunned by the negativity and unfairness of it. Art has developed a total respect for the other board members who he sees as competent and blameless. (He didn’t mention me because I have become invisible. It’s as if they feel so utterly justified in taking the law into their own hands to erase me and 2000 owners’ votes, it’s as if I never happened.) Art blamed instead that unknown blogger’s disinformation, errors and false charges to be the prime contributor to a major loss of our reputation and property values.

I am irritated with the “helpful” individual who baited Art. If it was who I think it was, he’s been helpful like that in the past, and I believe he too should be more self-aware in terms of the impact he has on perpetuating a toxic culture and on enabling the Board’s unlawful actions against me.

It’s hard to say whether our property values have actually taken a hit by virtue of SCA’s negative reputation (which all seem to agree exists now as well as in the past), and if they have gone down, who is to blame. In the Financial Report, revenue of $103,000 over budget from asset enhancement fees was described as being caused by an unexpectedly high number of home sales. Although no information about home price was given, the fact that the number of sales is up which would lead one to the opposite conclusion about the impact of our reputation on prospective purchasers.

Three more spoke in this echo chamber, not surprisingly all representing the same point of view.
I didn’t catch the name of the man who demanded that the owners be given the names of the originators of the petition and that the names of those who signed the petition should be posted on the association’s website. Sandy helpfully said that anyone could have the names of those who signed the petitions by filling out the proper form.

Yes, this is the same Sandy who authorized expenditure of thousands of your assessment dollars for the attorney to conceal SCA records from me, a sitting board member. She threatened SCA and me personally with litigation saying “employer liability”would be created if I could see SCA records related to her compensation and the transition to self-management.

Is it fair for the GM to gleefully release information that could be used to harass and intimidate petitioners who oppose her management style at the same time she spends large chunks of unbudgeted SCA funds to prevent my review of her compensation with the ludicrous claim that I was violating her privacy rights?

It is my prediction that SCA will have no peace as long as the Board forces the community into two camps. The definitions of the camps may have been different in the past, but now, they seem to be camps of Sandy’s friends vs. Sandy’s foes.  I imagine you can see why I have a little bit of trouble being silent watching the two faces of our leading lady as she inconsistently enforces the rules, bestowing blessings on the one camp and curses on the other.

Next speaker to chastise the petitioners was Jean Capilupo who stated that she had made a commitment to come to each board meeting to say something positive to help the unfairly maligned directors buck up under the strain. Clearly, she identifies completely with the directors in a “there but for” sense and so her sentiments are myopic, but understandable.

Where I get off the train is having to listen every month to the criticism of the people who don’t come to the Board meetings. I am amazed at the current and former directors’ self-righteous disdain for a large chunk of the community and their utter lack of comprehension about why those people would find the constant self-congratulation vs denigration, us vs. them, patter to be quite alienating.

The grand finale was brought home by none other than David Berman who claimed he only decided to speak after being inspired by Jean’s profound remarks. He expressed confidence that the recall will fail (no surprise, recalls usually fail at the petition stage even without overt interference), and foretold ominously, “When this is over, the originators will find they have awoken a sleeping tiger!”  Catchy turn of phrase, but I’m not sure what it meant.

 

How to avoid unnecessary election costs

Some people have told me they are voting no on the removal election because they are under the impression that it will cost between $50,000 and $100,000 to hold another election for replacement Board members.

Cost to replace

This cost estimate is both wrong, and a poor reason for keeping the current ineffective Directors that are costing the community even more money.

First, let’s address the cost. The GM removed the “volunteer” SCA Election Committee (chartered to handle all SCA elections) from the removal election process. Instead, a CPA was hired without any official Board action to take over the EC’s duties at an unbudgeted cost of $10,000. As I have stated before, the CPA’s contract was not approved at any open Board meeting, and therefore the unnecessary cost of his services skews the actual cost of the removal election.

As far as the election for replacement board members; the established “volunteer” Election Committee is experienced and fully capable of handling the same fair election process as we have had in the past, with very little overhead. Our 2017 annual election cost $11,900, and the budget for the 2018 election is $17,500.

Reporting a falsely-inflated cost is a scare tactic and is being used to make owners mad at the petitioners for exercising their legal rights to call for an election to remove Directors that are not serving us well. I read in Dan Folgeron’s message re-posted on AnthemToday.com that the Solera removal election cost $8,000.

Cost to keep

More importantly, the cost of an election is no reason to keep Directors in office who are not protecting the membership. The cost of an election pales in comparison to the cost of abdicating control of the Association policies, owner oversight and budget to the GM and attorney. These Directors have given a blank check to the attorney and are allowing the GM to disregard the budget when she unilaterally decides to make expenditures.

Cost of cheating

Rex, Aletta, and Tom should be removed from office because they didn’t let owners vote and didn’t follow our bylaws 3.6 when they appointed someone to fill my seat one month after they unlawfully removed me:

“Upon removal of a director, a successor shall be elected by the Owners entitled to elect the director so removed to fill the vacancy for the remainder of the term of such director.” – SCA bylaws 3.6 (page 11)

Rex, Aletta, and Tom should be removed from office because they doubled down and compounded problems created by my removal. They shouldn’t have filled my board seat without waiting for my appeal to be adjudicated, and they shouldn’t have filled my seat without letting any owners compete for the position. No one knew they were recruiting so no owner could compete equally for a chance to be appointed to the board. Instead, they just picked a guy (Jim Coleman), decided to appoint him in secret and appointed him to my seat at the very next properly noticed Board meeting. It’s not Jim Coleman’s fault the Board acted unlawfully, both to remove me and to replace me without an owner vote. Why can’t the Board make decisions that fast and decisive when it comes to doing something good for the membership, like opening the restaurant?

Cost avoidance and karma
I have a suggestion that I think would treat everybody fairly. I don’t want to displace Jim if I am reinstated because, in my opinion, Jim will be much better than Rex as a board member, at least he will listen to and respect owners. However, a fair way to avoid the expense of another election would be to put Jim in Rex’ seat when I am reinstated by the Commission and Rex is either voted off during the recall election or removed by the Commission.

Cost of dirty tricks

Note that I was elected to serve until May 2019 for the same two-year term as Rex. Rex got his role as President by using dirty tricks, and he is doing a terrible job for the people. As such, I believe that Rex is the most important one to remove from the Board, and if he were the only director voted off, no election would be needed. Aletta’s and Tom’s terms end in May, 2018, and if they were voted off in the removal election, their seats could remain vacant until the normal election.

By the way, when Jim Coleman was appointed, I told the Board that they made a mistake by appointing him only until 2018 since my term expires in 2019, and the bylaws 3.6 say that the replacement of a director that is removed shall “… fill the vacancy for the remainder of the term of such director”. Rex insisted that appointing Jim only until May 2018 was intentional, but there is no legal authority for the Board to decide that the new director’s term will be a year less than the term of the director being replaced.

Cost of cherry-picking rules and karma

Rex should be removed for cherry-picking which governing documents he choses to comply with. He led the Board in the violation of SCA Bylaws 3.6 by usurping owners exclusive right to vote to determine whether a Director is removed from the Board. He is responsible of Bylaws 3.6 being being violated a second time by not giving owners the right to vote on the replacement of a Director who was removed. Rex insisted on violating SCA bylaws a third time by shortening Jim Coleman’s term again since the new Director is required by our governing documents to fill the remainder of the removed Director’s term. Appointing Jim only until 2018 unfairly gives Rex the benefit of not having to run against Jim (by Rex making their terms not end at the same time. Rex’ act is to the detriment of Jim Coleman who is an innocent owner/volunteer who should have been appointed, if at all, to the end of my term. This act exemplifies Rex’s pattern of cherry-picking which rules he chooses to follow. Rex acts  benefit himself by consolidating political power and do not treat all owners, particularly political opponents, equitably. We deserve leadership that is better than that, not self-serving and that acts solely in the best interest of the membership by the consistent enforcement of the rules of the game.

 

SCA Board & GM cause substantial decrease in happiness factor

This open letter is republished with permission from Favil West, President of the Foundation Assisting Seniors, who formerly served as a SCA Board member for six years as well as for three years on the Commission for Common Interest Communities. Favil describes his view of how much the SCA Board, GM and over-used attorney are causing our community to suffer under their system of mis-management.

Ladies and Gentlemen:

Fake news abounds in our community. I’ve seen it produced by this SCA Board, a committee chair, a vice chair, a club president, a blogger and on down the line. Good grief even one of our board members has sent out a plea for you to vote no so she can stay on the board. A move without precedent

Let’s look at the Berman blog. He unabashedly states that the 3 board members, currently to be recalled, have committed “no crimes or malfeasance.” That just is not true. I personally know of 8 infractions of Statute. For starters, the 3 board members to be removed are accused of having violated the following statutes:

  1. NRS 116.31035
  2. NRS 116.31036
  3. NRS 116.31088
  4. NRS 116.31085
  5. NRS 116.3108
  6. NRS 116.31184
  7. NRS 116.31183
  8. NRS 116.31175

At least one of these violations is a misdemeanor and even though it is in the NRS 116 ACT, it falls under other jurisdictions.

Ron Johnson produces an editorial page, usually well documented, the most recent of which has factually debunked most if not all of the claims made by the OSCAR group. Dick Arendt lends his passion to the fray stimulating research and thought while Rana gives us a more even- handed treatment of the facts. Nona Tobin just started a blog. We won’t know its character for a while but I personally look forward to seeing it as I know it will contain significant detail. To top it off, through personal conversations with the Ombudsman, I know that NRED is concerned with what is taking place here at Sun City Anthem.

Anyone with even the slightest knowledge of financial figures knows full well that numbers can be manipulated to show anything you want them to show. I believe all of us have heard the old saw, figures lie and liars figure. I fear that is true in the instant case.  Why doesn’t the board lay out the true cost of management in dollars and cents for all the unit owners to see? How much has this self- management debacle truly cost? What was our annual cost of management before self- management and what is it now? They should show consulting fees, the trips, parties, meals, salaries, separation payments, if any, the current salaries of the top 5 highest paid staff, their bonuses, their allowances, and their benefits, as well as the total salary costs including that of Lori, who has since left SCA. Then add in the legal fees which according to the budget are approximately $90,000 over budget, and all the outside contracted work such as IT, and all accounting services. Once all of that is together, we, the unit owners, can actually compare costs. Until this information is released to the unit owners, well, the old saw is still sawing away.

While unit owner’s angst cannot be measured in terms of dollars and cents, there has been a substantial decrease in the happiness factor because of board, GM, and legal actions. In my nearly 18 years living here in Sun City Anthem, six years of which I served on the SCA Board, I have never seen anything that compares with what is now happening on our hill.

This removal election has already turned into a debacle. Words such as voter suppression, stupidity, mismanagement, failure of the board and its gm to do its fiduciary duty, and probably a few I cannot repeat are being bantered around while board members are pleading for you to vote no so they can continue this sordid behavior. Even those who do not support the recall agree that the ballot mailing and instructions show a high degree of incompetence.

In my opinion, these ballots should be thrown out and new ones issued. These new ballots should be color coded to eliminate confusion, a simple explanation included, and, finally, the outside envelope should say ballot enclosed. That’s not too hard is it. It’s what we done in the previous 17 elections. That is really not too hard if you know what you are doing.

Notwithstanding the impact this will have on the reputation of our Sun City, win, lose, or draw this removal election and the reasons for it remain  an everlasting stigma on the 3 to be recalled, the rest of the board and its GM. Frankly, in my opinion, Weddle, Burch, Nissen, and Waterhouse should all resign as they will have no respect in the future.

Folks, at the hands of this board board we are no longer the class active living community we once were. Our reputation has been sullied by incompetence, prevarication, and dereliction . How sad.

Favil

 

Recall Supporters

SCA BOD recall ad

Hello, my name is Nona Tobin. I have been happily retired and a Sun City Anthem homeowner for over 13 years. But, in the last year, I became concerned about the way this community was being managed, so I decided to do something about it and successfully ran for a seat on the seven-member HOA Board of Directors, garnering 2,001 votes. My campaign slogan “Owners Always Come First” has become my mission. 

As I began asking questions and requesting information about past Board actions, I was met with resistance from management and my fellow Board members. Just 116 days into my tenure on the Board, the other six members of the Board, along with the HOA Attorney and the paid management staff, held a secret meeting to illegally vote me off the Board. This action is one of many illegal and unethical actions that I, and many others, have questioned.

Over 800 homeowners signed petitions for a recall election to remove four of the Directors. Of the four petitions, three (Rex Weddle-758, Aletta Waterhouse-734, and Tom Nissen-726) had more than the needed 715 signatures to be subject to a removal vote. Bob Burch managed to skate receiving only 713 signatures, two short of the requirement.

So far on this website, you have only heard my voice. But my voice is not the only one that is speaking out. Above is an ad supporting the election recall that just ran in the current, October 2017 issue of The Vegas Voice, a monthly publication serving the 50+ community in Las Vegas. 

Here are a couple more links, and we will be updating the Resources section of this website with more periodically.

http://anthemtoday.com/ – This website is published by Rana Goodman, a SCA homeowner.

http://anthemopinions.blogspot.com/ – This website is published by Dick Arnedt, a SCA homeowner.

Get Involved

ACTION Items:

  1. Get informed: review our blog posts and resources
  2. Vote in the Recall Election – mail your ballot so that it is received by October 26th
  3. Stay involved: share this website and information & sign up for notices

Owners should ALWAYS come first!

Response to OSCAR-member Goldfried’s Anti-Recall Email

On October 3rd many of you received an email from Bob Goldfried regarding his opinion on the upcoming recall ballot. I would like to take this time to address Mr. Goldfried’s objections.

First, let me state that there is a reason that a recall election process is in place. Just as the election process allows the residents of this community to have a voice in how the community is managed, it also allows that voice to be heard if they feel it is being mismanaged.

In addition, the recall election process SHOULD also prevent the Board from arbitrarily removing another Board Member. However, as many of you know, the current Board unjustly and illegally removed me from my position without a vote of the owners that elected me.

Regardless of what happened to me, the required number of members of this community have legally filed petitions to recall three of the current Board Members and therefore, the Community has the right to vote on those petitions. My goal is to promote a fair system that will ensure that owners’ votes count, and that Sun City Anthem has a board that acts lawfully to ensure fair equitable treatment of all owners.

The following (in italics) is the letter sent out by Mr. Goldfried. I will in turn address each of his comments with my own opinion on the subject below each excerpt, and leave you to make your own decision.

“Early next week you are going to receive a ballot in the mail regarding a recall of three SCA HOA board members. During the four years that I’ve lived in Sun City Anthem, it has become apparent to me that our HOA board members are elected in free and fair elections, open to any candidate who decides to run. We have an election every year, in May, alternately for three or four of the seven board member positions. If homeowners do not support current board members, those homeowners have been, and continue to be, free to find candidates who they do support, and to vote for those candidates, in duly held regularly scheduled annual elections. For that reason alone I am opposed to the recall, quite independent of who is currently on the board.”

Why should owners not use the legal removal election process if more than 10% of the owners legally call for it?

The law governing how volunteers are annually elected to HOA boards also specifically defines the only lawful way elected directors can be removed – by an owner vote. For the reasons mentioned, the removal of a director is higher bar than getting elected in the first place.

NRS 116.31036 (1) “…any member of the executive board, other than a member appointed by the declarant, may be removed from the executive board, with or without cause, if at a removal election held pursuant to this section, the number of votes cast in favor of removal constitutes:

(a) At least 35 percent of the total number of voting members of the association; and

(b) At least a majority of all votes cast in that removal election.

The lawful method for calling for a removal election is also specifically defined:

NRS 116.31036 (2)  A removal election may be called by units’ owners constituting at least 10 percent, or any lower percentage specified in the bylaws, of the total number of voting members of the association.

Therefore, it is legally required to conduct a removal election if more than 10% of the owners call for one—whatever their reasons. Their right to do that is protected and should be respected even if their chance of success (even without active campaigning against it) is small.

“Moreover, the recall petitions do not allege any criminal conduct, fraud or other dishonesty, or gross abuse of discretion on the part of the three board members.”

This is not true. There are many recent complaints filed with the Ombudsman which are now assigned to NRED investigators. I filed four of them myself because of intolerable actions taken against me personally or that I observed being unfairly taken against other owners. (In 13 years living here, I have never before filed complaints with the state against the HOA.)

It is not surprising that you have the misconception that you do since there is active, full-on corruption of the official record to conceal what’s really going on in this community. This involves all the directors against whom petitions were signed. For example, the Board President and Secretary blocked a clear statement of my complaints from being placed on the agenda (as required by NRS 116.31087) and therefore dismissed my legal right as a unit owner. The Board Attorney also allowed six members of the Board to meet without me, the seventh (and supposedly equal), Director.

“While the law does not seem to require such culpable conduct as a prerequisite for recall, shouldn’t we, as responsible, mature people, require evidence of criminal conduct, fraud or other dishonesty, or gross abuse of discretion, before we take the extraordinary step of recalling fairly elected board members?”

This is a very well-reasoned argument and fully supports my claim that my removal from the Board on August 24 without notice or due process, and certainly not by 35% of the owners voting me off in a legally-mandated removal election was neither legal nor fair.

The six members of the Board took actions in secret against me without even hearing both sides of the issue, let alone indemnifying me or providing a defense or an open hearing, as requested and legally required. This unacceptable practice of deciding in executive session to take action against someone without giving them a chance to defend themselves is ALSO what happened when they decided to evict the Foundation Assisting Seniors. I would argue that those actions alone were “dishonest” and a “gross abuse of discretion.”

“Or are our annual elections simply a charade, a waste of time, subject to being reversed at the will of a dissatisfied minority, regardless of the merit of their claims?”

Having a removal election does not make the annual elections a charade at all. However, how I was removed certainly does.

Six members of the Board secretly voted to remove me from the Board seat that 2,001 owners had elected me to fill just 116 days earlier. Doesn’t that look like they just thumbed their noses at the 2,001 owners who voted for me?

“Shouldn’t we, as responsible, mature people, require evidence of criminal conduct, fraud or other dishonesty, or gross abuse of discretion, before we take the extraordinary step of recalling fairly elected board members?”

You are right. They should not have kicked a Director off the Board without any evidence of wrongdoing, but they did.

The allegations that I was making a profit from my board position were patently false and beyond ludicrous, but more to the point of your argument, they should have produced some evidence, filed a complaint against me, and gotten a ruling from proper authority. But, they didn’t. They secretly decided based on no evidence that I was guilty and that they had the “fiduciary duty” to declare my board seat vacant immediately upon my being handed the notice of their action.

I think this flagrant disregard for treating a duly elected member of the Board with common decency is another reason owners should vote these Directors out. They are simply not being fair and taking care of the interests of owners. They are willing to go to extreme lengths to prevent a dissident voice from being heard—even breaking the law. This simply should not be tolerated until the next election.

“Indeed, the overwhelming bulk of the allegations against the board members seem to me to be emotional in nature, phrased in vague language, with no examples given or facts cited in support.”

If you want specific examples, I’ll post my notices of intent to complain (which were used in a gross convoluted gerrymander as the basis for saying I was putting matters before the board to make a profit), and I’ll post other documentation of improper conduct on my new website www.scastrong.com. I started the website in an attempt to restore my reputation from damages caused by the atrocious lies that have been said about me in the process of kicking me off the board.

“What the allegations reveal to me is that there are some people who live in Sun City Anthem who simply disagree with decisions made by some board members, or who simply do not like some board members. I don’t agree with all of the decisions made by the board. But, in my view, that is simply an insufficient basis to overturn the results of free and fair elections, results that the supporters of recall are apparently unable to achieve through the election process.”

Again, this is a cogent argument for reversing my unlawful removal, but it is not a good argument against having a removal election called for by over 10% of owners.  

Although the law does not require that directors only be removed for cause, it does require that 10% of the owners call for a removal election. Then, it requires that 35% of owners vote in favor of removing the named Directors AND that the majority of those who actually vote must be in favor of removing them. The law provides for an alternative to the annual elections, but is designed to make it very difficult.

Doesn’t it seem incongruous that the same Board members who are protected by these very stringent legal requirements from being removed from the Board for frivolous reasons thought it was within their authority to issue an edict that remove one of the Directors without regard of this law by six of them simply voting in secret to declare it?

I think the petitioners called for the removal election for reasons much more substantial than just disagreeing with a few Board decisions. I think the reason so many people want a removal election of Rex, Aletta, Tom and Bob is because they are not doing a good job at ensuring that all of the people here are treated equally and fairly, and they are very dismissive of community complaints without taking appropriate action.

None of these four Directors even acknowledged that that there might be a slight possibility that they personally needed to show some leadership to correct the management problems and policy deficiencies identified by the petitioners. To just blow the petitioners off as whiners and complainers and do nothing about the issues they raised is not treating owners fairly. Then, to berate them for NOT wanting to wait until the next election to get new Board members (that will be more responsive to the owners’ needs) just exacerbates the problem.

Over 800 owners signed petitions to remove four directors who, in the view of at least those 800 people, have a very strong bias against listening to people and against meaningful owner involvement in governance. But the biggest issue which has been glossed over is that many people want these directors out because they have a big blind spot when it comes to the General Manager, Sandy Seddon. Nobody is complaining about how well she handled the deferred maintenance, but many, many people are dissatisfied with the way they are being treated and the Association is being managed.

At the last Board meeting while the budget was being discussed, the board spent most of their discussion congratulating themselves and absolutely gushing over how pleased they were that Sandy answered all their questions—unlike the former management company that kept proprietary secrets. I would love her too, and so would all the petition signers, if she treated all of us homeowners like she treats the board members she likes.

“But, in my view, that is simply an insufficient basis to overturn the results of free and fair elections, results that the supporters of recall are apparently unable to achieve through the election process.”

In this case, there is cause to justify removal of these directors without waiting for the next regular election. The causes cited in those petitions are really big problems to the 800+ people who signed them and those people’s concerns have been ignored, marginalized or insulted by the Directors they want removed.

“A successful recall election could be expected to chill the willingness of qualified residents to serve on committees and boards. Why would anyone want to do so, knowing that they will be subject to personal attacks and vilification? Would you want to serve under such conditions? People who serve on the board and on SCA committees are our neighbors, and in some cases our friends. They are all volunteers. They freely devote substantial amounts of their time to our community.”

On the other hand, I worry a great deal about the problems that are perpetuated because this Board has a strong culture against utilizing the expertise of owners and for attacking people who try to bring forward suggestions for improvements or better management or governance practices. These are the things that I think chill the willingness of qualified residents to serve.

The way I was treated as a Board member was horrible, but it was covered up and glossed over so you and the community don’t know a fraction of what happened behind the scenes. Even still, there are people who have told me that they would never go on the Board because it is so dysfunctional and abusive to anyone who tries to stick up for the little guy.

“I believe that they act in what they honestly believe are the best interests of the SCA community, as a whole.”

Don’t you think if hundreds of people started collecting signatures to remove you, that you would try to find out what their problems were and work with them to try to solve them? That’s not what these directors did. They did not treat the petitioners as having any value. They did not treat the problems the petitioners defined as even being worth their notice or any response. They attacked the messengers and called them “CAVE people,” never once responding to a single issue raised on its merits. The Board never answered, but they had a full defense mounted by blogger David Berman whose campaign against the removal election has been to discredit the people who raised the concerns and to reject the need for the Directors facing recall to take any personal responsibility for corrective action.

“I have seen no evidence to suggest otherwise. Are they perfect human beings, incapable of making a mistake on an issue? No more or less than any of us. Why then are they being portrayed in such an abusive manner?”

You want specifics. Here are a few. These Board members have taken multiple illegal and unfair actions. For example,

  • They unlawfully over-delegated to management control over Board functions such as the budget and banking (By-laws 3.20; 3.18 a, b, e, f, g, i)
  • Making decisions in secret meetings, (NRS 116.31085; By-Laws 3.15A)
  • Refusing to create an adequate policy framework to protect SCA as a first-time employer;
  • Failing to ensure the official record was complete and uncorrupted,
  • Allowing the restaurant to be closed indefinitely (CC&Rs 7.2 (b) and 7.9)
  • They violated By-Laws 6.4(c) to prevent my access to ANY association records because they did not want me to make inquiries into the GM’s compensation.

They also refused to treat me like an equal director during my entire term of office primarily because I expressed strong opposition to the practices mentioned above and unlawfully excluded me from board meetings wherein they took action against me and the Foundation Assisting Seniors.

The ruse used to “deem my position vacant” was that I had put matters before the Board for personal gain. I will post a list of the matters I put before the Board on my website, and you will see for yourself that there is no way their pretext for removing me has any merit whatsoever.

Forgive me if I am not sympathetic to how unfairly they think they are being treated by people who are calling for a legal removal election.

“A successful recall would also likely have a negative effect on all of our property values, since potential buyers who research SCA on the internet will become aware of the turmoil and instability that a successful recall would no doubt generate. Would you want to buy a house in such a community? I wouldn’t.”

The real question is—do you want to live in a community where the Board takes the law into their own hands and disregards the legitimate vote of the homeowners as this Board did when they removed me?

This letter and the on-line postings against the recall election is part of a huge effort to defend a Board that does not hold itself accountable for obeying the law?

I ask you—why aren’t those that oppose the recall on principle, making an equally strong objection to the arbitrary removal of a duly-elected Director without any petition or removal election or owner vote whatsoever?

“If you believe, as I do, that the recall should be defeated, I urge you to cast your vote promptly, by carefully following the instructions you will receive along with the ballot.”

Mr. Goldfried has every right to send out his letter in opposition to the election recall. However, the Board and management’s interference in the process is another matter. I have submitted several complaints regarding interference with the removal election process which are currently being investigated by Christina Pitch of the NRED HOA Investigations Unit. The most recent issue has been the General Manager’s refusal to post in the online Board Book the Update on the Removal Election because (according to her) it was only supposed to be an oral report.

“We cannot take the chance that the recall might succeed. I view it as vital to the continuing well being of SCA to defeat the recall, and to do so resoundingly. A successful recall would set a dangerous precedent for our community.”

Don’t you think that the actions six directors as outlined above and the secret voting to remove a director they don’t like, is a much more dangerous precedent?

“We would then be likely to see recall elections after every board election, because no one candidate is going to satisfy everyone all of the time. Chaos would result. That doesn’t make for a community that I, for one, would want to continue to live in. Would you?”

That last paragraph is riddled with hyperbole. We currently have a blatantly egregious Board of Directors that has stirred up 800+ community residents to the point that recall petitions were circulated against four of the seven members. You might call this, “The Perfect Storm” and something that has never before happened in this community. I would hope not to see the need for another recall election in the near future and certainly not four members at once. To move people to “chaos” takes more than the simple fact of not having their favorite candidate win an election. And with a seven-member board, one bad actor on the Board would not likely cause an uproar because that person would likely be out voted by the good members of the board on most issues..

The fact that there is a recall method specified in NRS 116 and the By-Laws and that the owners do take an active role in maintaining the community is a very positive selling point for future residents.

“If you are unsure how you are going to vote, or if you support the recall effort, and there are any questions that you have about it, please do not hesitate to contact me. I may be able to provide you with facts that you don’t already have. I would welcome the opportunity to at least discuss the issues with you.”

Please look at both sides of this issue and be sure to look at www.SCAstrong.com where I will post the actual documents and evidence to support what I have outlined above and more. To get updates in your inbox, subscribe to our newsletter

Thank you for your attention.

Nona Tobin

 

 

 

Fact Checking and Financial Hanky Panky

The following was originally written and distributed by Ron Johnson and is republished here with his permission for you to see what others are saying about the current HOA Board and happenings.

Wednesday, October 4, 2017

Fact Checking Some of OSCAR’s Claims

In a letter to residents, OSCAR’s leadership team of former board members and others have attempted to support their opposition to the Board Directors removal petition by making a number of claims about SCA’s self-management, financial condition and other issues. Unfortunately for the intended readers, the OSCAR letter makes a number of gratuitous and false claims, which I have commented on below.

Opinion and commentary by Ron Johnson

Self-management is working.
OSCAR’s Claims What are the Facts
Our facilities are in better condition than they ever were with the management company. False. It’s blatantly misleading to attribute the poor condition of Liberty (and now Anthem) Centers to FSR when successive Boards deliberately ignored and refused to timely address needed repairs.
We no longer have to pay $36,000 per month to a management company. True. However, SCA is compensating key management staff a similar amount per month.
Current payroll expenses are less than we formerly paid the management company to manage our Association. Inconclusive. There’s an array of issues that affect payroll expenses, including startup vs. FSR wage scales and employee turnover, which happens to plague custodial jobs here.
Communication with and understanding of members’ issues has improved. False. The Board eliminated members’ primary venue to voice their individual and collective input when it transferred the project management mission from the Property & Grounds Committee to the General Manager. With the loss of that venue, there is no longer any effective means
Sun City Anthem is in excellent financial condition.
OSCAR’s Claims What are the Facts
Expenses are under control. False. With management deferring over half a million dollars in originally scheduled repairs for 2017 to 2018, that’s a picture of expenses out of control, not of expenses under control.
Revenues exceed expenses by nearly $450,000 through August. False. Indeed, management simply manipulated the books to reflect that revenues exceeded expenses. How did they do that? They did so by moving $550,000 in reserve expenses that was originally scheduled for 2017 to 2018. In doing so, SCA’s revenues for 2017 could only then reflect an excess over expenses. Some might refer to that as hocus-pocus accounting.

 

If all of that originally scheduled work had been performed in 2017, expenses would have exceeded revenues by $100,000, just the opposite of the surplus that was claimed. It’s reasonable to assume that the Board and management, possibly for political reasons, wanted the financials to report a “surplus” rather than a “deficit.”

No dues increase is expected for 2018. True, but. Only on the basis of questionable financial statements does the “no dues” decision make any sense.  In reality, though, the Board is keenly aware of the extent of SCA’s financial problems. It’s evident that SCA did not have the funds needed to do all of the work that had been scheduled for 2017. And faced with the recall effort and despite incurring excessive costs for unbudgeted work at AC, the Board was unwilling to confront the downside of requesting members to authorize a supplemental assessment, let alone an increase in our annual dues. Further, the Board was privy to a legal opinion that will require homeowners to significantly increase their contribution to SCA’s reserve fund, further aggravating SCA’s financial picture going forward.
The 2017 dues increase was to replenish the Reserve Fund after costly repairs to Liberty Center. Assuming that to be true, that increase should have been returned to the homeowners in the 2018 budget. That return is not scheduled to happen, especially given SCA’s current funding problem.
The number of NRS complaints filed is an invalid metric.
OSCAR’s Claims What are the Facts
The Ombudsman and the Nevada Real Estate Division (NRED) have agreed that our Board has handled each situation correctly in all cases for as long as these directors have been on the Board. False. Regrettably, OSCAR’s former directors are either grossly misinformed or are intent on misrepresenting SCA’s history with the Ombudsman. First, I am personally aware that over the years, the Ombudsman has issued letters of correction notifying the association of the need to take specific corrective action to comply with this or that section of the statutes. Second, I am personally aware of at least one case in which the Division found that SCA had violated the law and recommended its prosecution before the Commission on Common Interest Communities. And third, I am aware of a number of Ombudsman cases where the Division has concluded that the case was not suitable for prosecution before the Commission, meaning that contrary to OSCAR’s claim, NRED had not agreed with SCA “that our Board has handled . . . [the] situation correctly.”
There are ZERO open complaints in the Ombudsman’s office. False. I am aware of roughly a dozen mostly recent complaints that have been submitted to the Ombudsman’s office, which includes a recent case that I had filed and was assigned to an investigator of their Enforcement Section.

 

 


Saturday, September 30, 2017

Financial hanky-panky or something else?

Contrary to what others may have led you to believe, the 2018 Budget portrayed a not so rosy picture for our association’s condition. While SCA’s financial condition has the appearance of being good, even “excellent” according to those OSCAR advocates, appearances can be deceiving. There is no doubt that homeowners will be reassured in learning that our assessments will not increase in 2018, but in view of what’s going on behind the scene, such reassurances appear to be merely hype and misplaced.

So, what’s going on behind the scene? The association has a number of financial problems, problems the board and management have been reluctant to adequately explain, address or even disclose. I suspect that more than a few ears were raised when Treasurer Forrest Quinn recently alluded to SCA’s “funding problem.” As I see it, those problems include the following:

  • Funding repairs for damage to “hidden assets.” “Hidden assets” are typically underground or in the walls and in addition to the equipment needing repair may involve water damage, mold remediation and related construction work. When such damage occurs, it can be very costly, as at Liberty Center and the Locker Room project at Anthem Center, which together may exceed one million dollars.

Traditionally, hidden or invisible assets are not included in reserve studies, perhaps because they are not visible or due to the mistaken belief that such assets have a life expectancy of more than 30 years and, therefore, are not required to be reserved. As a result, there are no reserve funds set aside when such assets fail, thereby creating a funding problem.

That funding problem can be resolved in one of three ways: 1) a one-time only special assessment to fund the needed repair; 2) an increase in annual assessments, which was done in SCA for 2017 and subsequent years; or 3) utilizing existing reserve funds, which has the practical effect of robbing funds intended for Peter to pay for the work that Paul needs.

Note that the second option is effectively permanent unless the funds are subsequently returned to the homeowners after the initial need was satisfied. And note that the third option might create a shortfall in needed reserves.

  • Rob Peter to pay Paul? SCA’s management team has been very busy last year and this year in moving large sums of reserve funding around for reasons that I do not understand. I happen to get a little curious when association reserve projects do not get done as planned. How can that happen? Yes, a repair project here that there might be deferred a year for one reason or another.

Let’s take a look at the 2014 Reserve Study. That study, as all HOA studies do, sets forth a yearly plan of which equipment or projects will be repaired or replaced, presumably in advance of their estimated life expectancy. For example, the 2014 RS called for an estimated $225,000 in fence painting for 17 Villages in 2017. That didn’t happen, although some disappointed homeowners may have expected to have their fences painted in 2017. Such is life.

What did happen was that in 2016 in connection with the “mathematical” 2016 update performed by Criterium, management decided to eliminate that requirement for 2017 and changed the RS schedule for fence painting to read “2018” for each of those 17 Villages. Why did they do that? I do not know. I suspect that they might have done that because that money was needed for a different project for which there was no funding authority in the budget. Were similar deferrals made in 2016? I don’t know but I do know that the reported total dollar value of all changes made in reserve spending for 2017 and deferred to 2018 (based on the 2014 RS) was at least $550,000.

Now, this year our management team has been busy making similar changes to the 2018 RS plan, reportedly deferring in reserve spending in 2018 “as much as $800,000.” What’s going on? Management has claimed and would have us believe that they are merely saving the homeowners money that did not have to be spent on the projects that they decided to defer to the next year.

If management is going to make such changes to the estimated life expectancy of association assets, I would hope that they are adequately documenting the basis for those changes since they are deviating from nationally recognized standards that are employed by all HOAs.

  • Reserve for invisible assets. A decision to reserve for invisible assets would likely have a significant impact on future assessments.
  • Association’s liability for walls and fences. Rumor has it that a legal opinion has been received advising that the association is legally responsible for 100% of the walls and fences, i.e., both sides. Furthermore, based on Criterium’s recent study, the amount of lineal feet of coverage of walls and fences is far greater than originally plotted.

If true, that would mean that the amount of reserves needed to fund walls and fences is far greater than initially projected and will have a significant impact on needed reserves. 

Other news

More on the Ham Radio Club under attack.

 I had intended to report that the Management of the Amateur Radio Club was out to destroy the club.  Follow-up investigations shines more light on this matter.  On the top of Independence Center, one can obverse multiple antennas on the roof.  This construction has occurred over the last few years.  The SCA Board has procured amateur radios and supporting equipment expending tens of thousands of dollars of SCA funds.  This equipment was intended for outfitting the Sun City Anthem Emergency Prep Service Group (EPSG).  The EPSG has a room in back of Channel 99 in the Independent Center.  This room is where the amateur radios are located.

It is left for another article to answer the question what is the SCA BOD doing buying amateur radio equipment.  The question for today is who are the FCC licensees using this SCA funded amateur radio equipment. To operate Amateur Radio equipment an FCC test must be passed and FCC license granted.

Amateur Radio Licenses are public records.  Are SCA’s volunteers properly licensed?


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