What’s the big deal about GM pay?
Excessive executive compensation is a huge trigger for lots of SCA owners. Unfortunately, the Board and GM have taken the tact that they can do whatever they want and they don’t have to answer to anyone.
And, worse for owners, our money is being used to pay an attorney who will say that
- there are no limits on the Board’s power to decide what to pay for management,
- that management has privacy rights so pay should be kept secret and
- it’s okay to threaten owners with legal action if the pay is disclosed to third parties.
These problems could have been avoided if the Board had only known that
It just ain’t so.
What training should the Board have taken?
If the Board had taken the NRED training, Responsibilities of the Manager,they might have learned that they should have, at least, had a written agreement defining ALL the terms and conditions for the GM’s employment, including compensation, as required by NAC 116A.325 and by her Community Association Manager (CAM) license.
Verbal deals aren’t good enough
Why no GM management agreement?
Probably because NRS 116.31085(2) PROHIBITS the Board from adopting or amending ANY contract in secret.
Or maybe because the Board “work group” who negotiated the GM’s terms and conditions of employment didn’t have the right expertise.
In 2014 SCA had a fine management agreement with FSR. It is a mystery why the 2015-16 Board would think they could just “wing it” with a handshake deal the first time SCA was flying without a management company’s net.
Isn’t a written agreement required just when contracting with a management company?
No. A written agreement is needed whenever an association pays a licensed community association manager (CAM) for management services.
Whenever management services are paid, the manager must be licensed. The only exception is when the association is small, and the board is able to manage the property by itself without paying a licensed professional manager.
A little common sense please
Besides, how can owners be protected if a community manager licensee does not have to meet the requirements of the CAM license just because he or she is an employee of an association as opposed to being the employee of a management company or being an independent contractor?
How does NRED exercise its authority over HOA managers?
NRED regulates ALL community association managers in Nevada through “licensure, registration, education, and enforcement”.
NRED states there is no legal prohibition against an association handling its own affairs if it does not need to hire/contract with a professional, licensed manager. Any HOA board can control its business directly without paying a licensed managing agent.
The law ONLY requires that the manager must be a licensed CAM, and subject to all the regulations of the community association manager license, if the manager is COMPENSATED.
Which duties don’t require a CAM license?
NRED has published a list of the specific duties that can be performed by UNLICENSED employees.
This means that it is unlawful to COMPENSATE any individual manager, or any management company, to perform the higher level CAM duties unless all the requirements of a CAM license are met.
SCA must be managed by a licensed CAM
The duties performed by the SCA GM require a community association manager license. The CAM license is required unless those duties are performed by a volunteer who receives NO compensation.
SCA bylaws are also controlling
SCA bylaws 3.13, 3.18, and 3.20 define, and limit, the Board’s authority to employ and compensate a LICENSED CAM to manage the association.
Section 3.20 gives the Board the authority to provide compensation to a manager, and specifies limits on what the Board can delegate to the manager.
Section 3.13 (f) says compensation to a community manager must be under the terms of a management agreement.
3.13 (a) prohibits compensation that creates an appearance of undue influence or a conflict of interest.
What conflict of interest?
Doesn’t it seem that paying the GM double the market rate, as well as paying a second licensed CAM the full market rate, created a huge, ACTUAL conflict of interest?
Who is protecting owners?
Ultimately, it is the Board’s job to protect owners from being taken advantage of by licensed professional agents.
If the Board does not do this critical job, then it is up to NRED to enforce NRS 116 requirements on the Board and the enforce the provisions of the CAM license on the GM.
NRED has no authority over the attorney because the attorney has ZERO decision-making authority over the association despite how it may appear.
Don’t you wonder who Adam Clarkson is representing when he turned a blind eye to the failure of the Board to publicly adopt a management agreement with the GM with the NRS 116A.620 REQUIRED TERMS that would protect the association membership:
There’s more, but you get the idea.
Apparently, the sky is the limit
“The Board could pay the GM $1 million/year if they wanted.” – former SCA CAM Lori Martin (in response to my information requests in November 2016)
This shocking pronouncement shows what SCA owners have faced since SCA began employing all staff directly instead contracting with a management company to run day-to-day operations.
What are they thinking?
The Board is being severely ill-advised, and it is costing owners way more than is necessary. Worse, how executive compensation is set at SCA has failed to conform to professional standards, Nevada law, SCA governing documents, or even common sense.
More than Henderson City Manager
Apparently, SCA Board feels the SCA GM’s level of responsibility exceeds that of Henderson’s City Manager, but does it?
- 390,000 city population vs. 7,144 SCA units
- 1,933 F/T employees vs 46 F/T SCA employees
- Operating budget of $244 million vs. SCA $8.5 mil
I don’t see any justification for it, and determining employee compensation was one of the things I used to do for a living.
How much is SCA’s GM being paid?
The January 2017 SCA table of employee salaries was provided to another unit owner, before Adam Clarkson, SCA’s legal counsel, began creating an unlawful veil of secrecy, asserting that the GM had some imaginary privacy rights which exceeded owners’ rights to know how our money is being spent.
The GM’s compensation was publicly known over a year and a half ago, and it’s just a waste of everybody’s time, money and energy to try to hide it now.
Sorry, Adam, it’s legally out in the open. You can’t pretend it’s confidential now. You simply can’t unring that bell.
When SCA got rid of the FSR management company, and the GM took over in April, 2016, the GM was paid $250,000.
By January 2017 the SCA GM was paid a base salary of $257,000 plus a $20,000 bonus.
Does the GM now get paid $22,000 more than Henderson’s City Manager?
Yes, and only, assuming that
- her 2017 base pay of $257,000 stayed flat.
- she was given no COLA (cost of living increase)
- her 2017 bonus expired on 12/31/17
- no bonus is being paid out for 2018
- no performance increase from the 3% budgeted for employee performance increases
I don’t know what you think, but I think it is pretty unlikely ALL of those assumptions are true. So, her salary could closer to 20% higher than Henderson pays its manager.
Is her pay AT LEAST $42,000/year more than the city’s manager?
My guess is that she is being paid at least $277,000 because…
It seems like the Board would let her carry her 2017 annual bonus forward into 2018. I think they would be reluctant to take $20,000 even though that is the way a pay system should work. So, the default position is “let it ride“.
The “Halo Effect”
I also imagine they probably carried her last year bonus forward despite all the myriad complaints against her because
- they repeatedly and publicly chastising owners for signing a petition for a vote of no confidence against her and because of
- their adamant refusal to address any of the petitioners’ criticisms on their merits and
- they didn’t hold her accountable for the failing to meet her deadline on the restaurant or for mediating the FAS-CSG dispute or for failing to de-escalate the community divide
The cone of silence
It would be an egregious sleight of hand, contrary to professional standards, for the Board to authorize rolling a $20,000 bonus into her base pay, but there is ZERO evidence to show that the Board didn’t do just that, and then kept it a secret.
These actions are all a big no-no
A bonus is supposed to be earned every year. It is NEVER just moved into base pay without an EXPLICIT public action by the Board.
But there are worse scenarios
- if the 2017 bonus were rolled into base pay, and then
- a 2018 $20,000 bonus added on top of that,
- ending up at a whopping $297,000 salary for 2018.
than paying $297,000 could be giving a 3% increase from the 2018 budgeted 3% pool for employee increases.
I’ll try to stop imagining the worst
I won’t even put that number ($297,000 + 3%) out in the universe because I don’t think it is possible that SCA Board would go that far off track.
And yet, follow the money
If they didn’t increase her pay in 2018, why would they spend so much money and political capital to hide what owners are paying her for what is little more than property management?
I also wonder how the GM and SCA attorney can honestly claim they are acting as fiduciaries, solely and exclusively, acting for the benefit of the SCA membership, when the GM uses the SCA attorney to threaten legal action against owners who exercise their legal rights to KNOW how much owners are paying employees.
This is the third, and final, part of my 6/6/18 email to the NRED Chief Investigator and Ombudsman to clarify NRED’s process for ensuring that
1. the rights of homeowners in HOAs are protected,
2. Nevada statutes are uniformly enforced, and
3. Board members or agents suffer consequences if they fail to act as fiduciaries.
Justice delayed is justice denied
Justice delayed is justice denied
The length of time NRED has taken to address the complaints I submitted last September without response has unfairly diminished their credibility or, in some cases, rendered them moot.
This is unacceptable, particularly since these issues (election interference, concealing association documents, retaliation, harassment, unlawful removal from the Board for essentially political purposes are all issues of great import to protect homeowners in all Nevada HOAs.
Denial without prejudice? Hardly.
Denial “without prejudice” in one election interference case was nonsensical. A 10/20/17 complaint that Bob Burch was wrongly left off the removal election ballot because two pages with a combined total of 22 signatures mysteriously disappeared so allegedly, he was two signatures short of being placed on the ballot. On 12/11/17 the complainant (not me) was notified by Christina Pitch that the case was closed stating:Say, what?
Claiming that the Ombudsman’s attendance at the vote count of the ballots (ballots that did not include Bob Burch) was sufficient justification to deny the complaint that Bob Burch’s name was wrongly excluded from the ballot (due to 22 missing signatures) is a complete non sequitur.
NRED might as well have denied the complaint because Kilauea volcano erupted.
Further, Bob Burch was treated as a non-conflicted Board member at the November 1 recall vote count despite the complaint about his not being included on the ballot was still open until NRED’s December 11 rejection.
To say that this was not prejudicial to the claimant (meaning that he could file the complaint again after the point was moot) adds insult to injury.
Inappropriate use of association attorney
NRED appears to condone SCA GM and Board giving an inappropriate level of deference to association attorney Clarkson.
Those same 11/1/17 recall vote count owner meeting minutes show the tip of the iceberg of the completely inappropriate role Adam Clarkson took in the recall election process.
Not only was there no Board approval:
- to amend the adopted SCA Election and Voting manual,
- to dump the volunteer Election Committee and
- no Board approval to hire a CPA and
- no Board approval to pay the CPA firm and the Clarkson firm over $100,000 in unbudgeted funds to take over (and bungle) the recall election,
No law gives an HOA attorney decision-making authority
There is substantial additional evidence that Clarkson unlawfully acts as a decision-maker, or as the GM’s attorney, rather than solely as a legal advisor to the full Board.
What more does NRED need?
In what form can I submit this evidence where I can be assured that it will be weighed by an independent trier of fact?
Freedom of information is non-existent at SCA
GM’s concealing association records and using the attorney to threaten owners for even asking appears to be condoned by NRED.
NRED gave two different responses to the draconian records request form revised by the Clarkson law group 2/28/18 to suit the GM regardless of the law or best interests of the homeowners.
NRED response 1 was pro-homeowner.
The first was an email response to a homeowner in March correctly stated the owner protections in the law,
“The “mandatory acknowledgement” form…is contrary to NRS 116, as such a document is not required by law.”
NRED response 2, as reported by Bob Burch, was pro-management.
The second NRED response was only reported verbally.
I haven’t seen any written response from the Ombudsman to the SCA Board, but the Board President has reported that NRED approved the unlawful “acknowledgements” on the document request form that restrict the homeowner from sharing legally accessed material with third parties.
Could this really be true?
According to the Board, NRED has approved the SCA threatening homeowners that, if the information (released per NRS 116.31175) is disclosed to third parties, the owners may be subject to fines and penalties up to foreclosure.
These Clarkson-crafted “acknowledgements” are allegedly (according to Clarkson) binding even if the owner does not sign or agree. According to SCA, NRED says this is okay, just so long as the owner is not required to sign the acknowledgement.
Does NRED have a double standard?
Note that the document request form’s revision was not approved by an official Board action despite the requirement of SCA bylaws 6.4(a)(b) p. 24.)
The Board abdicated its duty to make records accessible to owners contrary to NRS 116.31175, and the GM never signed a management agreement acknowledgement per NRS 116A.620(1)(a)and (m) that the HOA records do not belong to the manager.
Yet, NRED apparently issued a verbal ruling giving the SCA Board and management carte blanche to carry on.
Could this really be true?
And one last thing
Lack of transparency allows SCA homeowners to be put at risk due to
- management errors,
- bad decisions,
- inappropriate use of the attorney at triple the adopted budget, and
- resistance to implementing sufficient checks and balances.
My insistence in attempting to address these problems led to the harassment and retaliation that was the true impetus of my removal from the Board.
Note that NRED has not responded to my 7/21/17 Form 781 complaint other than to refer it to the investigations division. The problems of withholding and concealing records have been exacerbated over the past year, and I have submitted additional documentation to the complaints in September, November and January evidencing this unacceptable pattern.
What is NRED going to do to address these issues?
Rex Weddle’s’s May President’s Report in SCA’s Spirit Magazine is entitled (apparently unaware of the irony) “Keeping our nest clean“. Rex again devotes his entire official communication to sharing with all owners and residents his personal and chronic whine about how owner complaints about him, the GM and the Board are ruining this community.
Bloggers called Rex and his buddies “thugs and bullies”. Private individuals accused him, the Board, the attorney and the GM of unlawful conduct and criminal corruption. Rex belittles those who complain, but without specifically denying any of the charges.
What’s a poor, hand-wringing President to do?
Rex seems oblivious to his contribution to SCA’s problems. He did not suggest any way he could use his position of authority to address owner concerns or to heal community division.
Rex thinks that bullying bloggers into silence is the best course of action.
Rex apparently lacks any self-awareness of how inappropriate it is to use the Spirit, SCA’s official publication, to express his personal opinion and his personal hostility toward certain members of the community.
The President of the Board has a column in the Spirit which is intended to share with the entire community news about what actions the Board is taking, how the owners’ money is being spent, or to provide inspirational words of leadership.
Rex, unfortunately, has chosen instead to use SCA’s official publication as a personal soap box, to chastise residents for complaining about him personally or for criticizing actions of SCA elected official or agents that individual owners or bloggers believe are detrimental to the community.
Rex’s message: “My way or the highway“
Don’t you think it is ironic that Rex Weddle, speaking officially as the SCA President, uses the Spirit, the SCA website, Board meetings, and other official SCA communication channels, to shame and demean residents for expressing their personal opinions on blogs that they privately own, just because he personally disagrees with them?
Doesn’t it seem odd that he does not recognize that his claim that blogs have a negative impact on our property values is just his personal opinion, and one that has no data to back it up?
“Because they read like a bad restaurant review, the buyers may choose to go elsewhere.” -Rex Weddle
That is like a restaurant owner blaming his bad Yelp reviews on the customers instead of trying to figure out why they are saying the food and the service sucks.
Bob Burch only hears those on his side
Don’t expect these Spirit President Reports to be any better now that Rex’s protege and probable puppet, Bob Burch, will have his name on the President’s report byline. Bob’s intolerance of dissent and his blind spot when it comes to equal treatment of resident’s are huge.
How can I say such mean things?
I am just defending myself and my rights and protecting the rights of ALL owners. I don’t see that as being mean. I do see what Rex et al are doing as being mean.
after the restaurant workshop, I forwarded a copy of a blog, “How to cook our goose” to all members of the Board. I wanted them to know I thought the restaurant vendor selection process was unfair and incompetent.
Here’s what Bob graciously emailed me back:
“You really are a very strange person. In any case, any further emails from you will be considered SPAM and will be treated as such.” -Bob Burch
And another example of responsive leadership
Here is the gratuitous observation Bob made (not to me, but about me, on the only community blog that Board members seem to think deserves their respect) in response to my blog, “Being accountable for being good neighbors“,
I wonder if Bob is so non-judgmental about all of his constituents, or if I am just special.
Officer elections over in a flash
- No competition
- No owner input
- No surprise
- No hope
President Bob Burch
Vice president Rex Weddle
Secretary Candace Karrow
Treasurer Forrest Quinn
Why was last year’s officer election so bitter?
Simple answer. I committed the ultimate sin.
I volunteered to fix what I saw wasn’t working right in the transition to self-management. I told them the truth.
Unfortunately, changing the tone at the top means regime change.
OMG! Shut up!! You did not!
Yes, I did. Unlike this year’s newbies, I was totally unaware of SCA’s political realities. I never dreamed that volunteering to share my expertise would be treated as a capital offense.
How low will they go?
Frankly, I was surprised to see that Rex and his cronies would do anything – even break the law- to crush a political opponent.
And yet, here we are.
We have a full year of evidence that proves this point. This past year, we have seen VERY clearly many examples of how they have spared no expense (owners’ money, of course) to keep a death grip on the reins of power.
So, Dona Quixote, what did you say to tick them off?
I told them the incumbents were the bottom vote-getters so it was…
“a mandate to improve the effectiveness of the Board as a unified governing body“
That’s really bad. What other evil did you spew?
I caused an uproar of outrageous indignation when I said that the vote showed an interest in changing the “tone at the top”
Yes, horrible as it was, I also said
the Board needed to be trained together to be guided by common, articulated goals.
You said what!!?
Actually, what I said is exactly what happened. The Board predictably devolved.
“…(absent proper training)…this Board will predictably devolve and return to a pattern of making backroom deals, abdicating its policy role to management, creating dissent in the community, and interfering with operational decisions which should legitimately be handled by staff.“
Examples of how my fears were realized.Obviously, you can’t be trusted to keep a secret.
Snitches get stitches.
On the advice of counsel
Unbelievably, Adam Clarkson or his underling, John Aylor, said these things directly or helped the GM and her buddies on the Board do them.
- the Board can act without voting
- the GM has rights that exceed those of the membership
- directors facing recall have more control over the recall election than directors who were not named in petitions because the attorney says so
- it is okay for the GM to use the attorney however she likes, including to get rid of a director who is too nosy about her pay and protecting the directors who like her from getting recalled
- owners must pay whatever the GM and the attorney sayYou are so arrogant and mean, and you lie.
Even if I were arrogant and mean, I am not lying. Everything I say, I will eagerly say under oath.You deserved to be kicked off because, obviously, you are making a profit from doing this.
Seriously. They said that.
No decent Board member should have to work with you.
Well, that hurts.
It shows how stunningly effective a marketing campaign to demonize me has been. It persuaded a lot of people to agree with both that unfair assessment of me and with the ridiculous claim that other directors are above me and special.
It’s really sad, but the smear tactics have been led by,
current and former members of the Board, with the full support of the GM and the attorney, and funded by guess-whose money.
I was forced to become a blogger to respond to GM-initiated defamation and threats of litigation.
And now, Rex put out another self-righteous editorial claiming that it is the bloggers that have destroyed our property values.
Since Rex has aggressively blocked anyone having equal time to debate his self-serving prostelyzing on the Spirit, the website or at meetings or any other forum, the only way to get the other side of the story out is to blog.
Will Bob write patronizing, insulting President’s reports?
If his diatribes during director comment periods at Board meetings are any indication, he will invest a great deal of energy in verbally assaulting anyone who disagrees with him that tries to speak up.
But, I’m pretty sure the deal he made with Rex, our new Vice -President, was to be a version of co-Presidents so Rex can keep a grip of the reins.
By my best guess, as far as the written word goes, Rex will continue to treat the Spirit as his personal snide blog as he ghost writes the President’s reports next year for Bob.
Previously, Bob complained that he finds writing boring when, on May 1, 2017, immediately before I disturbed the peace of last year’s pre-determined officer election, he wrote
“I have no desire to be President. In my entire military and civilian careers, I have never found writing reports or articles in magazines very interesting. Therefore, writing monthly Spirit articles, monthly Board meeting recaps, etc., is not something I would look forward to doing.”
So, President this year,
Way to take one for the team, Bob.
Lesson 1 from April 26 BOD meeting
“What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” -Mark Twain
Blame the bloggers
At least the first hour of the meeting was dedicated to blaming bloggers for all that is wrong, including the loss of SCA property values. It was a stunning example of how the Board marches lock-step against owners rights and reflexively resists holding itself and the GM accountable for fixing problems of their own making.
Board beliefs vs. an alternative point of view
Tom Nissen listed his beliefs – all concerns shared by the Board – as his parting gift to the membership.
My beliefs offer another, albeit unwelcome, perspective, to show the way I think the Board and GM could better create value for owners.
Click here to link to the article about the UNLV study on HOA foreclosures referenced above.
Next time, I’ll share with you my planned request to correct the false and defamatory statements in the April SCA litigation reports. I didn’t speak up at the meeting because I was afraid I’d get lynched for complaining.
A point for transparent Nevada
The R-J just won a victory for transparency when the District Attorney was required to release information about how much the DA’s office was compensating witnesses in criminal trials.
Using taxpayer cash to fight the taxpayer
“To sum it up, the taxpayer-funded prosecutor’s office sought to conceal from taxpayers certain payments it made with taxpayer money – and then eventually cut a deal that will cost taxpayers $55,000 (in attorney fees).”
“Wouldn’t it have been easier – and cheaper – for those in the DA’s office to simply have made the information available in the first place? Instead, the default setting is always to retreat into the shadows and make liberal use of other people’s money to fight against open government.”
Sound familiar, Mr. Clarkson?
It should. Sun City Anthem Board and GM are misusing the SCA attorney to hide their sins, and he is laughing all the way to the bank.
SCA’s leaders are wasting owners’ money to hide information which should be easily accessible to us at virtually no cost on the website.
SCA’s brand of mean-spirited opacity- hiding actions and expenditures from owners and making the owners pay the attorney fees for hiding what could even be unlawful or fraudulent – has more elements of sleaziness than I saw in the government’s efforts to avoid transparency.
SCA has gone beyond the practice of merely blocking freedom of information requests as described in the R-J editorial to being outright abusive to owners who just ask for information they have a legal right to receive and distribute as they wish.
For example, the claim on the new SCA Records Request Form that SCA records that might be requested, such as employee compensation, are “private and confidential records of the private entity that is the association” is simply false.
Those records can’t be confidential by Nevada law in Sun City Anthem and not confidential by that same Nevada law in Sun City Summerlin.
Threats of litigation?
I don’t see that the Public Employees Retirement System threatened the R-J with punitive sanctions for just submitting a Freedom of Information Request like our mean-spirited leaders are doing to SCA owners, threatening litigation for even asking for information the GM or individual Board members want to be publicly known.
GM’s “privacy rights” bigger than owners’ rights?
I also don’t see that the government officials ever claim that freedom of information requests violated some imaginary and legally-unsupported “personal privacy rights” as SCA’s attorney has done on behalf of the GM.
Only withhold records from certain parties?
I don’t see that the District Attorney claimed the requested information could be withheld from the R-J, but that it could be released to the R-J’s competitor? SCA has done this very thing repeatedly by providing information to OSCAR (recall opponents) that was withheld from others who were not in that camp.
Making up laws?
I also don’t see that the District Attorney just made up some bogus legal requirement that the R-J acknowledge that the information can’t be used in ways the DA would consider harassment or even just embarrassing. The new SCA information request form contains multiple ridiculous “acknowledgements” which have no basis in law.
The SCA attorney is lying to owners about what owners’ rights are. Fines and other sanctions are threatened against SCA owners for requesting and disseminating information, both of which are within fully within owners’ legal rights.
For example, the claim that SCA CC&R 3.6(h) and SCA Rules & Regs 9.4 would be violated and an owner subjected to penalties for violating any of the totally fabricated “duty, restriction and/or obligation provided herein” is a double whammy of threatening an owner for violating restrictions the attorney just made up out of thin air.
Magically creating privilege?
I also don’t see any egregious claim by Clark County that documents, actions or conversations become privileged just because the secretive official wishes that they were legally protected from public view as the Clarkson Law Group, the GM and individual members of the Board ludicrously and repeatedly do to unlawfully attack owners for exercising our legal rights.
Ask any Discovery Commissioner
The burden of proof that documents, conversations or actions are legally privileged falls squarely on the party who is seeking protection from disclosure.
Not the other way around.