Category: GM

Sandy Seddon used our HOA attorney to help her in her divorce

Clarkson Law Group became Sun City Anthem’s Legal Counsel & debt collector on 5/1/17, the same day I was elected to the SCA Board of Directors. John Ayler, on the far right, of the Clarkson Law Group, inappropriately represented Sandy Seddon’s interests, on SCA owners’ dime, at this 8/30/17 hearing before the Discovery Commissioner related to motion to compel production of Sandy’s personnel records and toxicology report re alcohol abuse.

At this hearing the SCA attorney said the petition against her was nothing under the law:

“and further explained the petition of no confidence is not something that exists under the law or under the Association’s governing documents. It is of no consequence. There’s nothing with associations hasn’t recognize these homeowners have no authority over removing her from her position of employment

John Ayler, attempting to rationalize why it would be contrary to the association’s interest to let the divorce court know the truth

This hearing was six days after:

Adam Clarkson & Sandy Seddon took over the recall election

Adam Clarkson unlawfully removed me from my elected Board seat

Adam Clarkson advised the Board to conceal my complaints against his law firm and Sandy Seddon

Our HOA attorney’s attempts to conceal Sandy Seddon’s records from discovery in her divorce occurred 18 days after:

SCA management received petitions against four directors calling for NRS 116.31136 elections to remove them from the Board

SCA management received a petition calling for a vote of no confidence against Sandy Seddon

SCA management withheld notice of the receipt of the petitions from the Board – or at least from me

General manager Sandy Seddon did not answer – only one of the Board members who was facing a recall petition answered

General Manager Sandy Seddon did not answer again knowing that she would be protected by the attorney and the four directors who also had petitions against them

John Ayler wrote a 2nd cease & desist letter ordering me not to criticize Sandy Seddon evidencing his complete misunderstanding of the facts and the law related to confidentiality and privilege

Our HOA attorney-debt collector represented Sandy Seddon in her divorce eight days after:

Clarkson denied me access to documents requested as a member of the Board attacking me, defaming me, and misquoting the law

Our HOA attorney-debt collector represented Sandy Seddon in her divorce one day after:

Sandy Seddon published Clarkson’s defamatory, legally-inaccurate explanation justifying my removal from the board – that I was profiting from being on the Board

Sandy Seddon used the HOA attorney to keep her big fat unjustified pay check

SCA’s attorney billed owners for “legal letters” to stop me & channel 13 from knowing how much Seddon is paid.

The Clarkson Law Group & Sandy Seddon should both be fired for their long-term pattern of acting in their own self-interest instead of as fiduciaries.

If they had only known – Part 4

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.

What is the maximum the SCA Board can pay the GM?

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

In the R-J today, there was an article publishing that, yesterday, the interim Henderson City Manager was permanently appointed at an annual salary of $235,000, 

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

Click here for City of Henderson fact sheet

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?

Owners can’t know for sure what the GM is being paid in 2018 despite NRS 116.31175 and SCA bylaws 6.4(a)(i) affirming that owners have a LEGAL right to know what employees are getting 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…

Inertia

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.

Even worse…

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.

At SCA, either you’re “IN” or you’re “OUT”

Why knock them down & then kick them?

The Foundation Assisting Seniors (FAS) does not deserve to be treated as dead to SCA, “rubbed out” after being kicked to the curb.
After many successful years of partnership between FAS and SCA,

What changed…
  • that forced SCA to lose such a valuable amenity?
  • that converted a positive, mutually-beneficial arrangement into the bitter banishment of our partner?

I won’t rehash all the unnecessary escalation by SCA, that culminated in evicting FAS from their 15-year home on the flimsiest of reasons, but some things should never have happened:

  • assigning the GM to “mediate“ a dispute in which she was an interested party, and then blaming FAS for the failure to resolve the conflict,
  • filing a civil action against FAS without the required owner vote to approve it,
  • racking up $40,000 in unnecessary attorney fees that one of the two non-profits (SCA or FAS) had to pay.

Adding insult to injury

Yet, it has not been enough to force FAS out. SCA management is now refusing to print any article or picture in the Spirit if it says anything positive about FAS.

The recent incident that chapped my hide involved refusing to allow the Women’s Golf Club to report on the 2018 FAS Memorial Day Golf Tournament.

The most significant FAS fundraiser is this annual golf tournament at Revere in which 250+ golfers participate, and probably, 50 or more volunteers organize and put on.

In the past, the Spirit frequently had articles, maybe even a cover story, about the FAS Memorial Day golf tournament.  But not this year
The Women’s Golf Club liaison to the Spirit submitted an article for the August issue that included a reference to the FAS golf tournament.

The Spirit contact was polite and tried to help get, at least, part of the FAS article published.

But SCA GM/Board would not allow it.  Why?
Why must FAS be treated as dead to SCA?

How do SCA owners benefit by this brutal break-up?

The rationale for evicting the Foundation was that FAS was using facilities that belong to the association, and it would be a violation of the Board’s fiduciary duty to let FAS get a free ride.

This is not true. FAS was a free service, an amenity, that many volunteers and donors from across the valley contributed to over the years. By the way, the anonymous donor has extended his offer to match all contributions until the end of July, and I think FAS is only at 2/3 of their $30,000 goal now.

FAS continues to provide 85% of its services to Sun City Anthem despite being evicted and the SCA Board approving $25,000 for the Community Services Group (CSG) to purchase durable medical equipment to duplicate FAS’s service to SCA residents.

According to Favil West,

“The total amount the Foundation has paid as a benefit to SCA has been nearly $200,000.”

Aren’t SCA owners being forced to pay more for less?

How is the GM/Board’s making services to owners more expensive and less convenient meeting their fiduciary obligations?

Compare the actual benefit SCA residents have already received from our long affiliation with the Foundation with the “betting-on-the-come” deal the SCA Board/GM almost cut to bring in a restaurant vendor:

  • Free rent
  • Free utilities
  • Monopoly on catering
  • No share in the profits for SCA until a nearly impossible $1.4 million in annual revenue is reached
That deal fell through, but I’m just saying…

I don’t think owners are well served when the GM/Board offers sweetheart deals to some people who can make a profit off the owners’ backs while other people who have served our community for years, but who are not in the current IN-GROUP, are beaten up like a poor step-child.

Collateral damage: the Coffee Corner

Really, why use volunteers when paid staff will do?

“Heads will roll if lips aren’t sealed about GM pay”

Or, anyway, that was the threat, before…

Contact13’s Darcy Spears highlighted Sun City Anthem’s excessive executive compensation on the “HOA Hall of Shame” on Channel 13 action news last Thursday.

Living in Las Vegas can cost more when your home is in an HOA, but where does all the money go? Contact 13 looks at who’s getting a big slice of the pie in one of the largest communities in Southern Nevada. Click on photo to watch 3 1/2-minute video.

Threatened with legal action? Really?

Did you catch that report at the end of the video?

Neither the GM or the Board would even answer KTNV’s call to explain how the SCA Board justified such big payouts.

“Instead, they had an attorney respond who claimed State law prohibited the HOA from discussing anything about salaries and we learned the HOA threatened legal action against some owners after Contact13 started asking questions about manager pay rates.”

Is any of that true?

It is 100% true that the GM has used OUR attorney to threaten legal action to try to keep her pay a secret.
  • against me personally,
  • against other owners,
  • against the association itself, and
  • in this case, against a TV station,

But, it is 100% legally and morally wrong to use our SCA attorney to unlawfully hide from owners how much of OUR money is going into her pocket.

Are any SCA employee salaries/ benefits confidential by nevada law?
Short answer:       No.

Per NRS 116.31175, most personnel records are confidential, but not compensation.

…4(a) The personnel records of the employees of the association (are confidential), except for those records relating to the number of hours worked and the salaries and benefits of those employees;

Why would the SCA attorney say employee compensation is confidential when the law clearly says the opposite?

In my view, he is simply representing the wrong client.

As the SCA association attorney, he is being paid by the owners to act as OUR agent, not to be the GM’s agent.

In fact, there is a law specifically prohibiting him from representing the GM because it is a conflict of interest. See NRS 116A.640(6). He is duty bound by law to act, solely and exclusively, in the best interests of the association membership as a whole.

But, is he?

I certainly don’t see it. I see the GM approving tons of unnecessary attorney fees that owners pay to protect her imaginary privacy rights.

And like Ricky Ricardo, I think Adam Clarkson has some ‘splainin’ to do.
Why did I get a threatening letter because of this story?

I was told this story was taped, after the fact, last October, but then nothing happened, and I forgot about it.

On 12/22/17, I submitted a written request for SCA to update the 2017 employee compensation table that had been given to another resident on 1/31/17. The budget was ratified in November, and I suspected the Board had given the GM another bonus in secret despite the petition for a vote of no confidence signed by 825 owners and her failure to meet the 12/31/17 target about the restaurant.

When CAM Elyssa Rammos emailed me around 1/15/18 that the 2018 salary table was ready to pick up at the front desk, I was in Mexico and asked for it electronically.

When I got no response, I asked Ruby Leong to pick it up and email it to me before the MLK 3-day weekend. They gave her the run around.

“It’s not ready.
We gave it to someone else.
We have to make changes.”

None of which was true.

The reason for the stonewalling was exactly what Darcy Spears said. Between the time Elyssa Rammos had notified me that the 2018 employee compensation chart was ready, and Ruby Leong could drive a few blocks to pick it up, Sandy Seddon had gotten a call from someone at KTNV.

Quick as a flash, Adam Clarkson manufactured an absolutely false legal interpretation out of thin air that the 2018 version of the previously-released 2017 table was now confidential because Contact13 was doing a story.

Wow. It’s magic.
Documents become invisible, and our money disappears.

SCA’s $325/hour attorney blocked the release of the 2018 update of the 2017 SCA employee compensation table that was already in the public domain. SCA homeowners had to foot the bill for Clarkson to write “legal letters”, in SCA’s name, in January to threaten legal action against me if I told KTNV what the GM’s pay was (even though they already knew) and against KTNV if they ran the story.

There was no Board action authorizing this threat of legal action – unless, of course, they took the action in a secret meeting.

And, by the way, NRS 116.31088 requires a VOTE of the membership, before SCA can file a civil action. But no big deal.

This is a provision of the law that Adam Clarkson made disappear when the SCA Board filed a civil action to evict the Foundation Assisting Seniors. I’m sure Adam Clarkson’s convoluted reading of the law will come up with some magical way that allows the GM to use him to threaten litigation, against anybody or everybody, in SCA’s name, and on SCA owners’ dime.

What did I do about this “legal letter”?

I filed an affidavit under penalty of perjury on 1/31/18 with NRED.  I requested that this complaint be incorporated with the ongoing investigation into the harassment and retaliation complaint which precipitated my unlawful removal from the Board on 8/24/17.

It is my understanding that these complaints will be heard by the CIC Commission on November 6, 2018.

More to come.

The next few blogs will discuss the magnitude of the GM’s misuse of the association attorney to act as her personal fixer.

No restaurant as of June 28 Board meeting

The game goes on…but now they’ve got a scapegoat.

I have been dealing with other things this past month, and had not kept up with the last month of the two-year restaurant process. I had heard that the negotiations had broken down with the one vendor left standing.

So, I went into the Board meeting thinking that the deal with G2G was off the table.

When I sat down, an irritated resident told me the Board was still negotiating a sweetheart deal with G2G.

I was further confused when I opened my computer and saw that at 1:13 PM,  literally minutes before the 1:30 PM meeting, palace-favorite, blogger Berman published a letter G2G sent to the GM saying that the deal was off, no matter how big the subsidy.

And here’s the kicker – it’s all Dick Arendt’s fault that G2G pulled out because he talked bad about them on Anthem Opinions.

How (and why) did Berman get a leg up?

It is inappropriate, from my perspective, for the GM and the Board to have a death grip on information which should be openly and immediately shared.

But it’s worse when they blatantly give David Berman “scoops” because they can count on him to consistently write favorably about the GM and the Board – NO MATTER WHAT – and unfavorably about other bloggers who won’t give the Board or the GM a free pass when they screw something up or screw someone over.

Shouldn’t everybody have easy access to the same information at the same time?

If it is confidential, it is confidential from everybody. If it is not confidential, it should be made readily available for the easiest possible access. The GM and the Board are creating a huge amount of unnecessary conflict by the way they mis-handle communications.

The GM and the Board play favorites and do not uniformly enforce the rules of confidentiality. They use information as power, and block access from their detractors. When criticized for this failure, they go crazy, and threaten the owners, particularly bloggers, who out them.

Why couldn’t G2G make it?

Apparently, free rent, free utilities, and ZERO profit-sharing with SCA until the obviously-unattainable $1.4 million revenue number was reached was not a sufficient subsidy to overcome the damage done by the bad-mouthing of the non-Berman blogger.

How did the GM characterize what happened?

The GM did not quote the entire G2G “we’re outta here” letter with those attending the Board meeting that she unfairly shared with David Berman before the meeting.

I say “unfairly” because it allowed her to use a willing tool to illegitimately stoke the fires of animosity AGAIN against  their common nemesis, and his reviled, competing blogger, without her having to dirty her hands.

Anyone else who requested such a document would have been threatened with sanctions for even asking for it, and then had to swear on the head of her newborn grandchild that it would not be disclosed before it would have been handed over.

She did, however, in making her report, focus on the phrase in the letter that most effectively, albeit unfairly, shifted the blame away from her, and her own gargantuan part, in designing an RFP/negotiation process ensured to fail.

She said that the SCA-G2G negotiations had reached impasse over “drop and go’s”, alcohol and pot lucks,

The Board wanted to talk some more, and SCA’s team thought they could get a deal, but G2G wrote her today that it is no longer interested. She paraphrased this part of the pull-out letter.

“… the blogging of Dick Arendt and his call to boycott the restaurant even before we opened.

So, …(we’re withdrawing due to)… the poisonous atmosphere illegitimately manufactured by a blogger.”  G2G

What’s the bottom line?
The Board approved a motion to direct management to continue to look for a restaurant tenant.

The GM asked the Board to approve two Board members to work with her. Tom Nissen is now fully retired from the Board and not willing to serve as a non-Director member of the work group. No matter how many times this method has failed (using a couple of Board members with the GM instead of an independent, specialized expert), hope springs eternal.

The good news is Gary Lee, the Director I think has the most experience negotiating restaurant contracts, was appointed to the team.

The bad news is that, to get a successful restaurant, Gary Lee will probably have to do a lot of the GMs job. The GM has not demonstrated herself capable of getting a successful restaurant tenant in place since she got here in November 2015 – even through that expectation was the one specific criterion the Board adopted – and probably ignored – for her 2017 bonus.

Public comments

One owner had specific suggestions about how to economically poll owners about whether they want a restaurant at all, and encouraged the Board to look at the possibility of just a bar and appetizers. There were suggestions for the Board to take a broader view of what would work in that space, including a food court or the high quality of places he had seen in Asia.

The old guard continued to promote the idea that only people who show up at meetings should get a voice, but I got the sense there was a small crack opening in Board acceptance of the idea that other people need to be heard.

What were some of the Board comments?

Several Directors said they were disappointed to be back at square one, but had an interest in getting more owner input. They saw the need for improving the RFP process to more clearly spell out the parameters in advance and to be open to wider competition.

Several Directors unfairly blamed bloggers, particularly Dick Arendt, for G2G pulling out, just as other Directors have voiced this same unfortunate refrain to deflect criticism of previous Board decisions that weren’t particularly owner-friendly.

“Shut up. We’re in charge here.”

They again asserted that the Board should take legal action to stop the criticisms of the Board and management that they think are totally unwarranted.

It’s a weird perspective to me – this being America and all. Utterly lacking in a sense of what gives legitimacy to their power

“Governments are instituted …deriving their just powers from the consent of the governed.”
-the Declaration of independence

I am particularly saddened when I hear Art and Jim rant about the need to silence dissent. I like them both, on a personal level, and think they are good people.

I think they just are not getting how they are unwittingly contributing to the polarization of the community by representing only some of the people, and by not tolerating  diversity of opinion about the way we want to be self-governed.

To self-righteous and aggressively defend themselves and those who agree with them against perceived injustices only becomes dysfunctional when that outrage is used as justification for intolerance and threatening to use legal force to stop the free expression of dissent.

I never wanted to be a blogger, but now, I will defend my right of free expression to my last breath.

Part 3: In case you don’t think this is enough evidence

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

Three Hawaiian Princesses – Tara Noalani, Ella Nahiena’ena welcome Issa Anale’a to the world. I fight to ensure “liberty and justice for all” is a core value in the world we pass on to them.

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:

  1. to amend the adopted SCA Election and Voting manual,
  2. to dump the volunteer Election Committee and
  3. no Board approval to hire a CPA and
  4. 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?

Part 2: Secret meetings in general

This is the second 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 HOA agents suffer consequences when they fail to act as fiduciaries.

Issa Anale’a didn’t make us wait as long as NRED

Why has NRED needed more than nine months?

Tomorrow, I’ll see what NRED Chief Investigator’s perspective is on the 6/6/18 email I am sharing below in Part 2 “Secret meetings”, in the previous blog, “Why so quiet?“, and in the final part 3, “In case you don’t think this is enough evidence”

Part 2: Secret meetings in general

The second complaint was that the Board deliberates in secret meetings.  This complaint being dismissed perfunctorily is also problematic. It appears as if NRED condones a pervasive pattern at SCA of decisions being made by the Board, the attorney, the GM or individual directors without proper action by the Board in open session.

It also appears that there are no consequences if SCA Board is not compliant with NRS 116.31083, NRS 116.31085, or SCA governing documents.

NRED previously instructed SCA on this point

Previous NRED officials have issued letters of instruction (attached to previous email) to require statutory conformance (with owner protection laws) which SCA now ignores.

I, as well as other SCA residents, have alleged that, currently, many Board decisions are made improperly, i.e.,

  • in group emails,
  • in “workshops”,
  • in improperly noticed meetings,
  • private Board training (no notice, agenda or minutes) sessions which are
    • deemed “attorney-client” privilege while
    • simultaneously are deemed to NOT be executive sessions, but of which recording is prohibited:
  • meetings or email chains involving only a few Board members or which pointedly exclude dissenting directors
What does it mean when the NRED investigation of these complaints just stops without a finding?

Obviously, the SCA Board was notified that SCA has won by default, but apparently the owner who complained was not.

As Bob Burch said,

Both complaints were closed without any action being taken against the Association when the division determined that there was no good cause to continue with the investigation. In other words, we prevailed.

This is essentially what has occurred in 100% of the cases filed in the past year.

Is that NRED’s intent? 

  • Does NRED really intend to say that this Board conduct, that has generated many owner complaints, is permissible despite the Board’s failure to meet the requirements of NRS 116.31183 or NRS 116.31085?
  • Or are you not convinced that the complainants accurately reported impermissible acts?
  • Does NRED’s investigative protocol permit your investigator to rely on information provided by the HOA, but prohibit further investigation by seeking additional information, or at least a response, from the complainant?

Whose call is it anyway?

NRED needs to be aware that at SCA, Board decisions are routinely made by the GM or attorney in policy areas in which the Board is prohibited from delegating by SCA bylaws 3.20 and 3.18 pursuant to NRS 116.3106(1)(d).

These wrong parties (the GM, the attorney, a subset of the Board) falsely claim the Board made decisions that the Board didn’t make correctly, or worse, didn’t make at all, e.g.,

  • hiring debt collectors without an RFP (competitive process),
  • increasing group exercise user fees,
  • failing to comply with the Election & Voting Manual in the 2017 recall election,
  • hiring a CPA without a contract or an RFP to do the volunteer Election Committee’s job,
  • paying that CPA and attorneys, at a $100,000+ un-budgeted combined cost, to usurp the recall election process,
  • over-expending the legal fees budget by $200,000+ in 2017,
  • taking punitive actions, without legal authority, against me as a Board member and unit owner, i.e., threatening letters and kicking me off the Board in retaliation for my complaints and records requests,
  • authorizing the use of owners’ money to pay for the association attorney
    • to appear in the GM’s divorce and
    • to withhold SCA records in discovery that had been previously released to OSCAR, the anti-recall group.
When the NRED investigation into these actions just stops, or maybe never even starts, what does it mean?
  • Is abdication and usurping of Board authority okay in NRED’s view?
  • Does NRED need more documentation and more specific examples to establish that this practice is occurring?

What else does NRED need to stop this?

Here is a link to a www.SCAstrong.com blog, “If they had only known, part 3” that gives some examples of GM decisions that resulted in election interference, hiring bankrupt or conflicted debt collectors without due diligence or following proper procedure, a biased selection of a restaurant vendor (that is not proceeding for unknown reasons, leaving SCA with no restaurant for 2 1/2+ years and counting).

I can also provide you links to the actual documents that are are evidence of these and other specific incidences if NRED needs more documentation to make a finding and prohibit agents from taking advantage of SCA.

Coming up:

Part 3: In case you don’t think this is enough evidence

If they had only known… Part 3

Owners pay a high price for Board ignorance

Basic ground rules the Board must learn by heart
  1. Association exists to serve the owners.
  2. Board exists to speak for the owners.
  3. Board may hire agents to act on behalf of owners.
  4. Association does not exist to serve the Board or management.
  5. Owners pay even when the Board or SCA agents make mistakes.
  6. Agents, including SCA employees, have no rights superior to owners’ rights.
  7. Rules exist to protect owners.
  8. Board must protect owners.
  9. The Board needs to learn the rules and follow them.

How can NRED training help the Board do right?

  1. Without proper training, the Board is ignorant.
  2. The Clarkson Law Group trained the Board to consult attorneys before ANY decision to the point of letting attorneys decide.
  3. Being ignorant, the Board has failed to protect owners from agents’ actions.
  4. Board needs to learn the rules set up to protect owners and follow them.

The process determines the result

Poor process = poor results

Board failures of the “duty of care”

The costly mistakes described below could have been avoided had the Board taken the training about the proper way to hire experts:

  1. The GM did not sign a management agreement with terms required by NRS 116A.620.
  2. The Clarkson Law Group hired as SCA debt collector without an RFP for  debt collector issued.
  3.  CPAs Ovist & Howard were paid $85,000+ to replace the volunteer Election Committee on the 2017 removal election without legal authority:
  4. HOA Lawyers Group LLC hired as SCA debt collector to replace the defunct and bankrupt Alessi & Koenig LLC
      1. without an RFP,
      2. without a Board-approved contract
      3. without competing with NRS 649 licensed vendors.

Board must learn the rules

Click here for the NRED training all directors should take to know how to prevent SCA being controlled by agents instead of by the elected Board: Hiring Experts and Professionals


Lessons the Board has yet to learn

1. When SCA became “self-managed”, the GM/CAM were hired without of a management agreement.
Not okay.

Absent a management agreement, the GM is an “at-will” employee and has no other rights than those bestowed by the SCA Employee Handbook.

2. RFPs are required for professional services not just construction or maintenance contracts per NRS 116.31086.

2.  The GM wasted $85,000+ for an unknown CPA, Ovist & Howard, to take over the recall election:

  1. without an RFP,
  2. without a Board-approved contract,
  3. without funding to pay for a CPA to do the recall in the adopted budget,
  4. without the Board amending the Election & Voting Manual to strip the Election Committee of its duties, and
  5. after the GM and attorney were both the subjects of active complaints that they were interfering with the independence of the Election Committee
  6. which resulted in diminishing the integrity of the election process.

Guess who benefitted. (P.S. It wasn’t the owners.)

  1. Four of the six Board members who allowed the GM to usurp the Board’s authority benefitted personally from unlawfully hiring a CPA to replace the Election Committee.
  2. Owners’ right to lawfully petition for a removal election was besmirched by the subjects of the petitions who wrongfully blamed the owners who petitioned for their recall for the huge cost of hiring a CPA that was done solely, 100%, by the GM under their watchful, grateful eye.

“For every action, there is an equal and opposite reaction.”   – Newton’s 3rd law

Hiring a CPA wasn’t the only way the GM sashayed in to usurp the authority of the Board, but to really take over, all dissent had to be crushed. These are things a properly trained Board would never have tolerated.

Action
As the liaison to the Election Committee,  I tried to get the GM, President Rex, and the attorney to leave the Election Committee independent and neutral to do their normal job during the recall.

Reaction
I was removed as the Board liaison to the Election Committee by the very people accused of interfering with the Election Committee’s independence.

Action
As a non-conflicted Director (not one signature, not one petition against me), I was one of the three Directors who should have decided

  • how the recall election was to be conducted,
  • whether the Election Manual should be amended for this one election
  • how best to protect the integrity of the election process

Reaction
The GM and the attorney decided to relieve the Election Committee from its duties despite having no legal authority to do so.

Action
I gave the Board notice of my intent to file a complaint of harassment and retaliation for all the actions they had taken against me in retribution for my recommending that the attorney and the GM be fired.

Reaction
The Board took the law into their own hands and kicked me off the Board without notice, process or appeal.

Kinda the same way Putin handled the one serious challenger to his re-election.

3. Restaurant RFP mistakes

  1. GM and one Director met with one competitor to give a leg up prior to RFP.
  2. Board was not informed of GM + director actions until it was a fait accompli.
  3. RFP issued to a hand-picked group of possible bidders
  4. Bids were not opened at a Board meeting.
  5. Bids were not not submitted on the same terms.
  6. After the number of vendors dropped to two, the “operating parameters” were adopted.
  7. Winning bidder who negotiated with GM in advance was allowed to change bid after the other bidder dropped out because the terms had been changed.
  8. No other bids were sought nor considered.

4. Last two debt collectors shouldn’t have been hired without RFPs

Doesn’t it seem like it’s a problem that

  1. HOA Lawyers Group became SCA’s debt collector without issuing an RFP to replace the defunct Alessi & Koenig, LLC?
  2. The Clarkson Law Group became the SCA debt collector without a RFP?
  3. The Clarkson Law Group, hired via the RFP issued to replace the Leach law firm as SCA legal counsel, used its “authority” as the SCA legal counsel to  “rule” that its own selection as the SCA debt collector did not require a separate RFP?

Who cares about debt collection?

We all should. Debt collectors are the source of huge expenses for HOA owners because of the weird way the Nevada courts allow HOA foreclosures to extinguish the bank’s security interest. While you might think this is good for HOAs, it is actually only good for the debt collector.

Remember, abdicating debt collection is:

  • a huge cost to owners
  • a violation of SCA bylaws 3.20 and 3.18(a)
  • foolish
  1. The cost of collection exceeds the amount recovered.
  2. HOA homeowners pay for the debt collectors’ fight with the banks.
  3. The loss of property value to each and every home in a Nevada HOA is, according to the UNLV 2017 study commissioned by the Nevada Association of Realtors, is 1.7% per foreclosure for delinquent dues.