Missing in Action

Stuff that should be on the Board agenda, but is not…

GM performance and compensation is not on the open agenda but it is on the Dec. 7 @ 9 AM executive session agenda

Here is what I predict will happen tomorrow. The Board will:

  1.  continue to overpay the GM, including possibly another unjustifiable $20,000 bonus, without transparency or accountability to the owners
  2. fall prey to the Halo effect to give excessively high ratings by giving her a pass on failing to adequately perform significant aspects of her job.
  3. refuse to consider that customer service ratings might diverge greatly from their assessment of the job she is doing.
  4. continue to ignore that there have been multiple incidents of actions on her part which would be just cause for her termination as a violation of her duty to the membership and violations of the standards of practice of her license.
  5. fail to hold themselves accountable for paying her over $100,000 over the value of that job and allowing her to  pay other SCA managers at excessive rates.
  6. continue to refuse to allow appropriate owner oversight over the personnel system in favor of less qualified “Board work groups” controlling policy or abdicating too much authority to the GM.
  7. continue to dismiss and trivialize the concerns of the 836 residents who gave the GM  an “F” for owner relations and signed a petition of no confidence against the GM. The Board did not seriously evaluate one single criticism by owners to attempt to improve the division in the community. Instead, the petitioners were insulted and marginalized as if they were not  members of the community of equal value. The Board treated them like just a bunch of whiners and malcontents and discarded the petition was if it was just unwarranted “negativity from small vocal elements“.

I hope I’m wrong.

Not even a recommendation regarding the restaurant space

SCA CC&Rs 7.2(b) requires that the restaurant (or any other amenity) shall not be discontinued without the written authorization of 75% of the owners. CC&Rs 7.9 define the process by which the Board can change the use of the space. Neither of these provisions have been followed.

The Board locked up the restaurant right about the time the GM was hired. Ignoring the owner vote needed per 7.2(b) to lawfully discontinue operation of the restaurant and giving the GM over a year to just come up with a recommendation for the space was bad enough. Then, Rex made it worse by paying the attorney to opine in yet another no-good-for-owners violation of Board Policy Manual 4.10 that a temporary use of the space would require a vote of the owners. Then, the Board made it worse by letting her hire an unbudgeted consultant for an unknown amount of money to do the one job, by the one deadline the Board actually gave her.

So, what are we waiting for? How many excuses do we have to listen to? And how many people are we going to pay to not get the job done?

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.

SCA’s Wasteful Loss of Foundation Assisting Seniors

The recent open letter attorney Clarkson wrote attempted to justify the SCA’s Board’s actions against the Foundation Assisting Seniors (FAS). It was very disheartening. It shows SCA is lacking a system that guarantees Board decisions actually will serve the best interests of the community. It also shows how the Board does not hold the GM accountable for ensuring mutually-beneficial and cost-effective resolutions to community disputes.

The GM did not do a competent job to collaborate with FAS on a solution beneficial to SCA owners.

The Board delegated the dispute to the GM for resolution, but she was incapable of developing a collaborative solution or to avoid escalating the conflict. Why doesn’t the Board hold her accountable for that failure? Why doesn’t the Board hold itself accountable for achieving a negotiated settlement that would maximize benefits of both organizations to the SCA membership?

Instead, the Board followed the unhealthy pattern of power politics where they forgot who they are representing and who they and the GM are supposed to be serving. Their “Board/GM must win/be right and Favil West must lose” strategy made the Foundation Assisting Seniors and all of SCA’s members and residents just collateral damage to their “fight fire with Napalm” approach.

We all lose when the Board and the GM don’t do their job

In the end, we all lose when the Board does not hold the GM accountable for preventing or minimizing disputes.

When neither the Board nor the GM hold themselves accountable for bringing the community together or for maximizing “neighbor-helping-neighbor” strategies, we all lose.

When the Board picks a side to throw their weight and our money into waging a war against owners perceived to be on the other “side”.

We all lose when the Board does not hold the GM accountable for the owner relations and “people” parts of the General Manager job as much as for the property management aspects of the GM job.

WHY are we paying her so much if she doesn’t exhibit sufficient leadership or collaboration skills to bring the community together synergistically or to negotiate mutually-beneficial arrangements that allow diverse groups to thrive here?
Evicting FAS was the unnecessary destruction of a community treasure

Escalation of this conflict should never have happened. Consider for a moment how Favil West described as the FAS’ beginnings:

In 2003 the Foundation submitted a grant proposal to Pulte for a community service building.  Pulte accepted the proposal.  The Foundation President negotiated the design of the building, a building worth more than $550,000, to house the Foundation and the services it started; SCA TV, Community Service, and Emergency Preparedness (all originally part of the Foundation). The end result was that the building would be provided to SCA in addition to Independence Center, with Pulte’s condition that space would be dedicated to FAS so long as it serves SCA seniors.  This was evidenced by the original plans showing and referencing the Foundation space allocation. This term was accepted by SCA and was documented by a board resolution at the SCA April 2007 board meeting.

 

These statements were presented as documented facts so they should have been easy to verify. Why was there no simple, fair internal cost-effective process to ascertain their veracity?

Instead of collaboratively evaluating the facts where both sides were given an equal opportunity to present their side of the story, those in power wastefully decided to disregard these assertions, to ignore the good that was being done by FAS, and to dismantle a 15-year-old community service and destroy community relationships for no good purpose.

Attorney added cost, but no value in achieving a good solution

SCA Board spent a huge amount of money on attorneys to evict FAS, and yet they still managed to break a few laws while taking this completely disproportionate action that benefitted the community not one whit.

For example, NRS 116.31088 requires a member vote before initiating a civil action, but the Board ignored that and filed case A-17-760014-C to evict FAS. Please note that attorney Clarkson’s was paid both to file the civil action against the FAS AFTER Clarkson was paid to give the Board the self-serving advice that SCA did not have to follow NRS 116.31088 in this case.

Another example is the violation of NRS 116.31085 (executive session) where FAS was repeatedly discussed in secret long before SCA board decided to take legal action.  Perhaps, had the Board allowed the community to listen to their deliberations, it might have been harder for the Board to settle on the most expensive and least beneficial final solution.

GM Dumped $73,000+ Removal Election Costs on SCA Owners

The GM is to blame for the big bill – not the SCA owners who must pay it

This huge expense is still climbing, but it was totally unnecessary, not legally authorized by the Board, and did not serve the best interests of SCA.

Both the GM and the attorney should be fired for spending our money to interfere with the integrity of the removal election.

This unauthorized expenditure is sufficiently egregious to warrant the termination of both the GM and attorney, but that won’t happen because the beneficiaries of the election interference by SCA’s agents included a majority of the Board which was apparently important enough to them to stand by and let SCA owners foot the huge and unnecessary bill.

While I was on the Board I aggressively attempted to protect the independence of the Election Committee,  but alone and constrained by ethical boundaries, I was no match for the abuse of power by the Board President and SCA’s agents who were not so constrained.

A well-documented contributing factor to my unlawful removal from the Board was that I informed the Ombudsman on July 24 of my concerns about the need to protect the independence of the Election Committee (and also to protect owners lawfully collecting petition signatures) from the significant GM/CAM/attorney/Board interference I observed.

Berman’s constant improper placement of blame

David Berman continues to perpetuate the myth that these unnecessary and unauthorized costs were caused by the petitioners who (legally) called for the removal election.

This targeting of unit owners is obviously wrong. Owners don’t have enough power to be culpable.

Think about it.

  • If 1,200 unit owners had wanted  the Election Committee to conduct the removal election, but the GM did not want it, would they have been able to make their wishes happen over her objections?
  • If any of the petitioners had come to the Board meeting and begged to have SCA fork out over $73,000 to pay an unknown CPA and the attorney to do the Election Committee’s job, would SCA have spent one dime?

Both the GM and the Board President had to want SCA money to be spent on agents of their choosing  to run the removal election (incompetently or, more likely, unethically), or OUR money  would still be safely in the bank.

The Spin Doctor at work

Yet, despite all evidence to the contrary, David Berman persists in promulgating this almost laughable propaganda that unit owners could make the GM do something that doesn’t serve her interests. Smug in this delusion, today he blogged with a melodramatic and an almost audible sigh that this big $73,000 number would still be bigger when the attorney and CPA bills all come in:

Sad. SCA deserves so much better.
But, wait, hope may be on the horizon:

CIC Commission recently held a GM accountable despite HOA attorney advice that action was OK under NRS.

If Rex and Sandy having Clarkson on speed dial is no longer as good an excuse as “the dog ate my homework”, then maybe…

AnthemOpinions blogspot reported about a case that was heard at the recent CIC Commission meeting which seemed to demonstrate the Commission’s repudiation of the “the attorney said I could” defense.

 

The Zeitgeist
Perhaps, we are reaching a tipping point.

In the whole country, the public conversation has shifted seismically around sexual harassment. Suddenly, society-at-large is not just standing silently by while men in power abuse vulnerable people with impunity.

Maybe the tide is turning here at SCA too.

Now, owners no longer seem so resigned and no longer seem willing to tolerate inexcusable behavior or poor leadership. A critical mass is forming, and this is a necessary step to creating a healthier balance of power in our community.

As formerly discouraged and disenfranchised owners are more willing to speak up and stand up to bullies, SCA’s bullies will predictably face a Come to Jesus reckoning. A tectonic power shift will occur that, in retrospect, we will be surprised at how long it took us to take our power back.

 

 

Jim Mayfield re annual budget mailer

Jim Mayfield writes:

We received the annual mandatory budget mailer in today’s mailer.  I have reviewed the budget in detail as well as the materials sent with the budget mailer.
1.  The “Summary Budget” does not contain any information that compares the 2018 draft budget to the adopted 2017 budget.  Furthermore, a comparison is not provided of the 2018 draft budget to the projected actual financial statements for 2017.  Without these comparisons, unit owners have no way access the expected actual to budget performance for 2017 OR to see how spending priorities are budgeted to change between 2017 and 2018.
2.  The Budget mailer does not include a proxy form or return envelope for unit owners to use to vote for or against the budget.  This is a change from prior years.  Instead, the cover letter states that if a unit owner desires to vote for or against the budget, the unit owner should see NRS 116.311.  (So much for transparency and encouraging unit owner participation in the governance of SCA.)  The strategy is obvious:  Don’t raise the dues and hope the unit owners don’t care how their money is spent and find it too hard to find out to bother.
3.  The capital budget includes an authorization of $45k for “chairs, outlets, storage shed, BBQ tables and benches for the Pickleball court area.

Notes from Nona on saving some bucks

I haven’t received my budget mailer, but I want to address easier voting  described in NRS 116.311  as they can be used as an example of how SCA could avoid most of our huge legal bills. The Board and the GM are not competent in preventing owner problems using the attorney as their sole guide. They should shift from paying for secret attorney opinions defining the legal minimum to asking owners to help develop popular “best practices”.
The NRS 116.311 code section is entitled,
“Voting by units’ owners; use of absentee ballots and proxies; voting by lessees of leased units; association prohibited from voting as owner of unit; voting without a meeting.”
This section offers ways in some situations that voting could be made easier on owners – like absentee ballots, proxies and voting electronically.  Even though simpler, more convenient methods are available, doing things in the most “user-friendly” way doesn’t seem to be much of a priority for the Board or the GM even if not doing it the easy way is more costly.
The default seems to be just knee-jerk asking the attorney for an opinion. The attorney’s opinion generally veers toward advising the Board or GM what is the minimum that can be legally done. Conceptualizing a problem in terms of improving customer service is simply outside of the attorney’s paradigm, training and expertise – and yet he is their top-dollar “Go-To Guy”.
The GM does not seem to be inclined to focus on improving owner relations or utilizing owners’ expertise to research and recommend “best practices”. Instead, just handing over $325/hour for the attorney to rule on what the Board and GM can probably get away with is her counterproductive modus operandi. The Board has a total blind spot to this failing.
A better way of doing business would be to evaluate EVERY Board or management decision by asking owners BEFORE taking action,
“Is this action in the best interests of the membership?”
Then, if there are lots of owners who disagree, listen to them and remedy the problems. This could be done easily and systematically by utilizing the expertise of owners in a re-invigorated committee system. It certainly would be more cost-effective.
I believe that, had the Board and GM in 2017 followed the simple principle of acting SOLELY in the best interests of the membership, at least 90% of the $200,000 SCA is projected to spend this year for attorney’s fees could have been avoided, and there would have been a lot less community turmoil. 

Removal Election Results

Removing a Director LEGALLY is really hard to do

Predictably, the removal election did not succeed despite over 1,200 unit owners voting to remove Rex Weddle, Aletta Waterhouse, and Tom Nissen from the SCA Board. I say it was predictable because the only lawful way to remove a director is to meet ALL the rigorous requirements defined in NRS 116.31036:

  • More than 10% of unit owners must call for a removal election
  • More than 35% of ALL unit owners must vote YES
  • More than 50% of those voting must vote YES

It was even more predictable because GM Sandy Seddon, Board President Rex Weddle, association attorney Adam Clarkson and their accomplice and lobbyist, David Berman, took unfair actions to interfere with the removal election process to protect the incumbents and to make unit owner pay for the legal removal election approximately $40,000-$50,000 unnecessarily.

42 NRED Complaints against SCA

Interestingly, I have been told that the Ombudsman and an investigator were present at the vote counting today. I understand they came to observe the final step in the removal election because there have been 42 complaints filed against SCA for such violations as:

  • removing the volunteer election committee,
  • paying a CPA without a contract to perform the EC’s duties and performing them so badly some people didn’t even know there was a removal election,
  • not counting all of the petitioners’ valid signatures so Bob Burch wasn’t included on the removal ballot,
  • concealing information from unit owners about complaints,
  • retaliating against owners for making complaints,
  • and, last but not least, removing me, an outspoken homeowner advocate, without having the required removal election at all.

Deceptive eblast reports the news

Saying

“In order to RECALL a BOD member, 2,501 Yes votes were required.”

is a thinly veiled way to disguise the FACT that

“In order to REMOVE a BOD member, 2,501 Yes votes were required”

The Board unlawfully ignored this FACT when they removed me without abiding by ANY provision of NRS 116.31036 and without ANY owners petitioning or voting to have me removed or recalled.

That’s a really fast announcement when you consider that the GM NEVER announced that there were petitions going around in June to remove four directors, or that there even was a removal election scheduled, or that there were 836 signatures calling for a vote of no confidence against her submitted in August with a long list of owner complaints about her performance as GM.

Keep those fun facts in mind when you hear very soon whether the Board has given her an excellent performance rating and a $20,000 bonus. Rex Weddle made the off-hand remark at the last Board meeting that they had discussed “GM performance” in executive session, but item 7A lists “GM Compensation” on the public executive session agenda.

Elder Abuse: Part II – SCA Agents

We have another covert systemic type of elder abuse going on right here at SCA. We have all of the problems endemic to Nevada HOAs in general, but those generic problems have been fueled here by a historically divided community and exacerbated by a poorly-executed transition to “self-management.”

Our system fails to provide sufficient competent owner oversight and internal controls necessary to prevent abuse by professional agents who are supposed to be fiduciaries acting SOLELY in the best interests of the owners,  but who are taking unfair advantage of us for their own unjust enrichment.

You are going to hear this same refrain from me repeatedly:

The biggest risk SCA owners face is being screwed over by unscrupulous agents who are supposed to be acting solely in our best interest, but who are not. They are actually unfairly acting in their own self-interest and profiting at our expense.

The reason “they” kicked me off the Board is they wanted to shut me up. They wanted to prevent me from telling owners what they are doing. They wanted me to stop publicly trying to force them to make system changes that would protect SCA owners from abuse by our own, highly-compensated, but unscrupulous, agents.

Who is “they”?

  • “They” are now (2016-now) GM Sandy Seddon and (May, 2017-now) association attorney/debt collector Adam Clarkson Law Group now.
  • Before (2009-2015), “they” were FirstService Residential (FSR)/formerly RMI, SCA’s managing agent, also licensed debt collector dba Red Rock Financial Services (RRFS).
  • In between (2015-2016), “they” were Alessi & Koenig, LLC attorney-debt collector that went into chapter 7 bankruptcy after being sued on 500 of the 800 HOA foreclosures they did between 2011-2015 and then…
  • “they” illegally morphed into HOA Lawyers Group, LLC (2016) but continued being SCA’s debt collector until replaced by Clarkson.

“They” are NOT necessarily the members of the Board, but “they” need to control the Board. “They”get their hands so far into our pockets only because the Board lets them do it. At least a majority of the Board has to negligently, maybe unwittingly, enable the attorney and management to take over the reins.

I believe the Directors are probably acting in good faith and trying to do their best, but are simply placing their faith in the wrong “experts”. However, even if the Directors are just innocently looking the other way, their ignorance is allowing SCA owners to be taken for an expensive ride.

So, what now?

Too bad for them.

“They”didn’t really get rid of me by unlawfully deeming my Board position vacant.

Now I have the time to tell you all about it. And I think I’ll start with what’s wrong with paying Sandy Seddon twice as much as we should be paying her.

 

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.

 

$50,000 for the removal election and still counting

Last June I did not think passing around recall petitions was a good idea. I thought it was a fool’s errand – disruptive and doomed to fail.

However, I am a strong, some say overly-aggressive, defender of owners’ rights. I just hate it when people with power abuse ANY owner’s rights, but especially if they use dirty tricks or create an uneven playing field and make the little guy pay the price. 

That’s what’s happening here now. The opponents of the removal election are making owners pay way more than we should, and they are trying to get us to blame the wrong people.

All the tens of thousands we will be paying for this removal election (above the less than $10,000 cost of an annual election) could have been avoided if the GM hadn’t blown me off by not even acknowledging my July 20 email:

Sandy Seddon didn’t answer me. Why should she? She knew that there was no one on the Board except me that cared one whit about maintaining the independence and neutrality of the Election Committee. Quite the opposite, she knew that she had the votes to approve anything she wanted to do make the removal election process difficult.

Who decided that these actions were in the best interest of owners?

Now, SCA owners are obligated to pay a bungling CPA firm $20,000 for the work done through September 30 no matter how poorly it was done. We will be on the hook for maybe triple that amount because their errors or omissions are significant enough that a second recall ballot may need to go out with Bob Burch’s name added to it.

Who made the decision to take away the Election Committee’s job?

Who decided that it was in the owners’ best interest to use an attorney and a CPA for the removal election when the attorney in five months is already billed $150,000 – FOUR times the $37,500 budget (In just September the attorney billed $43,873 and the CPA who replaced the volunteer Election Committee billed $20,000)?

Did I mention that there was:

  • no RFP for a CPA,
  • no approved CPA contract,
  • no Board approval to change the Election and Voting Manual,
  • no budget authorization for the CPA, and
  • the CPA has made so many mistakes that there might have to be a second removal ballot?

 

 

 

Defending the GM and her excessive compensation is a slippery slope

I have heard many SCA homeowners talk about the recall election and their main focus of concern seems to be the cost of removing Rex, Aletta, and Tom from office.

However, the real issue of this recall election should be the unnecessary costs these Directors have created, and insist homeowners continue to pay, rather than admit they are wrong. Their visceral hostility to my professional assessment of how to address excessive executive compensation is what got me excluded from meetings and decisions and is the real reason they kicked me off the board.

Refusal to utilize professional compensation standards for GM is unacceptable.

Excessive executive compensation may be justified in the eyes of the board members who approved it when the GM was hired in November, 2015, but they erred significantly in the compensation for the GM going forward which is easily $100,000/year too high.

The problem needs to be corrected by using expertise within our community, but instead, it was exacerbated by Rex appointing Tom Nissen and Bob Burch, a Board work group, and excluding me with threats of legal action regardless of my expertise. There are professional standards and practices governing compensation in the public and/or non-profit sectors that cannot be legitimately dismissed, but have been. Compensation for a job class is based on a number of factors normally determined by a classification and compensation survey of comparable agencies within the geographic job market conducted by trained and independent persons. SCA lacks a needed professional protocol for this.

 As delineated in our Articles of Incorporation, SCA was incorporated in 1998 as “a non-profit corporation organized under Chapter 82, Nevada Revised Statutes”. As such, the Board, contrary to what they believe, must operate under the good governance principles of a non-profit even though we are not a non-profit in the sense of a charity under IRC 501c3.

An easy-to-read article, WHAT IS “REASONABLE” COMPENSATION FOR A NON-PROFIT EXECUTIVE? describes one professional method for addressing GM compensation issues:
“Establish a Good Governance Framework
As a preliminary matter, non-profit Boards must establish good governance processes and procedures.  As suggested by the Treasury Department, good non-profit governance in the area of executive compensation starts with the following basic framework:

  1.  Set and follow established procedures for determining compensation;
  2.  Use responsible effort to determine appropriate or reasonable levels of executive compensation; and
  3.  Maintain appropriate oversight of executive compensation levels.

Owner complaints of GM compensation should not be treated as beneath the Board’s notice.

The hot-button GM compensation issues listed below involve major deviations from standard compensation principles. I wanted the Board to take back policy control and be accountable to the homeowners. The other Board members wanted to pay the GM whatever they decided without having to listen to me ‘bitch’ about it or to my insisting that they explain their rationale to owners.

  1. The GM was hired at $250,000 which was $100,000 more than Sun City Summerlin paid to hire their Executive Director in 2015, and both SCA and SCS recruitments occurred at about the same time.
  2. We also pay for $100,000 for a CAM Lori Martin (recently replaced), so in essence, we are paying two people $400,000 (including increases, bonuses and benefits) for the work that other HOAs pay a single person under $200,000 on contract to accomplish. I have found that other larger and more complex HOAs pay for a top executive to operate the HOA under their own CAM license.
  3. In addition, Rex and the rest of the Board Members, gave the GM a $20,000 bonus, six months after she took over duties from FSR, the management company. However, to date, Rex has not been able to give a good justification for the bonus. The Board has refused to publicly adopt any GM performance standards.
  4. They cannot explain why there was a need for a 10% increase in owner assessments when we were moving to self-management as a more cost-effective form of operations.
  5. They claim that the GM’s big compensation was justified by the saving she accomplished when taking over early from FSR (a savings which was not known or predicted when she was hired in 2015 at such an exorbitant salary.)
  6. Why didn’t the $30,000/month for nine months that was supposedly saved by her early transition show up in the bottom line in the 2016 audit?
  7. The GM hired a CFO at $190,000 + benefits to handle our comparatively small $10 million budget. This compensation is also way out of line with the proper pay for that job class, maybe as much as double what others pay in this market for comparable work.
  8. The same problem of compensation rates based on a total disconnect with the local market rates for comparable jobs occurred again with the Facilities Manager compensation at $154,000, again double what other Sun City HOAs are paying in our region.

The combined compensation of four executives unreasonably takes up about 10% of the operating budget. However, but before I could finish my analysis, they ordered me to cease & desist asking questions. After prohibiting me from researching this subject further, they illegally removed me from my position on the Board on completely unrelated, bogus charges.  This is the Board’s fatal step off the cliff, and SCA is still tumbling down the slippery slope of an unfair, overly-politicized system.

Transparency and accountability to owners is essential, but inadequate at SCA.

As fiduciaries, the Board should be much more transparent and accountable to the homeowners as they fund all employee salaries. Compensation practices in organizations that are funded by taxpayers, donors, or assessment payers are necessarily different than compensation practices permitted in the private for-profit sector. The extreme resistance to this notion of transparency, accountability and homeowner oversight of GM compensation and performance standards has been a major source of contention between me and the other Board members who are overly protective of the GM to the detriment of the effective governance of the association as a whole

Sound personnel and salary administration requires formal policies which should NOT be delegated to the GM without competent owner oversight.

Coming from for-profit and military backgrounds, the current Board members don’t see a problem operating without strict policy control of positions, classification, and compensation. Nor do they see that this oversight can be provided more effectively and consistently by owners with relevant professional skills BETTER than the function can be performed by the Board which may or may not have members with the proper expertise. They don’t see the problem they create by abdicating complete control over position control, performance expectations, and compensation, a third of the budget, to the GM without an adequate system of accountability.

Just as there is a Finance Committee, SCA should be a Personnel Committee which includes owners, and at least one Board member,  as required by NRS 82.206(3) to utilize the expertise of owners with backgrounds in HR, with an emphasis in the public and non-profit sectors, to oversee the development of personnel policies appropriate to a self-managed Sun City. I submitted a proposal for such a committee to the SCA Board at the January 26, 2017 Board meeting, but it was given zero consideration and, despite my request to have my written comments included in the Board Book, it’s as if it never happened.

Once the salary is set for the job classification, performance standards, and measurements must be publicly adopted to determine any bonus. Absent customer-service ratings and other performance measured against publicly-adopted standards, any compensation increase by the board is irresponsible.

Contrary to what I believe is in the best interests of the membership and my literal interpretation of NRS 116.31085, Rex has aggressively blocked the PUBLIC adoption of GM performance standards to a ludicrous level. He claims that the law does not require members to know what factors or measurements control GM compensation. Further, unit owners haven’t been informed how many of your assessment dollars have gone to the attorney to prevent me as a Director from seeing documents showing what performance expectations the Board had adopted in executive session (if any). In my view, this skewed interpretation of the law benefits no one except the GM, attorney, and Rex, the man who would be king.

 

Refusal to use my expertise to address owner concerns about GM compensation was only the beginning. SCA’s system of accountability has been seriously damaged by how the Board mis-handled the GM’s frivolous threats of litigation.

This dispute is the real impetus for my being unfairly kicked me off the Board. Rex has allowed the GM to use the attorney to block ANY audit of the GM’s compensation and performance by me as an individual Director. This politically-motivated act could only be  accomplished by paying the association attorney literally thousands of dollars to conceal SCA documents from me and bless violating SCA Bylaws 6.4c:

Bylaws 6.4 ( c) Inspection by Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of the Association and the physical properties owned or controlled by the Association. The right of inspection by a director includes the right to make a copy of relevant documents at the Association’s expense.

Concealing records and unequal treatment of independent Board members are two of SCA’s BIG unacceptable governance practices.

Whether the GM’s salary is correct or too high is not the critical issue. The huge problem is the kind of system that’s created when when the Board tolerates the GM throwing a hissy-fit because I did a salary verification with her former employer, and then claims I am not authorized to identify myself as an SCA Director or ask questions about GM compensation, and then orders SCA’s official records be sealed from my view. I was threatened with litigation, accused of violating my fiduciary duty, and many other humiliations, including shunning, for refusing to just shut-up.

In what world is it justifiable to treat a volunteer Director in such a horrific manner?

In what world is there any possible way I could have used GM compensation information to make a profit in unrelated quiet title litigation as they claimed?

SCA’s system of accountability and responsible governance has been seriously damaged by how the Board mis-handled the GM’s frivolous threats of litigation.

The GM’s actions, to prevent me from interfering with her gravy train, and to shut me up about demanding higher performance and responsiveness to homeowners to qualify for her high level of compensation were acts so egregious that, in my book, she should have been fired for her vindictive and retaliatory acts alone.