Category: GM

SCA Board officer selection orchestrated again

Officer elections over in a flash

  • No competition
  • No owner input
  • No surprise
  • No hope 

President            Bob Burch
Vice president   Rex Weddle
Secretary           Candace Karrow
Treasurer           Forrest Quinn

Why was last year’s officer election so bitter?

Simple answer. I committed the ultimate sin.

I volunteered to fix what I saw wasn’t working right in the transition to self-management. I told them the truth.

Unfortunately, changing the tone at the top means regime change.

OMG! Shut up!! You did not!

Yes, I did. Unlike this year’s newbies, I was totally unaware of SCA’s political realities. I never dreamed that volunteering to share my expertise would be treated as a capital offense.

How low will they go?

Frankly, I was surprised to see that Rex and his cronies would do anything – even break the law- to crush a political opponent.

And yet, here we are.

We have a full year of evidence that proves this point. This past year, we have seen VERY clearly many examples of how they have spared no expense (owners’ money, of course) to keep a death grip on the reins of power.

So, Dona Quixote, what did you say to tick them off?

I told them the incumbents were the bottom vote-getters so it was…

“a mandate to improve the effectiveness of the Board as a unified governing body“

That’s really bad.  What other evil did you spew?

I caused an uproar of outrageous indignation when I said that the vote showed an interest in changing the “tone at the top”

Yes, horrible as it was, I also said

the Board needed to be trained together to be guided by common, articulated goals.

You said what!!?

Actually, what I said is exactly what happened. The Board predictably devolved.

“…(absent proper training)…this Board will predictably devolve and return to a pattern of making backroom deals, abdicating its policy role to management, creating dissent in the community, and interfering with operational decisions which should legitimately be handled by staff.“

Examples of how my fears were realized.Obviously, you can’t be trusted to keep a secret.
Remember,

Snitches get stitches.

On the advice of counsel
Unbelievably, Adam Clarkson or his underling, John Aylor, said these things directly or helped the GM and her buddies on the Board do them.

  • the Board can act without voting
  • the GM has rights that exceed those of the membership
  • directors facing recall have more control over the recall election than directors who were not named in petitions because the attorney says so
  • it is okay for the GM to use the attorney however she likes, including to get rid of a director who is too nosy about her pay and protecting the directors who like her from getting recalled
  • owners must pay whatever the GM and the attorney sayYou are so arrogant and mean, and you lie.

Even if I were arrogant and mean, I am not lying. Everything I say, I will eagerly say under oath.You deserved to be kicked off because, obviously, you are making a profit from doing this.

Seriously. They said that.

No decent Board member should have to work with you.

Well, that hurts.

It shows how stunningly effective a marketing campaign to demonize me has been. It persuaded a lot of people to agree with both that unfair assessment of me and with the ridiculous claim that other directors are above me and special.

It’s really sad, but the smear tactics have been led by,
Guess who?
current and former members of the Board, with the full support of the GM and the attorney, and funded by guess-whose money.

I was forced to become a blogger to respond to GM-initiated defamation and threats of litigation.

And now, Rex put out another self-righteous editorial claiming that it is the bloggers that have destroyed our property values.

Exhausting.

Since Rex has aggressively blocked anyone having equal time to debate his self-serving prostelyzing on the Spirit, the website or at meetings or any other forum, the only way to get the other side of the story out is to blog.

Will Bob write patronizing, insulting President’s reports?

If his diatribes during director comment periods at Board meetings are any indication, he will invest a great deal of energy in verbally assaulting anyone who disagrees with him that tries to speak up.

But, I’m pretty sure the deal he made with Rex, our new Vice -President, was to be a version of co-Presidents so Rex can keep a grip of the reins.

By my best guess, as far as the written word goes, Rex will continue to treat the Spirit as his personal snide blog as he ghost writes the President’s reports next year for Bob.

Previously, Bob complained that he finds writing boring when, on May 1, 2017, immediately before I disturbed the peace of last year’s pre-determined officer election, he wrote

“I have no desire to be President. In my entire military and civilian careers, I have never found writing reports or articles in magazines very interesting. Therefore, writing monthly Spirit articles, monthly Board meeting recaps, etc., is not something I would look forward to doing.”

So, President this year,

Way to take one for the team, Bob.

Board meeting as self-serving bully pulpit

Lesson 1 from April 26 BOD meeting

“What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.”                                             -Mark Twain

Blame the bloggers

At least the first hour of the meeting was dedicated to blaming bloggers for all that is wrong, including the loss of SCA property values. It was a stunning example of how the Board marches lock-step against  owners rights and reflexively resists holding itself and the GM accountable for fixing problems of their own making.

Board beliefs vs. an alternative point of view

Tom Nissen listed his beliefs – all concerns shared by the Board – as his parting gift to the membership.

My beliefs offer another, albeit unwelcome, perspective, to show the way I think the Board and GM could better create value for owners.

Click here to link to the article about the UNLV study on HOA foreclosures referenced above.

Next time, I’ll share with you my planned request to correct the false and defamatory statements in the April SCA litigation reports. I didn’t speak up at the meeting because I was afraid I’d get lynched for complaining.

Making owners pay to fight owners knowing how our money is spent

A point for transparent Nevada

The R-J just won a victory for transparency when the District Attorney was required to release information about how much the DA’s office was compensating witnesses in criminal trials.

Public interest
Using taxpayer cash to fight the taxpayer
Click on photo to read full editorial

 

“To sum it up, the taxpayer-funded prosecutor’s office sought to conceal from taxpayers certain payments it made with taxpayer money – and then eventually cut a deal that will cost taxpayers $55,000 (in attorney fees).”

 

“Wouldn’t it have been easier – and cheaper – for those in the DA’s office to simply have made the information available in the first place? Instead, the default setting is always to retreat into the shadows and make liberal use of other people’s money to fight against open government.”

Sound familiar, Mr. Clarkson?

It should.  Sun City Anthem Board and GM are misusing the SCA attorney to hide their sins, and he is laughing all the way to the bank.

SCA’s leaders are wasting owners’ money to hide information which should be easily accessible to us at virtually no cost on the website.

SCA’s brand of mean-spirited opacity- hiding actions and expenditures from owners and making the owners pay the attorney fees for hiding what could even be unlawful or fraudulent – has more elements of sleaziness than I saw in the government’s efforts to avoid transparency.

SCA has gone beyond the practice of merely blocking freedom of information requests as described in the R-J editorial to being outright abusive to owners who just ask for information they have a legal right to receive and distribute as they wish.

For example, the claim on the new SCA Records Request Form that SCA records that might be requested, such as employee compensation, are “private and confidential records of the private entity that is the association” is simply false.

Those records can’t be confidential by Nevada law in Sun City Anthem and not confidential by that same Nevada law in Sun City Summerlin.

Threats of litigation?

I don’t see that the Public Employees Retirement System threatened the R-J with punitive sanctions for just submitting a Freedom of Information Request like our mean-spirited leaders are doing to SCA owners, threatening litigation for even asking for information the GM or individual Board members want to be publicly known.

GM’s “privacy rights” bigger than owners’ rights?

I also don’t see that the government officials ever claim that freedom of information requests violated some imaginary and legally-unsupported “personal privacy rights” as SCA’s attorney has done on behalf of the GM.

Only withhold records from certain parties?

I don’t see that the District Attorney claimed the requested information could be withheld from the R-J, but that it could be released to the R-J’s competitor? SCA has done this very thing repeatedly by providing information to OSCAR (recall opponents) that was withheld from others who were not in that camp.

Making up laws?

I also don’t see that the District Attorney just made up some bogus legal  requirement that the R-J acknowledge that the information can’t be used in ways the DA would consider harassment or even just embarrassing. The new SCA information request form contains multiple ridiculous “acknowledgements” which have no basis in law.

The SCA attorney is lying to owners about what owners’  rights are. Fines and other sanctions are threatened against  SCA owners for requesting and disseminating information, both of which are within fully within owners’ legal rights.

For example, the claim that SCA CC&R 3.6(h) and SCA Rules & Regs 9.4 would be violated and an owner subjected to penalties for violating any of the totally fabricated “duty, restriction and/or obligation provided herein” is a double whammy of threatening an owner for violating restrictions the attorney just made up out of thin air. 

Magically creating privilege?

I also don’t see any egregious claim by Clark County that documents, actions or conversations become privileged just because the secretive official wishes that they were legally protected from public view as the Clarkson Law Group, the GM and individual members of the Board ludicrously and repeatedly do to unlawfully attack owners for exercising our legal rights.

 Ask any Discovery Commissioner

The burden of proof that documents, conversations or actions are legally privileged falls squarely on the party who is seeking protection from disclosure.

Not the other way around.

Being accountable for being good neighbors

Is a criminal-to-excellence measuring scale hard to understand?

It seems to be hard for the people currently in power here to grasp.

But, the association (meaning the membership) faces a very high risk if the Board, GM, and attorney are not held accountable for being ethical and fair.

With so much a secret, who can be held to account?

I invite you to look again at my  blog, The Cautionary Tale of the City of Bell.

Although SCA is a non-profit corporation that privately delivers municipal services rather than a city per se, SCA has hallmarks that mirror the City of Bell’s textbook case of municipal corruption:

  • laws are bent to serve executive’s private interests
  • those in power act in concert for self-interest
  • excessive executive compensation
  • disenfranchising of unsophisticated and inattentive voters
  • election interference
  • lack of transparency

Mmm…how can I make this clearer?

I know. Let’s discuss a fun fact about bestiality.

Did you know that until AB 391 passed last year, and became effective October 1, 2017, it wasn’t against the law in Nevada to have sex with a dog?

It’s pretty weird that it wasn’t illegal until a few months ago, but, I think we can all agree that,

just because you could have, doesn’t mean you should have.

Let’s take this tale a step further.
What if…

…before Nevada’s anti-bestiality law passed, a neighbor was disturbed by the noise of a dog whining. When the neighbor realized what was happening, he complained around the neighborhood that such conduct should not be allowed.

The neighbor complained strenuously that it was cruel and abusive to the animal, and offensive to community values.

Instead of apologizing or showing any shame or remorse, the “dog lover” was rude and insulting to the neighbor, flaunting his “rights” and saying in an arrogant and condescending tone:

“Shut up. I can do to my dog whatever I want. I do not have to change my ways just because some whiner complains about having to witness how much I really love my dog. My attorney says the law is on my side. You have invaded my privacy and defamed me. I’ll tell everybody you are a horrible busybody, and they’ll hate you. I’m going to sue you, and you will have to pay all my attorney fees.”

Your Ethics 101 Exam Questions
  1. How would you rate the dog lover‘s behavior on a criminal-to-excellent-neighbor scale?
  2. How would you rate the neighbor’s behavior?
  3. Should the neighbor have to pay the attorney fees?
  4. How could this situation have been handled better?

Even if the selfish dog lover had not technically broken any Nevada law, I think we can all agree that he was wrong to abuse the dog, and that he made everything about the situation worse by unfairly stomping on the aghast neighbor.

The moral of this tale

What the Board, the GM, and the attorney did felt to me as exactly comparable to how the dog lover retaliated against his neighbor for complaining. They bullied me, shunned me, threatened me with litigation and liability for attorney fees for speaking up when I saw things that were just plain wrong – just like the dog lover treated his neighbor.

SCA leaders must be held to a higher standard.

You can help. Vote. Raise our standards.
Bob Burch and Aletta Waterhouse should not be re-elected just because they have not had sex with their dogs.

Telling lies, ruining lives

“As I understand it, Ms. Tobin was prevented from running for the Board not because she has opinions that are critical of the Board and SCA management, but ONLY because she is involved in litigation against SCA from which she might stand to gain a financial benefit.” -David Berman

Poppycock.

My unlawful removal from the Board was completely 100% done in retaliation for my complaints of harassment and retaliation.

I presented the issues formally to the Board, the attorney, the GM, and the former CAM and to blogger David Berman as statements of intent less than two weeks before they acted in concert, without cause, without authority and without due process to strip me of my legal rights and my Board seat and to disenfranchise the 2,001 voters who had put me in office.

While I was on the Board those interminable 116 days (5/1/17-8/24/17), the GM, the former CAM, the attorney, David Berman and 5 of the 7 directors acted in concert to marginalize me from day 1. (Art Lindberg should get a pass since he was the only one who asked the right questions. The attorney lied to him too., and the pressure to conform was very, very strong.)

They made my life miserable, shunning, lying, berating me, denigrating my contributions, making false accusations, publishing false and defamatory statements, and making it impossible for me to be an effective homeowner advocate as a member of the Board.

They only came up with the convoluted ruse that I had put matters before the Board from which I could make a profit because, even relying on Adam Clarkson’s tortured reading of the law, they couldn’t say they were getting rid of me because I was an outspoken pain in the ass.

Execution was a complete non sequitur

The 8/24/17 letter which constituted my walking papers, signed by Adam Clarkson, was the totally unlawful and unethical response to my notice of intent to file a Form 530 Intervention Affidavit alleging harassment and retaliation.

Before that letter came out of the blue, there were many disputes between me and five of the other Directors, the attorney, the GM and former CAM, most of which you will recognize. I was transparent and vocal as possible as I sounded the alarm on deferred attention to owners’ concerns.

It’s pretty obvious why I had to go

And it was not because I did, or even could, profit from being on the Board.
My profit = ZERO

Did I mention I never made a dime off SCA before, during or after my Board service?

How much did the attorney make for creating the ruse that I did?

Attorneys’ profit for 2017 = $300,000+

2017 legal fees for “Director Issues”  = $40,000
January 2018 legal fees = $38,000

but they won’t admit how much of that was to unlawfully block owners knowing how much the GM’s salary was bumped up in 2018

Deny. Deny. Deny.

Accept no responsibility for ANY problems.
Then attack your accuser.
And kill her.
Sample of the problems I publicly said needed correction
  • No restaurant -Failing to comply with the CC&Rs and good business practices about the restaurant space study, letting only a couple of directors work on it, refusing to use an independent expert, too cozy with one bidder
  • Owner oversight committees – Refusing to allow appropriate owner oversight in areas where going to self-managed and changing legal counsel and debt collectors caused a high level of risk – personnel, compensation, legal services, insurance, investments; getting rid of the Golf Course Liaison Committee, the Communications Committee, and decimating Property & Grounds, making the GM the Board liaison to Pinnacle and other groups
  • Board agendas – Refusing to put my items on the Board’s open or executive session agenda as required by law, by Board policy equal to other directors
  • Secret meetings -meeting in secret without giving me or other owners the rights guaranteed by law or confining executive sessions to the four permissible topics
  • Excessive executive compensation – Refusing to conform to the law for access to data, to evaluate according to professional standards, or to fairly consider evidence to rebut the appropriateness of those salary levels; giving Tom Nissen excessive authority in this area and blocking me totally from it despite our differences in expertise or the appropriateness of substituting the judgment of ANY one director for the judgment of the Board; spending thousands on using the attorney to hide what her actual compensation is from the owners.
  • No GM performance standards – Not holding the GM accountable for meeting measurable, publicly-adopted performance standards
  • No management agreement – Violating SCA bylaws and failing to protect SCA by having no management agreement or even any written terms & conditions of employment. Although the GM is an AT-WILL EMPLOYEE, allowing her to usurp additional privilege to the detriment of SCA.
  • Unfair complaint process – Going beyond NOT having a customer-service rating system to aggressively attacking the 800+ owners who signed petitions and refusing to answer any of their complaints on their merits
  • Evicting FAS – The process for evicting the Foundation Assisting Seniors was flawed. They ordered me out of executive sessions. They did not act in the best interests of the homeowners. The GM was not held accountable for the failure. Civil action without required owner vote.
  • Debt collection process – Failing to do proper due diligence on debt collectors; refusing to evaluate the expensive, inhumane cost of collection for a more ocst-effective solution
  • Ill-advised recusal demand – Overreaching demand for me to recuse myself on ANY collection matter because SCA’s attorney/debt collector alleges there might be an “appearance of a conflict” for me, however remote, while ignoring the current attorney/debt collector’s obvious actual financial conflict and the fact that the last debt collector filed for chapter 7 bankruptcy without telling SCA and continued doing foreclosures by morphing into another LLC.
  • Bullying -On at least three occasions in executive sessions, using bullying, shunning, intimidation, threats and other demeaning and belittling marginalization tactics to try to make me conform with nonexistent policies or legal requirements
  • Failure to investigate – When problems are brought up, they are dismissed out of hand without conducting, or allowing, investigation on the merits
  • Inaccurate official records -Causing, or allowing the official SCA records to be corrupted and/or error-prone ALWAYS against the interests of homeowners and usually to protect individual members of the Board or management
  • Concealing SCA records from me alone, i.e., giving me incomplete executive session Board books, refusing to respond to ANY records requests
  • Abdication – Allowing the GM to use the association attorney as her personal attorney in violation of NRS and SCA bylaws
  • Election interference – Allowing the Board president, the GM, the CAM, David Berman, and the association attorney to interfere with the recall election process and to UNLAWFULLY COST OWNERS $90,000 BY STRIPPING THE VOLUNTEER ELECTION COMMITTEE OF THEIR CHARTER DUTIES to pay a CPA to do the EC’s job poorly.
  • Undue influence allowed – As it served the interests of the Board majority and management, David Berman, spokesperson for OSCAR, was allowed to have greater access to recall election information than I received as a director; he was allowed undue level of influence over the Election Committee to cut me out in retaliation for my attempting to protect the rights of the petitioners, including falsely accusing me what he himself was guilty of;  misrepresenting himself as an attorney; falsely accusing me of releasing “personal director correspondence” further defaming me by creating the false impression that I had released a legally privileged documents (absolutely not!)
  • Sanctions without notice or due process -Having meetings to sanction me without notice and to enforce policies that don’t exist
  • Unlawful orders issued by the attorney against me, e.g., cease & desist from representing myself as a director, or asking questions that I was not “authorized” to ask particularly regarding personnel and GM compensation
  • GM’s frivolous litigation threats – Allowing the GM to threaten to sue SCA for damages and to threaten me with personal liability; refusing to indemnify me as a director; falsely claiming I had violated my fiduciary duty without any evidence, a hearing or a finding
  • Misinterpretation of “employer liability” – Allowing the attorney to represent the interests of the GM over those of the homeowners. Accusing me of violating my fiduciary duty because I criticized the GM’s performance and because I requested a salary verification from her prior employer.
  • Abdication to attorney acting in the GM’s or his own interest -Telling me that the attorney had the authority to declare that I, as one of the seven directors, could be excluded from the right to vote on, or even know about, matters under the Board’s decision-making authority, unless he approved it (which in most cases, he has never approved to this day).
  • Abuse of privilege -Allowing the attorney to declare ANYTHING to be “attorney-client privileged” regardless of the lack of its meeting the legal definition of privilege in NRS 49 or NRS 116.31085.
  • Falsification of litigation reports -Allowing the attorneys to publish false statements in the litigation reports to increase the appearance of a conflict or to defame me and refusing to correct after evidence was provided.

It’s pretty obvious why I had to go

SCA Board election choices are narrowed by design

My granddaughter is six now, but a while ago, she loved knock-knock jokes. Her favorite one was apropos of the SCA Board race.

  • Knock-knock.
  • Who’s there?
  • Broken pencil.
  • Broken pencil who?
  • Never mind. It’s pointless.

And yet, here I am. In Hawaii, but still knocking my head against the wall, trying to keep the SCA Board composition from being so blatantly manipulated.

I know no one will listen. I know that the sides have already been chosen. Lines have been drawn in the sand. Positions are entrenched.

It’s pointless. But I am still just OCD enough to need to put these points on the record – where they are out of reach of those who are distorting or concealing the official record for their own purposes.

Board candidates are disappeared

  • What happened to the two that applied but whose names were not released, but were just gone at the same time I was declared ineligible?
  • Why did Vickie Lisotto drop out?
  • Why didn’t more people apply who have voiced concerns about how self-management is being implemented without owners’ coming first?

Why won’t owners run for the Board:
Fear of facing a recall petition?

Apparently not.

Candidates Bob Burch and Aletta Waterhouse were themselves both subjects of the petitions signed by over 800 owners to remove them from the Board, but they decided to run again for another two-year term.

Amazing that over 800 owners signed petitions over a few Summer weeks to call for an election to remove Aletta Waterhouse and Bob Burch from the Board, but that did not deter them from running again.

Even more amazing. They were seemingly so untouched by the list of grievances in the petitions that they did not even deem those 800 owners’ complaints were worthy of being investigated or, if verified, addressed on their merits.

Not so amazing since they were completely secure in the fully-funded support of the GM and the attorney, they did not see any irony in how six directors voted in secret to remove me from my Board seat when ZERO owners signed a petition to call for my removal.

Did owners decide not to run because they saw what happened to a director that spoke her own mind?

From my perspective, the answer is obvious.

All the stops will be pulled out to protect a director who has closed ranks to march lockstep with the other Stepford directors to parrot the party line.

Step out of line, and you will be threatened. Privately berated and shunned. Publicly humiliated. Then you will be disappeared. No amount of owners’ money is too much to spend to force compliance to the party line. No rule of law. Total hard ball.

Would anyone bet a homeowner advocate could be effective on the SCA Board?

It is not a safe bet.

Not when six of the seven directors apparently can just secretly vote a dissident voice off the island. No trial. No finding. No process. No owner vote. Just goodbye. Can’t run again. Disappeared.

Not when Sun City Anthem has a blogger in Hedda Hopper’s McCarthy-era role to maintain a Black List.

…(to) actively oppose the election of any candidate who was tied to, or supported, the removal campaign.

Ask yourself…who’s spending owners’ money to control who sits on the Board?

Would Sandy Seddon have sicced attorney Adam Clarkson on a director who supported her getting paid double the market and wasn’t questioning her paying the CFO and Facilities Manager salaries that were also double the market rate?

Would President Rex Weddle have turned a blind eye to the GM using the attorney to authorize the expenditure of $90,000 to ensure that the recall election would fail and $40,000 – a combined $130,000 — to ensure that my removal by secret vote would succeed if our positions had been reversed?

Would he had let a dime of owners’ money be spent on the recall election if I, and not he, had been the subject of a recall petition?

How much would he have authorized expending of owners’ money  to pay the attorney to remove him if it were he, and not I, being falsely accused of making a profit from sitting on the Board?

Would attorney Adam Clarkson have assisted the GM to make a bogus threat of litigation against SCA, and a director individually, if they weren’t trying to silence that director who was questioning the legitimacy of both their actions while requesting information needed to make fully informed decisions?

Wouldn’t attorney Adam Clarkson also have profited from disappearing a demanding director to escape accounting for SCA owners’ being forced to expend

  • $300,000+ in 2017 legal fees, triple the budget
  • $38,000 in January 2018 legal fees alone to block 2018 changes to GM compensation
  • $90,000 to conduct the removal election which was solely caused by his and the GM’s decision to disempower the volunteer Election Committee?

 

 

I’m sorry. We weren’t so lucky after all.

I have to take back what I said about the restaurant. I can’t recommend any one of the three bidders.

The process being used was so flawed that it virtually guarantees the same failures as SCA earned in the past.

To use an SNL metaphor, trusting the GM to get this right is like trusting Stevie Wonder to do my grandson’s bris.

Doing the wrong job really well so the right job can’t be done right

There’s no point in even giving you a summary of Tom Nissen’s and Forrest Quinn’s reports – even though they tried really, really hard, and they did a lot of fine work. It was just the wrong job, and doing it that way hijacked their job as Board members.

And worse, by them doing the wrong job, it makes it impossible for the Board as a whole to do its job right.

Remind me, what is the Board’s job?

The Board, working as a unit, sets policy, gives direction and defines financial limits and rules to control the GM. The GM then must design and manage the process for getting done what the Board, as a single entity, told her to do.

The Board must hold the GM accountable to get the job done right, not let her pick a few Board members to do her work or let her keep secret what she’s doing.

That’s why she gets the big, big, big bucks. To my way of thinking, she has a long way to go to prove that she’s worth it to the owners she is here to serve.

The Board must hold the GM accountable for building community consensus before she acts –  even though, as she often complains,

It’s really, really hard. After all, at the end of the day, some owners are just whiners.

The Board should have required the GM to do the job right by:

using a volunteer owner-oversight committee to guide a fair and open process and monitor her use of appropriate experts and/or neutral brokers.

(I know. I’ve been warned that I better be careful talking bad about La Principessa. Last time I criticized her performance on the restaurant, I got a cease & desist letter from her attorney, I mean from SCA’s, attorney that probably cost owner’s a couple grand.)

It makes me so sad I want a drink, and there’s no bar.

Really, it breaks my heart. I still really want a restaurant. Well, actually, I mostly want a great big, long bar with a great, long happy hour, but there are just way, way too many things wrong with the process to even consider proceeding to choose a vendor from this highly selective RFP.

There was too much done without the right people being involved and too much info given to the wrong people. Two Board members were doing the wrong job so they couldn’t do the right one. The GM wasn’t doing her job right.

The workshop really hyper-accentuated what has got to change around here. (I’m sorry. I really hope you don’t have to pay for Clarkson to write me another letter.)

Learn not to swallow poison pills

On the bright side, this is a very valuable lesson. The fatal flaws in this restaurant selection process are the same leadership failures and systemic deficiencies that will doom the viability of self-management, if we let it. But having identified the poison pills, we just need to pay attention. We don’t have to swallow them any more. And, if we do, as SCA’s attorney advises, it’ll be our own fault.

What do poison pills look like?

  • Confusion and blurred lines between the Board and GM roles
  • Board as a single entity not providing adequate direction and limits to GM
  • Board’s failure to hold GM accountable for developing processes to achieve cost-effective results
  • Using 2-member Board work groups or attorneys to propose policy or to do the GM’s job
  • Lack of transparency where it counts
  • Incentives that reward the wrong behavior
  • Relying on the wrong experts, e.g., attorneys everywhere and experts with the requisite skills nowhere
  • Board allowing the GM to block functional owner oversight through refusing to have a committee structure appropriate to self-management
  • Board President’s abuse of authority and attorney to make sure Board members are compliant or are disappeared
  • Cultural pattern of “In-groups” and “Out-groups”

 

Rating Rex’s Self-Management Report Card

Demonstrating all the transparency and humility we have come to expect from our supreme leader, Rex Weddle once again used SCA’s official house organ, the Spirit, to stroke the ego of the Board and GM by giving a glowing Self-management Report  Card. Although Rex didn’t give any letter grades, let’s fact-check his assertions of outstanding performance, and I’ll offer the letter grade I think is warranted:

SCA made the right decision to be self managed.

True. The former Boards’ grade should be a B for taking action based on specific plans and goals to correct deficiencies.
The current Board should get an F for failing to follow through on good work done by prior Boards.

SCA’s management company FSR needed to be replaced, but for more reasons than either Board acknowledges. FSR was double dealing by being both the managing agent and the debt collector following the collapse of the real estate market.

Even with a solid management agreement, previous Boards did not keep FSR from grabbing profits from abusive collection practices. Prior Boards were unaware of the negative impact these abuses had on owners’ property values. Their attention was overly focused on deterioration of property values caused by excessive deferred maintenance of the common areas.

The current Board has also over-emphasized catching up on deferred maintenance, and has not held itself or the GM accountable for other critical areas (customer service, owner relations, transparent communications, fair and open culture, strategic planning, protection of individual property values, and maintenance of high quality amenities and other lifestyle options). Ultimately, this Board has a failing grade because their lack of accountability to owners is supported by paying an attorney to say that the rules don’t apply to them.

According to Rex, a Human Resources model was included as part of the transition.

False. This Board scores an unequivocal F.

Adequate human resource systems are not in place needed to protect SCA from “employer liability”. It is a disgrace that since 2015, the GM has not presented ANY plans or timetables for developing these internal controls or for incorporating essential expert owner oversight. The most important feature of transitioning to self-management is that SCA is now an employer. This failure has already resulted in:

  • excessive management compensation (the GM gets $100,000+ more than the market requires and three other managers annually take in more than a quarter million dollars more than SCA should be paying);
  • lack of performance standards (GM bonuses provided without justification despite massive owner dissatisfaction with her performance);
  • lack of contractual service level expectations (they remain undefined and unmeasured);
  • lack of written terms and conditions controlling GM employment (no management agreement makes her an “at-will employee” who is subject to the SCA Personnel Handbook. Unfortunately for SCA owners, SCA’s attorney has fabricated imaginary“rights” for her that she has asserted against SCA in threats of frivolous litigation and that allow her to act like a “super Board member” rather than as staff).

No 2018 assessment increase.

True, but the grade is still D.

Assessments were increased without clear justification in 2017, and those excess funds have been repeatedly used as validation of the quality of self-management. But, many questions remain unanswered:

  • Why were rates increased in 2017 if $300,000 in budgeted transition costs were saved by reducing the 9 of the 12-month budgeted overlap of the GM and FSR?
  • Why was a 12-month overlap of the GM and FSR budgeted anyway?
  • Why was the entire 2017 rate increase transferred to reserves? If the assessment increase was intended to reserve for walls & fences, what happened to the construction defects settlement for the walls if there was no remediation of the defects?
  • Was the 2017 increase intended to bring up the reserves funding level? If so, that has nothing to do with the difference in operating costs between using a management company and being self managed.
  • Was it for the Liberty Center? If so, why was it not a one-time assessment?

Whatever the reason the 2017 assessments were increased by over 10%, it can’t be ignored while the Board congratulates itself and the GM for not having another assessment increase in 2018.

Per Rex, Tom Nissen’s December Board report comparing SCA to other self-managed HOAs, shows the transition is going well.

False. The grade is D.

Tom should be given credit for researching other HOAs, but should be given no credit for answering the wrong question and deserves no credit for  timeliness and no credit for owner participation.

Tom’s report simply reaffirms that going to self-management was the correct thing to do. It might also support the idea that it was good that the Board adopted a policy to increase the reserves by increasing assessments in 2017. Regardless, neither of these have anything to do with whether the Board and the GM are doing a good job in the transition to self-management.

Showing that SCA’s assessments are relatively low says nothing about cost-effectiveness or about any differences between using a management agent and being self managed. Further, comparing assessments with other HOAs is not really informative unless you eliminate all gated communities from the comparison.

“The Board has made it clear that the complete transition would take a minimum of three years. There is still much to do and more culture change to undergo.” -Rex

True, and yet, the grade is still a big, fat F.

If there is another 1 ½ years to complete the transition, what specifically is planned?

  • Why are there no written plans and timetables?
  • Why is there no transparency and no standards for GM accountability?
  • Why is this Board resisting the necessary culture change by treating owners who are even mildly critical of the Board or GM with such disdain?
  • Why has the Board strenuously rejected developing the committee structure needed to provide expert owner oversight over HR, legal services, insurance and other amenities that has been successful in other self-managed HOAs?
  • What steps has the Board or GM taken to change SCA’s culture to be more inclusive, fair and transparent?
  • What steps has the Board taken to ensure that SCA owners won’t be taken advantage of by unscrupulous agents?

The transition to self-management is very successful in handling deferred maintenance.

True. The grade could be an A, but since there is no transparency, no way of measuring cost effectiveness, and no standard for defining priorities, I can’t be that generous. But remember, no matter how well this portion of property management is done, the grade for it should count only as about 25% of an overall grade for a successful transition to self management, not be given the nearly 100% weight the Board has given it. 

What kind of HOA do we want SCA to be?

And what owners can do to make it that way

Taking a cue from Jim Mayfield’s article “Distinctions between Governance and Management” re-published below, here are a few action items.
In italics: how I see things are currently being done around here.

  1. Encourage owners to run for the Board who are willing to contribute to creating more transparent, competent and accountable governance, or volunteer to serve yourself.
    There is a battle for control of the Board between those who want a fair and open system created that’s good for all owners vs. those in power who want to keep centralized control by excluding anyone who has complained about this GM or who signed a recall petition. 
  2. Utilize the expertise of residents on a Personnel Committee to protect SCA against employer liability, to propose GM performance standards using customer ratings and  objective measures to prevent excessive executive compensation.
    These functions currently are done, if at all, by 1-2 Board members who don’t have the requisite skills, and the Board and GM have acted unlawfully to block necessary owner oversight.
  3. Require the GM to utilize an inclusive process and resident expertise to recommend goals and strategic plans to bring SCA back to be #1 Active Adult Community in USA.
    SCA had this #1 rating in 2011, but has slipped, and we currently have no adopted goals or shared vision about how to get SCA back on top.  Instead, the Board abdicates to a GM who has not evidenced any strategic approach to lessening owner dissatisfactions or community divisions.
  4. Demand that governance be completely transparent to owners.
    Right now, the Board pays lip service to improving owner communications, but allows the GM to use the attorney to conceal SCA records for reasons other than serving the best interests of the association. This secrecy allows SCA owners to be put at risk of being bilked by SCA agents, and it inhibits the SCA Board from being held fully accountable for its duty of care to owners.
  5. Get control of the budget out of the hands of the GM. Although the law prohibits the Board from delegating policy decisions about the budget and prohibits the GM from expending funds for unbudgeted purposes, the blurring of the lines of authority regularly occurs, and owners just have to pay the bill.
Former Director thinks SCA Board chose wrong path
Jim Mayfield served six years as an independent voice on the SCA Board. His experience with fractured governance in the last couple of years had some interesting parallels to what I  suffered during my short tenure:
  • President, GM, and attorney exerting excessive self-interested power;
  • Board rejecting any owner oversight and
  • punishing owners or individual Board members who complained.

Jim’s comments in his article, published in the November issue of the Community Association Institute magazine is re-published here with his permission.   – Nona

“Two and a half years ago, the Board was offered a clear choice between two forms of governance.
One form was the legal model embedded in NRS 116 and approved by CAI.  This form is based upon a model in which all elected Board members are considered equals and participate in a transparent, collaborative relationship, and the President (CEO) is directed by the Board and speaks only for the Board.  It also establishes the major responsibility is to protect homeowner rights and to establish processes for oversight of management.  This is the model described in the above article that was published in November.
The second form is a dictatorship that empowers the President (CEO) to exercise dictatorial powers, makes decisions, imposes his/her decisions on the Board (the Board reports to the President).  This model sees its primary responsibility to represent and protect management from the homeowners.  The model also expands the ability of the President, Board, and GM to operate in secret meetings and to empower its attorneys to use legal process to accomplish its objectives and those of the GM.
SCA is now reaping the fruits of this decision.  I hope all persons thinking about running for the Board in 2018 will read the article and commit to the principles outline therein.” -Jim Mayfield (see Page 10 in link below.)

Is SCA Board retaining lawful control of the budget?

Just saying that the Board acted “on the advice of counsel” doesn’t cut it

If the Board learned and followed these simple legal requirements, the GM and the attorney would be prevented from taking control of our budget and spending our money for something other than our benefit:

NRS 116.31151 (1)(a) requires the Board to prepare and distribute to owners a “budget for the daily operations of the association” which per CC&Rs 8.1(d) is deemed ratified “Unless 90% of all Owners reject the budget…”
The budget is distributed as required and is always ratified. No surprise. Hard to imagine 90% of all owners being mobilized to object to any budget the Board puts forward, but at least everybody knows what expenditures the Board has approved. 

NRS 116A.620 (1)(i) requires any management agreement to define spending limits for the GM.
Here’s the start of the slippery slope toward abdication. SCA Board and GM did not execute a management agreement nor have spending limits for the GM been defined. Pretty easy to rob Peter to pay Paul and then blame Peter for the missing money.

Per SCA bylaws 3.20, the SCA Board is prohibited from delegating policy control over the budget or, for that matter, deciding the amount of assessments, or deciding who can open bank accounts or sign checks or enforce the governing documents.
Here’s where SCA is really careening down that slippery slope. SCA is unprotected by not the Board not defining GM spending limits or service-level expectations in the legally-mandated terms of a management agreement.
Of course, without an agreement, the GM is not legally protected either. She is just an “at-will” employee, meaning she can be fired for any reason or no reason, just not a discriminatory reason. Her terms & conditions of employment are defined in the SCA Personnel Handbook and nowhere else.
But, don’t feel sorry for her. Not only does the Board coddle her, the SCA attorney has magically , albeit unethically, created “rights” for the GM that do not exist in black letter law and which are in direct conflict to the interests of the membership.

SCA bylaws 4.6 requires two Board members must sign all checks for any amount, and bylaws 3.25 requires that directors act on an informed basis while carrying out this duty, i.e., sign a check only if it is for something that has been approved in the budget.
Two Board members do sign all checks, but they may as well let the GM use a rubber stamp.

SCA Board Policy Manual 4.10 limits authority to request legal opinions to the Board as a whole or, in narrowly defined circumstances, to the President for the purpose of “…assessing the legal risks on actions under consideration…”. This provision specifically limits the GM’s authority to “…contact legal counsel regarding NRS 116 or other compliance issues…” not to act only “on the advice of counsel”. The SCA-Clarkson Law Group legal services agreement ONLY allows the attorney to provide legal opinions in response to specific Board requests. The attorney has NO decision-making authority over SCA policies.
Previous Boards had enough common sense to govern SCA without having to spend four times the budget to get the attorney to bless every action before it’s taken.
But then, Clarkson is a bully who has, using tactics bordering on elder abuse, and in clear violation of his professional standards of conduct, convinced the Board that it is a violation of their fiduciary duty to act without consulting him even in areas outside his firm’s practice specialty.
As a result, the President and the GM blithely use the attorney far in excess of what is legally permissible for self-serving purposes and in defiance of all common sense.

In conclusion…

The GM’s takeover of the SCA budget is happening on a grand scale because the attorney has blessed it (thereby being unjustly enriched), and the Board (who thereby gets to stay in power) self-righteously allows such foolishness as:

  • Spending an unbudgeted $85,000 for a CPA to do the Election Committee’s normal job to mess up the recall election was allowed by the GM solely “upon the advice of counsel”, but absent the inconvenience of legal Board action.
  • Six months spending for legal services was approved in the budget to cap at $45,000, but four times that amount, $185,000, was spent by the GM without any formal Board action to approve it and without conforming to the laws governing civil actions (NRS 116.31088), or sanctions for violations of governing documents (NRS 116.31085, CC&Rs 7.4) or limits on authority of the Board (NRS 116.3103, NRS 116.31036, NRS 116.31084) or owners rights (NRS 116.1104, NRS 116.31083, NRS 116.31175), or good faith  (NRS 116.1113, NRS 116.1112), and prohibition against harassment and retaliation (NRS 116.31183, NRS 116.31184).

I’m as amazed as you are at their gall.

Who benefits from spending SCA homeowners’ money?

Assessments levied against the unit owners’ property can only be used for the sole and exclusive benefit of the membership of the Association, e.g., maintenance of the common areas, actions to protect the property values of all our homes, preserving amenities and high quality lifestyle.

It is not ever acceptable for the Board, the GM or the attorney to put their personal, financial or political interests ahead of the interests of owners AKA “the common good“.

Therefore, allowing SCA management or agents to spend owners’ money for highly controversial and unbudgeted purposes that provide no benefit to SCA membership should not be tolerated.

Board decisions must always be evaluated against the standard of “Who benefits by it?”
If the answer is anybody or anything other than “the common good“, don’t do it.

Here are some examples where no benefit accrued to “the common good“, but they did it anyway.

  • The SCA membership lost when the Board vindictively evicted the Foundation Assisting Seniors after the GM failed to mediate a mutually-acceptable solution to CSG’s problems, blamed the Foundation President, and made up a silly story to justify forcing members to pay more after damaging a valued community resource.
  • Paying $85,000 for a CPA to conduct the recall election in a manner designed to keep the current Board majority from being recalled for cause provided no benefit to the association. It was more than a waste of owners’ money to keep those Board members in power. It allowed the attorney and the GM to keep their over-compensated jobs, too.
  • Paying untold thousands of dollars to make repeated threats of frivolous litigation of defamation against a Board member and unlawful orders for her to  cease & desist making inquiries regarding GM compensation clearly wasted owners’ money. It’s easy to see how using the attorney this way was protecting the GM and her fat paycheck. But, it’s impossible to see how such extreme action was protecting the association.
  • There is no benefit to the association for the Board to unlawfully remove an elected Board member on the false charge that she is making a profit from her Board position. It is simply a power trip and a nasty way of showing 2,000 voters that their votes don’t matter.