transition to self-management

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

Apparently, the sky is the limit

“The Board could pay the GM $1 million/year if they wanted.” – former SCA CAM Lori Martin (in response to my information requests in November 2016)

This shocking pronouncement shows what SCA owners have faced since SCA began employing all staff directly instead contracting with a management company to run day-to-day operations.

What are they thinking?

The Board is being severely ill-advised, and it is costing owners way more than is necessary. Worse, how executive compensation is set at SCA has failed to conform to professional standards, Nevada law, SCA governing documents, or even common sense.

More than Henderson City Manager

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

Apparently, SCA Board feels the SCA GM’s level of responsibility exceeds that of Henderson’s City Manager, but does it?

390,000 city population vs. 7,144 SCA units
1,933 F/T employees vs 46 F/T SCA employees
Operating budget of $244 million vs. SCA $8.5 mil

Click here for City of Henderson fact sheet

I don’t see any justification for it, and determining employee compensation was one of the things I used to do for a living.

How much is SCA’s GM being paid?

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

The January 2017 SCA table of employee salaries was provided to another unit owner, before Adam Clarkson, SCA’s legal counsel, began creating an unlawful veil of secrecy, asserting that the GM had some imaginary privacy rights which exceeded owners’ rights to know how our money is being spent.

The GM’s compensation was publicly known over a year and a half ago, and it’s just a waste of everybody’s time, money and energy to try to hide it now.

Sorry, Adam, it’s legally out in the open. You can’t pretend it’s confidential now. You simply can’t unring that bell.

When SCA got rid of the FSR management company, and the GM took over in April, 2016, the GM was paid $250,000.

By January 2017 the SCA GM was paid a base salary of $257,000 plus a $20,000 bonus.

Does the GM now get paid $22,000 more than Henderson’s City Manager?

Yes, and only, assuming that

her 2017 base pay of $257,000 stayed flat.
she was given no COLA (cost of living increase)
her 2017 bonus expired on 12/31/17
no bonus is being paid out for 2018
no performance increase from the 3% budgeted for employee performance increases

I don’t know what you think, but I think it is pretty unlikely ALL of those assumptions are true. So, her salary could closer to 20% higher than Henderson pays its manager.

Is her pay AT LEAST $42,000/year more than the city’s manager?

My guess is that she is being paid at least $277,000 because…

Inertia

It seems like the Board would let her carry her 2017 annual bonus forward into 2018. I think they would be reluctant to take $20,000 even though that is the way a pay system should work. So, the default position is “let it ride“.

The “Halo Effect”

I also imagine they probably carried her last year bonus forward despite all the myriad complaints against her because

they repeatedly and publicly chastising owners for signing a petition for a vote of no confidence against her and because of
their adamant refusal to address any of the petitioners’ criticisms on their merits and
they didn’t hold her accountable for the failing to meet her deadline on the restaurant or for mediating the FAS-CSG dispute or for failing to de-escalate the community divide

The cone of silence

It would be an egregious sleight of hand, contrary to professional standards, for the Board to authorize rolling a $20,000 bonus into her base pay, but there is ZERO evidence to show that the Board didn’t do just that, and then kept it a secret.

These actions are all a big no-no

A bonus is supposed to be earned every year. It is NEVER just moved into base pay without an EXPLICIT public action by the Board.

But there are worse scenarios

if the 2017 bonus were rolled into base pay, and then
a 2018 $20,000 bonus added on top of that,
ending up at a whopping $297,000 salary for 2018.

Even worse…

than paying $297,000 could be giving a 3% increase from the 2018 budgeted 3% pool for employee increases.

I’ll try to stop imagining the worst

I won’t even put that number ($297,000 + 3%) out in the universe because I don’t think it is possible that SCA Board would go that far off track.

And yet, follow the money

If they didn’t increase her pay in 2018, why would they spend so much money and political capital to hide what owners are paying her for what is little more than property management?

I also wonder how the GM and SCA attorney can honestly claim they are acting as fiduciaries, solely and exclusively, acting for the benefit of the SCA membership, when the GM uses the SCA attorney to threaten legal action against owners who exercise their legal rights to KNOW how much owners are paying employees.

If they had only known… Part 3

Owners pay a high price for Board ignorance

Basic ground rules the Board must learn by heart

Association exists to serve the owners.
Board exists to speak for the owners.
Board may hire agents to act on behalf of owners.
Association does not exist to serve the Board or management.
Owners pay even when the Board or SCA agents make mistakes.
Agents, including SCA employees, have no rights superior to owners’ rights.
Rules exist to protect owners.
Board must protect owners.
The Board needs to learn the rules and follow them.

How can NRED training help the Board do right?

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

The process determines the result

Poor process = poor results

Board failures of the “duty of care”

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

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

Board must learn the rules

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

Lessons the Board has yet to learn

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Restaurant RFP mistakes

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

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

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

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

Who cares about debt collection?

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

Remember, abdicating debt collection is:

a huge cost to owners
a violation of SCA bylaws 3.20 and 3.18(a)
foolish

The cost of collection exceeds the amount recovered.
HOA homeowners pay for the debt collectors’ fight with the banks.
The loss of property value to each and every home in a Nevada HOA is, according to the UNLV 2017 study commissioned by the Nevada Association of Realtors, is 1.7% per foreclosure for delinquent dues.

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.

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

How would you rate the dog lover‘s behavior on a criminal-to-excellent-neighbor scale?
How would you rate the neighbor’s behavior?
Should the neighbor have to pay the attorney fees?
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.

Criminal corruption – best practices continuum

The Issue

Sun City Anthem will only get to be #1 again if we have a Board and GM that are committed to – and capable of – being excellent, and who are not focused on evading detection and accountability for their sins.

The Board brought in an overpaid, autocratic GM who has created or exacerbated problems that are very upsetting to owners.

And the Board did not require that the excessively-compensated GM fix the problems. Instead, the Board brought in a thuggish bully for an attorney who serves as the GM’s hired gun. The GM has ONLY worked well with Board members and owners who support her, and made life miserable for those who don’t.

Bob Burch and Aletta Waterhouse not only allowed this unacceptable conduct to continue, and they are the explicit beneficiaries of it. They allowed the GM and attorney to interfere with the recall election process in order to unfairly prevent voters from booting them out of office.

Bob and Aletta must be removed from the Board because they have been major contributors to the failings of the transition to self-management. The GM is simply not as good as she should be for the money we are paying.

Here’s the bottom line

I am critical of the Board and the GM when they are willfully negligent and so resistant to instituting best practices that they veer, no, they careen, to the lower end of the spectrum into being bullies and thugs.

What are voters really deciding?

How have incumbents Bob Burch and Aletta Waterhouse contributed to making Sun City Anthem the best it can be?

Should Bob Burch be voted back in after he publicly berated 800+ petitioners for complaining that this GM is not good enough for SCA?
Should Bob and Aletta be voted back even though they unlawfully allowed the GM to spend over $84,000 for a CPA and $16,000 for the attorney to interfere with the recall election to protect them from owners voting them out?
Should Aletta Waterhouse be voted back in after she voted to evict the Foundation Assisting Seniors, voted in secret to kick me off the Board based on false charges without a trial because I questioned the GM’s value, and has allowed the GM to raise dues to pay bloated salaries and then punished owners who ask questions — just because Aletta insists these acts were not illegal?

Why should they be re-elected?

My point is Bob Burch and Aletta Waterhouse should not be re-elected simply because not everything they did during their first term was illegal.

They should be voted out because they refused to address owners’ complaints about the GM and have no system for keeping her vindictiveness in check.

They should be voted out because instead of fixing problems, they made them worse by letting the GM and the attorney make life miserable for anyone who stood up for the owners.

Not everything that’s wrong is also illegal

Just because you can, doesn’t mean you should.

This election is about raising our standards and about getting the bullies out.

The decision to be self-managed is not being questioned.
Everyone agrees SCA should have employees instead or contracting with a management company.

The decision to replace SCA’s former managing agent, FSR, is not the issue.
Everyone agrees that FSR needed to be replaced.

The decision to hire this GM at this rate of pay was the trigger.
Not everyone agrees that decision was right or done according to Hoyle.

It’s about the decision to let the GM rule SCA backed by a hired gun.
Close to no one agrees that is good.

SCA deserves better. Lord knows we’re paying for it

Self-management is right.
Implementation is wrong.

Mr. Fox, Esq., has been hired to watch the chickens.
The family dog has been left alone with the owners’ cake.

The problems with the implementation of self-management will continue unless the system is changed. Changing Board members won’t make the difference.

The system has to be changed to include owner oversight, checks and balances, and guarantees that owner protections are firmly in place.

Tom Nissen frequently describes the implementation of self-management as “setting up a whole new company”. In my view, that misunderstanding of SCA as an entity is a crucial part of the problem.

The things that are missing or are being done wrong (anything which is not done 100% for the benefit of the SCA homeowners is WRONG) are being done because the Board members erroneously think SCA should be set up like a company.

SCA is not a company.

It is a non-profit corporation incorporated under NRS chapter 82.
It is now an employer by virtue of becoming “self-managed”.
It is a mutual-benefit corporation that exists solely for the benefit of the owners.
It is fully funded by the owners.
It is a monopoly and membership is a requirement of ownership.

Why these distinctions are important to owners

Owners who own specified parcels of land (listed in SCA’s CC&Rs) must be in SCA. No owner can withdraw or pick a different competitor HOA. Every lot has the responsibility of paying an equal share of the cost of maintaining the common elements. When a lot is purchased, it carries with it deed restrictions which cannot be escaped. In exchange for agreeing to relinquish certain individual freedoms of choice as to how owners can use their lots and the common areas, the CC&Rs and state law guarantee certain protections for owners and prospective purchasers to prevent their being sanctioned unfairly, lied to, or treated differently from other owners.

It is the Board’s job to make sure ALL owners comply with the deed restrictions and that ALL owners are protected from unfair enforcement actions.

The Board creates problems when:

it doesn’t provide ALL owners equal protection from its actions or the actions of its agents;
when it sanctions an individual owner without providing guaranteed due process protections;
when it tries to enforce policies or restrictions against a unit owner that don’t exist or are not applied equally to other owners;
when it usurps the enforcement authority of the Nevada Commission for Common-Interest Communities by sanctioning a unit owner for an alleged violation of NRS 116.

What is the Board’s enforcement job?

It is the Board’s responsibility to ensure that ALL owners comply with the deed restrictions as listed in SCA governing documents, i.e., CC&Rs, bylaws, and any rules and regulations formally adopted by the Board. The Board can only perform this enforcement function if it does so by giving an accused owner the due process protections guaranteed by law, i.e., notice, a hearing, a chance to correct, etc.

Limits on the power of the Board to sanction an Owner

Here are the governing provisions of the law and SCA governing documents that are intended to ensure that the Board protects owners and does not ever allow an owner to be sanctioned without these guaranteed protections having been provided.

Click here for NRS 116.31031: Power of executive board to impose fines and other sanctions for violations of governing documents; limitations; procedural requirements
Click here for NRS 116.31085.…limitations on power of executive board to meet in executive session; procedure governing hearings on alleged violations; requirements concerning minutes of certain meetings.
Click here for SCA CC&Rs 7.4, Compliance and Enforcement on page 35.
Click here for SCA bylaws 3.26, Enforcement Procedures on page 20.
Click here for SCA bylaws 5.2, Deed Restriction Enforcement Committee on page 23.
Click here for SCA Board Resolution Establishing the Governing Documents Enforcement Policy and Process

There are more laws to protect owners, but you get the idea.

At SCA, the Board is supposed to serve as the appellate level when there is a charge that an owner has violated the governing documents. The Board is not supposed to initiate actions against owners directly.

First, the issue is handled by the Covenants (aka Deed Restrictions Enforcement) Committee that formally provides the first steps of the due process guaranteed to owners to protect them from being unfairly sanctioned for an alleged failure to comply with the CC&Rs.

If an owner is going to be sanctioned or fined for not following some rule after the Covenants Committee has investigated and heard the case, the owner can still appeal to the Board and can have an open hearing if requested. This system works great except when the Board of the GM decides to bypass it.

SCA governance must be the best fit to protect the owners’ interests, and under self-management, it is not.

SCA CC&Rs and bylaws are not optional. The Board can’t legally cherry-pick which rules to enforce or make up rules that apply only to certain people. Yet, “on the advice of counsel”, it does.

If the Board claims that taking away an owner’s rights was justified because it was done “on the advice of counsel”, it is wrong.

A wrong opinion by the association attorney does not excuse the Board of culpability. It just shows that the Board used owners’ money to pay a hired gun to mow an owner down.

Owner Oversight is essential, but lacking now

Rex Weddle’s chronic use of Board work groups is ill advised. It guarantees that the Board will not be as well-informed as it could be prior to making decisions affecting all SCA owners’ pocketbooks and lives.

It actually builds conflicts of interest into the system because it differentiates between individual directors access to information and authority. It does not use the best expertise that is freely available. It gives inappropriate power to the President to silence and punish political opponents. It sets does not permit the Board to be fully informed before making decisions. This causes unnecessary liability and risk to SCA and excessive cost to owners because appropriate executive controls are deficient or absent.

A committee structure is needed (NOT Board work groups) that utilizes resident expertise to prevent fraud, mistake and errors by management.

a.     Employment, organizational performance and compensation
b.     Communications and owner relations
c.     Records management and access to governance information
d.     Insurance, safety and risk management
e.     Legal Services
f.      Collections

Why didn’t SCA Board charter owner committees when self-managed Sun City Summerlin offers a successful model?

Apparently because the majority of the board thinks they know what’s best for owners without involving them. Rex Weddle thinks that as President he is the “decider” of who is “authorized” to work on a problem by appointing “Board work groups” and that directors with a different perspective can be excluded just on his say so.

I think differently.
Owners must speak for themselves.

I stand for owners’ rights.
That’s what got me kicked off the Board.
Not the load of crap they are shoveling about me making a profit.

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.