Election Recommendations

 

Election Recommendations
The SCA View Newsletter by Ron Johnson

Vote for Coleman, Karrow, Lee and Wigen

It’s that time of year again and your vote is needed to determine who will best represent the interests of our community. On the heels of the results of a very divisive recall petition, where a substantial number of members voted to throw Bob Burch and Aletta Waterhouse off of the board, your vote is more important than ever. While that petition failed to meet the very high threshold needed for a director’s removal from the board, this election campaign has provided voters with another opportunity to demonstrate their concern.

It’s my position that the community would be far better served by electing three new members to the board rather than returning any of the old directors who had been previously elected. Let’s say goodbye to Bob Burch and Aleta Waterhouse and vote for JAMES COLEMAN, CANDACE KARROW, GARY LEE AND CLIFF WIGEN. Director James Coleman was not elected but was appointed to the board last year.

My concerns about Burch and Waterhouse stem from the board’s questionable and potentially illegal actions in approving if not directing management to adopt certain accounting gimmicks. Those accounting gimmicks have resulted in the deferral of almost a million dollars annually in scheduled repairs to the following year(s).

Such unreported deferrals amount to self-serving efforts by the board to avoid increasing assessments, thereby helping those directors who are running for reelection.

While one prominent blogger has been eager to pass along management’s assessment that the Association’s finances are in “excellent” shape, that assessment is grossly misleading. That assessment failed to reflect what’s been really going on behind the scenes in what I view as an unorthodox effort to provide millions of dollars over time for unanticipated and unfunded repair projects at Liberty and Anthem Centers.

One method management adopted was to defer almost a million dollars in previously scheduled repairs from one year to the next year. Such deferrals have a cumulative effect on subsequent scheduled repairs in the following years, which is exacerbated when there are recurring unplanned events in the following years, like the Anthem Locker Rooms, forcing management to annually push scheduled repairs forward year after year. As reserve funds are expended for such unplanned repairs, the reserve fund keeps going down by that amount. At some unknown future date, that reserve deficit will have to be replenished.

Meanwhile, the board will continue to rely on members not paying close attention to what’s going on behind the scenes in the accounting room as your money get “created” and spent for unbudgeted purposes.

 

 

 

 

 

 

Restaurant Rumors
Did the board or management influence G2G (Denny’s) to drop gaming in order to assure their likely selection as a tenant?

Club Rumors
Some residents are looking forward to the possible creation of the NEW YORK CLUB.

Administrative matters
My new Email address is: rljohnson32@coxÆnet
My new phone number is: 702-413-6026

Copyright © 2018 The SCA View-Journal, Inc., All rights reserved. The SCA View Newsletter

Published by Ron Johnson, Email: rljohnson32@coxÆnet, Phone: (702) 413-6026

 

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.

How to make your vote REALLY count!

You must vote.

No matter how disenfranchised you feel.

This envelope will be in your mailbox today or Monday.
No problem recognizing your ballot this time.

Do you want to drain the swamp?

Well, your vote will ONLY help clean up this place  if you

DO NOT vote for Aletta Waterhouse or Bob Burch, the two tone-deaf incumbents,

who wiggled out of the recall by allowing the GM to use our money

  • to pay $85,000 to a CPA to takeover the job of the volunteer election committee, and
  • to use the association attorney at $300,000++ in 2017 for reasons unknown, including LOTS of $$$ to screw over owners who weren’t in her corner and  $15,000+ to make sure your vote didn’t count in the removal election process

Vote like this.

Ironic signs have been posted.

(I don’t have time right now to expand on the irony. My grandson’s here for the holiday, and we’re going to see a different magic show tonight.)

 

 

 

 

 

 

 

Happy Easter! Time for renewal and rebirth!

HOA collection practices cost us all more than you think

What makes our property values go down?

There has been a lot of concern expressed about how having – or not having – a restaurant lowers property values.

There have also been concerns expressed that owners calling for a removal election or complaining about how they were being treated would make this community unattractive to purchasers.

I think those issues, as serious as they are, pale in comparison to the impact HOA collection practices, including SCA’s, have had in suppressing the property values in HOAs statewide.

The Reno Gazette-Journal reported last July that an  academic study provides evidence for this claim.

Click here for the  7/7/17 Reno Gazette-Journal news article that ran under the headline:

HOA foreclosures tied to more than $1B in lost Reno, Vegas home values

In my blog The house that took over a life“, I wrote about how my late fiance Bruce’s house was snatched by SCA’s former agents and sold for pennies on the dollar.

You might have felt bad for me, but you probably didn’t think that foreclosure, and the other foreclosures that have occurred, lowered your property value as well.

The recent study by UNLV LIED Institute for Real Estate and Nevada Association of Realtors claims it did.

In fact, the study supports the claim that the entire system is flawed, and ALL homeowners pay a price every time their HOA’s debt collector kicks an owner out of their home and then (on the owners’ dime) tries to beat the bank out of their security interest in court.

Survey says:
Homeowners are not happy with HOAs

Part of the research included surveys of Clark and Washoe County residents that I’ll report in another blog, but generally, those surveyed were not pleased with HOAs.

In particular, those academics’ research (Click here for executive summary of report) showed that many Nevada residents (81%) are unhappy with HOAs’ having “super-priority” status to foreclose for delinquent assessments because it hurts them (all the other owners in the HOAs).

One of the study’s conclusions:

“The LIED Institute found that every HOA foreclosure reduces the sale price of every property in the HOA by 1.7%. Thus, LIED inferred that every property, even the ones that have not sold, has suffered this same value reduction. “

           –Analysis of HOA foreclosures in Clark and Washoe counties from 1/1/13-6/30/16 

At least $1 Billion Loss in Clark & Washoe Counties alone

What happened to my late fiance’s house as well as my analysis of public records of multiple foreclosed properties has led me to conclude that this finding,

…every HOA foreclosure reduces the sale price of every property in the HOA by 1.7%“,

underestimates the impact on ALL homeowners’ property values by a large margin.

But, I’ll share that analysis with you in another blog.

We ALL pay

Those personally victimized by unfair HOA foreclosures are not the only ones damaged financially by them. My detailed review of the study shows there were even more significant financial impacts on ALL HOA homeowners statewide, and from more causes, than those identified in the UNLV/NAR study.

Why do HOA foreclosures lower property values?

The study identifies a few major reasons why HOA foreclosures bring down the values of ALL properties in the HOAs:

  1. Depressed sales price – Properties are sold at HOA sales for a  small fraction of the property’s fair market value (FMV). Since the buyer pays pennies on the dollar of what it is worth, ALL community property values go down.
    Study says: Every home in an HOA loses 1.7% when the HOA forecloses.
  2. Banks charge more for loans in HOAs to cover the risk of loss if the HOA forecloses. HOAs’ super-priority extinguishes the bank’s security interest (mortgage) and the study estimated how much banks have lost after  the banks’ loans were cancelled.
    Study says: Banks lose 100% of the loan balance on every property sold at an HOA sale, and Federal and Nevada courts disagree about how to handle this.
  3. Corruption within HOAs, particularly when management agents have a financial connection with the debt collection agent as was happening at SCA until 2015 when FSR, our managing agent, was financially intertwined with, and was the license-holder for SCA debt collector, Red Rock Financial Services
    Study says:

“…80% of respondents would support a law prohibiting HOA management companies from also owning and operating their own HOA collection agencies.” 

So what?

This series of blogs is intended to put SCA’s collection practices within a much larger context so you can see how we are all affected.

  • SCA is just one of over 2,500 HOAs in Nevada in the LIED database.
  • Nevada is just one of 22 states that have huge problems with HOA agents, using the HOA’s power to foreclose, such that

1) both the homeowner and the bank lose 100% of their property, 2) the HOA gets very little they are owed, and
3) the debt collector gets very, very rich, frequently by taking more money under the table than the law allows them to charge.

  • My late fiance’s house is just one little house, but it is a stark example of what happened many thousands of times in the wake of the 2008 economic collapse.
The foreclosure system is broken and needs to be fixed

Whenever you have economic turmoil and large reversals of fortune, you have a breeding ground for corruption. I want to show you how the limitations in the legal and judicial system have allowed some unscrupulous individuals (and institutions) to wildly profit at your expense and mine.

Did SCA Board members profit at owners’ expense?

No. Certainly not me.
I did not, and will not, profit from exposing any of this.

No other SCA Director profited from any of this either.

As you peruse these next few blogs about how SCA collection practices affect your personal bottom line, please note:

  1. I did not ever place a matter before the SCA Board from which I made, or could have made, any profit. No matter what action the SCA Board takes, or doesn’t take, related to collections or foreclosures has any impact on the quiet title decision of Judge Kishner, Nevada 8th district Court.
  2. I don’t believe any current or former SCA Board member personally profited from the foreclosure of any SCA property.
  3. I believe SCA Board members have simply trusted and followed the advice of SCA’s agents without suspecting that the agents had set the process up to unjustly enrich themselves.
  4. I don’t believe anyone on the current SCA Board understands that the SCA Board has legal alternatives for handling collections that could prevent many of the downsides using self-serving debt collectors who unfairly profit from foreclosures and the huge volume of litigation that ensues.
  5. However, I believe the current SCA Board is culpable for REFUSING to even examine flaws in SCA’s collection system or to consider more humane options which would benefit ALL SCA homeowners financially more than SCA’s agents benefit.

HOA Boards and homeowners have frequently been victimized by their agents (managers, debt collectors and attorneys) who can take advantage of their ignorance or inattention.

The HOA Board must ensure all assessments are collected. That’s a given.

But, in general, volunteer boards do not have the expertise to select the most cost-effective and humane method for doing so.

Our SCA Board has been duped by all three (or four or five) debt collectors SCA has used. They have all unjustly profited by conducting foreclosures without following the statutes, by retaining proceeds from the sales that they were not legally entitled to, and/or by tricking the Board into believing that their costly methods were the only legal option.

Our cost when agents serve themselves

It’s tragic how easy it is for HOA agents who play fast and loose with the law to unjustly enrich themselves. Lax enforcement of the laws on the books, such as they are, is ineffective to stop their fingers from reaching into our pockets.

Statewide, a much stronger regulatory system is needed to prevent such institutionalized corruption from getting a stronghold, and to protect HOAs and homeowners from getting ripped off.

Why would a debt-collecting agent derail his gravy train?

Telling the SCA Board that there are more cost-effective options to successfully collect assessments than using the SCA association legal counsel as the debt collector would drastic reduce The Clarkson Law Group’s big, fat bottom line.

Agents are supposed to act solely and exclusively for the benefit of association membership, but the temptations for a quick buck are just too great!

It’s much more lucrative to keep the Board in the dark about how much the costs of collection exceed the amounts collected.

Or better yet, the attorney/debt collector can bully the HOA Board into believing he is the final authority and that the lucrative (for attorneys) litigious process is only legal option available.

Sound familiar, Mr. Clarkson?

 

 

 

 

 

 

 

Legal fees beget more legal fees – $80,000 in two months!!!

Giving attorneys a blank check = bad idea

In the first two months of the fiscal year, SCA’s spending $79,760 for legal services. Attorneys have burned through 40% of the $195,000 budget for the whole year.

Had the 2018 budget not be more than doubled from the 2017 level, the burn rate would have been a whopping 89%.

2017 Legal services budget was $90,000, an amount that prior Boards fond to be adequate for SCA’s needs.

Was the service SCA got worth it?

  • Do you feel like paying this attorney has improved the quality of your life in Sun City Anthem?
  • Do you think, as this current Board does, that the attorney must be retained to do work that is normally performed by a Community Association Manager, like propose towing or publication policies?
  • Do you believe that the Board is incapable of making decisions unless the attorney approves them?
  • Do you think SCA owners should pay for the association attorney to represent the GM to protect her “privacy rights” against owners finding out what she is being paid in 2018?
  • My best guess is that SCA has been billed in the tens of thousands of dollars for the GM to use the  association attorney to keep her secrets. I can’t be more precise because when I requested an explanation for spending $321,000 instead of less than $90, 000 in 2017,  the response boiled down to:

“We don’t have to. You can’t make me”

2017 legal expenditures exceeded $321,000

This was a whopping 3 1/2 times the $90,000 budget! So, one would think that the correct response would be to look at ways to bring that number back in line. But, that wasn’t what the Board did. They more than doubled the 2018 budget to $195,000. 

While a strategy of carefully calculating the increases needed in the budget to cover runaway costs may be prudent in a strictly fiscal sense, it completely ignores the Board’s duty to analyze the root causes of why we are wasting so much money on attorney fees.

Last year’s waste blew my mind, and this year is starting out even worse.

What I told the Board at the 3/22/18 meeting

The Board and the GM are using attorneys excessively, inappropriately and in a manner which is not serving owners well.

The Board is not following the business judgment rule if you:

  • Use attorneys to conceal from owners how our money is being spent when you are required by law to tell us.
  • Allow the GM to use the association attorney to serve her own purposes in violation of SCA’s bylaws and the Board policy manual, e.g., relieving the Election Committee of their duties in the recall election ($90,000 spent on her order), and at least $50,000 to conceal records from me as a director, and threaten frivolous litigation, and unfairly remove me
  • Accept without question demands for payment for unbudgeted services which others who are not being paid tell you, are not necessary or cost-effective if done by attorneys.
  • Ignore warnings of inappropriate expenditures
  • Refuse to allow any investigation by owners to determine the veracity of the complaints that these fees are out of line.
  • Refuse to have a Legal Services Committee to provide owner oversight to protect the Association.

The Board silently noted and (round)filed.

I predict no action will be taken to control the costs of control.

And another thing

Why did owners have to pay $43,022 to write-off bad debts last month?

When this amount was written off, Forrest said that it had largely been due to foreclosures by banks.

  • What properties were affected?
  • Why so much write off?
  • Was litigation involved?

My questions  could be answered if the Board would require the GM/attorney/debt collector to publish the quarterly delinquency report mandated by our bylaws and keep them posted on the website.

Refusing to manage the attorney instead of letting him run amuck is costing owners money unnecessarily. It is not a good example of sound business judgment.

Bylaws 3.21 (f) (5) Quarterly reporting requirement

…(quarterly) commencing at the end of the quarter in which the first Lot is sold and closed,…(v) a delinquency report listing all Owners who are delinquent in paying any assessments at the time of the report and describing the status of any action to collect such assessments which remain delinquent…

Publishing the required report would improve the cost-effectiveness of collection efforts significantly, reducing attorney/debt collector fees and uncollectible debts.

But this isn’t something you will hear from the attorney.

Let them eat cake: learning how to be fair

When I was 12, my mother was killed in an United Airlines plane crash, leaving by father bereft with six kids ages 5 – 16 to raise alone. At 52, he had just retired a Colonel from the Air Force and was starting a private practice as a physician. He needed to have a way that we kids could get along and learn to treat each other fairly without him always having to resolve disputes.

I remember one system we used that taught us all to be more fair than we would have been if our dad had let the big kids rip the little kids off and hog up a pig’s share of a cake:

Whoever cuts the cake, gets the last piece.

This is a lesson that those in power at SCA need to learn if self-management is to succeed.

What’s wrong with the SCA system of “self-management”?

First and foremost, SCA is not fair. The big kids (the Board, the GM, and the attorney) are bullying the little kids (owners, residents and dissenting directors) to hog up all the cake that rightly belongs to owners.

  • The Board President is running amuck, consolidating power by controlling who can participate in decision-making by creating Board work groups and blocking owner-oversight committees.
  • The Board President is also misusing his power to disenfranchise political opponents and to silence opposition to the “party line”.
  • By disempowering appropriate owner oversight, executive limitations are poorly defined and internal controls are inadequate to ensure fair and equitable treatment of ALL owners.
  • The Board majority is just going along with the bullying and hogging up the cake “on the advice of counsel”.
  • The GM has been allowed to use the association attorney as her personal attorney (at owners’ expense), and is stealing the Owners’ cake and beating the crap out of the little kids who cry, i.e., owners /residents /board members who complain about non-owners grabbing their cake.
  • The association attorney has shoved a very big piece of the SCA Owners’ cake into his own mouth and grabbed another big piece for the GM while waving the knife threateningly at owners who even look at the cake, let alone try to get their fair share.
Owners pay dearly for having no control over their own cake

Here are some examples of problems with the implementation of self-management caused by the Board’s enabling the GM’s resistance to appropriate owner oversight.

  1. Owners pay for everything, but can be blocked from even knowing what they are paying for or how much they are paying.
  2. There is no way to control excessive executive compensation.
  3. The Board can act in ways that create liability or don’t protect SCA against manageable risks and the owners just have to shut up and pay for it.
  4. There is no way to hold the Board, the GM, and the attorney accountable as fiduciaries or to prevent them from abusing their positions for their own profit or personal or political power.
  5. Owners can be unfairly treated without being afforded the due process required by law.

The SYSTEM must build in controls so it is fair no matter who is in charge.

SCA does not have a system in place that protects owners from the very people who are supposed to be acting only for us.

If the interests of owners are adverse to those the GM or the Board President, then there is NOTHING built into SCA’s version of self-management to ensure that the owners’ interests will prevail.

In fact, with Adam Clarkson and Sandy Seddon calling the shots, there is no owner-protection system in place at all.

 

 

 

 

 

 

 

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.

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”

 

Suggested Questions for today’s Board Candidate Forum

Here are some questions I hope somebody will ask the candidates today.
I would ask them myself, but you know, it’s the kiss of death when the words pass my lips…

Ask Aletta Waterhouse

  1. Did the Board vote in executive session to give the GM another bonus  after 800+ people complained and petitioned for a vote of no confidence?
  2. Why didn’t the Board follow the equitable enforcement procedures (notice, hearing, right to present evidence, witnesses, appeal in SCA CC&Rs 7.4, p. 35 and bylaws 3.26, p. 20) when the Foundation was evicted, when SCA forecloses on someone’s home, or when 6 of you kicked Nona Tobin off the Board?
  3. that are fair to owners except when the Board is taking action against  Why as Secretary did you allow the Board to meet in secret (no notice, no agenda) to take actions against owners without giving them a chance to defend themselves?
  4. Why didn’t you answer any of the complaints against you in the petition calling for an election to remove you from the Board?
  5. Why did you and Bob Burch recommend to eliminate the Golf Course Liaison Committee, the Communication Committee and gut the Property and Grounds Committee?
  6. Why did you vote to evict the Foundation Assisting Seniors?
  7. Why did you refuse to vote for proposed owner-oversight committees that are needed under self-management to control costs and prevent waste and fraud
    1. Communications
    2. HR and compensation
    3. Legal Services
    4. Investment
    5. Insurance
    6. Collections
  8. Isn’t a little arrogant to use 2-person Board “work groups” as if they would be more knowledgeable and achieve better results than owner-oversight committees comprised of resident experts, like the Finance Committee?
  9. Why did you ignore it when you personally were put on notice that the former debt collector had filed chapter 7 bankruptcy and SCA was at risk by continuing to contract with their sham successor  LLC?
  10. Why did you join 5 other directors to secretly vote to remove Nona Tobin from the Board when no one signed a petition to remove her, like 800+ people signed to remove you?
  11. Why have you abdicated policy control over the budget to the GM and the attorney even though our bylaws prohibit it and 2017 legal expenditures were $321,110 instead of the $90,000 budgeted and $38,000 has already been spent for legal fees January 2018 alone?
  12. Don’t you think having one firm be SCA legal counsel and SCA debt collector is a potential conflict of interest?
    1. What “Director Issues” cost $39,635 in attorney fees? Dumping Nona Tobin? That’s pretty high for a wham-bam process like a Muslim divorce where the man just says, “I divorce thee” three times and it’s done.
    2. Why did you let them spend $84,866 for a CPA to do a sloppy job on the recall election when the proponents of the recall supported letting the election Committee do their normal job?
    3. Why wasn’t there a bidding process for the CPA? Whose friend was he?
  13. Why should anyone vote for you when you always say that you are just following the advice of counsel?
  14. Why do we need you, or a Board for that matter, if you let the attorney and the GM take over?
  15. Why as BOD secretary did you allow the miutes of meetings to be falsified, e.g., to refuse to correct the minutes of the 7/13 executive session. It was not an emergency. You did not notify Nona to attend. The topic was false on this and 7/27 and 8/24. Why is that ok if you benefitted by lying on the official record and by
  16. that Nona had been excluded and not allowed to vote

Ask 2-year incumbent Robert Burch

Many of the questions to Aletta also could be asked of Bob. He wasn’t the Secretary but he should answer to why he voted me off the island for quiet title litigation when he has the potential conflict of interest that he lived across the street from the house I’m fighting to get back for 15 years, and those neighbors are certainly not neutral.

  1. Why have you consistently voted against meaningful owner oversight?
  2. Did you vote in executive session to give the GM a raise for 2018?
  3. Why do you think the right way to deal with owner complaints is to chastise them at BOD meetings for signing petitions or otherwise legally registering their disapproval of your performance or the GM’s?
  4. Why did you think you and 5 other BOD members could vote in secret to remove Nona from the BOD and block her from running again when over 800 signatures on a petition to remove you wasn’t deemed legally sufficient to remove you from the BOD?

Ask James Coleman, appointed in fill my seat 9/17

  1. When and how were you approached to sit on the Board?
  2. Do you think that your appointment was fair to others who might have wanted to be considered for appointment?
  3. What were you told was the reason that you could be appointed without any competitive process or notice to owners when the SCA bylaws 3.6 (p. 11) say otherwise?
  4. When you started last September you talked about values. Is one of your values creating meaningful owner involvement in governance?
  5. Why do you think having 2-board members be the Board-owner communication work group is more likely to come up with better proposals than a work group that includes owners?

General Questions

  1. What are your values and principles that would guide your decision-making?
  2. What do you think you could do to improve the performance of the Board in terms of responsiveness to owner concerns?
  3. Will you “Go along to get along” or will you speak up if the Board is not protecting the owners first?

Election Committee was inhospitable, angry even. Nevertheless, I persisted

Today’s SCA Election Committee meeting was an important part of the SCA Board election process because it was the official start of the election process where candidates drew lots for their ballot position.
What could it hurt if I drew a lot until the proper authority rules on my eligibility to serve?

Instead of considering the rejection of my candidacy for the Board as final, why not just treat me like any other neighborhood volunteer  – at least until there was one iota of proof that I really was worthy of such vilification?

What happened went I went looking for justice?

I gave the Board and management notice that I was appealing the 2/9/18 Notice of Ineligibility that the Clarkson Law Group had whipped up on SCA owners’ dime to make sure that someone who had the support of at least 2,000 owners was blocked from even being a candidate.

In the prior notice, I asked for them not to use the attorney or security to threaten or humiliate me. They accommodated me only insofar as owners didn’t  pay for an outside agent to ensure that I was relegated to pariah status. But then, they knew full well, they didn’t need to bring in the heavy-weights, the Election Committee – dutifully, sternly, and totally predictably stepped up to take on the enforcer role.

The Officials act official, or was it officious?

Before the meeting, I went to the EC chair, Carol Steibel, and told her that I was appealing the attorney’s decision to deem me ineligible and that I wanted to draw for a ballot number so I could stay on equal footing in the election process until a determination on my eligibility was made by proper authority (NRED).

When I handed her my 2-page appeal, she tossed it aside testily, and said,

“I’ve already read that.”

“How could you have? I just wrote it this morning.” said I.

“Well, I read something else, then. The attorney said you can’t be a candidate, and we have to listen to the attorney.”

When I sat at the table, two members of the committee told me sternly to get away from the table. Only candidates could sit there.

Carol somberly started the meeting by saying that the meeting would not be recorded and that no one was allowed to record it as it was against the law.

The thing about this edict that totally chaps my hide is a major owner protection to allow recordings so, to be ornery I guess, I said I was going to record it. Their reaction was intense. Forrest Quinn joined in saying that he did not authorize recording him.

Bob Burch said he wanted my assurance that I wasn’t going to record it. I said I wasn’t recording it, and he announced to the crowd,

“We’ve had this trouble before”

further solidifying the ‘Us vs. Them Her’ dynamic permeating the room.

Carol very formally read a notice from the attorney about my situation. She would brook no argument. It was FINAL!

  • The Board deemed Nona Tobin’s Board position vacant by law making her ineligible to be on the Board.
  • Nona herself made the charges public.
  • No circumstances have changed that would make her eligible.
  • Clarkson law office was merely asked to inform Nona since the Board’s decision that  was ineligible has not changed.

My, my, my…what an awful person that Nona is! An existential threat.  Carol’s tone made it totally clear that questioning the veracity or authority of the attorney would be considered treason, the concept of “Innocent until proven guilty” totally shrouded by her blind spot.
P.S. None of the above statements from the attorney that Carol reported are true. I’ll be handing the documents over to NRED to prove it as soon as I can.

Carol was so busy genuflecting before Clarkson’s awesomeness that she might have forgotten for the teensyist second that as the Election Committee Chairperson, her primary job is to protect the integrity of the election process, to ensure the election is free from undue interference and to protect ANY owner from being disenfranchised.

Maybe a little training? I suggest training should come from NRED or any competent, independent professional, but absolutely not conducted by Adam Clarkson.

Gary Lee, Board candidate new to the scene, innocently asked for a better explanation why I was dumped, but Carol was adamant that she had said all that needed to be said on the subject, and that he was holding up the very, very important business of the committee.

Tobin appeal to being disqualified as a candidate

Quick note about # 4 above, it should read that in addition to the NRED form 850, I also submitted the disclosure form as edited by the attorneys even though it was not legally-mandated for me to do so.

Tobin Appeal Page 2

Ask Yourself:
Would my actions make sense if I were on the Board to make a profit?

What does my being on the Board have to do with what the court does about the house? The Board doesn’t have anything to say about it.

But, for the sake of argument, let’s say the Board could vote on something related to the outcome of the title fight. If my ulterior motive was to get the Board to vote to quiet title to me instead of the bank, wouldn’t I have tried a different approach?

If I were trying to get a Board vote on litigation I could profit from, wouldn’t I have been smarter to ingratiate myself and “go along to get along”.
  • Wouldn’t I have been foolish to risk the ire of the Board to protect the right of owners to legally sign petitions to call for a vote to remove directors from the Board?
  • Would I have pursued formal complaints to enforcement authorities saying that the attorney and the GM should be fired for causing the Board to act unlawfully?

Ask yourself:
Isn’t it more likely that the same over-compensated GM and attorney, after protecting compliant directors in power from a removal election, just created a convenient ruse to bypass owners’ votes and remove the thorn in their side and block me from coming back?