The last SCA Board meeting of the year is tomorrow at 1:30 PM. I’d like to point out a few things that you might not notice immediately, but which are important to for owners to know the full story.
Click here for full agenda. Click here for draft Board Book.
Financial Report for October
Two things mar an otherwise brilliant job of bean counting:
- How much are we paying for who to do what? SCA is now an employer with 80 employees costing $3.5 million -over 40% of operating budget, there should be a clearer accounting of cost of staffing by budget objective. The Board cannot hold the GM properly accountable nor can the owners be protected from such failures as excessive management compensation or featherbedding, if the accounting obfuscates these facts. And, more importantly, the Board is not holding itself properly accountable to the owners by letting the GM hide what SCA employees (particularly managers) are being paid and what they are being paid for.
- Since Adam Clarkson became SCA Legal Counsel on May 1, there have been $185,010 expended for legal fees which was 411% 0f the $45,000 budgeted for legal fees over half a year. This is the same attorney
- who told the Board the GM did not need its authorization to expend SCA funds for unbudgeted purposes.
- who does SCA’s debt collection function in the least cost-effective and most draconian way available.
- who, along with the GM, is responsible for additional unnecessary expenses of at least $73,000 for the recall election which were STRONGLY objected to by the proponents of the recall.
- who is being paid $325/hour to cause or allow the Board to take unlawful actions against political opponents of the GM and certain members of the Board.
Election and Voting Manual Revisions
Reviewing policies on voting may be really boring, but it is important to protect homeowner control over who represents us on the Board. There has to be a sound, uniformly administered system in place to prevent ANY election interference from tampering with ballots, abuse of power, or even unfair communications.
The largest HOA board election rigging scandal in Southern Nevada involved primarily attorneys who were supposed to be neutral outsiders who stacked HOA Boards to channel construction defects litigation. This Election and Voting Manual is intended to ensure that the SCA homeowners actually control who sits on the Board and that those Board members actually work SOLELY for the benefit of the homeowners.
Yet, it doesn’t matter what is in this or any other SCA policy manual if the Board doesn’t follow SCA’s own rules or if it allows the GM and/or the attorney to manipulate the process in favor or against certain owners.
Cherry-picking which laws to follow is a slippery slope
There are several areas where our election process is not in conformity with NRS or the SCA Bylaws. For example, SCA Board does not have a nominating committee as required by SCA bylaws 3.4a below. While there may be good reasons to not want to have such a committee, this is an example of how problematic it is to simply disregard a provision. The bylaws must be uniformly enforced and not simply disregarded. The narrow exception is when the bylaws explicitly conflict with a mandate in a Federal or state law.
Filling Board vacancies after a director is removed.
The final clause of SCA bylaws 3.6. requires a vote by the unit owner to fill a Board vacancy caused by a Board member being removed.
“Upon removal of a director, a successor shall be elected by the Owners entitled to elect the director so removed to fill the vacancy for the remainder of the term of such director.”
The proposed change to the Election Manual, below in green, apparently attempts to justify retroactively how Jim Coleman was appointed, but even the new provision doesn’t allow for an appointment to be made without any notice to owners, any candidate nominations, or the required vote of owners.
Note that there is nothing in either the existing nor the proposed versions of the Election Manual that gives the Board legal cover for what they actually did to remove me nor what they did to replace me nor what they might be contemplating to do in the next election (keep me off the ballot).
- How they removed me from the Board by simply declaring my position vacant is not authorized in NRS 116, NRS 82, SCA governing documents or any existing or proposed Board policy.
- By extension, that also means that there is no legal means by which the GM, the Board or the attorney could refuse to allow me to be a candidate for, or to serve on, the Board should I choose to run again.
- Also, note that this manual includes the NRS provisions which the Board President and GM violated by using the Spirit to publish their one-sided argument regarding the recall without permitting equal time and access to the opposition. Complaints of these violations are currently being investigated by NRED.
These proposed changes don’t describe what the Board actually did nor do they conform to the bylaws. The Board is simply pretending they have the authority to act against laws and policies “upon the advice of Counsel”. We’ll see.
Complaints to the Election Committee are not fairly handled
The Election Committee complaint process is to informal and allows for problems at both ends of the spectrum. On one end of the spectrum, informal complaints may be submitted without evidence or substance which could just waste the committee’s time .
On the other end, there is substantial risk of unequal treatment occurring, or even being merely perceived, if there isn’t a good enough procedure defining accountability, investigation, documentation and notice requirements. It’s sloppy management, and it reduces the community’s trust of the election process. It also allows interference in the independence and neutrality of the Election Committee.
In the proposed draft, there is still no standard format for resolving complaints, no required documentation to be maintained in the official SCA record, and no notice of the disposition formally given to the complainant.
I recommend the process defined in the SCA CC&Rs and utilized by the Covenants Committee would be a good model for the Election Committee to employ to fairly investigate and document complaints regarding Board elections.
Board Communications Task Force
In June, I proposed a resolution to improve Board-owner communications , but couldn’t even get a second to the motion. Now, five months later, nothing has been done to increase transparency or meaningful utilization of owner expertise in governance.
Rex appointed a couple of Directors to be a Board Communications “task force” (with no owner involvement) and here are their recommendations:
Here’s what should be done immediately:
- Either use SCA-TV to video broadcast Board meetings live or use some service like GoToMeeting.com to make the Board meetings accessible online in real time and interactive.
- Take the password off the website.
- Make the eblast mailing list opt-out instead of opt-in
- Follow the lead of Sun City Summerlin’s new GM in attitude.
- Stop using Board work groups that withhold information from owners.
- Expand the committee structure to utilize expertise of residents and have meaningful owner oversight and influence in governance.
Item 15B “Self-Management” is listed as New Business to be presented by Tom Nissen rather than the GM. 
The paragraph above the total back-up in the Board book to let owners know what the Self-Management item is about.
This raises a lot of questions about the Board’s failure to protect homeowners by hiring a GM without ANY of the defined terms and conditions of employment required in a management agreement.
- Why is a Board member making a presentation on the transition?
- Why doesn’t the GM whose compensation is $100,000 greater than other GMs at comparable Sun Cities like Summerlin make the presentation?
- Why hasn’t the GM been held accountable for the development of the complete policy framework needed to protect SCA from legitimate risks and potential liability associated with becoming an employer or
- Why hasn’t the GM held accountable for AT LEAST having written plans and timetables for getting the job done?
- How will the Board – let alone the owners – even know if the job is done right and on time?
- Why did the Board let the GM unlawfully conceal SCA records on the transition to self-management from one Board member in violation of our bylaws 6.4c when this information should have been easily available to any unit owner?
After the Board meeting, I’ll let you know if any of these questions have been answered. Or if there are just new ones.
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