By the Numbers – Part 2

Who Controls the Budget?

Sun City Anthem (SCA) homeowners are being taken for a very expensive ride. Six of the seven elected members of the SCA Board are allowing SCA’s new attorney, Adam Clarkson, along with Sandy Seddon, General Manager and Lori Martin, Community Association Manager, to have an unlawful level of control over Sun City Anthem.

These highly compensated employees and attorney are unjustly profiting from their power grab. Six of the seven members of the Board are just letting them do it. Owners are expected to ‘just take it and pay for it.’

Cost of Control

Every expenditure for one purpose is an opportunity lost for something else you wanted to buy. Why do we have a budget (which is a spending plan defining the priorities and use of money that is assessed from the homeowners for the benefit and betterment of the community) if the GM can change it at will?

Why even have a Board if the attorney in concert with management is really calling all the shots?

Who said that the 2017 adopted budget, which has NO allocation for any of these expenses, could just be ignored so the unit owners would have to pay?

Who said it was okay to over-expend the $30,000 (May-August) Legal Services budget by $73,000 to pay Adam Clarkson $103,000 for his first four months of service as SCA’s attorney?

Who said the attorney Clarkson was authorized to take over the removal election process at a cost of $325/hour?

Who said that the GM had the authority to execute a contract with an unknown CPA to pay for an unknown, and unlimited, amount to work with Clarkson Law Group to certify petitions and mail out ballots for the removal election?

By the Numbers

Based on their current compensation, Sandy Seddon, Lori Martin, and Adam Clarkson will continue to financially benefit if they can help keep the four directors currently facing a recall vote, from being removed from power. These four the directors helped to hire them and fiercely protect them during any discussions from the residents. However, they illegally removed without a recall election the one director, me, who challenged their salaries and actions.

Here’s the profit they are making for working for the Board:

  • The GM was paid $100,000+ over market when hired and was given a bonus of $20,000 six months after FSR left.
  • The 2017 budget also includes another $20,000 bonus but is not tied to any publicly-adopted performance standards or measures.
  • Compensation for four management employees eats up 10% of SCA’s total 2017 operating budget.
  • The legal services provided by Clarkson during his first four months as association attorney have cost owners $103,000, primarily spent on writing “legal letters” to stop me from questioning or to take legal action to evict the Foundation.

The Finance Committee stated that the legal services budget should double to $180,000 in 2018 proposed budget by extrapolating the trend of payments. How does SCA benefit from this expenditure?

My Removal from the Board

The reason given for removing me from the Board is that I was trying to profit. Here’s the profit I was making for being on the Board…Zero dollars.

My cost so far has amounted to $3,000 in attorney fees for my defense against the other six members of the Board’s illegal actions against me. However, by law, these attorney fees should be paid by SCA.

According to Article 3.4 (f) of the SCA by-laws – Indemnity. If a member of the Board of Directors is named as a respondent or sued for liability for actions undertaken in his role as a member of the Board, the Association shall indemnify him for his losses or claims and undertake all costs of defense, unless it is proven that he acted with willful or wanton misfeasance or with gross negligence.

Clarkson has refused to let SCA pay my attorney fees, stating that I am personally liable (even though I am innocent of any charges). SCA paid Clarkson ten times that $3,000 amount to illegally attack me, while objecting to my rights, under the above-stated By-Laws, to attorney representation.

Clarkson also redefined my demand for attorney fees as a ‘demand for monetary damages as putting matters before the Board from which I could make a profit.’

I’m saying that because of their obvious conflicts of interest, Sandy Seddon, Lori Martin, the majority of the Board, and attorney Adam Clarkson should have been excluded from making any expenditures or making any decisions related to the recall election. I don’t believe that they are performing in a neutral or fair manner, especially after their secret meeting to expel me from the Board.

I’m saying that the attorney and the GM, having convinced the other six members of the Board that the GM has the authority to spend money for unbudgeted purposes, make a pretty big profit and have an extraordinary level of power. For instance:  

  • Hiring a consultant about the shuttered restaurant,       
  • Hiring a CPA to do the Election Committee’s job for the removal election  
    • According to Article 3.5(b)(i), The secretary or other officer specified in the By-Laws shall cause a secret ballot and a return envelope to the sent prepaid, by United States mail to the mailing addresses of each Lot or to any other mailing addresses designated in writing by the Owner.         
  • Paying the attorney $73,000 over the $30,000 budgeted for his first four months.

Did you get that?

I’m saying that the other six members of the Board have abdicated that much power even though it is flat out against the law. Right now, the GM is able to rob Peter to pay Paul. She has been allowed to expend SCA funds as she sees fit without legal Board action to amend the budget, without any financial limits, and without any notice to members regarding where the money would come. So much for our spending plan.

I’m saying, these highly compensated individuals certainly have a motive to do just about anything to protect their gravy train, and we have seen how they have taken illegal actions to run me over for getting in the way of that train.

I’m saying that Adam Clarkson should not have been given a blank check to collect $325/hour for whatever he says SCA needs. Why do we need a Board if an attorney has to bless every decision?

Resources:

GM compensation comparison chart (pdf)