Archive for March 2008

McCullough Asks Manning For Help

Norm McCullough has been impressed that Don Manning, Finance Committee Chair, has finally started to post blog responses to issues and questions, and he asked for some updated info.

See Norm’s penetrating list of Villas Reserves questions as posted on the Anthem Voice Web Site.

Dixon’s Whoppers Debunked?

Check out the Anthem VOICE web site for the latest update on taxes by John Briggs.

He challenges Mike Dixon’s recent excuses for the multi-million-dollar slush fund that our Treasurer, Roz Berman, calls “surplus equity” and John calls “excess dues that the IRS says should be returned or credited to homeowners.”

John helps members to better understand the deceptions and misdirections being promoted by most board members and members of the finance committee.

Bottom Line:  Member dues can be collected in excess of the annual needs by operations and reserves, but if they are not returned or credited to the member accounts each year, most, if not all, of those excess dues are almost certain to be considered “profits” to the corporation by the IRS.

If SCA gets a surprise audit visit, SCA may have to pay more than a million dollars of back taxes and fines– plus interest for the past few years.  But, if we approach the IRS with hat in hand to ask for guidance, we will either find out that no problems exist with our filings (extremely unlikely!) or we will get positive assistance on the revised returns.

We significantly reduce our exposure to paying unnecessary taxes and fines and interest if we approach IRS instead of waiting for the axe to fall!  Ask anyone who has ever worked for the IRS before (we have many living within SCA).

Arm waving, outrage for being questioned, and loud protesting of innocence by the current leadership on the board and finance committee can not change that fact.  If the Finance Committee CPAs, Treasurer(s) and President have proof that SCA owes zero taxes, you can be sure they would have rushed to prove it and stop the complaints.  So far, the lack of facts from the “unity crowd” is a telling indictment…

Dixon’s Report Is False & Defamatory

See Anthem Voice web site for details.

Review Director Bob Frank’s personal and legal responses to Mike Dixon’s flagrantly false statements and defamatory comments given in his President’s Report during last week’s Board Meeting and then sent via email to SCA members.

It is clear that Mike Dixon was 100% wrong in his reporting of the status of the case.  Do you think he will sincerely apologize for such serious mistakes?

A new item posted today explains why Bob Frank is being blocked by the Real Estate Division’s interpretation of NRS 116 from saying anything about the allegations, or about his fully successful rejection of all of Dixon’s bogus claims.

Bob also explains what the milestones have been since the September 2007 affadavit filed by Dixon (with John Leach’s assistance) on behalf of the SCA Board.

Also posted on the AV Website is a November letter from Board Secretary Berg claiming that Bob Frank had done nothing wrong while serving as a Board Member.  You gotta see that one to believe it!

Full David Berman Case Available

The full report from the MA Supreme Judicial Court about David Berman’s Forgery Case is now available online.

Truth About SCA’s Taxes?

For those who share my concerns about the accuracy and completeness of our Income Tax Returns since 2003, there is an updated report posted on Anthem VOICE.

The disturbing fact about this issue is that the harder I push to get straight answers to my relatively simple questions, the more defensive and emotional the Treasurer, President, Finance Committee members and others involved have become.   Why?

If I were an IRS Auditor, they would have to give me quick, crisp replies to such questions.  Stalling while answers are formulated is a troubling sign.

SCA tax returns back to 2000 with full and complete answers to obvious questions should be posted on the SCA web site for all to see.  We should have nothing to hide.

Dixon Receives a Villas Complaint?

Dear Mike, I got your latest message. Dixon Ltr Mar 25, 2008

Somebody (maybe Ron Johnson?) sent you a registered letter complaining about violations of NRS?.  Wow! I would think you would be pretty well versed on NRS. You seem to spend a lot of time at the Ombudsman’s office. You should be taking more notes.

Remember when you and I (and John Leach and my attorney and Kay Dwyer), were at the Ombudsman’s office? You seemed a little frustrated, and red in the face, but I attributed that to the heat level in there.

Kay Dwyer also seemed a little off her game (Ms. cool). When she said she didn’t have to name the attorney she and Favil West consulted when they signed “The Villa Agreement”, I almost fell off my chair. I hope my laughter didn’t disturb you. It’s one of my faults. I have other faults like expecting the truth from board members, but then again maybe I still believe in Santa Claus.

Getting back to your message, I didn’t realize you knew so much about how a reserve study works, and how its conducted. Jack Troia told every one at the Reserve Task Group meeting that Diversified (the reserve company) was here in 2005, and conducted a physical inventory of all the “stuff” in the reserves.

That must have taken a long time. I don’t remember any one going around here measuring stuff. Maybe you could help me get some of the records of that inventory. I like to check Diversified’s math. Would you believe it? They made a math error when they measured the square footage of the Villas. Boy, I thought those guy in California were smarter than that. Is that the best reserve outfit we could get? My grandson can do math better than that.

I’m really impressed that you seem to know so much about the Villas. When did you learn about all those bids and stuff? I can never get that information from RMI. You sure are lucky to have the inside track with them. Your also lucky to have a good buddy like John Leach. I see a lot of his influence in your message. You almost talk like a lawyer nowadays. Quite a difference from working in a restaurant, huh?

I would like to tell you about my neighbor. She will be 99 years old in a few days. When she read your message that threatened all the Villa owners with a special assessment of $1,480 she began to cry. Shame on you Mike!

I also want to remind you of some thing you seem to have forgotten. You said “There was no money taken from the Villa owners.” Maybe you forgot about the 2007 Budget. The Villa owners were the only residents that had to pay an extra $500 that year ($500 x 162 Villas = $81,000). That much money buys a lot of paint.

I have never figured out how any one could determine how much to raise the dues, BEFORE they knew how much Del Webb was going to contribute. It’s like trying to figure what your monthly payment is going to be when you buy a new car, with out knowing how much your getting for your trade-in. Boy who ever did THAT was sure smart - huh, old buddy?

Did you have to pay an extra $500 in 2007? Oh – sorry, I forgot, You don’t live in a Villa, Why would you care. Let me know when you need some more of my money. You know me, always happy to oblige.

Norman McCullough

Ron Johnson Goes After Berman, Trumpets, Reserves & Taxes!

The latest articles by Ron Johnson include:

  • “A Wolf in Sheep’s Clothing is, Well, Still a Wolf
  • “Does the Association Have Unsettled Tax Issues?”
  • “Will the Board Be Able to Avoid A Scandal Over Their Actions to Fix Villa Reserves?”
  • “With Three ‘top’ contenders for Trumpets having made their presentation to Sun City Homeowners, we should be happy, right?”

Click here to take a look at those stimulating editorials!

New: Investigative Audit Request

SCA Director Bob Frank today complied with a recent recommendation by the Ombudsman Office by filing a request for an “Investigative Audit of Sun City Anthem Finances” as provided under NRS 116.790(1)(A).

Investigative Audit Request of SCA Finances

Click for more details and copies of the exhibits attached to the audit request.

Questions on Your “Update”?

Open letter From Norm McCullough to Mr. Mike Dixon
(Reference President’s Update: 
Update

I just read your last “Presidents Update”. I must say it has raised more questions than it answered. Perhaps you might like to expand on your message, and let the residents of Sun City Anthem gain some insight as to the reasons you felt it necessary to conduct a board meeting in your home, away from the comfort of The Anthem Center we all know and love.

The Anthem Center has many fine rooms, suitable for meetings. No bar or Refrigerator at the moment, but certainly suitable for a “get to gather” that would be more hospitable to a visiting dignitary like Gary Lien (the independent auditor who prepares our tax returns).

He evidently was more comfortable in the Anthem Center, because (according to your explanation), he left your home without discussing the 2007 tax returns for Sun City Anthem. What a shame, now we will have to schedule another meeting with Mr. Lien.

At any rate Mike, your narration of the events of that episode raises a lot of questions with the residents who have entrusted you with the burden of leadership. Some of the questions follow:

  1. You seem to have a lot of “pull” with Mr. Alitt (The Chief Investigator for the Real Estate Division of Nevada). All it took was a phone call from you and he responded by placing a phone call to John Leach. Could you possibly get Mr. Alitt to call me? He doesn’t seem to answer my calls even though his office is supposed to help me as well as govern the board of director’s behavior.
  2. You referred several times to “The majority of the Board” making decisions that day. Could you be a little more specific (I know Bob Frank was not there).
  3. When you (and the “majority) decided against the first option that you could legally hold the discussion without Bob Frank, you stated “it was not in the best interest of the Association”. Can you please expand on that statement. I’m not sure what you mean by “the best interest of the Association”. You see a lot of the people I talk to are concerned about the money you are spending to drag John Leach to the Ombudsman’s office, and also the money that it takes to for Bob Frank to defend himself from your accusations which have not been proven–as far as I know.
  4. The second option you discussed with “the majority” was to cancel the “workshop” I was completely blown away! I missed another “WORK SHOP”? Was it “noticed”? When was that? Had I known that a work shop was scheduled to discuss the 2007 income tax returns, I would have canceled a bypass to attend. Why didn’t you tell me.
  5. Regarding your third option, you reported that Mr. Alitt suggested the Board could hold the discussion with only 2 or 3 Board members present. You later said (Quote) “this option SEEMED to follow the “business judgment rule” (use of CAPS to emphasize my idea). Is the use of that word “seemed”, another suggestion from John Leach? Wow, you sure have a good relationship with Mr. Alitt. I bet his Christmas cards are real keepsakes. I never get any from him, I’ll have to work on that some day.
  6. At any rate, I’m curious how did all of you people fit into two cars? The last time I saw that many people get in and out of 2 cars was at a circus, but that’s another story.
    What I really want to know is what you meant by (Quote) “The Board officers, Finance Committee members, and RMI’s CPA then analyzed the impact of not being able to discuss our 2007 tax returns with Mr. Lien”. That really made my head spin.
  7. Does that mean you talked about the fact you were unable to talk about the subject you were talking about? Gee Mike you could be a little more explicit. I don’t know what the h—l you mean.Norm McCullough

Who Believes The Spin Doctor?

David Berman made the following FALSE statement on his blog: “…in view of the fact that Bob Frank has informed the community that he is currently under investigation by the Ombudsman’s office for possible removal from the SCA Board…

That is totally false! Why would anyone accept such spin from a self-admitted forger and suspended lawyer? Details at: http://www.anthemvoice.org/7.html

What I recall saying was that Mike Dixon had submitted bogus/trumped up allegations against me last September on behalf of the other board members. Since that time over 7 months ago, Dixon and the other board members and SCA attorney John Leach have been doing their best to get the Real Estate Division to kick me off the board and/or to try to get me to resign. But, I am not a quitter like David Berman.

Bottom line: all of their hateful efforts have failed and my legal advisers state there is no chance they can succeed. This is a classic case of harassment and retaliation for not succumbing to their unreasonable and unethical demands. Meanwhile, possibly as much as $50,000 of SCA/D&O insurance funds have been spent on multiple attorneys. And, over 1,000 man hours have been wasted.

So, ask yourself–for what purpose? If the other board members simply dislike me, all they have to do is ignore me. They have the votes to do what ever they wish. But, they have found it is impossible to ignore me because there are truly dangerous financial secrets being uncovered, and they know I will not tolerate such mismanagement and cover ups.

Bob Frank

SCA Officers Violate Meeting Law

As previously reported on this site, Sun City Anthem’s Officers are vigorously striving to hide vital financial and income tax information from Director Bob Frank and SCA homeowners.  And today’s bizzare behavior by Mike Dixon, Roz Berman and Lanie Berg is the strangest yet!

When questioned Thursday by the Nevada Ombudsman Office about the legality of an announced Board Workshop on Finance and Tax matters for Friday afternoon where Director Bob Frank was told he would be denied access, Mr. John Leach, SCA Attorney, advised that the meeting had been canceled.

But, it turned out that SCA Officers (Mike Dixon, Roz Berman & Elaine Berg) had deceived the Nevada Real Estate Division.  Instead of canceling the meeting, as reported by SCA Attorney Leach, all they did was change it from a “board workshop meeting” to a “board officers workshop meeting”.

This action was no less a violation of Nevada Law, and the arrogant disregard for the Statutes displayed by this behavior is yet another clear symptom of the serious leadership problems by the current Board majority.

Director Bob Frank showed up for the meeting and his email report on Friday, March 14, 2008 to the Ombudsman (Waite) and Chief Inspector (Alitt) of the gross misbehavior by the three officers is quoted below:

“Dear Ms. Waite and Mr. Alitt,

This is a brief report on the events this afternoon with regard to the “Board Officers Workshop Meeting” announced via email for 2 PM this afternoon. Note the announcement was “only board officers have to attend” but the email was to all directors, including me.

I was present in the SCA Executive Conference Room at 1:50 PM and no one was there. I waited 5 minutes and then started looking in the facility for other Directors. As I was searching, one of the residents noticed, and told me to look in the “Green Room”, which is a small conference room near the Fitness Center.

In the Green Room I found Director/Secretary Elaine Berg, Gary Lein (association CPA and auditor), and 3 members of the SCA Finance Committee. Ms. Berg ordered me to leave, and rudely shouted that I was not invited and not welcome at this workshop.  I simply said thank you, I have the legal right to sit in, and I prefer to stay.

A few minutes later, Director/President Mike Dixon and Director/VP and Treasurer Roz Berman came into the room. They demanded that I leave, and again rudely told me I was not welcome. The others in the room hastily left the room while we discussed whether I had a statutory right to sit in on the meeting. Dixon, Berman and Berg continued to demand that I leave, and I insisted that I needed to stay to receive the facts directly from the auditor and finance committee members.

When it was obvious that I was going to stay, no matter how unpleasant they became, they decided to relocate to another room. I advised them I would follow, and then the group decided to go to the private home of one of the finance committee members.

As they were leaving, I asked Dixon if he had a legal opinion from John Leach that authorized them to deny a Director from such an important meeting/workshop. Mr. Dixon shouted that he did have SCA’s HOA Attorney Leach’s agreement, and that he could do what he was doing. I asked for a written copy of that opinion. Dixon just shrugged his shoulders and directed me to file a complaint with the Ombudsman Office if I did not like anything he was doing.

Then, the entire group drove off in two vehicles to have their secret workshop to discuss with our CPA/Auditor the financial condition of SCA, at one of the homes of a finance committee member.

In September 2007 Mike Dixon expressed his desire to remove me from the Board, but recognized that he would not be able to obtain the requisite support from enough Home Owners to accomplish his goal. The characterization of this meeting of Board of Directors as a “workshop” does not make it so. Indeed, this workshop is an illegal attempt to exclude me from my right and obligation as part of my fiduciary duty to participate in all Board Meetings, however characterized.

I am consulting with my legal advisers on what I should do next.  In the meantime, please be advised that one or more individuals in this group are behaving as if they have much to hide.  From the looks on their faces, most, if not all, are quite frightened by secrets they are striving mightily to keep hidden from the residents.

Robert E. Frank”

See this document for background information:
Secret Meetings on Finances & Taxes

The Screams Are Getting Louder…

For those of you who still occasionally check on the DB blog for some “entertainment”, you probably have seen the predicted howls and shrill responses to the very professional community work accomplished by Bob Frank, John Briggs and many others associated with AnthemVOICE.

The DB blogging community is focused on protecting the status quo, and on profusely denying that there is any chance of significant problems existing in SCA.  On the other hand, the AV community is focused on facing reality, and making things better in SCA for the long-run.  We ask questions and formulate cost-effective solutions for problems.  We lead by example and insist on quality management by our Directors and contractors.

We will not waste your time with trying to respond to the truly staggering amounts of negative blogging on the Berman site.  No reasonable person with a normal life could or would attempt to match that blizzard of diatribe from DB’s blog.  If you visit that site, rest assured you can not find the whole truth.  You can only find half-truths and distortions that thoroughly confuses most people.  The pervading question is “why?”   Why would that man be driven to write such vast volumes of trash–day after day, year after year?

We suggest that you monitor this VOICE site, and we will provide factual information as it become available.  In the meantime, if you want to know something very specific, just sent us an email, and we will try to respond.  (anthemvoice@anthemvoice.org)

Dixon Violates Statutes–Again!

Mike Dixon, President of the Sun City Anthem Community Association, is attempting to deny Director Bob Frank access to all Board Meetings. See Dixon’s recent letter. Dixon Denial Letter

Bob Frank is not going to tolerate such gross misbehavior.  Here is his response:
package_dixon-frank-final.pdf

So Long, David and Roz Berman…

Since the last board election, it has been frequently reported to me by dozens of residents that David Berman has some kind of personality problem. This problem drives him to bouts of barely controlled rage and vicious, unprovoked written attacks on individuals through his blog and other websites.

As many of you know, two of his favorite targets in recent months for unprovoked attacks via his blog have been my wife, Kay, and I. Before turning on Kay and I, David spent most of his waking hours, after quitting the Board, working to destroy former Director, Favil West, and his closest associates. There is pattern here. Now he is focused on me and my associates–but no one knows why?

If you are thinking I might be exaggerating, you only need to read one of the items that David’s blog says about me lately. His headline says: “Bob Frank: Lying About A State Senator“. Now, why would I do that? And, why would he post such an outrageously false statement without checking with me to ensure it was accurate? What could motivate such unacceptable, hateful behavior? One thing you can be certain of: David’s blog statements this week, and in past weeks, about Kay and I have all been absolutely wrong.

For the past couple of decades, Kay and I have communicated on a wide variety of topics with elected officials and their spouses. This year I have found it quite helpful to talk to State Senator Warren Hardy about HOA matters. He is always helpful to all of his constituents–particularly to those he has learned he can trust.

I also serve on US Senator Ensign’s Veterans Affairs Committee, and just last week, I met with Senator Ensign’s energy and veterans affairs staff members in Washington DC. I am also currently assisting Congressman Porter on his Veterans History Project, and I have been recently invited to similarly assist Congressman Heller.

In other words, it is totally outrageous and untruthful to write a blog article alleging that I have lied to, or about, an elected official! An intelligent person who values their positive relationships with an elected official would never openly discuss detailed conversations they have with such officials, and they would not lie to them.

David’s crude attempt to try and damage my relationship with Senator Warren Hardy failed miserably, and any attempt to rebut the grossly distorted blog item on David’s blog site would be a total waste of everyone’s time. The truth will be seen in the highly successful results of my work in the near future. In the meantime, I believe that residents can not find the “truth” on David Berman’s blog site.

In conclusion, Kay and I have had it with David and Roz Berman’s deceptions and dirty tricks. No matter what they say or do in the future, we will not allow ourselves to be baited into a mud-slinging exchange with them or their associates. Life is too short to play David’s games!

Bob Frank

Errors in Past SCA Tax Returns?

The members who attended the Campaign Forum/Debate on Sunday evening in Freedom Hall were stunned to hear Candidate John Briggs declare that his recent research into Sun City Anthem’s Financial status had revealed some potentially serious errors in our association tax returns since 2003.

The problem seems to be that the association has been filing using IRS Form 1120 which is intended to be used by for-profit corporations. Instead, Homeowner Associations are supposed to be filing using 1120H and following the HOA rules.  In addition, homeowners are required by IRS rules to vote on the disposition of surplus operating funds, and that has not been happening.

As a result of SCA using Form 1120 for the past three years, and no homeowner voting on the disposition of surplus operating funds, it seems that SCA’s traditional large cash carryovers of one to three million dollars (sometimes called dues surplus or cash equity) are subject to the for-profit income tax rates of around 30%.  If John’s claims are confirmed, the combined (unpaid) tax liability by SCA may exceed $1 million, the accumulated surplus funds of approximately $2.5 million may have to be distributed to homeowners, and SCA’s annual dues rate might have to be cut back in the future.

Members of the Finance Committee, RMI, Treasurer Roz Berman, President Mike Dixon, and Association Auditor Gary Lein need to immediately investigate John Briggs’ allegations.

For additional information, please see John’s working paper on this matter displayed on the Anthem VOICE website at : http://www.anthemvoice.org/briggs.html

Some relevant web documents from a leading national expert in this tax area by Porter & Company are attached for those interested in more details about the significant differences between Forms 1120 and 1120H.

Whistling In The Dark?

Mike Dixon recently said in an email President’s Report to residents:

“In my opinion, it is unlikely that any audit will be ordered based on Mr. Frank’s letter.”

Unfortunately, Mr. Dixon is just, as they say, “whistling in the dark”. My audit request to the Nevada Real Estate Division is well-justified and well-documented. It was carefully developed with the help of leading SCA residents and two HOA-specialized attorneys. It was then coordinated with Senator Warren Hardy, Chairman of the NV Senate Government Affairs Committee.

In other words, SCA members can anticipate that some type of independent, forensic audit of SCA will be conducted by some outside agency–in the near future. And, regardless of the audit findings, community morale should be improved and our property values improved over the long-run because everyone should be able to become confident that our community association has been placed on a solid financial footing for the future.

In the meantime, SCA members may hear some loud and nasty complaining by a few current and past board members–as well as some community management staff members. That kind of behavior is normal during an audit period where there are such clear signals of past mismanagement involving our reserves and restaurant management. Individuals with something to hide can become very uncomfortable and disagreeable during such an independent audit.

But, individuals with nothing to fear will welcome such an independent audit as it will provide the baseline our community urgently needs to complete the transition process. An independent audit is exactly what resident-controlled boards need to be able to effectively manage our exceptionally valuable association assets in the future.

Bob Frank
SCA Director

See Anthem VOICE Website for detailed information on the audit request.
http://www.anthemvoice.org/2.html

Open Ltr. To Board President

An open letter to SCA Board President, Mike Dixon, from SCA Member, Norm McCullough:

March 2, 2008

In an Email communication to me (on Feb. 11, 2008), you reminded me of my rights as a citizen to file a complaint with the State of Nevada Ombudsman’s Office if I believed that NRS statutes (or NAC statutes) had been violated.

As you know, I have questioned the board about the reserves of the 162 Villa home owners, and the “Villa Agreement” that has limited the amount of money due from the developer at the time of transition that occurred on May 31, 2005.

The underlying cause of this dispute is the fact that there was no reserve study in place on the transition date as required by law. That fact not only impacts the 162 Villa home owners, it impacts the financial well being of every home owner living here in Sun City Anthem.

I find it hard to comprehend why you would expect me, a lay person (and a single citizen of this community), to go through the process of finding out if the laws of the State of Nevada were violated.

On the other hand Mike, you are the spokesman for all the citizens. We (the citizens) have entrusted you to see that the NRS and NAC statutes are protecting us, and not being violated. You have the power to enlist legal authority to investigate why there was no reserve study in place on May 31, 2005.

In your December 2007 president’s report, you referred to the documents that were supposed to be turned over to the association by Del Webb/Pulte, and you said ;

“Because the records were not maintained and transferred to us in accordance with NRS 116, we will be seeking compensation from Del Webb for costs associated with getting our association records compliant.”

I take this to mean that Del Webb/Pulte was NOT in compliance with NRS 116?   Do you expect me, a lay person (and a single citizen of this community), to go through the process of finding out if the laws of the State of Nevada were violated?  You are the appointed spokesman for the citizens of Sun City Anthem, not I.

I think you made it quite clear that Del Webb/Pulte was in violation of NRS 116 in your message.  What was the effect of these missing records? Were they bank records, or contracts?  Were the missing records needed to compute the necessary amount due from Del Webb/Pulte at the time of transition?

Instead of asking me (a lay person and a single citizen of this community), to file a complaint with the State of Nevada Ombudsman’s Office, I would think it more appropriate for you as our spokesman to undertake this chore. Y ou might even enlist the association’s attorney to draft the complaint. I do not have those tools at my disposal.

Respectfully

Norman McCullough

More Truth about Board Candidate John Briggs

Our local defrocked attorney has wasted considerable time and effort trying to smear the reputation of board candidate John Briggs.

Wikipedia, the on-line encyclopedia, has another view. 

It states comments like:“Briggs was a leader in several important legislative reforms in California, including:• Proposition 13: Jarvis Property Tax Reduction Act • Proposition 7: Restoring a tough death penalty law • California Indoor Safe Air Act, which banned smoking in public buildings • Reduced the voting age to 18 from 21”.  Learn more from Wikipedia at: http://en.wikipedia.org/wiki/John_Briggs_%28politician%29 

Will Property Values Increase Because of Audit?

Some concerns have been expressed about the potential property values impacts from the requested State audit. I have explained why I believe the audit is good for this community and why it could increase SCA values in the future.

My comments are on the AnthemVOICE website at this link: http://www.anthemvoice.org/2.html

Bob Frank

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