Questions About Co-Gen & RecCtr 3 for Board Meeting
Some nagging, unanswered questions about the Co-Generation Plant fiasco and related 3rd Recreation Center Construction delays and costs are listed below for you to ponder and consider asking during the board meeting on 1:30 PM on Tuesday, October 7 in Freedom Hall. This will be a turning point in the history of Sun City Anthem.
- Since Pulte collected over $25 million by selling SCA’s golf courses in 2002 and shared nothing with SCA, and since Pulte saved over $10 million in cash by not building the 3rd golf course, and since Pulte profited by over $100 million by building the homes in Shadow Canyon and Desert Sky on FAR smaller lots than elsewhere in SCA, and since the Master Plan forces Pulte to build RecCtr 3, why should the board agree to allowing Pulte to charge the members for the greening features? Why shouldn’t the current design costs, including “greening” features, be within Pulte’s $10 million budget, and Pulte pay SCA the $1.4 million plus interest?
- Why are we doing this “greening”? There is no guarantee the delivered prices will be same as quoted on such state-of-the-art technologies in a period when demand for the “green” components is likely to be much higher than expected. And, there can be no guarantee that the return on investment will ever be achieved. When considering the previous 2-year delays in construction, the extremely high risks of more schedule delays due to technology issues, and Pulte’s high benefits by not having to pay the co-gen money and interest for the past 3 years, why should Pulte be allowed to charge extra for the greening? Is that not a double or even triple charging the Shadow Canyon and Desert Sky homeowners? And, why should Pulte not be required to build and complete on schedule without extorting compliance to that unfair settlement agreement?
- Why shouldn’t the relatively small additive costs of greening be absorbed by Pulte considering all that is has gained and its two year construction delays? The higher unit prices, smaller lot sizes, and higher density of homes built in Shadow Canyon and Desert Sky have caused members in those villages to have already paid for RecCtr 3. Why should they have to pay again by giving up the co-gen funds and releasing Pulte from all obligations–before the building is even finished? Pulte failed miserably on the standards for RecCtr 2. Who believes that Pulte will complete RecCtr 3 on schedule in 2010, and finish it up to the promised standards? Particularly if they already have a release that blocks the board from having any real leverage over it.
- Would it not be fraudulent for the board to agree to this “settlement” that lets Pulte off the hook forever for the above liabilities? Even if one wanted to consider such a sweetheart deal, why would you consider it before the company has finished the building? Is this not the worst example of “negotiation” you have ever seen? See why the situation raises thoughts of extortion, bribery and corruption? It simply does not make sense.
- How could the 2005 board members Favil West, David Berman, Bob Berman, Bob Sansing, Lyndal Ruiz, and David Weil allow Dea McDonald and Pulte to get away with not paying the $1.4 million Co-Generation funds in 2005? And, even when they struck such a bad deal, why did they not execute a written amendment for the changes?
- Were there any SCA benefits received in return for the big cash savings to Pulte? Was that deal a sign of stupidity or corruption? Who among the board and CAM, if any, voiced any disagreement with the deal? How could the previous verbal and otherwise informal deals be considered valid when the “contracts” did not include “consideration” for the SCA members?
- Why would anyone consider allowing $1.4 million of cash to be used sometime in the future for “greening” a senior center facility when many users would never live to benefit from the hoped-for savings? Did the 2005 board even ask for an economic analysis when they offered their illegal handshake agreement to defer payment? What possible explanation other than corruption could one formulate?
- How much money has Pulte saved in the 3rd rec ctr building construction by using green materials instead of normal materials in the building? Does anyone know the truth? There are numbers floating around from Pulte, but we should not accept them without detailed validation. We are talking about really expensive components for a one-of-a-kind, very high-risk facility that is a true research and development project. It will be the first of is kind in a HOA in Nevada and maybe the first in the Nation.
- And, by the way, what is a senior community doing sponsoring a high technology, advanced research and development construction program? Would that even be a good thing for something as esoteric as enhanced property values when it is clear that the cost-benefit ratio is uncertain and it is unlikely to produce significant value compared to the cash value of the $1.4 million in the reserves with the resulting dues reductions? How does a practical person make sense out of this whole deal?
- Due to the above history of gross misconduct by Pulte and SCA boards and RMI that allowed such a series of fraudulent actions against the SCA homeowners, what risks of legal actions against the board and Pulte will there be that cause high risks to the construction schedule? Could rushing into making a bad deal to appease Pulte result in causing much greater problems, litigation costs, and construction delays over the next two years? What is the smart path to follow on October 7, 2008?
3 Responses to “Questions About Co-Gen & RecCtr 3 for Board Meeting”
Leave a Reply
You must be logged in to post a comment.
October 7, 2008 at 10:29
Bob;
You asked ;
“How could the 2005 board members Favil West, David Berman, Bob Berman, Bob Sansing, Lyndal Ruiz, and David Weil allow Dea McDonald and Pulte to get away with not paying the $1.4 million Co-Generation funds in 2005? And, even when they struck such a bad deal, why did they not execute a written amendment for the changes? “
One can also ask; “Why those board members allowed Del Webb to under-fund the reserves of the association AND the Villa’s?
One can also ask; “Why those board members did not INSIST on an independent audit BEFORE the transition negotiations were concluded and the funds were turned over to the resident controlled association?
One can also ask; Why those board members did not ask the associations attorney to oversee the negotiations (or why they were not advised by RMI or the associations attorney to do so)?
One can also ask; Why those board members did not ask the reserve specialist to INCLUDE the most important date in the history of any HOA – (THE DATE OF TRANSITION), when they ordered the replacement reserve study for the one rejected by the board.
One can also ask; Why those board members (after receiving the reserve study used for the 2007 budget), that indicated SEVERE SHORTAGES in the association’s reserves, and the neighborhood reserves, they did not immediately ask Del Webb for compensation instead of passing the burden of funding on to the members of this community.
One can also ask; —- But they won’t answer.
October 8, 2008 at 11:16
Norm, the developer owes this community millions of dollars, and we can not collect a dime–if we never ask.
It is commonplace for developers to stack and/or influence the elections to HOA boards by directors who are friendly to the developer’s interests. We can see this happend in SCA since 2005. Not one single, important issue has been resolved to SCA’s benefit. Not one!
In my opinion, that disasterous record proves we have been poorly served by our directors, CAMs and our developer-selected lead attorney. Remember that our attorney, John Leach, was selected by Del Webb at the early stage of this association. It is up to you to conclude whether that losing record is due to negligence or misconduct. Either way, the members have lost the millions to the developer, and it is us who will have to make up for the losses to our association in the future. The directors and developer are close to moving on to other things, and leave us holding the bag.
Finally, if the board never asks for any of the money due, without a forensic audit, we will be wasting our critical time and money and continue to be serving the developer’s interests. Without the proof of financial mismanagement from a forensic audit, the SCA claims are not likely to be provable in court against the massive legal resources available to Pulte.
If you have any doubt about the above, just ask the board to report on its successes against Pulte since 2005. What disputes have they had, and what have the boards accomplished? While you are asking, bring up the Co-Gen Plant money, the trumpets lease failure, and the RecCtr 3 failure. You probably will be staggered by the BS that comes out.
Why do I say these things? It is my job to protect the interests of the community–not the developer. Knowing that we re losing millions of dollars due to willful misconduct by my fellow board members is not something I can accept.
Most of our 7,144 homeowners are ignorant of the financial facts, and I have the legal duty to keep trying to educate members so they can excute the only true power in HOAs–membership votes. All of the misbehaving directors could be removed by a vote within 90 days if a removal election was requested by at least 10% of the members. In addition, four directors will be up for re-election or replacement at the next board election in April 2009. We will continue to get what we tolerate.
Bob Frank
SCA Director
October 8, 2008 at 15:54
You state: “…Since Pulte collected over $25 million by selling SCA’s golf courses in 2002 and shared nothing with SCA,…” Del Webb/Pulte never owned the golf courses to the Association. SCA NEVER OWNED the golf courses. You have known that and still you spew out this stuff. Where did you come up with “$25 million?” The recorded documents show $20,632,000.00. That’s a more than a 17% exaggeration…
So as the businessman that you would have others believe you are, how could Del Webb/Pulte sell “SCA” courses? Besides, would you really like to have those albatrosses around our neck? On one hand you talk of waste by the board, and you would want golf courses? Ask the home owners in McDonald Ranch and Summerlin what golf course ownership means to them.
You state: “…The higher unit prices, smaller lot sizes, and higher density of homes built in Shadow Canyon and Desert Sky….” Once again, you are wrong. Here is what I found on the County Assessor’s web site: 1). Bliss Corner (Desert Sky) .20 acres, 2). Bliss Corner (Desert Sky) .20 acres, 3) Freedom Hills (Valley View) .18 acres, 4) Freedom Hills (Valley View) .18 acres, 5) Freedom Hills (Valley View) .15 acres, 6) Downeyville (Mountain View) .17 acres, and at 2374 Sandstone Cliffs (Black Mountain) .22 acres!
You state: “…above history of gross misconduct by Pulte and SCA boards and RMI that allowed such a series of fraudulent actions against the SCA homeowners,…” You have used a series of untruths and exaggerations to justify a charge of “gross misconduct” and “fraudulent actions.”
You state: “…for a one-of-a-kind, very high-risk facility that is a true research and development project. It will be the first of its (sic) kind in a HOA in Nevada and maybe the first in the Nation….). Maybe for a HOA, but the following statement is an excerpt from http://fitnessbusinesspro.com/mag/campus_leeders/
“…In the past seven years, more than 8,000 new buildings have registered for Leadership in Energy Efficient Design (LEED) certification, and the U.S. Green Building Council (USGBC), which awards LEED certifications, has awarded the certification to 1,059 of those buildings. About 7 percent of those projects are for colleges and universities, according to the USGBC, a nonprofit organization with 11,500 member organizations….”
It has taken a while to respond to this and the Board of Directors have already approved the document and instructed Del Webb/Pulte to continue with construction. See you at the Ground Breaking ceremony.