Archive for July 2010
Why Change Security Patrol Name?
July 31, 2010 by bobfrank.
George Meese posted on the SCA-HOA message board:
“The Board of Directors wants to change the name of our Security Patrol to Courtesy Patrol. They say the change is at the request of our insurance carrier and attorney, both of whom have been acting in those capacities for the 10 year life of the Security Patrol. It seems strange that after 10 years, the name needs to be changed. At the last Board meeting, the discussion of the name change was continued to August 12th. Security Chief Joe Mihalich has requested that the date be changed due to the fact that he will be out of town on August 12th. He received a terse reply from Board Member Ann Small that stated the meeting date would not be changed and that one of his assistants could appear in his behalf. As most of us have observed, not only in this area, but nationwide, most security personnel, volunteers or paid, are called Security Patrol, not Courtesy Patrol. The name ‘Courtesy Patrol’ doesn’t carry the same message to criminals or trespassers that Security Patrol does. There has been no good or logical reasons given for this proposed change. Please notify all our Board Members that we want the Security Patrol to remain our Security Patrol.”
During my 2 years on the board, an issue about the name of Security Patrol was never raised by the Wells Fargo insurance broker or the underwriter.
Since that time, the underwriter changed to AIG, who has had financial problems. This new issue may be nothing more than an excuse by Wells Fargo and/or AIG to raise the policy rates for next year. Or, they may be heading towards proposing a separate policy covering just the Security Patrol.
Despite the rumors, I doubt this matter has anything to do with ‘legal advice’. It should be focused on the business aspects and avoid unnecessary emotional outrage. To me, it is a simple matter of ‘Who says there is something seriously wrong with the Security Patrol name, what evidence exists to force a change, and what are the consequences or costs if we do not change?’
Perhaps one or more of our residents experienced in insurance industry negotiations could look into this situation and advise the board and community on some options.
Perhaps we need to ask the Wells Fargo broker to expand the bids for 2011 to offer more choices on underwriters? But, since not many underwriters serve the HOA markets, that might not be viable.
Perhaps Director/Attorney Ann Small should tell the community what the broker has said it would cost next year if there was no change in the Security Patrol name? Surely Ann knows the answer to that question, and it certainly could not be considered confidential.
If there would be an increase in underwriter price, what data does the bidder offer to show the increased risks and proposed rates for continuing to use the ’security’ name? Since the insurance industry is driven by data, if the broker can not produce any data to show increasing law suits by similar patrols using security in the name, we could suspect we were just being jerked around.
Finally, if the broker insists we must have a separate policy or rider for keeping the Security Patrol name, maybe that minor cost would be worth it to avoid the disruption and destruction of morale within the SP community. I suspect whatever the costs might be, they would be trivial compared to dictating unreasonable terms to a very large group of dedicated volunteers who are worth many times their current costs.
After all, the costs would be paid by our community and the majority of homeowners may well prefer to pay an increased insurance cost than risk the destruction of the volunteer support of the organization.
Posted in Ann_Small, SCA Board, Laws & Rules, Operations | Print | 5 Comments »
Should We Be Concerned About The IRS Audit?
July 27, 2010 by kayfrank.
Some members are asking, “So what if the IRS is here to audit SCA’s 2007 income tax return? Haven’t we had the best HOA auditor in Nevada and many CPA’s on our Board and Finance Committees?” How could this happen?
These articles might help answer those questions:
After intense pressure from various members since 2007, the board finally disclosed in August 2009 that it had NOT been returning (refunding or crediting) all surplus assessments as required to qualify for an income tax exemption on the “surplus incomes from membership assessments”. Accumulated surpluses from over-charged assessments since 2002 was reported to be close to $5 million and growing.
surplus-build-up-2002-2009.pdf
The qualified people I know believe that all of that money should have been returned/refunded each year to SCA members. Since 2007, many competent SCA members have expressed concern to the Board and to the auditor at what has appeared to be a violation of IRS rules and tax laws, but all comments and recommendations have fallen on deft ears.
If the board, auditor and attorney have been perfectly correct all along, why have they refused to explain their rationale to concerned members? And, if the audit goes poorly, SCA members may see most of their money wasted on paying taxes, interest, penalties and professional fees instead of receiving credits to their accounts.
Meanwhile, we should remember that such IRS business audits can take months to complete and years to settle–if the board decides to challenge the findings in court. We will just have to wait and monitor the monthly attorney and auditor billings for signs of progress.
Use the “search” tool for “audit” at the bottom left of this screen to find all of the relevant Anthem Voice Blog articles since 2007. There are other related articles on the Anthem Today and Anthem View web sites and they also have search tools.
Kay Frank
Posted in Truth Squad, SCA Board, Operations, News! | Print | No Comments »
Board Failures on Liberty Center and Co-Gen Funds
July 24, 2010 by admin.
AnthemToday blog has sponsored investigative articles about board failures and deceptions concerning the major loss of the $1.4 million Co-Generation funds and the wasteful “greening” of Liberty Center.
To review the historical articles published by AnthemVOICE Blog, use the “search” tool at the bottom left column of this site.
To review past AnthemVOICE web site articles, go to this link for more details about Co-Gen and related matters.
http://www.anthemvoice.org/c-gen_issue.html
To review all of the recent AnthemToday articles use the following link and its search tool:
http://www.anthemtoday.com/forum/viewtopic.php?f=12&t=1897#p3097
In addition, here are specific responses to some of the recent bogus statements on these matters found on the Berman Blog. The board’s slide presentation on Rec. Ctr. 3 by Bd. Pres. Roz Berman, and Director Frank’s strong objections are found at this link:
http://www.anthemvoice.org/rec-ctr-3_issue.html
1. DAB said: “Note, too, that NONE of the threats issued by Bob Frank at the 2008 meeting came to pass.”
Our reaction: Those were not empty statements, and it is common knowledge that some investigations take many years before anything is released to the public. A good example is that the expected IRS audit of 2007-2008 is just now coming to pass. There is an old Yogi Bear saying of “it ain’t over til its over.” Many high-dollar disputes members have had with the boards are not “settled” matters.
2. DB also said: “Essentially, the SCA whiners who don’t want the issue to die are doing nothing more than object to a legitimate business decision by the duly elected Board of Directors. You can quarrel about the decision all you want, but these are the types of things we elect our directors to handle.”
Our reaction: It depends on one’s definition of “legitimate business decision” and on “handle“. If laws were violated, and major amounts of funds owed to the members of this association were lost or wasted, then the opinions of those above, and many others seriously concerned about SCA financial management will not be dismissed as “whiners”. Mr. Berman and associates should not forget that the losing board candidates in the two previous elections all received hundreds of member votes. Those member votes represents significant knowledge, continuing concerns and opportunities to become change agents in the future.
3. DB said: “I would also add that whatever credentials Mr. Miller claims to have as a “follow the money” expert apparently did not impress the Finance Committee when he applied to join it.”
Our reaction: One only needs to have a private conversation with Bob Miller and listen to his first-person accounts of financial fraud investigations in New York to recognize that he is much better qualified to be on the Finance Committee than many of those who were previously selected. Bob Miller is convincingly an honest, ethical person who would truly represent the best interests of our community members.
4. DB said: “Board Treasurer Shirley Cheri asked Attorney Song to comment on the question of individual Board members’ liability if they voted to execute the Settlement Agreement. Song said there could always be the question of individual liability, but he said that even if Bob Frank were correct in theory, the Board would be protected because, in Song’s opinion, it practiced due diligence and sought expert opinions. He added that he thought Bob Frank was in order to raise his questions, which he believed were in furtherance of Frank’s duty.”
Our reaction: Attorney Song acknowledged in public that Director Frank could be right for believing the deal was wrong in all of the ways he submitted.
5. DB said: “Song described the Settlement Agreement as a “carrot-and-stick” document.”
Our reaction: We saw it differently. In our opinion, it was outrageous for Pulte to claim it would take a year to re-submit and gain approval for the original building designs–without the LEED requirements. It was also outrageous for Pulte to refuse to proceed with building Rec.Ctr. 3 unless the board accepted the developer’s proposed agreement. And, it was also ridiculous for some board members to reject accepting the $1.375 million and demanding the original design be built because SCA “might” have to pay income taxes on the money. Our national tax experts advised the IRS would not demand tax on the co-gen money payment put into our reserves; and, even if taxes were paid on some cash withheld from the reserves, how many decades of energy consumption by that building would equal to a million dollars in the bank to compensate?
6. DB said: “Song went on to say that in order to validate his own conclusions, he had obtained other legal opinions which confirmed that SCA has no legal ability to contest the Pulte plans.”
Our reaction: When it was insisted that we get an “independent” legal opinion on our association’s position with regards to requiring Pulte to comply with all previous agreements, the board refused to even consider it.
7. DB said: “Al Tenner said he was not interested in the past.” Tenner also was quoted to have said: “Sun City Anthem does not have an absolute right to get the money,” he said, “and we don’t have the right to assert that the money is ours. It is a gift,” he said. “We don’t have a right to the money, and it is not a bad deal.”
Our reaction: This fellow is the former CA attorney who is reported on the CA Bar Assoc. web site as being disbarred a record of three times. Why would anyone could consider his opinions useful or quotable?
8. DB said: “Sonny Sonnenfeld said he disagreed with Attorney Song’s opinion that the building is a gift and not a bribe. He asked if there had been an energy audit to calculate the expected savings from greening the building. Roz Berman replied that his assumption was wrong that the greening is based on a specific payback period.”
Our reaction: Time has proven Sonny was correct; and, Roz Berman made a false claim. Nothing like an “energy audit” had been conducted, and no professional ever stated that the “greening” would have a specific payback period.
9. DB said, speaking about Bob Frank: “Sometimes his “facts” are so blatantly off the mark that it can be easily understood why he is held in wide disrepute over his inability to professionally document his accusations. What could be more laughable than his failure to come to grips with the following FACT? Mr. Frank writes that Roz Berman served on the Finance Committee from 2005 to 2009. Wrong!!! Roz Berman left the Finance Committee in early 2006.”
Our reaction: Mr. Berman is wrong. He likes to pretend that when his spouse was serving as Board Treasurer and then as Board President in 2007 to 2010, that she was not serving “on” the Finance Committee. But, that is his style of deception and spinning. Anyone who attended the finance committee meetings before 2007 and since could see that Treasurer Roz Berman never stopped “serving” on/with the Finance Committee–as the Board Representative. Technically she did not have a vote; but, as Treasurer/VP in 2007-2008, and later as 2009 President, and now again as VP, the finance committee she always got her way. So, she has been far more powerful (and FAR MORE ACCOUNTABLE) than just serving “ON’ the committee. In 2007, as the VP/Treasurer, she occasionally had major disputes with President Mike Dixon on what the finance committee would do. But, in the end, the finance committee never passed anything she opposed.
We work hard for the whole truth to be known to those who seek it. But, it is hard to achieve when so much time must be spent on unraveling the massive spinning on the Berman Blog. We are grateful that AnthemToday and AnthemView continues to work with AnthemVOICE to keep the brakes on the uncontrolled spinning of the Berman Blog.
And, this is a reminder that to stay on top of all of the facts must review all of the Anthem web sites (including the SCA-HOA). Each one is unique and elects to focus on different matters. And, with all that has happened in recent weeks and others that appear to be breaking in the near future, we recommend that members stay in touch with all of the news sources in SCA.
——–Enclosed Files——–
Board Report on Co-Gen & Rec. Ctr. 3
objections-to-co-gen_recctr3agrmt.pdf
Posted in Truth Squad, SCA Board, Community Affairs, Operations | Print | No Comments »
Federal & State Tax Audits Coming
July 24, 2010 by admin.
Here is the July 2010 Board President’s Report published by Jack Troia:
July 2010 SCA President’s Board Report
The arrival of the Internal Revenue Service for an audit is August 2010, and public confirmation of a State of Nevada audit of sales and/or use taxes on items purchased by SCA/RMI is also likely to start in August.
Also, note the sudden resignation of the SCA Community Manager–effective the next month. We do not know if such actions are related.
This suggests there may be some significant shortfalls in practical tax expertise and/or integrity within the RMI, auditor, finance committee and board resources.
Here are just a few of the links to past web articles about apparent SCA tax irregularities. They are not listed in any particular order:
http://www.anthemvoice.org/taxes_issue.html
http://blog.anthemvoice.org/2009/08/29/unjustified-47-mil-surpluses-forces-09-dues-cut-to-720/
http://blog.anthemvoice.org/?s=tax&paged=2
http://www.scaview.org/FalseReport.html
http://blog.anthemvoice.org/2008/03/10/errors-in-past-sca-tax-returns/
http://blog.anthemvoice.org/2008/03/26/truth-about-scas-taxes/
http://blog.anthemvoice.org/2008/04/01/dixon-fails-to-answer-key-question/http://www.anthemvoice.org/resources/SCA-HOA_tax_posting_revised.pdf
http://www.anthemvoice.org/resources/70-604.pdf
http://blog.anthemvoice.org/?s=tax&paged=2
http://blog.anthemvoice.org/?s=audit&paged=2
http://blog.anthemvoice.org/2009/04/13/729/
http://blog.anthemvoice.org/2009/08/20/tax-planning-workshop-friday-aug-21-2-pm/
http://blog.anthemvoice.org/2009/02/19/special-audit-items-for-2009/
http://blog.anthemvoice.org/2009/12/20/how-much-should-sca-dues-be/
Posted in Truth Squad, SCA Board, Laws & Rules, Operations, News! | Print | No Comments »
NEWS! IRS To Audit SCA Board & SCA Community Manager Resigns
July 22, 2010 by admin.
An AnthemVOICE leader who attended today’s SCA Board of Directors meeting said that Board President Jack Troia announced today:
1. The Internal Revenue Service will audit SCA CAI in the near future.
2. Community Manager Caren Carrero has resigned–effective end of this month.
More details will be posted as soon as we have them.
Posted in Ann_Small, SCA Board, Community Affairs, Operations, News! | Print | No Comments »
Boards Limited to Managing “Corporate” Assets?
July 17, 2010 by admin.
Starting with the infamous former Board President, Favil West, and his mentor, Del Webb-selected association attorney John Leach, SCA board majorities have been trained to claim they are only responsible for managing the SCA CAI community property and finances.
Said another way, the controlling directors have claimed the attorney and community management company have convinced them that the board has no duty or responsibilities to the members who elected them–except to enforce the governing rules and regulations and manage the resources.
This position has been proven wrong, but it is hard to make any changes in board behavior as long as the membership is denied the truth and kept ignorant of the facts. With this in mind, the following information is provided to help educate and to stimulate debate.
A. NRS 116 reviser’s notes from the 1999 legislative history concerning the purpose of NRS 116 says:
REVISER’S NOTE. “Ch. 617, Stats. 1999, the source of this section contains a preamble not included in NRS, which reads as follows:
“WHEREAS, Planned communities are a dominant method of residential development in the State of Nevada; and
WHEREAS, Planned communities are developed for the purposes of preserving neighborhood continuity and creating desirable places to reside; and
WHEREAS, Planned communities are governed by specific rules and regulations and by unit-owners associations; and
WHEREAS, A unit-owners’ association is the form of self-government closest to the people; and
WHEREAS, All forms of government should follow the basic principles of democracy found in the United States Constitution and the Nevada Constitution; and
WHEREAS, Some unit-owners’ associations in this State have a history of abuse of power; and
WHEREAS, Unit-owners’ associations have power over one of the most important aspects of a person’s life, his residence; and
WHEREAS, Homeowners invest financially and emotionally in their homes; and
WHEREAS, Homeowners have the right to reside in a community without fear of illegal, unfair, unnecessary, unduly burdensome or costly interference with their property rights”
B. Tim Stebbins has recently written an overview of some of the basic homeowner association corporate issues. They are quoted below:
“For starters here are some major and significant differences:
Purpose of the corporation -
1. Corporations, for profit or non-profit, produce or distribute goods
or services of some type.2. HOAs only operate and maintain properties owned by the HOA, and
occasionally acquire additional properties.Stockholder/Member obligations -
1. Stockholder/members of for profit or non-profit corporations have
no obligation to give any money to the corporation.2. Stockholder/members of a HOA are required to continuously give money to the HOA.
Quality of directors -
1. Directors of for profit or non-profit corporations are typically skilled and experienced business people. They are elected based on their abilities.
2. Directors of HOAs are typically persons with little or no business skills or experience. They are elected based on popularity.
Tax obligations -
1. For profit or non-profit corporations are required to pay tax on profits. No way to avoid it.
2. HOAs can avoid taxes on profits if the profits are returned to the stockholder/members.
Maybe (others) have some additional points as well.
Tim”
C. Las Vegas Attorney Robert E. Sullivan (who practices law representing HOA homeowners having disputes with HOA boards, Arbitration Judges, and/or Nevada State Agencies) has responded to Tim Stebbins’ comments as quoted below. AV has underlined and made some items bold for emphasis. (By the way, Mr. Sullivan mentions the need to update NRS 81, a common statute used for many of the early Nevada HOAs, but the NRS 82 used to incorporate Sun City Anthem would require similar updates at the same time.)
From: “Robert E. Sullivan” <rsullivan@bhpslaw.com>
Date: Thu, 15 Jul 2010 21:45:10 -0700
“Hi Tim,
You are exactly right on all points!
There is an intrinsic difference between holding shares in a corporation (stock is fungible personal property) and ownership of a house within an HOA (real property; NOT fungible).
Thus, the actions of an HOA should be governed, not by run-of-the-mill “corporate law”, but as governmental / quasi-governmental, because HOAs are imbued with the imprimatur of state law and because they exercise traditional governmental functions with respect to private property rights. Private property rights are rights of first-order significance under our Constitution.
HOA attorneys focus way too much on the “corporate” identity of HOAs (because it excuses a lot of bad / lazy behavior), while at the same time they (deliberately) ignore the real property aspect of HOA “business“.
That is why I think REAL REFORM of HOA law in Nevada will have to involve reform of Nevada corporate law. Thus, we must not just examine NRS 116, but also address the treatment of HOAs as corporations under NRS Title 7 (NRS 78, NRS 81, etc.). Reforms must be made so that HOAs are properly regulated with the types of open meeting requirements, “sunshine laws”, and/or fiscal transparency that good government is subjected to.
The usual justification for the corporate veil of secrecy is so that companies can develop market strategies and/or otherwise obtain competitive advantages over their competition in the marketplace. Logically, if corporate board meetings were subject to open meeting laws, and if their books were open to public inspection, then every company’s competitors would exploit that information to destroy the competitive advantage of the company. This, in turn, would destroy the incentives to innovate, and the free market would either be destroyed or would become very stagnant.
Those justifications DO NOT MAKE ANY SENSE in the H.O.A. context! One HOA “corporation” does not need to hold secret meetings to preserve a competitive advantage against neighboring HOAs. Secrecy and autonomy may serve a valid business purpose in the corporate world, but secrecy and a lack of accountability do NOT serve a valid purpose in the HOA context.
I have yet to hear anyone give a good logical reason why HOAs should be able to operate within a veil of secrecy. HOA attorneys simply argue that HOAs should be able to do so…because they are corporations. That’s circular reasoning. It is tautological.
The “good news” is that corporations are “creatures of statute.” Therefore, a lot of the problems with HOA “corporations” could be remedied by changing the statutes that govern them!
Looking at it from another angle: a lot of the provisions in NRS 116 that are “homeowner un-friendly”, which protect the HOAs and CAMs, are there because the HOAs are being treated as corporations. In other words, NRS 116 starts with the premise that HOAs are corporations, and it strains to treat them like a business corporation.
But if NRS 81 can be revised so that HOAs are treated as quasi-public corporations, and perhaps required to comply with open meeting requirements, ethical standards of conduct, financial transparency, etc., then that will take away the justifications for the anti-homeowner tenor of NRS 116. Changing NRS 81 and/or NRS 78 might be the secret weapon that could be used to ‘drain the swamp’.”
Posted in SCA Board, Truth Squad, Community Affairs, Laws & Rules, Operations, News! | Print | No Comments »
What Can Be Done About The Ugly Restaurant Signs?
July 16, 2010 by bobfrank.
The board’s anointed blogger has launched his usual personal attacks against people for daring to challenge the board policies on anything. So, here are some specific facts on an otherwise confusing situation concerning the burma-shave style of temperary signage being used by the new SCA restaurant lessees. See this link at Anthem Today for more details and photos of the signs:
http://www.anthemtoday.com/forum/viewtopic.php?f=26&t=1879&p=3061#p3061
1. Berman claims that none of the sign policies or authorities by any of the committees apply to the restaurant lease, and that the community manager can allow anything she wishes as an “administrative decision” without redress.
- Hogwash! We know for a fact that the CAM does nothing without permission from the board president, and when allowed to do so, the various standing committees do have jurisdiction over community property policies.
- So, if you hate the signs, focus your attention on Mr. Troia. He is solely responsible for the outrageous restaurant signs polluting our beautiful community. There are no “loopholes” in the committee structure. One or more can easily exercise authority over such matters affecting abuse of community property–unless the board president blocks them from taking action.
2. Berman’s buddies have suggested that someone other than me should remove the signs (undamaged) and deliver them to the CAM office for return to the lessee. In this case, I have to agree. If no one else is willing to do something tangible about removing the eyesores, than the various blog complaints will have no effect.
- I was challenged to prove that signage abuse on community property was dealt with in the past. Ok, there were some cases in recent years when real estate agents put out inappropriate and excessive numbers of real estate signs (similar to the burma-shave style), and they were required by the CAM to remove them. Some even involved Pulte marketing people during the late stages of home sales (they seemed to forget they no longer controlled the association). I know of one case where a board member removed some flagrantly abusive real estate signs and delivered them to the CAM. They were returned and the agent told to not do it again. That agent got the message, and it did not repeat its misbehavior.
- Since the Board President has apparently approved these ugly and inappropriate restaurant signs, it is always possible the board could object to unilateral removal and then charge a member with something ridiculous. But, as long as the signs were not damaged, it is unlikely there will be board action. Meanwhile, it is unlikely the same lousy signs will be re-installed on SCA community property by the lessee.
- One would expect the lessee has not gained any positive benefits from the signs, and it could agree to removing them, or at least allow a community member or RMI to take them down and return them to the company. And, the end result is that the lessee and CAM might use better judgment in the future.
- If not, we can look forward to many more such “garage-sale” type signage in the future. The conclusion is that people can put such temporary signs up on community property–as long as they are buddies with Jack Troia. So, for those of you who wish to advertise such Troia-favored events as Tall Mesa parties or Bowling Club events on community property, it appears you might get your friend, the board president, to allow it. Perhaps the board president is also indicating he believes he has the personal authority to erect his own, large re-election campaign signs on community property next year? Who would dare challenge his apparently unilateral power to do whatever he wishes?
3. On a different aspect, some of the business marketing experts in our community might like to comment on the value and low expected results from the lessee’s signage tactics? It will always be extremely difficult to attract tourists and others unfamiliar with the SCA area to locate the restaurant, and to seek it out–unless it become a world-class culinary experience like a Chef Wolfgang Puck type of operation. Perhaps that is the goal for the future? But, since an experienced, wealthy, and highly profitable restaurant operator like Victor Scotto of the famous “Scotto Brothers of Long Island” failed to do so within 5 years, why would the current inexperienced operator have a better chance in the current market?
- And, that previous failure is a key reasons why it should never have been opened to the public in the first place. Moreover, true success as a public dining destination is the worst possible thing that could happen to member enjoyment of Anthem Center. Imagine having to always have reservations to eat at normal times in our own facility, fighting over parking spaces, constantly dirty restrooms, and having to suffer the other gross inconveniences and safety problems of trying to police the disrespectful public and their children. The past proved that many of such public people are certain to be disrespectful and constantly trying to ramble throughout Anthem Center facilities, the pool, and other grounds! How could public success of that type ever benefit our community?
- Few potential customers of such a high-priced menu would ever be attracted to such unprofessional signage. Such people are not the kind of customers who would happen to stumble across the existence of the restaurant and its view, and finally decide to wander into the facility for a spontaneous dining experience. And, those who are heading to the restaurant specifically to eat there will Google it in advance, and should not need the kinds of signs we see. Of course, an inadequate/uninspiring web site sponsored by the lessee will also discourage visitors even more than the ugly signs.
- Either way, the temporary burma-shave kind of signage at the destination is never going to be effective. That kind of advertising would have to be more professional and attempted along the Eastern, St. Rose, and Volunteer access routes. Ask Pulte how difficult/expensive it was to advertise their close-out homes in SCA. The lessee has a similar problem.
- The destination, temporary, saturation signage approach proves how really inexperienced in business the board president and restaurant operators are. The lessee will not turn the property into a commercial success this way, and ugly signs crammed into resident faces every time they visit Anthem Center is the least likely way to attract and motivate our SCA members to patronize the new management.
Posted in SCA Board, Community Affairs, Laws & Rules | Print | 2 Comments »