Highlights of the June Board Meeting

Again my esteemed colleague in internet publishing David Berman has published an excellent and very detailed summary of Thursday's Board meeting. To read his summary, click here.

While Mr. Berman is optimistic about the progress being made by our new Board, an opinion I share in principle, I have a slightly different perspective on the direction that alleged progress is taking us. To illustrate my point of view, I will conclude my discussion on the Board's problems in their attempt to fast track the replacement of 3 treadmills with 3 elliptical exercise machines.

I suggest that the attitude that this Board action displays reflects a certain degree of benign contempt for process, truthfulness, and, yes, the rest of us.

The Board in Denial

As I had previously alluded to, the Board had what I called a problem of elliptical proportions. I am only now beginning to see what the Board is all about when it comes down to the simple task of purchasing. Here is what I have learned so far. They, meaning the Board, will decide for us what the Community’s needs are and they will act accordingly. If that happens to conform to the Community's liking and needs, all the better. Whether one calls this type of behavior micro managing or a form of imperial rule, it all comes down to the same thing.

Let’s see how this is supposed to work by taking a look at what I call the NEW purchasing strategy, uniquely illustrated by the Fitness Department’s recent request for 3 elliptical machines to replace 3 treadmills. Contrary to the Board's recent "explanation" of this activity, the 3 ellipticals would be up and running had the Finance Committee, at least in my mind, not smelled a red herring and balked at the request. So, here is what the Board would have preferred to see happen:

• RMI goes to the Board with a request in May for 3 elliptical machines to replace 3 treadmill machines.
• The Board apparently likes the idea and OK's the request.
• The next and significant step is to place the requested item on the capital (or reserve) budget, as appropriate, meaning that funding has been pre-approved by the Board. In other words, buy the item.
• We’ll call the placement of any such funding request on the capital (or reserve) budgets the "fast track" process, which gives the Board the authority to essentially bypass the established Committee process, except for the Finance Committee. The traditional role of the FC is merely to verify that funds are actually available at the time the request is made, are budgeted for, and to take affirmative action.  
• The FC confirms that the item being requested is included in the budget, that the amount being requested is not above the amount on the pre-approved budget, and recommends to the Board that the item be purchased. Everything is going as planned.
• About two weeks later, the Board meets and receives the recommendation from the FC. The Board then acts to approve the funding request for the item, in his case the 3 elliptical machines.

Since the intent all along was to bypass P&G, we learned later that RMI ostensibly committed the procedural misstep of sending the request for the 3 ellipticals to P&G, who acted on the item as if they had a mandate to do so. Mr. Dixon subsequently took care of that presumed fau paux action by P&G by directing that P&G erase their record of this matter as if it never occurred.

   Then, instead of the FC performing their traditional duty, as set out above and sending the item forward for approval, the FC balks at approving the request. In listening to the elliptical request discussion at the FC meeting, which included, as at the P&G meeting, a presentation made by the Fitness manager, safety issues and all, it was evident to me that there were serious problems with the Fitness request. I was not alone in discerning the difficulties involved since the Committee did not agree to the purchase of any elliptical machines the Board had already approved of purchasing.

The most serious obstacle to overcome was the issue of replacing 3 treadmills with 3 ellipticals. That a horse is not a camel was a potential red flag, apparently not to the Board, but a flag the FC was supposed to ignore. The unanswered question to this day was the rationale or basis for replacing treadmills with ellipticals. P&G listened carefully to the potential safety issues and concluded the rationale for replacing 3 treadmills with 3 ellipticals did not fly. It seemed that the issues for both P&G and for the FC was one of lifestyle and Community demand and less out of any potential concern for safety, a weak rationale that apparently got the Board's attention and ultimately their support. The FC also listened carefully to the rationale and was obviously troubled by the request. In fact, they were so troubled, they also concluded that the rationale provided by Fitness was insufficient to support the request, a rare step for the FC to take.

Then came the June Board meeting. There was no P&G report on the request for elliptical machines since Mr. Dixon took care to color that action gone as if it never happened. And, there was no FC recommendation to purchase the 3 elliptical machines since they made no such recommendation.

So, you may ask, how did the Board “take care of” or handle this apparent rejection of their decision to purchase the elliptical machines? The Board’s point man on this issue was Roz Berman, the liaison to the Finance Committee. If you forget, she was the one who had mislead the FC into believing that P&G had already approved the request for the 3 elliptical machines at an earlier date.  But we know that that prior event never occurred. At best Roz had been ad-libbing and at worst, she was inventing to get the FC to approve the action the Board had already agreed to--buy the elliptical machines.

So, at the Board meeting, what did Roz Berman tell us about the FC’s action on this request? Before we get to that, let’s recall what we did not hear at the Board meeting. We did not hear that the Board had already decided to:

• Replace 3 treadmills with 3 elliptical machines.
• Fast track the Fitness proposal by placing it on the capital (or reserve) budget.
• Bypass the P&G Committee since the Board had already determined the Community’s need to eliminate 3 treadmills for 3 elliptical machines; ostensibly, we learned that it was only through an RMI so called “mistake” that P&G actually received and acted on the Fitness request.
• Rely on the Finance Committee's quick turn around and approval for the purchase of the 3 elliptical machines since the item was already listed in the Board-approved budget.

The Board’s expectations were clearly very specific if not high. But things went quickly awry. P&G performed on the Fitness request when they were not supposed to. And, the FC, well, did not act favorably on the Fitness request as the Board had assumed they would. With nothing going right for the Board, as in most endeavors when Plan A fails, there may be a need to call upon what is euphemistically called, “Plan B.” Let’s see if I have this right. The new, after-the-fact Plan B, called for something like the following scenario, which was spelled out at the Board meeting. The Board would:

• Declare to the assembled residents that nothing is awry at all. In fact, everything is going according to plan.
• Declare that what the Board wanted all along from the FC was [not their approval on the proposed purchase of 3 elliptical machines but] their detailed analysis of how to manage future requisitions of very costly fitness equipment that was previously leased and is wearing out, including the development of a long-term plan to bring that about so as to not adversely affect our budget cycles.
• Then backtrack by announcing that the elliptical machine request would be sent to the respective Committees for their review and actions, as if that was the Board's original intent all along.

So how did Roz explain the action of the Finance Committee? Incredibly, I thought, when she announced to the audience that the FC’s failure to act on the Fitness request reflected their “need for more time to review.” Please! More time to review what? Was Roz referring to the Fitness request or was she referring to the Board’s new “Plan B” mandate to the Finance Committee, of which the Fitness request is a very small part?

As in the infamous “it all depends on what the definition of “is” is, we now have a clearer example of Board-speak. I assume that Roz was mostly likely referring to the new Board mandate to the Finance Committee that was just announced at the Board meeting. That new mandate is to develop an overall, long-term purchasing strategy to periodically replace existing fitness machines as the need arises. Roz' "need more time" comment would make some sense in that context, but clearly not in the context of the request for funding that was then before the Finance Committee. The Board wanted to replace those treadmills with ellipticals asap, not after some extensive review of the matter.

• The Board and its president are in a learning mode and missteps are not unexpected.
• The Board may exhibit some flexibility in responding to new developments.
• The Board appears too quick to make decisions that affect the Community’s interests without properly evaluating the needs of the Community or the consequences of their decisions.
• The Board is reluctant to admit mistakes. In fact, the Board would deny that any mistakes were made.

Ron Johnson, 2 July 2007