Untitled Document

"Getting to Know You"

A response to Al Glickman on his more recent OP-ED comment on Neighborhood reserves

Ron Johnson below in boldface

Al Glickman below in lightface

Well, hello again, Al Glickman

The issues you recently raised are important and deserve a response. You point out a potential problem about any election at any level of governance. If matters are perceived to be OK by the voters, then those judged responsible for your feeling of well being are typically kept or voted into office. If that perception is strong enough, voters may actually dismiss or ignore certain uncomfortable facts that paint a contrary view or do not fit into their preconceived notions. While that may be their choice, those uncomfortable facts do not go away or change, leaving the voter to accept the consequences of their ballot decision.

Al may be a typical example of a Sun City homeowner who knows some things but is really uninformed about many other things. Al acknowledges that in his more recent blog posting when, in response to a Villa homeowner who had contacted him, he apologized for his misstatements and for misunderstanding the Neighborhood’s unique situation.

Well, never did I think that anything I said would cause enough of a stir to rate an entire Ron Johnson Op-Ed piece. I'm honored. Or maybe I am just clueless enough to keep it up. . . . . . . . . .

Based on what we have here in SCA, I remain convinced that our present dues structure is very reasonable and that, regardless of who should get the credit, someone did something right. I also am convinced that most people here are very happy that even in this economic timeframe we do presently have a stable association, and I'd bet that they are willing to keep our present dues level or even pay a bit more to keep that sense of security.

Low dues and long term financial security are why many people are voting for Roz Berman, Jack Troia and maybe also other Unity members.

As corporate America knows only too well, when money is flowing in there is little need for concern. One “problem” facing corporate America was what to do with all those surplus funds. If the money were invested wisely, companies typically prospered. On the other hand, as in the Enron case, if the company took unsafe risks and attempted to cover them up, the company likely faltered and eventually collapsed.

In Sun City’s heyday, the dues structure and the sale of new homes by the Developer generated an additional $1 million a year, year after year. As with corporate America, Sun City’s major fiscal problem was the proper allocation of those additional funds, not in finding new sources of revenue. When your major problem is surplus funds, there is little effort needed to maintain or justify an artificially high dues structure. That surplus situation has only recently changed.

With Sun City’s build out completed, that surplus “problem” will no longer exist. With the new Liberty recreation center coming on line at the end of this year, and no surplus to count on, the Association will have to raise roughly $1 million annually to pay for that new amenity. As a result, a substantial increase in assessments for CY 2010 will be needed to take care of that need.

Getting back to decision-making issues. While Enron took unacceptable investment risks that led to its downfall, nonprofit entities like Sun City are not necessarily immune from decision makers taking unacceptable risks. Fortunately, however, our income is invested wisely and the Finance Committee is always alert to allocate our funds properly. So, with that acknowledged what could possibly go wrong?

Indeed, what could possibly go wrong? What went terribly wrong was when board officers Dixon-Berman decided that it was in their interest to make roughly $500,000 in potential reserves (a 2006 reported shortfall) for Neighborhood homeowners to somehow disappear, as if that shortfall never existed. That effort took some quite clever and deceptive bookkeeping. Rather than a mere accounting entry, however, the Dixon-Berman decisions on this matter actually harmed our Neighborhood homeowners. Those decisions amounted to roughly $1,300 per Neighborhood homeowner, money that they would never allocated to their reserve accounts. That’s money that, if acquired, would have been set aside as reserves to do needed Neighborhood repairs in the future. Instead of that money coming from Pulte or the Association, where it could and should have come from, the Finance Committee and the Board decided to have the homeowners make up for that shortfall in reserves by increasing their assessments.

Their decision to erase that potential liability from the association’s books is no different from the practice engaged in by companies like Enron who covered up their misdeeds by cooking the company’s books. You deceive and engage in secret transactions and eventually you arrange to cook the books to hide from your fellow homeowners what you do not wish them to know. That in a nutshell describes what Roz Berman orchestrated and Jack Troia implemented in his role as Chair of the 2005 "look-back" reserve task force.

I guess that this is where we differ the most. I feel that there are more important issues than recovering all of what we may or may not have lost while you do not. Admittedly though, I was not as involved in the "loss"
as others.

Al, I would like to think that your standards of conduct are no different than mine. Insofar as the deliberate errant actions of the board are concerned, I believe there is nothing more important than doing the right thing. If we have enough time, perhaps you will agree with me.

Is it worth it to keep going after whatever amount of money the Neighborhood owners, or all of us, may recover or to "punish" people who were all volunteers, if it continually harms the community, both inside and out, thereby eliminating any chance of our recouping lost home values, which, I believe, is a far greater present economic harm that we have all suffered?

Al, the mantra that doing the right thing is in any way harming the community is simply ludicrous. I believe that looking the other way, essentially doing nothing, does a huge disservice to the future governance of our community. Only by securing equitable relief for those Neighborhood homeowners who were deliberately harmed by the board’s action will the community be truly at peace.

As far as I am concerned, equitable relief does not entail punishing anyone, but in securing what is rightfully owed to those Neighborhood homeowners who were harmed by the board’s actions. The board has the power and the duty to make this right. Whether they will do so voluntarily is another matter. What is certain is that if Roz Berman and Jack Troia are elected to the board, the board will fail to act responsibly and take corrective action that is needed to resolve the Neighborhood reserves issues.

Just to clarify, I am not a Neighborhood homeowner.

Ronald Johnson, 16 April 2009

Note: The title "Getting to Know You" is from the show tune from the 1951 Rodgers and Hammerstein musical The King and I.