Return to Today's Anthem View The Art of the Con, Part 1 The Art of the Con, Part 2 The Art of the Con, Part 3

THE ART OF THE CON, PART 4

An unexplained million dollar reality gap

Board officers can publish what they wish, as they plainly did at the Villa owners meeting in July 2007. In that meeting, the board made an unusual albiet totally false claim. That claim was that the level of fully-funded Villa reserves at the time of transition in 2005 totaled $323,701. For a number so precise to the dollar, one might readily assume the truth of the board’s claim, as most Villa ownner did. But if not that number, then what number?

In giving us their figure, board officers as fiduciaries must be cognizant of their responsibility not merely for the accuracy of what they publish but also to provide homeowners with an acceptable explanation of what they did and why. However, on this occasion, the board's credibility would be severely tested. The board’s officers making that July presentation, Roz Berman and Mike Dixon, were not merely careless with the facts, they were about implementing an ominous game plan with devious consequences. Roz Berman would proceed to hoodwink Villa homeowners with a series of phony reserve figures.

Unfortunately, here we have a glaring, and sadly for Villa homeowners a very costly, example of board officers making unbelievable transition reserve claims which cannot be verified, cannot be supported under any circumstances, and cannot pass the smell test for accuracy and reliability. However, my saying so does not necessarily make it so. Next to showing you a picture that attempts to explain all, a chart is the next best thing that can go a long way to demonstrate what this Villa reserve matter is all about.

In the chart below, we have two columns. The first column to the left tells us what the board claimed at that Villa owners meeting as the level of fully-funded Villa reserves at transition, or roughly a combined total of $324,000. The second column, and key column for our purpose, tells us what the board knew based on the recently completed 2006 Reserve Study. That study reported the level of fully-funded Villa reserves at the end of 2006, which was more than a year after the date of transition.

Now, if the only data available to the board in July 2007 tells them that the amount of fully-funded Villa reserves at the end of 2006 is $1.47 million, how was the board able to publish a calculated amount as the level of fully-funded reserves at $323,701 for 2005? We may never know. For those who have forgotten, that amount just happened to yield an alleged Developer Excess in cash contributions.

More simply, how will the board ever be able to explain that million dollar discrepancy for essentially the same amount when there is no reliable source other than what was reported by a third party only months earlier in the 2006 Reserve Study? Answer: In a nut shell, the board can’t and apparently they wont even try since to do so will expose their devious intentions.

So, where does that leave our Villa homeowners? Using what the board claimed in July 2007, the West/Dwyer settlement agreement resulted in an Excess Developer contribution of $19,985. However, using the data from 2006 Reserve Study as an approximation of the level of fully-funded transition reserves, that alleged excess actually becomes a million dollar Deficit. For a more detail description and comparison of the various amounts involved, Click Here.

Said differently, the West/Dwyer settlement negotiators eventually walked away from the negotiating table, leaving behind an unclaimed million dollars on the negotiating table for the following board to deal with. And deal with they did! Elsewhere I have attempted to explain how the Dixon/Berman board, along with certain cooperating committee members, proceeded to deal a death blow to the honest aspirations of the Villa homeowners for fair and equitable treatment they were entitled to but were wrongfully denied.

 
Ronald Johnson, 25 July 2009