For Board Workshop, 4/26

With a packed agenda and as the last Board meeting under the control of the Developer, it was disappointing to see no more than the usual number of residents in attendance. While no one looking at that heavy agenda could find the word  “Trumpets” displayed anywhere, Trumpets nevertheless continued to play an important part in the meeting. Giving the Trumpets indebtedness issue some prominence, Dea McDonald took several moments at the beginning of the meeting to summarize the conclusions of the Board’s Trumpets workshop this past Tuesday. That workshop dealt with the issue of Trumpets indebtedness due to their failure to comply with the terms of the lease in making timely payments to the Association. In so doing, Dea McDonald reinforced the workshop’s conclusions, expanded below for needed clarification:

• that Trumpets, based on the adoption of a different accounting method from the one employed by the Controller, now owed the Association roughly $14,000 instead of the $100,000 the Association had previously determined due and had unsuccessfully sought to collect from the lessee;
• that S & D Café, the lessee of Trumpets, will not pay the Association any late penalty fees under any circumstances, let alone this revised amount, thereby leading to the present standoff;
• that the Association will not press or pursue its revised claim against Trumpets; in other words, either there is no balance owing the Association or the Association will merely write it off as an uncollectible debt; and
• that the matter of any amounts owing will no longer be carried as an unpaid debt, but, instead, will be placed in the hands of our Trumpets Liaison Committee to work something out with the lessee in some mutually agreeable manner.

That “Blue Card” Question!

If that were not enough, the Trumpets matter came up in one of those “Blue Card” questions submitted by one of the candidates for the Board who has an accounting background. According to the questioner, after a careful review of the terms of the lease, asking some pertinent questions of the resident auditor, and professing his concern and the need to clear up some questions, his “Blue Card” inquiry asked if he could have copies of the work papers that led to the workshop’s conclusions on Trumpets indebtedness. Although seemingly a simple request, the answer, according to Dea McDonald, was an  unequivocal, “No!”

Ostensibly having a powerful reasons to justify its Trumpets decision to the members, Dea McDonald found himself in the uncomfortable position of having to deny a member access to the very records that presumably would have supported the Association’s action. Was there a problem? It would seem that the level of openness available to members of the Association on an issue of Association business and indebtedness does not reach down to the Association’s members. It’s remains unclear what would be needed for a member to gain access to this important documentation.  

The Outside Audit 

And finally, Dea McDonald entered the Trumpets realm for the third and last time. Following his “you cant have access” response and most likely looking to quell any further inquiry into the Trumpets debt matter, Dea made what appeared to be a promise the Board had no intention of keeping. Seemingly a tad rattled and apparently in an effort to satisfy resident concerns over this uncollectible debt issue, Dea proceeded to announce that the Board would be seeking an outside audit, one, he said, that would address the indebtedness issue and the workshops conclusions. That simply will not happen.

It was the impression of some in the audience who had attended that workshop that Dea simply misspoke, presumably not deliberately, although that remains a possibility. In so doing, it would seem that Dea had mislead the audience on the nature of the audit to be conducted. While the workshop meeting indeed had mentioned a future outside audit, that audit was NOT to be an audit of the debt matter, but instead, was to be an audit specifically called for under the terms of the lease: an audit of gross proceeds to ascertain compliance with the revenue sharing provisions of the lease. That’s it! Having listened to and presumably having read the workshop report a number of times, it’s difficult to understand how Mr. McDonald could have gotten it so wrong.

On Getting it Wrong

Moving away from the Board meeting for the moment, but not the topic of interest, some residents continue to believe that our Controller got it wrong, that she is the one who got us into this indebtedness mess in the first place, and that everything will be OK if she were fired. I would like to offer some comments and information about this matter.

·        The SCA controller did not get it wrong. There was no mishandling. Under the terms of the lease, the controller may and did compute late fee penalties in a manner that is readily recognized and is perfectly acceptable in the accounting industry. The controller's methodology is no less wrong than was the methodology used by Mr. Jack Silas is right. While both are accepted methods of computing late fee penalties in the accounting industry, Mr. Silas just happened to leave that piece of information out of his presentation. Mr. Silas knows that and if asked he will likely tell you so. According to Mr. Silas, the controller had actually undercalculated the amount owing in not compounding interest.

·        There was no October surprise! Contrary to some reports, the indebtedness matter was vigorously tackled from the very beginning. With no resolution between the parties, the amounts owing merely continued to grow. There is no arbitration clause in the lease and, unless I’m mistaken, the lessee would not voluntary agree to arbitrate. The only recourse was a legal one, which was not an option.

·        According to Dea McDonald, and speaking in defense of the controller at the workshop, the ONLY thing she did “wrong” was to let the indebtedness cat out of the bag at a meeting of the Finance Committee. But to suggest from that event that others were not long privy to what was going on would be a mistake. In any event, the controller really did no wrong and is entirely blameless. The controller made no accounting mistake in adopting the methodology she used in arriving at her estimate of the amount found due. At the most, she may have undercalcualted the amount owning.

·        The revised amount found due at the workshop was merely an exercise to present a more “acceptable” amount to the community, an amount that would be less embarrassing for certain members of the Board to walk away from collecting. And, besides, having to campaign for the Board and attempting to explain away a $100,000 uncollectible debt did not set well in some quarters.    

Moving On

Now, back to the Board meeting with a few remaining items.

• Manager Selected. Dea announced the selection of a new Community Association Manager, who will replace Judy Farrah. She will report for duty on the 23^rd of May.
• Let their be light. Up for the Board’s funding approval action was improved night lighting around the extremely dark circle in front of the main entrance. This very long sought after improvement was summarily dismissed for reasons that were not made clear. Perhaps DW decided the residents could use “light sabers” to expose their presence, or more preferable, that DW could accomplish more and save us some money in turn by fixing the problem themselves. That would be nice.
• Sewers are in a stitch. After being told they could move into their expanded quarters left behind when the Arts & Crafts moved into the Independence Center, the Sewing Club reasonably assumed that along with that move, the Association would fund the purchase of additional machines. To their dismay, the Club was told by the Finance Committee, “No,” that the Club would have to fund their own purchase of new equipment. The Club, in appealing to the Board, claimed a foul, citing as an example the extravagant expense incurred by DW in furnishing the new pool room with state of art pool tables when the Billiards Club moved from one building to another. What’s fair for the Billiards Club should be as equally fair and applied meeting the needs of the Sewing Club.
• Tennis anyone? The Board acted to increase the amount of prime-time tennis play from 11 to 15 hours a week per court. With a potential of 35 prime-time hours of play available per week per court, this leave a total of 20 prime-time hours a week per court that the Association has NOT scheduled for Tennis Club or any other use. Apparently the prime-time needs of the Tennis Club are being met with only 15 out of a total of 35 hours of prime-time play hours available per court per week. Does anyone see something wrong with this picture? Not too worry, though, since there will be 6 additional courts constructed in 2006, adding an additional 210 hours of prime-time playing hours each week.
• Channel 99. Good news! Back on schedule, the crawl message has been changed to report candidate viewing times. Dea, perhaps a cook himself, asked how many in the audience (presumably composed of the more active or interested folks) had seen the cooking lady’s presentation on Ch 99. A disappointing number raised their hands.
• The Clarion Newspaper. DOA. As originally envisaged, there will be no such newspaper, although some publication diehards continue to remain hopeful that they can still manage to pull that newspaper cat out of the hat. Until then, we will have to continue to rely on the AC for all the news that the Association deems fit to print.
• Election Committee Stuff. First, the good news. Bob Berman announced that everything is proceeding according to plan and all is apparently well on the election front, except for one matter (latter). As Bob explained, the Polish-produced ballot envelops are a tad shorter than the Scantron ballots that must go inside. However, he correctly insisted that they can still be used to fit the longer ballots. And to the inquirer who wanted to know if they could cast 6 ballots for one person, he said, “No.” Up to six votes for six different individuals, or 5 votes for 5 different individuals, etc.

Second, believing that the Election Committee had been unfairly criticized by yours truly for its role in the last debate’s questioning process, Bob rightly defended the hard and good work of the Committee members against what he & others viewed as unsupported allegations directed at the Committee.

In its defense, the Election Committee relied on a process (used for the first time) for an explanation of events to deny any involvement in the questioning of candidates. That process, which may have worked as intended, was designed to absolve the EC of any responsibility for knowing the content of questions asked. As to how that process actually operated, however, given the detailed wording of that so called "gotcha" question asked of a candidate, and without obtaining additional facts from the point of origin of that admittedly hostile question through to the end, neither I nor the EC is in a position to say for sure what really happened or who, if anyone, may have been responsible, even though it would be nice for us all to believe in what Mr. Berman had to say at the meeting.

Ron Johnson

4/29/2005