Published on June 26, 2009
A Publication of Residents Voice June 2009 Volume 2 Issue 5 The Voice Elephant! (What Elephant ?) T he United Board is facing it’s first ever re- They are unwilling to make this public so that call of a director, in fact, FOUR Directors! every owner understands what this meant to the These Directors believe that the action was ini- United Mutual assessments. Not only will they not tiated by Direc- tor Mike Curtis, make this public, but, they will not even admit that “so he can run the Mutual by if this happened, it was potentially against the Cor- himself, as he sees fit.” The re- porate Code and is an illegal operation of a Home call is actually the result of the Owners Association Managing Agent. trating on Mike $5 board concen- .4M Mr. Johns continuously states that he only does Curtis and being what the Mutual Boards tell him to do. Did the blind to the ELE- Boards tell him to give his staff $5.4 million in in- PHANT in the room to centive bonuses? No! That action was initiated the tune of $5.4 million solely by Mr. Johns without the knowledge of the dollars that PCM has Boards. The people being recalled want us to ig- nore this past action and to start afresh with a clean slate. Most residents support the objective of Mr. Curtis which includes an understanding of how the Incen- tive Bonuses were derived, AND, are there other similar expenses of which the Boards and owners were unaware? Inside this issue: Find us on the Web The Elephant 1 WWW.RVOICE.ORG Should we Recall? 2 Senior/Criminal 3 Residents Voice United Board Meetings Spec United Mtg 3 Thursday, July 09 Transfer Fee 4 Thursday, July 23 San Sebastian 5 spent between 1996-2006 without justification, consensus or even knowledge by the majority of CH #5 6:30 pm Smash & Grab 6 any of the Mutual Boards of Directors. Opinion 8 Page 1 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 6. Do you think it should be made public? Should Why Would We Recall the owners understand the details of the In- centive Plan? United Directors? 7. Do you believe that we should review the pub- lic statement by the General Manager that the Credit Cards that were issued to his staff, were A ll United Owners will be receiving a letter in the mail during the next couple of weeks. This will contain a ballot to allow you to either for “emergency use only?” 8. Do you feel that just because you have been made aware of these areas of PCM expenses, “recall” or “not recall” any or all of the four cur- there is no reason for further oversight and/or rently seated Directors. Obviously this will be a auditing in these or other areas of our Budget? critical decision for each of us to make and will take some research to come to a reasonable con- We have been unsuccessful in getting answers to clusion. Here are some thoughts on how one might ap- proach this decision. You should be able to ask the following questions, and get a logical and con- structive answer directly from the mouths of these Directors: 1. What level of trust do you put in PCM? If the answer is 100% then you probably feel that L. Foster L. Wilson there is no need for oversight on your part and you acknowledge that PCM does not need any oversight today (see page 1 of this newsletter). 2. If your answer is less that 100%, then please explain to us what oversight you have pro- vided, or plan to provide, where you do not have 100% trust? 3. It has been 2 years since the rumors of an “Incentive Plan” became “public” knowledge, G. McNulty M. Rubin accounting for approximately 5.4 million dol- these questions and all of the Boards are remiss in lars in Bonuses. Do you believe that this plan accepting their responsibility to oversee the ac- was legally implemented? tions of our Managing Agent. PCM has had a free 4. If not! What are your plans for a review? rein by default. Yes! They continually emphasize 5. When would you consider that the justifica- that they only do what they are told to do by the tion, implementation and oversight for this Boards, and if this is true, then a recall surely is plan for the years 1996 thru 2006 be made essential. public to every owner? (Continued on page 3) Page 2 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 Residents Voice does not suggest how you should they were hardened, un-repenting criminals. vote. But, by the answers to the above questions, We should be thankful that we never came be- it will be easy to make your own choice. fore this “Judge?” looking for understanding and an open mind. We are faced with Directors who fail to real- ize that their fiduciary responsibility to the owners includes both monetary oversight, and, Seniors or Criminals civility when communicating with the owners for whom they work. I f you have been listening to the Board Meetings over the past few months, it is evident that as we get older we lose the abil- ity to communicate with one another. A Special United Board prime example is the ti- Meeting 6-19-9 rade that the GRF Board President, Erwin Stuller, exhibited in his last Board Meeting on June 6, 2009. O n 6/19/9 The United Board called a special Open Board Meeting. The formal “Open Session Agenda” that In response to Kay, he was provided to the Board members was; said, “You have a loud mouth and I’m not going listen to it!” His re- ________________________ sponse to Jane was, “I don’t feel that I should 1. Call Meeting to Order—Lloyd Foster, have to be polite to you madam. I’ve had Chair quite a bit ..uh enough of this this morning!” 2. Establish Quorum and State Purpose (Check out the following website if of Meeting—Lloyd Foster, Chair possible. It will give some insight into 3. Entertain Motion to Approve Recall what this GRF President thinks of a Election Ballot Leisure World Senior; 4. Members Comments http://www.redcounty.com/stuller- 5. Adjournment should-apologize-then-resign ) ________________________ Both women were attempting to air a com- On 6/19/9 the following events occurred plaint, as is their Home Owners Association at this meeting; right. In return they were treated as though (Continued on page 4) Page 3 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 (Continued from page 3) This kind of nonprofessional control of our Mutual Board meetings by our Direc- 1. At 2:02 pm the United President, Lloyd tors is becoming altogether too common- Foster, called the meeting to order. place. It is embarrassing to the owners to 2. At 2:03 pm the United President, Lloyd see a $30 million dollar corporation being Foster, adjourned the meeting so that managed with no regard to oversight of the Board could go into a closed ses- our money or responsibility by the Board sion. Members to the owners. The result is chaos through their behavior interfacing with 3. Considerable Board discussion oc- the owners and they can’t seem to under- curred on the objective of this open stand the importance of common cour- meeting before it was finally adjourned tesy. so that the Board could meet in closed session. It is mind-boggling that the Directors fail to understand why owners are upset when The corporate code and Roberts Rules of they come to the microphone with their Order specify how a meeting is to be complaints, and then are promptly ig- noted, and the provision of an agenda for nored or verbally trampled on. the meeting, for either an open or closed meeting. The United Board, and PCM, ig- nored their responsibility and obligation to the owners which resulted in; 1. Failure to provide the owners with the Transfer Fee Agenda at the meeting, 2. Failure to follow the published agenda that was given to the Board. U p thru 1987, members were assessed a fee when they sold a manor in Lei- sure World. This was usually paid by the Even though the formal Agenda that was buyer and the amount varied from year to distributed to the Board members had; year. At times it was as high as $5,000. This 1. Entertain Motion to Approve Recall fee was determined to be illegal by the Ballot, and, state and it was subsequently terminated. 2. Members Comments GRF was the recipient of this fee and when the president adjourned the meeting with- it ended, the result was to account for this out addressing a motion to approve the “lost“ money by increasing the yearly as- ballot or, allow any member to speak, ig- sessments. The manor owners paid this fee, noring the resident who was standing at one way or another, via a transfer fee, or, (Continued on page 5) the microphone with the intent of making a statement. Page 4 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 an increase in assessment. Supposedly, the responsibility of our Boards. The Boards money went into our budget and was to just need the backbone to make PCM do it. be spent by our four corporations. The costs associated with trying to imple- Since it was terminated, many Boards have ment a transfer fee are horrendous. PCM wanted to re-implement this fee since the has plans to consolidate the effort with Boards are always interested in finding other HOA’s, initiate efforts through a lob- ways to generate income (even though we byist, hire a facilitator to manage the proc- are a non-profit organization). The current ess and take it through the state courts for effort to re-initiate the fee is in response to a legal judgment. the Boards need for additional monies. For They plan on doing this on the backs of what purpose? To try to limit increases in the current residents. At a time when our yearly assessments, or, to build a new home sales are critical, they plan on add- Clubhouse #2? ing an additional cost that will devalue our The major fault of PCM is similar to the home. If we implement a $5,000 transfer problem that our country faces. We see an fee, the value of the manor will undoubt- ever increasing cost for our services while edly be reduced by $5,000 making a diffi- no one makes any effort to reduce those cult sale even more difficult for the seller. costs. We are going to be “taxed” beyond If PCM would spend as much effort on our capability to pay with no regard to es- managing our housing mutual costs as it tablishing a limit on expenses. does on various and other questionable We are currently going through the “developments,” we could live within our budget process and THERE WILL BE AN means. INCREASE in assessments. This is a guaran- teed fact and the Boards have taken no steps to stop the spiraling increase in yearly costs. The Board should have had San Sebastian the courage to stand up to PCM and limit A the assessment to a 0% increase in 2010. If t the last Residents Voice Meeting a PCM is one of the “premiere” Managing resident commented on the access Agents in California, they could prove it between LWV Library Parking lot and the by living within our means. Instead they Long’s Drug Store parking lot. We had not feel that they have a never-ending well of looked at the final construction and the money that allows them to reach in our resident was absolutely correct. pocket whenever they need it. The cart path from our property goes di- There are ways to reduce costs and it is up rectly from the library parking lot onto to PCM to find those ways via the fiduciary the San Sebastian property. There is a gate (Continued on page 6) Page 5 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 at the parking lot that will open for either a overstated profits (which turned out to be cart or pedestrian using our ID card that has non-existent) with the unwitting (?) help been keyed for this gate. The gate can also be of Arthur Andersen auditors in order to opened for a vehicle to provide the Fire Au- justify huge bonuses to executives. Bernie thority access from the San Sebastian onto Madoff allegedly defrauded thousands of investors in an elaborate Ponzi scheme. our library parking lot. We will ask the city to identify all of those who have keys for this These are activities that victimized the gate. rich, faceless institutions, or investors who When you leave our Library Parking lot to go become faceless because individuals are to Long’s Shopping Center, you will have to lost in the sheer numbers of victims. drive on San Sebastian property and pass by Does this seem remote from your daily their entrance using the same street that the life? It shouldn’t. We are often victimized residents of the San Sebastian will use to get by those who should be our strongest al- to their entrance door. Once past the San lies. We elect our boards based on what Sebastian, you will be behind the Bank Amer- turns out to be meaningless campaign ica parking lot and on the shopping center promises and stances. For openness, parking area. Classic GRF planning! against secrecy. For residents, against profligate spending. And what happens? Over in Third, a group of self-styled law- “Smash & Grab” yers decide they can remove a dissenting director by majority rules. They will fight to the bitter end no matter how long it takes, no matter what the expense in terms R ecently a number of very upscale of dollars or human cost. (Just as they did smash and grab robberies made the in the case of Lucie and Joe Falk.) In the news. One or more people run into a large mean time, the bullies continue to verbally jewelry store, smash cases, fire guns, grab a abuse the honest minority who actually fistful of diamonds and run as the alarms go follow their campaign pledges. Majority off, increasing the confusion and fear which rules and anyone who dissents is victim- facilitate their escape. Some consider the ized by the majority. The theme is “win at true victim to be an insurance company any and all cost.” Settlement means the with swollen coffers, bloated from feasting case is lost, just as they have lost their off the pennies gained from widows, or- credibility. phans, and other needy persons. It is easy to Consider United—oh, please consider forget a crime which victimizes a faceless United. A director, Mike Curtis, is elected corporate entity. by a record majority of votes. He promises Enron and other corporate giants vastly openness and vows to disclose financial ir- regularities (so many, so irregular.) Here Page 6 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 is a voice crying out in the wilderness, imagine the cost of a lobbying effort to alone, standing up while they revile him change a law that protects the rights of publicly, demean him and his motives, make those of us who sell property? The vic- false and misleading statements about him. tims? Not just those who chose to move PCM managers even tried to get him fired on, but those who must sell to go to shel- from his high security job. Why do they do tered care, those who sell because they this? They are in the majority, an over- can no longer afford the continually es- whelming majority and feel entitled to kick calating assessments, those who have lost and excoriate Mike. But in actuality they loved ones and must sell to liquidate are abusing all of us. We elected Mike to their estates. But that’s all right. Seniors stand up and make a difference and the are the ultimate faceless victims. No United thugs abuse all of us who supported rights, no voice, no protection. Smash and voted for Mike. Mike is the face, we are and grab all you can and we are the vic- their victims. tims. It is not about personalities, it is Now let us consider the biggest smash and about real issues. The noise and brutality grab of all—GRF. Elected by bloated pluto- of a smash and grab are simply to distract cratic directors (who often vote for candi- the innocent while the crime is commit- dates simply to remove directors that are ted. even too crass to remain on the housing mu- What can we do when we are told by the tual boards) they feel immune and omnipo- President that he doesn’t like our voice, tent, free from oversight and regulation. when he tells us to shut up, when he Check out the latest plan hatched (pun in- closes a meeting without allowing mem- tended) to extort up to $5,000 from anyone ber comments (a right supposedly guar- who sells a manor. Thwarted by legislation anteed by law?) I don’t know what oth- notably Civil Code Section 1368(c), these di- ers will do, but I will lend my support rectors sought the advice of counsel to find and vote to the recall. Let’s face it, if we ways to weasel (pun intended) around the replace four (United) directors the re- law. When advised that any weaseling would placements cannot possibly be worse end up defeated and at huge cost to the than those currently on the board. Let’s community, GRF is now proposing another go through (remove) them again and un- wonderful line of attack against what they til we find a set that will honor the consider a “bad law” according to Robert wishes of the membership and shoulder Hatch. Milt Johns, at a recent GRF meeting stated that they would (did?) hire a consult- their fiduciary duties. Let’s recall them ant (Richard Kingston of California Political without fondness. Consultant Group) to determine the feasi- “YES” on RECALL. bility of getting support of other HOAs and lobbying to have the law changed. Can you Page 7 of 8
A Publication of Residents Voice June 2009 Volume 2 Issue 5 Opinion Not-for-Profit ! What It Means to LWV ! T he IRS has many options when filing One of the precautions directed at a 501(c) your income tax. Two of them that 4 is, there is no “excess benefit transac- LWV would consider are; tion” between a Disqualified Person and the organization. A disqualified person is one 1. A 501(c)3 Non-profit Corporation, or, who benefits from an excess benefit trans- 2. A 501(c)4 Non-profit Corporation action. This potentially includes an Or- The 501(c)3 requires that the organization ganization Manager who may also be liable must be organized and operated exclu- for an excise tax on the excess benefit sively for exempt purposes. These are nor- transactions that might occur. mally characterized as charitable organi- Not being an expert on taxes, Residents zations. Voice can make no opinion on what are The 501(c)4 is a social welfare organization some of the possible “Benefit Transactions” and must be operated exclusively to pro- that might be chargeable by the IRS. “An mote social welfare. excess benefit transaction is a transaction in which an economic benefit is provided PCM has defined LWV as a 501(c)4. We are by an applicable tax-exempt organization therefore an organization that operates directly or indirectly, to or for the use of a primarily to further the common good and disqualified person, and the value of the general welfare of the people of the com- economic benefit provided by the organi- munity (such as bringing about the civic zation exceeds the value of the considera- betterment and social improvements). tion received by the organization.” One of the acceptable activities of a 501(c) It would be interesting to get an opinion 4 is the seeking of legislation that is ger- on where the “Incentive Plan Bonuses” mane to the organization’s programs. PCM would fall in the eyes of the IRS. is increasing it’s headcount (thusly our as- sessments) for considerable lobbying in- terests that are not always in our best in- terest. Many Managing Agents have differ- Contact; ent objectives than do the owners in a Residents Voice Home Owner Association and yet we (the 24100-D #296 El Toro Rd owners through the Boards) are paying Laguna Woods, CA 92637 money for lobby activity that is in the best (949) 683-7317 interest of the Managing Agents. email@example.com Page 8 of 8
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