Saturday, June 23, 2012

Le Cirque Du Directors & Lawyers at Laguna Woods Village


LETTER

This went to the Globe today June 21, 2012, to be published in the next issue.  I doubt it will appear. If this single thing doesn’t upset you then you have either decided to join the ranks of those who just have so much money to live on for the rest of your lives that you just can’t spend it all or you have not been paying attention. This is just one single thing that has been a part of the overall and overwhelming abuse heaped upon us for all the years any of us has lived here. I apologize for the run on sentences. I am just very upset. We moved here before we were to retire so we could set down roots and live here for the rest of our lives. That isn’t going to happen.

Is it any wonder that our assessments are rising so fast and our services are so bad. This week alone we have had landscape crews mowing, blowing and making general upset and noise for 7 solid days. They haven’t even done a decent job of trimming this time. Equipment has been left behind at night and just thrown into the bushes. Residents are expected to move around them, not them around residents. It is no wonder that the costs for landscaping in Third Mutual alone have risen so fast and so far that they are greater than water costs. 

Remember the newly-seated majority on Third Board immediately put back into the budget $500,000 that had been removed from this year’s budget by the “old majority.”  The new majority is:  Mike Straziuso, Sy Wellikson, Rae Tso, Isabelle Muennichow, Denise Welch, and Won Chang.  Let’s call it the spendthrift slate.  The overage in the budget for landscape is a disgrace while buildings are falling down around our heads because of dry rot. I am certain that the situation in United is just as bad. There is no reason to have to listen to the cacophony of landscaping equipment for unending days at a time. We have an incompetent in the office of Treasurer. No oversight. Rampant spending. You can look for more of the same behavior funded by the sources mentioned below in the upcoming election.

There is no reason for the members of this community to have to put up with any of the abuse that is going on. Our boards continue to make rules which tighten and tighten their control over our lives and increase fees to the point of driving people out who have lived here for a long time. There is no reason for the members to sit back and allow this to continue.

The Mutual Boards are not being honest with the members. The management system is a disgrace. Nobody seems to remember who lives in this community and why it was developed in the first place. I have no saintly crown  for Ross Cortese. He was a businessman who was in the business of building and developing communities. He made his personal fortune doing it.  He was not a man to be venerated years later by presidents of mutual who are just looking for excuses to continue a policy that is long past its reason. This community was built for active seniors who cared to live out their lives in peace and enjoyment. Instead we have been saddled with controversy, sly maneuvering, opacity in governance and backbiting by boards and management because the purpose has been forgotten. The purpose and reason for their existence is to enhance the quality of life for the membership. Instead they are petty dictatorships being run by egos without bounds.

The next election is going to be very interesting. It has been alleged that an insurance agency and a real estate agency have both heavily funded slates of candidates for election (to the tune of tens of thousands of dollars.) Vicious fighting goes on during board meetings at every single meeting; between both board members themselves and boards vs. members. It is all about power; who has it and who wants it. None of it is about the membership and quality of life. People running for the boards next year are people we are all familiar with. There will be some newcomers to the races. It behooves each of us to be reminded of the saying that “those who ignore history are condemned to repeat it.” You might keep that in mind when selecting candidates to vote for. There are people who are unable to do anything other than be on some board in order to fulfill their needs (power and the ability to spend millions of dollars with impunity.) They show up and run over and over and over again for various positions. Some resign for the odd reason but they pop back up again when they feel better over and over and over. For them it is not about what is good for the community, the corporation, the membership. It is all about what they as individuals need to feed their giant egos. It isn’t their money they are spending. It is YOURS.  Remember the favorite sayings of directors past “sometimes you have to eat a crap sandwich” and “let’s just do it and if it is not legal we will fix it later.” Look for even more escalation in United. We know of one former president making the election re-run this fall.

Yesterday’s performance of Hart King and Coldren regarding the Trust and the analysis performed by Paul Hastings, LLP was as expected. It was another high priced spin job applied to the report of the second set of lawyers intended to show GRF and their lawyer in a better light than the report did.  Questions, from directors and members alike, not on the lawyer’s agenda went unanswered. Questions that might hold GRF responsible for its actions.  It is blatantly obvious that GRF has been told that any and all assets removed from the trust (Broadband) must be returned to the trust. And here we are with an article in the Globe saying GRF had to buy Broadband back at auction during the bankruptcy proceedings of Capitol Infrastructure/Connexion. What did this cost us?  Nice show yesterday.

Katie McDaniel


 COMMENT:

Mr. Foster
How much did this cost us?
this is not a comment, it is a question
and I, and many others, want  an answer

Joe Fischler




If you would like to make a comment about a specific news article, editorial or commentary and have it considered for publication in the CotoBuzz Journal as a Letter to the Editor, please send it to buzz@cotobuzz.com --. Do not send attachments- or mail to Letters to the Editor, c/o CotoBuzz, P,O. Box 154, Trabuco Canyon, CA 92678

Letters should be brief, and may be edited 
for clarity and length.. They become the property of CotoBuzz Journal  and may be republished in any format. Please include your full name, mailing address and daytime phone number (your number will not be published).




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September  2008 ISSUE
We do not make jokes, we simply watch the LA Times, the Orange County Register and CID/HOA board of directors and report the facts!
LETTERS
 Public Relations for LWV or  for  Service Providers - The Golden Age or the Golden Parachute? 

August 13,  2008  
By
LWV, Maxwell Bendarien

PCM of California, the management company for Laguna Woods Village, demanded management fee increases which raised the fee from $363,700 in 2006 to $654,100 in 2008.  In just two years, the management fee has increased by 79.8%.  What could possibly justify this sort of increase when the annual inflation rate was running just above 2% over the same time frame.  Of course PCM has a perfectly good rationale for this increase.  PCM’s explanation?  “The largest portion of the increase in the management fee is due to the additional costs that are incurred by PCM of CA due to lawsuits and community activists exercising their rights. The increase of almost $200,000 was negotiated by PCM of CA to cover increased legal fees, increased insurance premiums for Errors and Omissions (E&O) insurance, and Directors and Officers (D&O) insurance, and increased public relations related costs, ”  according to statements contained in a local newspaper - I’m sure that the fact Mr. John’s, the managing agent for LWV, recent divorce settlement, had no impact on his need for additional funds.
If we rationalize this statement step by step, we must first ask what lawsuits are pending.  This is a difficult question since the boards of LWV have repeated that there areno lawsuits pending.  If this is true, then what lawsuits are anticipated?  And, of course, why are they anticipating lawsuits?  Is this a tacit admission of malfeasance and impending judgment?  Is there some conspiracy that would prompt a RICO investigation?  It simply boggles the mind to speculate.
Next we must consider community activists who are exercising their rights.  I believe that this refers to increasing requests for financial documents.  Several directors have stated that they are often refused access to documents or they receive them so heavily “redacted” that the documents they receive are useless.  You could argue that residents might only have access to heavily edited documents (although that flies in the face of at least the spirit of Davis/Stirling and the governing documents of LWV.)  But directors are covered by confidentiality requirements and should have free and full access to all financial records.  If PCM actively interferes with free access, they are preventing the directors from exercising their fiduciary responsibility.  In fact, this is why Davis/ Stirling specifically grants them free access to these records.  Has PCM created a different state with some unique set of laws?
Why is there a large increase in errors and omissions insurance?  If increased requests for financial documents were coupled with anticipated lawsuits, the logical explanation would suggest that PCM is trying to hide the horrendous lack of oversight that past mutual boards have exercised—giving PCM free rein over spending up to and including haircuts, lavish gifts, parties, and questionable “business meals” that are approved without question. That would suggest an increase in insurance rates is a logical consequence.
It is certainly reasonable to say that LWV needs increased public relations.  Several residents have pointed out that while Leisure World was a readily recognized senior CID, Laguna Woods Village has abandoned that recognition and has had virtually no presence on the internet.  Up to a month ago, it was virtually impossible to bring up LWV by searching for senior communities or retirement communities.  This is a readily identifiable current need.  However, the only entity that required better PR in 2007 and 2008 was PCM which has increasingly come under fire from concerned residents demanding access to financial records.  PCM suffered serious damage to its image when two years of credit card records showed the extent of co-mingled funds, haircuts, Starbucks visits, On the Boarder meals, Las Brisas fetes, premium Angels tickets, $400 earrings, and on and on.  PCM, though, is a for-profit corporation while the housing mutuals are nonprofits.  Rumor has it that the recent attempt to survey residents’ satisfaction with PCM turned out so abysmally that the survey was scrapped over a technicality.  All of this questionable activity has resulted in PCM hiring a full time PR specialist (Rasmussen)—using resident member money of course.
One must note a few additional fascinating aspects of this increased management fee. The increased fee is now totally controlled by PCM, a private for-profit company owned by Disbrow and Olsen.  PCM has steadfastly refused to allow access to details of employee salaries due to privacy rights and the private nature of PCM itself.  Thus we can expect less oversight of management expenses which now include staff support and, according to Janet Price at a committee meeting, is another term for parties, free lunches, gifts, and incentives,  To make matters worse, unspent budgeted monies used to be carried over to the subsequent year’s budget and used to reduce any increase in assessments. With the monies buried under management fees, spent or unspent, this money is now a gift to PCM with a no-return stipulation.
The quandary for concerned LWV residents and concerned directors is the near impossibility to oversee PCM.  In addition to indecipherable records, PCM regularly moves budgeted items from one budget line to another.  Thus it is impossible to look at budgets from year to year and accurately review each expense.  It appears reasonable that some expenses will increase while others decrease, but moving expenses from account to account effectively hides the activity.  It would take a forensic audit to decipher the actual transactions, much less determine if they are usual and reasonable in accounting terms.  And this does not address issues such as the many for-profit subsidiaries of PCM and their financial involvement in virtually every operational area of LWV from internet services to real estate.  It does not address the question of whether PCM is running subsidiary businesses out of the LWV Community Center, rent-free, which are not support activities for LWV. 
Nor does it address the apparent violation of California Civil Code 1363.2 which states that all moneys deposited by the managing agent must be covered by insurance provided by an agency of the federal government.  Of course this last may be petty, but with the recent failure of two area banks, it would seem that fiduciary responsibility and prudence would dictate a more conservative approach.  But then again, it’s not as if it were PCM’s money; there is always more where that came from—out of our pockets.

If you would like to make a comment about a specific news article, editorial or commentary and have it considered for publication in the CotoBuzz Journal as a Letter to the Editor, please send it to buzz@cotobuzz.com --. Do not send attachments- or mail to Letters to the Editor, c/o CotoBuzz, P,O. Box 154, Trabuco Canyon, CA 92678

Letters should be brief, and may be edited 
for clarity and length.. They become the property of CotoBuzz Journal  and may be republished in any format. Please include your full name, mailing address and daytime phone number (your number will not be published).

COMMENTS

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(c) D. Vanitzian
May 16, 2007The Gray Panthers are on record as SUPPORTING A BAD BAD BAD BAD BILL: Senate Bill Number 948. SHAME ON YOU. Where the heck are you getting your information from?

The Law of Unintended Consequences: Legislation and HOA BOD Cause and Effect: Clueless in my CAR Coming off a most improbable but successful campaign to defeat SB 670 author and HOA advocate Vanitizian thanks supporters making a connection between the quality of legislation being passed in Sacramento, and the quality of life in most homeowners...



1 comment:

John Milton said...

“Congratulations JL "Buzz" Aguirre! Thank you so much for taking the time to share this exciting information.”

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