Laguna Woods Village Straziuso’s Closed Open Letter

 LETTERS

Parsing words in Laguna Woods:   “it all depends on what an incentive is, is”

M. Straziuso, President, Third Mutual:

We are currently discussing an amount of $96,000 that the resident owners are being committed to pay PCM for some undefined justification. You wonder why residents question your actions and motives. When they don't agree with your conclusions, you assume they are idiots. If you want to live up to your original campaign slogan that promised openness and visibility so that anyone can understand where the money is going and why, answer the following questions, or, are you in the dark just like an average Director and resident/owner?

The first thing that you should do is provide a history and definition of the following expenses so that everyone, including yourself, can be talking about the same costs;  Fees, Incentives, Bonuses, Gifts, Awards, etc., etc. You should clarify the purpose (what the money was spent on) and the timing of the expense changes. 

For example, when the Managing Agent reduced the credit card  usage, why did the Management Fee go up by $300,000 per year? A 53% increase in 2007 and another 20% increase in 2009. Was it a random coincidence that the two occurred at the same time, or, did the Management Feeincrease cover the credit card usage decrease?

Where is the motion, signed by a majority of a Board of Directors that initiated the "Incentive Plan?"

When you talk about justifying a "GIFT" (Employee Appreciation Gift) of $96,000 to PCM, how does that relate to Account #'s 21450000 and 41080000 defined as Safety Awards? Is there a difference between Gifts and Awards?

Clarify those expenses and see if there are any more hidden or overlapping costs that the residents should be aware of when you give away OUR money.

In addition, identify under which account numbers a member can find these expenses; ie. the "$96,000 GIFT." Or, will that be kept secret just like the Incentive Plan which was never identified as a line item in our budget. The F.I.C.A. Incentive was identifiable with a separate account number but the actual Incentive Plan money was hidden within other account numbers.

If you don't believe me, ask any past or current director if they knew the account numbers that included the Incentive Plan. They Can't! Unless they look up the hidden keys to where it was allocated! When you reference such nebulous and unidentified items as "Employee Appreciation Gifts" does that have any relationship to "Safety Awards?" Your Ledger Chart of Accounts should cover any expense and you should be able to identify them.

Can you honestly say that you are aware of this data and have it at your fingertips?

When you avoid understanding what happened with the Credit Cards and Incentive Plan and keep your head in the sand, you will become one of, "Those who ignore history and who are bound to repeat it."

Connie Grundke

ps... Please define the difference between "Incentive Plan" and "Incentive Bonus?" Or is there a difference?

####### 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).

RELATED STORIES

Le Cirque Du Directors & Lawyers at Laguna Woods Village

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.

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Busy Busy and still covering up

Posted by Katie McDaniel 10-07-2009 2:30 PM

Laguna Woods Village, CA- Bob Hatch has decided along with the help of that Corporate Oracle, Kathryn Freshley, that a new incentive plan should be put in place for PCM. The fox is ripping apart the hen house. Even Linda Wilson of the United Board admitted the board members are hardly experts according to the newspaper report.

LETTERS

LWV Open Board Meetings Memo

We received a follow up letter, posted below,  to a GRF resolution  outlining rules of engagement for open board meetings (click here for copy) scheduled for approved today.  We asked  Ms. Donie Vantizian, co-author of the long-standing Los Angeles Times column "Associations"  to comment on the merits of such letter, and have included her response under Comments below

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GRF Rules of Engagement Innovation, or Self-preservation?If you would pay attention ((click here for copy of GRF resolution dealing with rules of engagement) ) to what the residents are telling you, you wouldn't have to be so scared and try to impose illegal sanctions against the people who are paying the bills.  The residents would not be angry. 

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ors 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). 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