By Forrest Quinn (former SCA board member & treasurer)
This is my partial response to Steve Anderson’s post. His remarks are in black text, my responses are in italics.
Whether the issue is one dealing with assessments, the restaurant, the rechartering of clubs and committees, etc. this board operates on the belief that by ignoring issues and not dealing with them only create complications and the need to catch up in the future.
Past Boards did not ignore these issues. I’m not sure how Steve missed it because it was daily news, but the COVID pandemic froze society for over two years. Is it his advice that the Board should have reopened the restaurant during the pandemic? Furthermore, he is ignoring the COO’s inaction on these matters.
There were too many years of keeping assessments the same or of then have a small increase and again keeping them the same for a few years. Then we had the smoke and mirrors of having a surplus and refunding it back to the residents as a way to again reduce their assessments.
This is complete bunk. There was no smoke and mirrors. NRS 116 stipulates that HOA assessments must equal expenses. Steve has been on the Board for nearly three years. If he felt expenses were missing, why didn’t he say something?
SCA’s operating surpluses were created by the COVID pandemic, not by Board action. Furthermore, Steve ignores that NRS 116 and SCA’s CC&Rs require operating surpluses to be returned to homeowners. Finally, IRS regulations treat unreturned operating surpluses as taxable income. For example, one year, SCA had a $925,000 surplus. As Steve suggests, if we had kept the money, SCA’s residents would have had a $277,500 tax bill. As a fiduciary, it’s the Board’s duty to minimize costs, not increase them by ignoring tax law.
Common sense tells you that due to inflation and increases in costs and labor that you should have increases of 2 to 5% a year.
Common sense also says if you are grossly overpaying for labor, see the COO and CFO salaries, you can cut back salaries and not increase assessments.
Had past boards done this we would not have needed to carry out the larger increases of the past year.
Again, past surpluses were primarily caused by COVID and they were returned to residents as a matter of law.
You may feel that we are wrong in what we have done. My view is that the Board has made the tough decisions to take fiduciary responsibility to bring us current with where we need to be. Inaction over the past years has finally caught up with us.
Again, COVID prevented any “action.” BTW, our COO has been at SCA for over seven years. Where are her restaurant startup and operating budgets? Oh right, she and her CFO never prepared one. She always sits back until the Board takes the initiative. For example, where are her rewritten club rules and policy manuals?
SCA adopted this policy within the year after the law changed. Unfortunately, the homeowners were not notified last year in accordance with the law’s notice requirement.
And something tells me that Steve will make sure the Board does absolutely nothing to hold staff accountable for their failure to keep home owners informed. It’s a lot easier to blame past Boards.