September 22nd SOA Board Meeting

BOD Agenda 2

Following is the Agenda for the Somersett Owners Association (SOA) Board of Directors (BOD) Meeting to be held at The Club at Town Center (TCTC) at 5:30 PM on Wednesday, September 22nd in the Canyon View Room. Attendance may be either in person or via Zoom videoconference. Zoom log-in instructions are contained on the Meeting Agenda under “Join via Zoom”

September 22nd BOD Meeting Agenda

The Board Meeting Packet for the September 22nd Board meeting is available on the SOA website (www.somersett.org) under the SOA Documents/Board Documents/2021 page link. Some extractions from the Board Packet are included in the following Agenda Item comments.

Comments on Agenda Items follow:

3.  August 25th and September 8th, 2021 Meeting Minutes

The reader is referred to the Board Meeting Packet for the SOA draft meeting minutes, However, for a more complete recap of these meetings, the reader is directed to the following SU posts:

September 8th SOA Special Board Meeting Summary
August 25th SOA Board Meeting Recap

4.  Committee Reports

4.a.  Budget & Finance – No information contained in the Board packet. The Board Treasurer, Simon Baker, usually provides a verbal update.

4.b.  Communications – See the following link: Communications Committee Report

4.c.  Strategic and Facilities – See the following link:  Facilities Committee Report.  (Note: This is now just a Facilities Committee with a new Strategic Planning Committee having been formed, but not yet included as an Agenda item).

4.d.  West Park Garden – See the following link: Community Garden Committee Report

4.e.  Community Events – See the following link:  Events Committee Report  (Note: report contains an updated Calendar of Events)

4.d.  General Manager – The reader is referred to the Board Meeting Packet for this multi-page report providing information and updates on: 1) AGC activity, 2) Community enforcement data, 3) Owner communications, 4) TCTC events and club usage data, 5) Maintenance projects, and 6) BrightView landscape reports.

5.  Financials

The usual 30+ pages of Association financial data. The reader is referred to the Board Meeting Packet on the SOA website for details.

6.  Unfinished Business

6.a.  Legal Updates – The following quote from the September 10th SOA Attorney letter to the Board regarding the Rockery Wall lawsuit: “On August 25,2021, the Nevada Supreme Court’s Judgement and July 29, 2021 Opinion was filed in the lower court. On September 7, 2021 the Nevada Supreme Court filed its Remittitur returning the case to the lower court. To date the opposing parties have not filed a memorandum if costs”. Not sure what impact this filing has on the SOA, as it has been previously reported that, in light of the SOA loosing its appeal, no more legal funds would be spent and that the SOA was not responsible for reimbursement of any of the Defendant’s legal fees.

6.b.  1880 Dove Mountain – No supporting information contained in the Board Meeting Packet for this long lingering hillside stabilization project. Perhaps just an impromptu update discussion.

6.c.  SOA Management Consultant Update – Usually consists of the SOA Management Consultant, Nancy Kerry, providing a status report on the SOA management transition process. Will most likely include items from the following report:

Transition Coordinator Update, September 10, 2021

6.d.  Agreement with Village Management Software (VMS) – The Management Company ,Taylor Associates, contracted for by the SOA as part of the Transition process, utilizes VMS Accounting and Project Management software to carry out their business. Since these functions will eventually be ported over to the SOA, a separate agreement with VMS is required. For those interested, a copy of the proposed Agreement (at a cost of $1580/month) is available via the following link.

Village Management Software Agreement

7.  New Business

7.a.  Receive and Open Landscaping Bids and Proposals – It is anticipated that the Board will be opening bids from Brightview, Reno Green and Reliance Grounds Management.

7.b.  Review and Approval of 2020 Audit – For a reading of the SOA’s 2020 financial audit report (all 40 pages of it) by Hilburn and Lein CPA’s, the reader is referred to the Board Meeting Packet available on the SOA website. The report contained the following Opinion: “In our opinion, the financial statements referred to above present fairly, in all material aspects, the financial position of Somersett Owners Association as of December31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.”

7.c.  Review and approval of Common Area Easement – This item apparently involves the SOA granting a permeant Easement of SOA common area property to the owners at 1772 Fairway Hills Trail. That is, a parcel of SOA land adjacent to the rear of their property. This “for the purpose of fencing in the Easement and installing landscaping, a patio, and other improvements in the Easement Area for the sole use of the Dominant Tenement”. Sounds like the owners at 1772 Fairway Hills Trail want to add 1,062 sq. ft. To their back yard. If this is the case why not sell it to them? A description (picture) of the property in question and a copy of the Grant Deed is available in the Board Meeting Packet on the SOA website.

7.d.  Approval of Common Area Turnover from Ryder Homes – Ryder Homes has apparently sufficiently completed their SBE development to warrant turnover of common areas to the SOA. Hopefully the SOA will do the proper inspections and review all documentation prior to acceptance. A description of the areas to be turned over are contained in the Board Meeting Packet available on the SOA website.

7.e.  Review and Approval of SOA Management Staffing and Transition Plan – An item of significant interest to all Somersett owners. The submitted Transition Plan identifies responsibilities, actions and schedules associated with the following focus areas: Project Management, Financial Systems, Information and Security Systems, Organization and Staffing and Community Engagement. Also, included are proposed salary schedules and a recommendation to hire Unique HR as the SOA’s HR and Payroll Services provider. This is the first mention of Unique HR as a SOA vendor and no cost data was included within the Board Meeting Packet. SU does not believe that any competitive proposals were obtained. See the following link for a copy of the SOA Transition and Salary Plan:

SOA Transition and Salary Plan

7.f.  Review and Approval of Consulting Agreement with Lorrie Olson – At the previous Board meeting a recommendation was made by the SOA Management Consultant, Nancy Kerry, to employ Ms. Olson to assist in the transition process, as there is much to be done in a short period of time. Ms. Olsen has extensive HOA management experience and has served as the Community Manager for the Caughlin Ranch HOA. Following is a copy of the proposed Agreement, compensation is capped at $1500/week and would be based on Board approved work completion.

Agreement for Consulting Services

7.g.  Proposal to Install Divider Netting between Courts – To prevent balls from intruding on adjacent courts, installation of a screened divider between the SOA’s two tennis courts has been recommenced by the Facilities Committee, with a budget not to exceed $3,000.

September 8th SOA Special Board Meeting Summary

recap 1

Following is a summary of items discussed at the September 8th Special Board Meeting (see: “September 8th SOA Special Board Meeting Agenda”).

Note: Given the early termination (October 31st, 2021) of FirstService Residential’s (FSR) management contract with the SOA, there is an urgency in completing the transition process to SOA self-management. Hence the Board will be holding these Special Meetings in addition to the regular monthly business meetings.

Item 3.a.  Update and Discussion Regarding Transition

The SOA Management Consultant Nancy Kerry provided a verbal update on the SOA management transition process, which addressed the following areas: Project Administration, Accounting, Organizational Structure (staffing) and Homeowner Engagement. Salient points made were as follows:

  • A tentative timeline for the transition has been developed (not yet published, SU will provide when available). A transition team consisting of Ms. Kerry, Board members, a Taylor Association Management Company (Taylor) representative and perhaps some unnamed homeowners, will be meeting every Tuesday to address the transition timeline and corresponding action items. Owners who feel they have some expertise in this area and would like to volunteer their services are encouraged to contact Ms. Kerry or a Board member.
  • Taylor is taking the lead on migrating the SOA’s accounting data from FSR over to the system used by Taylor. They have done this before with FSR and expect to have completed the migration by early October, with the actual switchover occurring on October 31st.
  • Organizational items underway include generation of a proposed SOA Organizational Chart, an employee budget and staffing considerations. With regard to staffing, those permanent FSR employees who may wish to stay on within the new organization have been assured a position, either in a similar or new capacity. Interviews with FSR employees have been completed with most wanting to stay on (this does not include the SOA Community Manager, Ryan Fields, who will remain with FSR). Offer letters are being prepared, but there is an issue with regard to the provision of employee benefits. Give the October 31st deadline, it may be difficult for the SOA to secure all that is required if they transfer in as direct SOA employees. An option here would be for them to become Taylor Management employees (who already have benefit plans in place) on an interim basis. Another option discussed involved the SOA hiring them directly while picking up their employee costs for extending their medical benefits via the Federal “Cobra” plan, which would only be through November and December of this year.
  • Ms. Kerry recommended to the Board that they bring onboard a Ms. Laurie Olsen to assist in the transition process, as there is much to be done in a short period of time. Ms. Olsen has extensive HOA management experience and has served as the Community Manager for the Caughlin Ranch HOA. No Board action was requested at this time regarding Ms. Olsen, as a formal proposal for such will be submitted at the next Board meeting.
  • Regarding Homeowner engagement, there will be series of communications on the transition process advising Homeowners what to expect and when. On the subject of assessment payments, the October payments will be made as usual through FSR, but the November payments will be via a different avenue.
  • A comment was made that all the FSR office equipment, including IT items, are owned by the SOA. Therefore, no budget allotment required in this regard. FSR proprietary or confidential programs or data would be removed from the IT equipment prior to turnover.
  • In response to Ms. Kerry’s update, Board member O’Donnell expressed a concern over Ms. Kerry and Ms. Olsen being able to handle the workload they would be facing, and that the Tuesday Transition Team meeting also address not only Ms. Olsen’s employment, but others (e.g., Administrative Assistant and Club Manager) as well. This in light that the SOA is also facing Board elections and Budget ratifications in the same time frame.

Item 3.b.  Ratification of Agreement with Taylor and Associates

The Board approved an Amendment to the Taylor Association Management agreement which simply added a couple paragraphs emphasizing the SOA intention, with Taylor help, to move toward self-management.

Item 3.c.  Agreement with Village Management Software (VMS)

Apparently the Board has made the decision to utilize the Village Management Software suite of products for managing the Association, which is the same software package used by Taylor Associates. However, the VMS agreement was not completed at the time of the meeting, so action was deferred.

Item 3.d.  Payroll Processing Discussion and Possible Agreement

Board member O’Donnell commented on the implementation of a SOA employee Payroll Processing System (wages, taxes, Workman’s Compensation, health care and other benefits), and what employee data would be required. Data that would most likely require a FSR release to obtain from those FSR employees transferring over. Apparently Board member O’Donnell has past experience (as a computer/software company owner) in this area and does not consider this a complex issue to address. In this regard, Mr. O’Donnell was tasked to head the effort for seeking out potential Payroll Processing Companies for the SOA. The overriding issue being timing.

Item 3.e.  Review and Approval of Lap Pool and Spa Resurfacing Proposal

This was a holdover item from the previous Board meeting due to the uncertainty as to whether resurfacing of the lap pool was really required by the Washoe County Health Department for the 2022 season. It was determined that this was not the case for the lap pool, only the two Spas. Therefore, it was decided to reissue a request for proposal to resurface the two Spas only.

Item 4.  Homeowner Comments

A Homeowner requested clarification on the following from Ms. Kerry’s presentation

  • Will all full time FSR employees who want to transfer over be offered a job? The answer was yes.
  • How was Village Management Software (VMS) selected and did we look at other companies? The answer was that VMS is the accounting software employed by Taylor and we will migrate it over to the SOA during the transition process, in addition to any other VMS required software modules. However, a separate agreement with VMS will be required, which is expected to be ready for the next Board Meeting. SU assumes other alternatives were not considered.
  • Will Ms. Olsen be employed as a consultant or SOA employee? The answer was that in the absence of a near term payroll processing system, Ms. Olsen would initially be hired as a consultant. However, given that her employment is expected to last for several months, perhaps as a SOA employee sometime in the future.
  • Will the SOA be issuing any formal request for volunteers to aid Ms. Kerry and others in the transition process? The answer being that no formal requests will be forthcoming, but would not turn down assistance from those with relevant experience who may wish to help out. Also, a comment from the Board that the FSR Community Manager, Ryan Fields, has and continues to be, a very helpful participant in addressing transition issues.

An owner expressed concern over the practice of mailing election ballots via the US Postal Service, and whether or not this resulted in a problem with timely delivery to those non-resident owners. Also, an opinion that emailed ballots would be more efficient and is a permitted process under Nevada Law. In response, the Board advised (via SOA Attorney opinion) that email balloting for Board elections was not permitted under Nevada Law.

SU Note: Following is the Nevada Statue that SU believes to be applicable regarding Board elections. Note that it does not define “mail” as being via USPS. Could it be interpreted that “mail” also includes electronic mail? Perhaps a deeper look is in order. However, another issue here is that whereas all physical addresses for owners are available, email addresses are probably not.

NRS116.31034.8.  If, at the closing of the prescribed period for nominations for membership on the executive board described in subsection 5, the number of candidates nominated for membership on the executive board is greater than the number of members to be elected to the executive board, then the association shall:
(a) Prepare and mail ballots to the units’ owners pursuant to this section; and
(b) Conduct an election for membership on the executive board pursuant to this section.

A Sierra Canyon owner commented on the Transfer Fees the Association collects on the resale of a home within Somersett. Wanting to know where the money goes and offering an opinion that the transfer fees being based on the value of the home, that with escalating home values, they appear to be excessive and can the Board do something about it? The ensuing discussion by Board members revealed the following:

  • For resales, the transfer fees are 0.1% of the selling price. (example, for the median home price of around $700K, the transfer fee would be $700.
  • The transfer fee monies go into two buckets, one to the Management Company (as a revenue generator) in accordance with their contract (not sure on the FSR contract, but a $400 amount was mentioned) and the other into the Common Area operating budget. A reading of the Taylor Agreement states a transfer collection fee of  $325.
  • Board member O’Donnell expressed the opinion that transfer fees should be cost neutral. That is, only assess what the actual cost is for updating the SOA owner databases with the new owner information, which he felt would only be a nominal amount. Board Member Capalongan made reference to the governing documents, which under Article III, Section 15 of the CC&R’s state:

Section 15. Transfer Fees.  Initially after a Unit which has reached its Assessment Threshold, when a transfer of ownership occurs, a transfer fee shall be charged to said initial transferee by the Association. The initial transfer fee for each Unit is presently FOUR HUNDRED AND NO/IO0THS DOLLARS ($400.00) and is subject to adjustment by the Board, After the initial transfer, all subsequent transfers of a Unit (e.g., resales) shall cause a transfer fee in an amount equal to one-tenth of one percent (.1%) of the sales price for such Unit, based on the gross sales price for such re-sale as disclosed in the Declaration of Value filed with the Washoe County Recorder in connection with such sale, to be charged to the transferee by the Association. The Board may set different transfer fees of uniform application to all Units, Those transfers exempted from transfer tax under Nevada Revised Statutes 375.090 shall also be exempt from all Association transfer fees; and bulk transfers of five (5) or more lots at one time to a single entity shall also be exempt from all transfer fees, The imposition of such transfer fees is intended for the purpose of providing a continual source of capital to the Association for the purpose of enhancing the Association’s financial capabilities in meeting its obligations in maintaining and improving Common Areas in a manner in keeping with the first-class nature of the Subdivision over time.

Given that Homeowner assessments will no longer be collected by FSR after October 31st, a owner questioned how assessments that had been paid in advance would be handled. Response was that this was not an issue, as FSR would apply the appropriate credits into the new (Taylor) accounting system.

Board Member Ad-hoc Comments

Board member O’Donnell wanted to, on behalf of the Board, thank all our volunteer Committee members for their hard work and that the Board would  be relying on them heavily during the transition process.  Also, reiterated that those owners who wanted to assist in the transition process and/or serve on the Transition Committee (i.e., subject to the requisite qualifications) submit their applications. This suggestion did not appear to get overwhelming support from the Board President. Perhaps a “Too many cooks spoil the broth” concern.

Note:  The above summaries paraphrase what SU derived from the Meeting. For complete and actual dialogs, the reader is referred to the following videoconference link:

https://drive.google.com/file/d/1kiNyNiiu4P1vHM3syRVLrmoIAQbeWp8r/view

September 8th SOA Special Board Meeting

Specialeeting

The Somersett Owners Association (SOA) has called for a Special Meeting of the Board of Directors (Board) to be held at 5:30 PM on Wednesday, September 8th in the Canyon View Room at The Club at Town Center (TCTC). The primary purpose being to discuss and take action on items associated with the transition from a professional to self-managed Association. That is, as formally approved at the August 25th Board meeting (see SU post of August 28th – August 25th SOA Board Meeting Recap). Meeting attendance may be either in person or via Zoom videoconference. Zoom log-in instructions are available on the Meeting Agenda following “Join Zoom Meeting”.

September 8th SOA Special Board Meeting Agenda

The Board Meeting Packet was not yet available on the SOA website at the time of this posting. However, SU fully expects that one will be published prior to the meeting. For this, the reader is referred to the SOA Documents/Board Documents/2021 page link on the SOA website (www.somersett.org).

Agenda Items and Comments follow:

1. Update and Discussion Regarding Transition – Since the SOA Management Consultant, Nancy Kerry, has been chartered with overall management of the transition process, SU anticipates that Ms. Kerry will be providing a status update on what has transpired since the August 25th Board Meeting.

2. Ratification of Agreement with Taylor Management – At the August 25th Board meeting, the Board voted to accept the Taylor Management proposal to contract with the Association on a “hybrid” basis while transitioning to a self-managed structure. It would appear that an Agreement has been reached.

3. Agreement with Village Management Software (VMS) – Given that the SOA is moving to self-management, a suite of HOA property management tools will require purchasing by the SOA. From this agenda item it appears that the Board has decided to go with Village Management Software (check them out at www.villagemenagement.com), which is also the software utilized by Taylor Management. Without access to VMS’s pricing data, SU is not sure whether or not Competitive quotes will be required.

4. Payroll Processing Discussion and Possible Agreement – Unknown what Payroll Service Companies the Board is considering (i.e., to accommodate SOA direct employees) and whether it will include HR services as well. Same comment as for Item 3 above regarding pricing and competitive quotes.

5. Review and Approval of Lap Pool and Spa Resurfacing Proposal – This is a tabled action item from the August 25th Board meeting (See SU post of August 28th – August 25th SOA Board Meeting Recap – third bullet under New Business), wherein the Board needed clarification from the Washoe County Health Department as to whether or not resurfacing of the TCTC Lap Pool was required for the 2022 season. Note that although several vendors were requested to submit quotes, only one was received in the amount of $39,700 for the Lap Pool and $15,605 for the two Spas.

August 25th SOA Board Meeting Recap

recap 1

Following is a summary of discussions and actions taken by the Board at the August 25th Board Meeting. The Meeting Agenda may be accessed below:

August 25th BOD Meeting Agenda

Physical attendance by owners at the Meeting was low, about 5-6 attendees. Attendance via Zoom videoconferencing was undetermined by SU.

Since the crux of the meeting dealt with the “Future of Management in Somersett” issue, these agenda items will be addressed first:

Item 6.c. SOA Management Consultant Update

The SOA Management Consultant, Nancy Kerry, summarized her weekly report to the Board, which may be viewed via the following link:      “August 20, 2021 Weekly Update Memo

The update memo included a reference to the recently issued “Request for Proposal for Landscaping Services”, those wishing to access its contents may do so by clicking on the aforementioned title.

During the Landscape Services proposal preparation process there was a discussion on the benefits for posting the SOA’s RFP’s on bid-management websites frequently accessed by contractors. To quote: “By making construction bids publicly available and widely published, entities, such as the SOA, have the best chance of receiving a greater number of proposals thereby a better opportunity for obtaining the best price for the work”. In this regard, it was recommended that the SOA pursue this option by contracting with Planet Bids (www.planetbids.com) for this service. A Planet Bids quote was obtained, which consisted of a $150 one-time setup fee and a $3,875 annual fee. The Board approved the recommendation.

Item 7.e. Discussion and Selection of SOA Future Management

At the August 10th Special Board Meeting (See SU’s previous post of August 12th entitled “August 10th SOA Special Board Meeting Recap”) The Board voted to narrow the HOA Management Companies under consideration to CAMCO Nevada Management and Taylor Association Management Trust.

Predictably (In SU’s opinion the outcome had already been decided months ago) all four Board Members voted for contracting with Taylor Management. This with the understanding it will be on a transitional basis as the Association transforms from professionally managed to a self-managed structure, which Taylor will support and assist to accomplish.. To their credit, Board Members Capalongan, O’Donnell and Williams all read prepared statements explaining their vote. which may be viewed via the following links:

Mark Capalongan – Management Decision Comments
Bill O’Donnell – Management Decision Comments
Jacob Williams Management Decision Comments

In addition to the selection of Taylor, the Board voted to extend Nancy Kerry’s contract to perform the following services: 1) negotiate with Taylor on the details of the contract, 2) coordinate the transition process and establish timelines, 3) form a transition team (two Board members and a homeowner or two were mentioned), and 4) Coordinate with FSR during their termination period and interview those FirstService Residential (FSR) employees who may want to stay on (Note: FSR has given the Board a 60 day termination notice and provided permission to interview their employees).

It has not been determined exactly who will be employed by who and by when during the transition process, but clearly the Board would prefer to have the day-by-day operations staff as Association employees from the onset, leaving the administrative work (e.g., accounting) with Taylor. Also, to accomplish the full transition within six months and certainly before Board members Capalongan, O’Donnell and Williams’s terms are up, so as not to leave unfinished business to the next Board.

Other Agenda Items

4.  Committee Reports

  • Finance – The committee is mostly complete with their 2022 budget recommendations. Possibly looking at a small increase (5% or less) in Common Area Assessments, this due to cost increases and debt paydown considerations. No assessment increases anticipated for TCTC and Gates. It was also noted that the Committee is still looking for new members and a Chairman.
  • Communication – See attached “Communications Committee Report”. With regard to the Committee recommendation to create a list of residents, with specific expertise, willing to help others through Somersett Cares, it was concluded that the best way to accomplish this was via a resident newsletter. This would be a precursor to implementation of a Somersett Cares program proposed by Board Member Williams to provide volunteer help to assist those owners in need.
  • Facilities – See attached “Facilities Committee Report”. Solicited bids from security camera vendors and contractors for the TCTC Tot Lot expansion project. No Board actions required at this time.
  • West Park Garden – See attached “West Park Community Garden Report”. No Board actions required at this time. Expressed a desire to participate in Community Events as a vendor to raise funds for the Community Garden.
  • Community Events Committee – See attached “Events Committee Report”. The Board approved the addition of Kate Falcocchia as a member of the Committee. (SU Note: Still an all-female committee, understandable as women do a much better job at planning than men. However, with male representation perhaps in addition to the car show we could squeeze in a Texas Hold’em tournament or Casino Night!). It also appears the Committee will be asking for a $20K increase in their budget for 2022 (i.e., from $15K to $35K). Worth it, considering what has transpired this year!

5. Financials

  • Treasurer Report – Board Treasurer Simon Baker reported that through June 30th, 2021, the Association was sitting on $16.5M million in cash ($2.6M operating cash, $7.9M reserves) with $4.1M in debt. Also in the first six months of 2021, the Association experienced an excess of revenues over expenses in the amount of $910K (Common Area at $679K and TCTC at $212K).
  • June Financials – The Board approved the June financial statements

SU Note: It had been previously reported that Board Treasurer Baker was selling his house and moving out of Somersett. Indications are that the timing will be such that Mr. Baker will be serving out his term. This is good news, given Mr. Baker’s knowledge and involvement with Association financials and the 2022 budgeting process.

6. Unfinished Business:

  • Legal Updates – Nothing new to report on Legal Issues.
  • 1880 Dove Mountain – No closure yet on this hillside stabilization project, engineering plans and contractor selection nearing finalization.
  • On a different issue, the Board President advised that Travelers Insurance would not be renewing the Associations Directors and Officers (D&O) liability insurance policy and a new vendor would be required, most likely with an increase in premiums.

7. New Business:

  • Gate Code Discussion – Apparently there has been some concern over gate code abuse with too many combinations (past and present) out there. Discussions included the changing of codes used by Association, Homeowners, Service Firms, Emergency Services, etc. on a more frequent basis. Too many things to consider here, so topic was referred to the Facilities Committee for study.
  • Rock Wall Monitoring Program – The Board approved renewal of the Kane Geotech contract to continue the Crescent Point Rockery Wall and SBE Slope Stability monitoring program. Cost of services being $6,000 annually with a rate schedule for supplemental services.
  • Lap Pool and Spas Resurfacing Proposals – Apparently a visit from the Washoe County Health Department’s pool inspector indicated that the TCTC Spas and Lap Pool would require resurfacing prior to the 2022 season. About 14 vendors were requested to submit bids. However, only Tahoe Pool and Spa Construction submitted a sealed bid, which was opened at the meeting. Quoted price was $39,700 for the Lap Pool and $15,605 for the two Spas. A confusing factor was that in a subsequent document from the County, only the Spas were mentioned. This caused the Board to table action until further clarification from the County could be obtained.
  • Approval of Charters for the newly formed Technology Advisory and Strategic Planning Committees – Both Charters were approved. The Technology Advisory Committee is a temporary ad-hoc committee consisting of members appointed by the Chairman of the Communication Committee. The Strategic Planning Committee is a permanent committee consisting of appointed members from the Facilities, Finance and Communication Committees. For the purpose and responsibilities of each committee, one may access the following:

Technology Audit Committee Charter
Strategic Planning Committee Charter

Homeowner Comments:

  • A comment on the hiring of FSR employees who may wish to stay on after FSR leaves, that it should be the new Management Company’s decision and not the Boards. Also, that owners should be surveyed to determine if self-management of the Association is really the direction owners wish to go.  Board response was that past communications have provided owners with sufficient avenues to express their opinions.
  • Given the importance of the Boards decision to homeowners and the complexity of the transition to a self-managed Association, a suggestion that the Board convene a “Town Hall Meeting” wherein the transition process is explained to homeowners. Thereby providing them with the opportunity to know what to expect and to ask questions.
  • A somewhat heated exchange occurred between the homeowner at 1880 Dove Mountain Court and the Board President. Apparently over a misconception of what Agenda Item 6.b “1880 Dove Mountain” pertained to. As the resident owner at 1880 Dove Mountain, the owner assumed this item pertained to his property and therefore, had the right to ask questions and express opinions when it came up on the agenda. The Board however advised that it did not involve his property, but only the Common Area hillside adjacent to his property, and if he wanted to comment he had to do so only during the homeowner forums at the beginning and end of the meeting. The controversy was resolved by the Board agreeing to meet with the owner at the next executive session.
  • An owner raised the following questions: 1) How many and what roles would those FSR employees, who may wish to stay, play in the new management structure, and 2) Given that the Association expects to save considerable funds with the move to self-management and new landscaping contracts, what are the off-setting costs that would require an increase in the Common Area assessment? (SU Note: not to mention the $679K excess of Common Area revenues over expenses previously reported by the SOA Treasurer, or the $100K budgeted amount for Rockery Wall lawsuit appeal that will now not be spent). With regard to question 1), the Board President responded that they were only looking at the senior FSR staff of around 10 employees. With regard to question 2), the Board Treasurer responded to cover uncertainties in future costs and if a surplus resulted to apply it to the Association debt. (SU Note: Perhaps paying down the debt is the primary reason behind any assessment increase!)

SU Note: Regarding the reference to senior FSR employees, and although not specifically stated, SU assumes this would pertain to the Community Manager (Ryan Fields), Assistant Community Manager (Jessica McCarron), Operations Manager (Jeff Lucas), Administrative Assistant (Michelle Powers), Aesthetics Coordinator (Aleah Marcelino), Communications Coordinator (Robin Bolson) and Club Manager (Camille Porter) staff positions. No mention was made regarding competitive interviews.

August 25th SOA Board Meeting

BOD Agenda 2

Following is the Agenda for the Somersett Owners Association (SOA) Board of Directors (BOD) Meeting to be held at The Club at Town Center (TCTC) at 5:30 PM on Wednesday, August 25th in the Canyon View Room.  Attendance may be either in person or via Zoom videoconference.  Zoom log-in instructions are available on the Meeting Agenda under “Join via Zoom”

August 25th BOD Meeting Agenda

The Board Meeting Packet for the August 25th Board meeting was not yet available on the SOA website at the time of this posting.  However, SU fully expects that one will be published prior to the meeting. For this, the reader is referred to the SOA Documents/Board Documents/2021 page link on the SOA website (www.somersett.org).

Comments on Agenda Items follow:

4.0  Committee Reports:

Regarding the Committee Reports (i.e., Budget & Finance, Communications, Strategic & Facilities, West Park Garden, Community Events and General Manager), these appear on every Board Meeting Agenda as place holders that may or may not be commented on.

5.  Financials:

Most likely just the standard Treasurers Report and monthly financial statements. The reader is referred to the Board Meeting Packet referenced above for details.

SU Note: It has been reported that the SOA Board Treasurer, Simon Baker, has placed his house on the Market. If so, hopefully he will be relocating within Somersett. If not, we will miss his service as Treasurer, which has been excellent.

6.  Unfinished Business:

a.  Legal Update –  SU does not anticipate any new news here. That is, no closure on the Preston Homes Lawsuit or any new legal actions against the SOA to report.

b.  1880 Dove Mountain –  After the ridiculous passage of time to settle this hillside stabilization issue, perhaps closure is finally on the horizon.

c.  SOA Management Consultant Update –  The SOA Management Consultant, Nancy Kerry, has published the following update on the SOA Website (click on to view):

Memo, SOA Managements Options Overview, August 25th Board Meeting

7.  New Business:

a.  Gate Code Discussion – No info yet available on what this discussion entails

b.  Rock Wall Monitoring Proposal –  For years now the SOA has been paying Engineering firms to monitor some suspect rockery walls for movement. Given the loss of the SOAs lawsuit against Somersett Development Company et al, is it now time to stop this practice, especially given that no significant movements have been encountered?

c.  Lap Pool and Spas Resurfacing Proposals –  Speaks for itself

d.  Approval of Charters for Newley Formed Technology Advisory and Strategic Planning Committees –  At the June 30th Board meeting, the Board approved formation of two new Committees: 1) a Technology Advisory Committee to carry out a SOA “Technology Audit”, that is, to study and recommend changes to the SOA’s many communication and data systems, and 2) a Strategic Planning Committee, which will be separated out from the current Strategic and Facilities Committee. Given that the SOA Website does not currently identify these new Committees or their membership, it is not known if members have already been established or are being solicited.  However, one may always access the SOA Website Committees page and fill out the “Application to Join a Committee”.

e.  Discussion and Selection of SOA Future Management – This Item is a  result of the August 10th SOA Special Board Meeting, wherein the Board met to “Consider and review the management proposals and identify those that the Board wishes to interview”, which was recapped in the following SOA Post of August 12th:

           August 10th SOA Special Board Meeting Recap

Now that the Board has gone through its “due diligence” in addressing future management options, SU believes the option selection is obvious, if not preordained. That is, the selection of Taylor Management as a professional management company to assist the Board in transitioning the SOA to a self-managed Association. A decision for renewal of the FirstService Residential contract or selection of any other professional management company, would come as a major surprise to SU.

August 10th SOA Special Board Meeting Recap

recap 1

Following is a summary of discussions and actions taken by the Board at the August 10th Special Board Meeting. Attendance was via Zoom videoconferencing only. Approximately nine homeowners signed in. The video/audio recording of the Zoom meeting is available on the SOA website (www.somersett.org) under the “SOA Board and Committees/The Board of Directors” page. The special meeting consisted of three agenda items. Comments follow:

Item 1.  –   Consider and review the management proposals and identify those that the Board wishes to interview.

To start this discussion, the SOA’s Management Consultant, Nancy Kerry, gave a summary report on the management proposals submitted by the following six companies, focusing primarily on cost data.

    • First Service Residential
    • Associa Sierra North
    • CAMCO Nevada Management
    • Eugene Burge Management Corporation
    • The Management Trust
    • Taylor Association Management

To support Ms. Kerry’s presentation, the following cost comparison table was put on the screen for viewing by Zoom conference attendees:

Management Proposals Financial Impact Comparison

Following Ms. Kerry’s presentation each Board Member was chartered with expressing comments that they may have on the individual proposals and to vote for two companies they would like to bring in for interviews. First Service Residential was essentially excluded because the current working relationship and contract is well known by the Board, and therefore, no interview required.  The Board members voted as follows. Note that Board members Capalongan and O’Donnell cast their two votes for the same company.

    • Jacob Williams –  CAMco and Taylor
    • Simon Baker  –  CAMco and Taylor
    • Bill O’Donnell  –  Taylor and Taylor
    • Mark Capalongan  –  Taylor and Taylor

Board Member Williams and Baker’s selection of CAMco was predicated on the desire to interview another large company.

The selection of Taylor by all Board Members was predictable. It has become abundantly clear that the Board wants to transition the SOA to a self-managed (internal) structure. Apparently, to address this eventuality, Taylor has proposed a hybrid structure which would support a transition to self-management. Hence the redundant votes for Taylor by Board Members O’Donnell and Capalongan, who, in doing so, appeared to have no interest in interviewing any of the other five. In commenting, Board member O’Donnell pontificated extensively on why the current professional management model is unworkable, proclaiming self-management as the only viable option for Somersett. It was also apparent that Board President Capalongan had previously evaluated Taylor and had already zeroed in on them as his choice. This raises the following questions: 1)  were any of the other companies interested in or requested to also submit a hybrid approach, and 2) was there really any objectivity present in the evaluation process? Whatever the case may be, Kudos to Nancy Kerry for her diligent work on this issue.

The Summary Report prepared by Ms. Kerry which addressed each of the six companies was contained in the Board Meeting Packet and is available via the following link:    “Review of Management Proposals

The individual proposal summaries for the “chosen” two, along with First Service Residential, are repeated below:

Item 2. —   Review Insurance Proposals

This was not a review of individual insurance proposals by the Board. Rather this agenda item consisted primarily of an agent who specializes in HOA insurance (Ron Wright – Menath Insurance) providing the Board with his take (during a 25 minute dialog) on what they should be considering when renewing the SOA’s insurance policies. He has apparently reviewed the SOA’s insurance policies and opined that we were underinsured in some areas. He also advised that, in his opinion, the SOAs insurance costs would be doubling in the future.  In response to the question if moving to self-management would result in an increase in the SOA’s insurance costs, he advised not necessarily. That added costs such as Workman’s Compensation and Employment Practices Liability were currently being paid for indirectly via FSR’s management fees.

If Mr. Wright submitted an actual cost proposal to the Board, it was not discussed.  It also appeared that, rightfully so given the effort he put into his review, Mr. Wright was soliciting his services.

 Item 3.  –  Approve Brightview’s proposal to extend their contract on a month-to-month basis after September 1st.

The Board approved the BrightView proposal for extending their contract, which expires on August 31st, on a month-to-month basis.  This to provide the Board time to obtain competitive quotes.

Homeowner Comments (SU apologizes for any mischaracterizations of homeowner comments and refers the reader to Zoom video/audio recording for actual statements)

The Board President of The Villages sub association had read into the record his endorsement of BrightView as the SOA landscape contractor. This in response to the Boards apparent dissatisfaction with BrightView’s performance and the decision to go out for competitive bid rather than renew their contract. He praised the quality of BrightView’s services as compared to previous landscape contractors and urged the Board to retain them. In response, the HOA Board President, advised they were not looking specifically to replace BrightView, but to consider other options.

 A Board member of the Vue sub-association stated their satisfaction with FirstService Residential as their community manager. However, liked the idea of self-management but cautioned that we know exactly what we are getting into before we do it, as there is a cost to get in and a cost to get out. He also expressed a concern that while we may be doing the right thing for the current Board, are we doing the right thing for future Boards? This based on the observation that the current Board is well motivated and willing to spend a lot of time on Association management, but this has not been the case for past Boards and may not be the case for future Boards.  In response, the Board President basically advised that if the internal management structure was properly established, that future Boards would function in an oversight role as opposed to the day to day Association management.

An Owner Perspective on the SOA Rockery Wall Lawsuit Settlement

The following post submitted by Geoffrey Brooks, Somersett Homeowner:

SU Note: Following the announcement that the SOA Lawsuit Appeal against the Somersett Development Company et al had been denied, Mr. Brooks posted the following within the Discussion Forum on the SOA website. It is being republished here at his request. The following also contains Board President Mark Capalongan’s response, with his permission,  to Mr. Brook’s comments.

Geoffrey Brook’s August 4th SOA Website Post:

“I attended the legal meeting before the vote to pursue the rockery wall builders and developer. Schulman gave a presentation where little in the way of a “prima facie” case was made. (We were told that they did not want to tip off the legal opposition)

Most of the meeting revolved around discussing the Geotech report on how badly built the SOA owned 17 miles of walls were… Monitoring devices were put into place in some areas (now removed as no significant movement has been detected). The report created a climate of fear within the community …

Personal inspection using the GeoTech report of nearby rockery walls (not just in Somersett) at that time, including those near where my house is located (along with my neighbors) led us to the conclusion that any defects noted were minor and inconsequential. The danger of them tumbling down was obviously exaggerated (for the law-suit)!

At the meeting several folks spoke out against pursuing legal action. The community vote did not meet the CCR/NRS legal requirements. Back in 2011 when the SOA (developer controlled) was suing under Chapter 40 – the vote was held open until the CCR/NRS voting requirement was satisfied…

The Board actually had perfectly good reason not to pursue the law suit…(homeowners were not privy to the legal analysis, on which the suit was to be pursued).

But the fear for the safety of the community from collapsing rockery walls (based on GeoTech’s report) and under persuasion from our attorneys – justified their decision to go ahead, without proper legal community approval (per NRS and CCR’s).

I read through the original judgement against Somersett … The judge was all over our attorneys for not having a case, and making nonsensical arguments about how long a wall should last!

At a subsequent homeowner meeting, when the attorneys wanted the Board to pursue the appeal. We were told that this would be done essentially pro-bono. They were pursuing a similar case in Las Vegas; where the turnover date by the developer to the residents, is the date from which the “countdown” clock for 6 years start for any property now owned by the HOA. This would establish a new legal precedent!

In my business life, I never felt that being on the cutting edge of legal precedent was a good idea; whereas, conversely for science based projects it might be OK to be on the leading edge!”

Mark Capalongan’s Response:

“Hello Geoffrey,

That informational meeting is still on the web and can be viewed here:

https://www.youtube.com/watch?v=NWziVILTz48

Afterwards, 71% of the votes received were in favor of the lawsuit. Missing from the presentation was any discussion of the risks of bringing the lawsuit, the costs of that lawsuit, if the defendants had any ability to pay, and any estimated on the chances of success. The discussion seemed to be centered on the fact that the walls were bad, and defects were identified. Very little was said about the statute of repose, and in the end that’s all that mattered.

So homeowners were missing some key information when they voted. We forgot to ask (or the law team effectively evaded) the hard questions. In making the wrong case, the legal team pumped up the defect status to include some 70 miles of rock wall and did the entire community a disservice by overstating the risks and problems. Some of those claims made the papers.

For the appeal, the SOA paid a fixed cost up front. It wasn’t free.

In the end, this case was probably used to test the robustness of the statue of repose, something that should be left to deeper pockets (and scientists.) In the future anyone coming up against a similar situation will have an even tougher time of it.

Mark Capalongan”

Mr. Brooks response on August 4:

“Hi Mark

It is obvious that if the CCR’s and NRS had been followed to the letter, the suit would not have happened… The then Board decided to sue, based on the fact that by the end of January the 6 years the Statute of Repose for the Declarants turnover to the Homeowners would have expired.

Unfortunately, before the turnover, over 2000 homes had been built, and the SOA was a functioning entity for the homeowners, albeit controlled by the developer. A change in control, did not mean that the clock restarted from the infra-structure building viewpoint.

Future Boards can avoid esoteric legal theory being pushed by their attorneys, by following the R&R!

Back then, the Board was under pressure from many residents to get the private golf course to pay for the repair to their collapsed wall, and the SGCC encouraged the suit. Note that 2 of the Board members were members of the country club. Somersett HOA should not have paid to fix the golf course wall, the responsibility to repair and maintain leased property was clearly theirs.

The falling walls were attributed to an extreme weather event – a once in a 100 year storm. We have to ask ourselves whether this kind of event can happen again in the near term. We need to make sure that any wall built either 20 years ago, or today in Somersett drains properly, and is built on a stable land base.

I Appreciate your taking time to comment on past events, I believe that a litigation light existence is far less stressful!

Geoffrey”

Mark Capalongan’s Response:

“Several people have asked what the final cost of the rock wall case was.

From the past financial reports here is what I’ve found:

Looking strictly at the rockery wall case against Somersett Development as summed in account 77765 we might have spent $644K. However, the other legal expenses for 2018 and 2019 were also unusually high and probably included legal costs of the action against SGCC for that rockery wall.

Our average legal costs in a typical year average 100K. So for the period of 2018-2019 while the rockery walls were being litigated, our legal costs above normal were $844K.”

SU Note:  For those interested, the Court of Appeal’s legal ruling make be accessed vis the following link: 

Supreme Court Appeal Opinion 21-21960, Case No. 799211

 

Error Correction

opps

As indicated in Mr. Capalongan’s comment on SU’s previous post “August 10th SOA Special Board Meeting”, under Item 3. “Approve Brightview’s proposal to extend their contract on a month-to-month basis after September 1st”, we erroneously made reference to the FSR contract, which expires December 31st, 2021. The BrightView extension is required because the Board will be going out for competitive bid rather than renewal.

SU apologizes for mixing the two!

 

 

August 10th SOA Special Board Meeting (Updated to correct item 3 error)

Specialeeting

Following is the Agenda for the Special Meeting of the Somersett Owners Association (SOA) Board of Directors (BOD) to be held at The Club at Town Center (TCTC) at 5:30 PM on Tuesday, August 10st in the Canyon View Room.  For those wishing to participate via Zoom video conferencing, the login passwords are contained within the Agenda document.

August 10th SOA Board Special Meeting Agenda

The Special Meeting Agenda Items are as follows:

 1.  Consider and review the management proposals and identify those that the Board wishes to interview.

One of the Management Options Study objectives was to obtain competitive quotes from a number of HOA Professional Management Companies. At the July 21st Board Meeting, the Board opened sealed bids from the following six companies.

    • First Service Residential
    • Associa Sierra North
    • CAMco HOA management
    • Eugene Burge Management Corporation
    • The Management Trust
    • Taylor Association Management

Action on the above proposals were deferred to a subsequent Board meeting to allow time for the generation of a matrix of comparable features and fees to assist in the evaluation process. The intent being to narrow down the field, who will then be brought in for interviews.  The results of this review process are contained within the following report, prepared by the SOA’s Management Consultant, Nancy Kerry.

Review of Management Proposals

In the proposal submittal process, our current management company, FirstService Residential (FSR) was requested to submit answers to some supplemental questions.  These may be accessed via the following:

FSR Supplemental Answers to proposal

SU Note:  Apparently the Taylor Association Management proposal addressed a hybrid approach to Association management in the event the Board is interested in pursuing a combination of  internal and external management elements. At the last Board Meeting the Board President expressed a strong interest in this approach, such that SU expects they will make the short list.

2.  Review Insurance Proposals

An option under consideration by the Board is to convert to an internal management structure (i.e., as opposed to the hiring of a professional management company). This option would obviously require a re-structured Association insurance policy. Hence, the request for quotes from various insurance companies for such a scenario.

 3.  Approve Brightview’s proposal to extend their contract on a month-to-month basis after September 1st.

Given the Boards decision to go out for competitive landscaping bids rather than renew the BrightView contract, which is up on August 31st, extension on a month-to-month basis will be required.

The above linked documents were extracted from the Board Meeting Packet and are included here for convenience. The reader is also referred to the “Future of Management in Somersett” page on the SOA website (www.somersett.org), for a listing of published documents (past and present) related to the Management Options Study.

Rockery Wall Litigation Update (7)

Case-Dismissed-1

Yesterday (August 2nd) the SOA Board President, in a “Somersett Happenings” email distribution to Homeowners, announced that the Nevada Court of Appeals has upheld the District Court’s Summary Judgement dismissal (based on statutes of repose and limitations) of the SOA’s lawsuit against Somersett Development Company et. al. That is, the SOA’s lawsuit for damages (In excess of $4M) associated with the SOA Common Area Rockery Wall failures. This essentially bringing an end to the litigation. Or does it?  Will the SOA be liable for any of the defendants legal fees?

In announcing the appeal decision, the SOA email contained a brief summary of litigation events (initiated in April 2018), implied that the lawsuit was ill advised and will end up costing the SOA in the area of $754K.

Did the SOA Attorneys lead us down the “primrose path” for their own benefit? Many believe so. However, the previous Board did conduct Homeowner Information Meetings on the lawsuit, wherein the SOA Attorneys and  Engineering Firms presented the case for litigation and addressed owner questions. Subsequently, information letters and ballots were distributed to all SOA members (approximately 3000) for ratification of the lawsuit by majority vote as required by Nevada law. The Vote count being 716 for, 205 against, and 36 invalid.  Note that a “majority vote” would constitute approximately 1500 votes. However, the SOA attorney advised that the SOA had conducted a good faith effort and that their interpretation of Nevada Law allowed the SOA to proceed with the litigation without having to extend the voting deadline to obtain a majority vote, which they did, bringing us to the present.

The President’s email contained the following quote from the Court of Appeal’s decision, describing it as a “scathing opinion”.

“NRS 11.202(1); NRS 11.2055, which we clarify in the context of the common law, means sufficiently complete so that the owner can occupy or utilize the improvement. Here, SOA failed to offer anything beyond “gossamer threads of whimsy, speculation, and conjecture” to support its argument that it commenced this action within that six-year period.”

However, for the complete text (13 pages) of the Supreme Court Opinion, the reader is referred to the following legal filing:

Supreme Court Appeal Opinion 21-21960, Case No. 79921

For those interested in reading the “Summary Judgement” issued by the District Court in October 2019, which was he basis for the appeal, the following link is also provided.

Order Granting Defendant’s Motion for Summary Judgement

The SOA President’s email also contained a paragraph about being more judicious in pursuing legal actions. Amen to that. However, Board members are normally not legal experts and have to rely on the Association’s legal team for guidance. Perhaps a new legal firm representing the SOA is warranted!