Country Club Reality Check

golf ball on lip(Submitted by Charnelle Wright)

Although it was thoughtful for one of our fellow homeowners to alert everyone in our community to the opening of the SunSett Grille at the Somersett County Club, we should be mindful that this restaurant is housed in a double-wide trailer / tent, upgraded using $75,000 of property owners money without the benefit of a vote by those property owners.  We firmly believe this was a disgrace and insult to the intelligent people who choose to live in this beautiful community.

During the early development of Somersett, Somersett Development Co., our developer, enticed 270 Homeowners to invest $25,000 to $45,000 each (approximately $10M) to become members of the Somersett Country Club promising them a decent building for their Club.  Instead, they were given a double-wide trailer and a tent and called that substandard structure a Country Club.  Nowhere else in Somersett or Reno or any other city would such a structure be allowed.  It is an embarrassment to the community.

Many members left their investment in the Country Club when the developer requested they  take control of the clubs mounting expenses, further adding to their already sizable investment.  The remaining 170 club members now refuse to face the reality that most private clubs throughout the country have had to face.  That is, they must go public to survive.  The only clubs that are currently succeeding, are those that have gone public and given up the concept of exclusivity.  With just 170 members, they have little to be exclusive about, least of all, the substandard building they call a Country Club, which as many fear, and if the current SOA Board has its way, a replacement may be built using additional SOA assessments .
Are you aware that the Country Club is using property owner’s funds to build a separate driving range so that the non-members won’t rub elbows with the exclusive 170 members?  We believe this is a travesty, abuse of power and a misuse of funds without input from the remaining 2311 other property owners.  Millions of property-owner dollars have been targeted in the so-called “Lease Agreement” with the Country Club to be used over the next ten years for so called “improvements” that should have first been put to a vote of all property owners.  Instead of giving that money away in a contract called a “Lease”, perhaps it could have been put to a better use as a trust fund to build a decent clubhouse in the future, or as a subsidy agreement to be repaid to the Homeowners Association at some point in time.  Without a vote of the property owners approving these actions, the resulting misuse of these funds, is a flagrant abuse of power and negates the concept of “Democracy” that we firmly believe in.

April 12 SOA Board Meeting Wrap-up

The April 12 SOA Board of Directors meeting was held with very little attendance on the part of homeowners.  Comments on some of the more important agenda items follow.  For complete meeting minutes please visit the SOA website at www.mysomersett.com.

SOA Board Turnover.

Expansion of the Board to five members and election of an all Homeowner Board in November of this year was approved. This will end Developer control of the SOA Board, an event that SU has long lobbied for, as it will end any conflicts between what is in the “best interests of the Developer” versus “what is in the best interests of the Homeowners”.

Developer Subsidy Repayment Agreement

Per this agreement, the SOA Board agreed to reimburse the Somersett Development Company $365,907 for prior subsidized services. Validity of this agreement has been challenged by a homeowner and is the subject of the previous Blog article.

Country Club Lease Agreement

A homeowner had challenged the validity of the Country Club Lease Agreement on the grounds it violated certain provisions of the Nevada Revised Statutes regarding common-interest communities.  As expected the “neutral” SOA attorney’s opinion was that these were without merit.  What was not expected was the Board president’s (Blake Smith) criticism for wasting the Boards time and attorney fees for alleged violations that had been previously ruled upon, which was false.  The alleged violations were first raised in a letter to the Board in February, responded to by the SOA Attorney in March and placed as an agenda item on the April Board meeting. It is unfortunate that the Board president feels free to mis-state the facts and to direct attacks against those who may disagree with Board decisions. SU also considers the SOA Attorney opinions as challengeable.

Reference: Legal Opinion SGCC Agreement Validity

Complaint for Damages Against Summit Engineering and Moana Nursery

The Board advised that the settlement agreement for damages against Summit Engineering (i.e., the Somersett entrance rock wall issue) was close to resolution, but was not the case for Moana Nursery (mainline irrigation issue).  In the event settlement agreements are not reached in the near future, the Board approved resolutions for the filing of damages against both.  Such filing would require homeowner approval via vote.  A homeowner raised the question as to whether these actions would release Somersett Development Company, as prime contractor, of any damage liability on their own, the answer was no.  A question here is: Should the Developer be paying the legal fees for this litigation instead of the SOA?  SU believes that this should be a Developer expense.  Also, it was revealed that 27% of any recovered damages would be paid to the Developer as credit against the Subsidy Repayment Agreement discussed above.

Land Purchase Adjacent to TCTC

The Board (Ray Lee) extolled the strategic importance to the SOA for purchase of this land.  However, purchase of the land was placed on hold for unclear reasons, even though it is again on the market. Blake Smith blamed a recent offer (subsequently withdrawn) on this property by a Somersett resident as “muddying the waters” and causing the bank to consider placing land purchase on a 90 day hold.  SU considers this to be some sort of smoke screen as the SOA Board had sufficient time to purchase the property after resident withdrawal of their offer.  One might ask the question, if the property is of such strategic value to the SOA, why was it not included in the original common area? Maybe because the Developer expected to sell it to a retail concern at a nice profit?

Developer Subsidy Reimbursement Agreement – Valid or Invalid?

Money Changing HandsIn October 2011, the SOA Board approved a “Subsidy Reimbursement Agreement” dated July 20, 2011, whereby the SOA would reimburse the Somersett Development Company $365,907 for subsidized services performed in the years 2004 through 2007.  After a thorough review of prior year Financial Statements, Independent Auditor Reports and Subsidy Agreements, by a Somersett resident (Cornelius E. Hardy), it was concluded that, under the terms of previous agreements, the 2011 Subsidy Repayment Agreement was invalid and no additional reimbursement was owed to the Somersett Development Company.

Mr. Hardy compiled a report (Reimbursement of Developer Subsidy Payments, dated May 15, 2011) of his findings and submitted it to the Board on March 15, 2012. This was followed by a summarization of his report, which was presented at the April 12, 2112 SOA Board meeting for inclusion into the meeting minutes.  Subsequent to submittal of Mr. Hardy’s March 15 report, the SOA Attorney provided a legal opinion (“Subsidy Agreement Allegations”, dated March 30, 2012) wherein they took exceptions to some of Mr. Hardy’s conclusions.  An analysis of the legal opinion raised additional concerns, which were documented in Mr. Hardy’s response to same.

All of the documents referred to above are available in the Blogs Reference Section for viewing by the reader. Also available in the reference Section are the 2004 and 2008 Subsidy Agreements referred to in Mr. Hardy’s report. These documents may be accessed by clicking on the following links:

2011 Subsidy Reimbursement Agreement

Report – Reimbursement of Developer Subsidy Payments

Summary Report – Reimbursement of Developer Subsidy Payments

Reponse to SOA Attorney Opinion Letter

2004 Subsidy Agreement

2008 Subsidy Agreement

SOA Board of Directors Meeting

Town CenterThe Somersett Owners Association Board of Directors meeting is scheduled for Thursday, April 12 at 5:30 PM in the Loft. The agenda is available via log-in on the SOA website at www.mysomersett.com.   However, for those of you who may not be signed up to access the SOA website (we encourage all to do so), a reprint of the meeting agenda is available on our reference page and the link below.

April 12 BOD Meeting Agenda

We urge all to read the agenda and attend the meeting if at all possible.  There are many important items to be discussed and the more homeowner involvement in these meetings the better.  If you are so inclined to express your viewpoint or ask questions on any of the agenda items we would encourage you do so during the homeowner comments portion of the meeting.

Of particular interest are New Business items 7 a,b,c, pertaining to SOA Board control turnover and expansion to five members, as this will be a significant event affecting all Somersett homeowners. Also, items 7 e,f related  to filing a Complaint of Damages against Summit Engineering and Moana Nursery for the rock wall and irrigation system defects.  This action being done pursuant to Nevada Revised Statute NRS 116.31088 1(e), a copy of which is also available on our reference page and the link below.

NRS 116.31088

Other New Business Items include SOA attorney legal opinions relating to SGCC Agreement Validity and the TCTC Pool Solar Cover.  Whereas these opinions are available on the mysomersett.com website, they have also been included on our reference page for viewing and the links below.

Legal Opinion SGCC Agreement Validity

Legal Opinion Solar Pool Cover