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