“Melissa Mail” Response to SU Flyer

Posted by Jim Haar

 In the recent issue of “Melissa Mail”, the SOA Board apparently found it necessary to comment on a “Flyer” that had been circulated to some Somersett residents by Somersett United.  In it they stated that the Flyer included “several inaccuracies”, but failed to identify what they were.  From my perspective I did not note any inaccuracies in the statements contained within the Flyer.  Let’s analyze them.

$6M of HOA dues being gifted to the SGCC:

 Over the ten year term of the Lease Agreement, homeowner assessments are $15/month/unit for the first three years (Section IV.1.1) and $12/mo/unit for the last seven years (Section IV.4).  At the beginning of 2012 there were 2415 dues paying units.  Without any consideration of resident growth over the ten years, this equates to $3.74M.  Factor in the “Event Trigger” option (Section IV.5) wherein the SOA can participate in permanent SGCC clubhouse design and usage for an additional fee structure (Section IV.5.1) of up to $15/mo/unit (Section IV.10.2 ).  Assuming the $15/mo/unit amount and that the Event Trigger occurs at the three year mark, this equates to an additional $3.04M, again without any consideration of resident growth.   One might contend that the Agreement options may not be implemented thereby reducing the homeowner liability below $6M.  This is possible, but given the actions of the current board, questionable.  Whether or not one considers the SOA contribution to SGCC’s operating income a gift, subsidy or justified purchase of new amenities for residents is simply rhetoric and does not alter the potential $6M+ liability figure.

Bail-out for an insolvent golf course:

Per the SGCC’s own financial summary, they had a net income loss of $685K in 2011, and a break even projection for 2012 predicated on $435K income from SOA homeowner assessments and $61K income from resident use of amenities.  Call it what you want, but many believe the “bail-out” description fits.

Contract implemented without your approval:

 No argument here.  Agreement was entered into between the Developer controlled SOA BOD and the SGCC without appropriate disclosure to or buy-in from the Community at large.  The Agreement added 10% to the 2012 SOA budget for the SGCC amenities, which under the current CC&Rs we have no right to use (Article VII Section 6).  The logical process for an agreement of this type would have been full and timely disclosure of Agreement details and submittal for homeowner vote and amendment to the CC&Rs.

No payback or equity ownership:

At the conclusion of the Agreement there are no payback or ownership rights for the Driving Range Addition, Putt-Putt Course, Bocce Ball Court or Dining Room Improvements built with SOA funds.  The SGCC retains ownership and all rights.

Payments continue after the SGCC sells the golf course.

Being a private entity, the SGCC equity owners have the right to sell the SGCC to a third party.  In this event, the Agreement stays in force and SOA payments must continue to the Buyer (Section IV.11).

I have no doubt that this post will elicit a response from Country Club members.  This is welcome as long as one addresses the facts and keeps it civil. Unfortunately, this is not always the case as witnessed by the very hostile approach I received from a Country Club member at the Financial Committee Meeting demanding to know if I wrote the Flyer, which I did not, and then demanding I tell him who did, all of which is really immaterial and not the issue to be discussed.

Moana Nursery Litigation Ratification

Courtesy of FreeDigitalPhotos.net

Somersett residents recently received a letter from the SOA’s attorney which contained a ballot on whether or not to ratify the SOA Board’s decision to continue litigation (i.e., through the filing of a lawsuit) against Moana Nursery.  This action being required because negotiations with Moana Nursery to resolve defect claims associated with installation of the common area main line irrigation system have not been successful.  The letter further stated Association expenses to date (defect corrections and fees) are over $400,000 and do not include any unknown future costs.

 It is SU’s opinion that Somersett residents should vote “Yes” to ratify the decision to continue the litigation against Moana Nursery.  This seems like the logical path given the situation as stated in the attorney letter.

What the letter did not address is the Somersett Developers liability with regard to this issue.  The “Tolling Agreement” signed between the SOA Board and the Somersett Development Company (SDC) in early 2010 states that: “Each party agrees to jointly pursue and cooperate in pursuit of a claim against Moana Nursery and Hansen Landscape Architects …” and “…each of them shall bear their own attorneys fees…”.  The attorney letter implies that the $400,000 in corrective work, the $8,000 in expert fees, the $40,000 in attorney fees and an estimated $10,000 in future attorney fees are an Association expense.

It is SU’s opinion that none of the above should have been or should be an Association expense.  The irrigation system installation was not performed via a SOA contract, but rather by the Developer and/or its subcontractors.  Therefore, the corrective work and all claims against Moana Nursery and Hansen Landscape Architects should have been the sole responsibility of the SDC.  Given this, it is hard to understand the reason behind the “Tolling Agreement” to proceed jointly.  Fortunately the Agreement also states: “In making this cooperative Agreement, Somersett Owners’ Association does not relinquish any rights or claims it has or may have against Somersett Development Company, LLC in the future”.  Hopefully the new all homeowner SOA Board to be elected in November will recognize where the liability for defect corrections really lie and proceed accordingly against SDC for any unrecovered SOA costs.

Somersett Parkway Entrance

Somersett Entrance

As you have probably noticed, work has begun on correcting the long awaited “Rock Wall” construction defect at the Parkway entrance to Somersett.  The SOA Board of Directors reached an agreement with Summit Engineering and Q&D Construction (which we assume to be the original Somersett Development Company subcontractors) to tear up the existing walkway through the area and build a catch basin (i.e., ditch) to catch the falling rocks.  This work will be performed at their own expense with no monetary payment to or from the SOA.  However, landscaping of the torn up sidewalk and catch basin areas will be the responsibility of the SOA and accomplished using SOA Homeowner funds.  Apparently $15K was allotted for this work under the 2012 Landscape Renovation account.  Looking at the torn up walkway and catch basin areas, one wonders if this will provide sufficient funding for the re-landscaping effort.

The temporary detour, which routed walkers around the area via the emergency access road terminating in the Whisper Rock Way residential area, will now become a permanent pathway.  Whereas this solution appears to be the most cost effective, was it the best alternative for the Somersett community?  Permanent routing of the walkway through the Whisper Rock Way gated community apparently has generated some on-going concerns with its residents.

It is Somersett United’s position that the SOA should not be subject to any of the costs associated with fixing this defect.  That is, all legal fees and corrective action costs should be the responsibility of the Somersett developer.

The Poll is Now Closed

The poll associated with “How Would You Like To Spend Your SOA Money” has run its course over the week and is now closed.  Thanks to all who participated.  Here are some of the statistics/facts for your review:

293 responses voted for applying their money for other SOA endeavors

287 responses voted for the ‘subsidize the golf course’ option

Less than 30 % of all Somersett residents were polled and included in the initial email distribution.

53% of the voting came in from Thursday afternoon to Friday morning, the fourth day of the poll.

Thank you again for your participation.



Somersett Resident Tee Times

Posted by Jim Haar

Every year I host friends who come to Reno for a golf outing and every year we have played the Somersett golf course, either when I was a member or through sponsorship of a member friend.  This year was to be no exception and I called to make a reservation via the Somersett resident $40 amenity.

I called a week in advance and to my surprise was informed residents could only make reservations three days in advance.  Upsetting, but what the hell, the kid was only following instructions.  I called three days in advance and requested a tee time in the 10:00 to 10:30 range and was advised an 11:40 tee time was available.  I objected somewhat and was then advised I could get one at 11:00 AM, which I took.  However, one has to wonder if the cooler morning times were being left open for Club members.

Given the amount of money the Somersett residents are contributing to the golf club via dues assessments, I suggest this is not the best way to treat them. Perhaps the SGCC BOD should revisit their tee time policy.

2013 SOA Budget Workshops

The SOA Board of Directors (BOD) and Transition Committee Workshops for developing the Somersett Owners Association 2013 Budget have been scheduled and are now accessible on the www.mysomersett.com community website via MEMBER LOGIN/SOA.  For those readers who may not have Log In access, meeting schedules are as follows:

Tuesday, July 24, 5:00 pm 2013 Budget Overview – Goals & Objectives

Committee and Board will receive proposed budgets by Friday, August 3 for review from Management

Tuesday, August 7, 4:30-6:00 pm Special Projects

Tuesday, August 14, 4:30-6:00 pm General Common/Canyon Nine

Tuesday, August 21, 4:30-6:00 pm Club at Town Center

Tuesday, August 28, 4:30-6:00 pm Private Streets & Gates

Committee and Board will receive revised/edited budgets by Friday, August 31 for review

Tuesday, September 11, 4:30-6:00 pm General Common/Canyon Nine

Tuesday, September 18, 4:30-6:00 pm Club at Town Center

Tuesday, September 25, 4:30-:00m Private Streets & Gates

Committee and Board will receive “FINAL” budgets by Friday, September 28 for review

Thursday, October 4, 5:30-7:00 pm Budget Presentation

Friday, October 5, 5:30-7:00 pm Budget Presentation

Thursday, October 11, 5:30 pm BOD Meeting – Budget Approval

Thursday, November 15, 5:30 pm Annual Meeting – Budget Ratification

Meetings are open for homeowner attendance.  All interested in having a voice in how our association dues are allocated are encouraged to attend.  If you believe that you have a “Special Projects” idea worthy of consideration, you can submit it via email to communications@mysomersett.com