Somersett West Park – Are We Close?

Somersett UnitedApproximately two years ago, this website published a status report on the proposed Somersett West Park.  For those of you who may not be familiar with this project, it involves construction of a 2nd Park as planned for under the Somersett PUD.  This Park was to be located across from the fire station on Hawk Meadow Trail.  The Park was to be built by the City of Reno from new residential construction tax fees.  Although a public park, routine maintenance costs would be the responsibility of the Somersett Owners Association (SOA).

In the two years since the last report, no information has been provided by our Board of Directors (BOD) on what is currently happening with this Park.  However, as the result of a new set of questions submitted to the Reno Parks Department by a Somersett resident, the following update was obtained from Parks Manager, Jeff Mann.

  1. The City has received clear title for the land from the Developer; this had not yet been accomplished at the last update.
  2. The original estimated construction cost for the Park and associated Somersett trailhead was $575K. This value is subject to change based on prevailing construction costs.
  3. Park construction funds are derived from new home construction tax fees (1 % of building value up to $1000 max) within the Park District encompassing Somersett. Of these fees, 52% are dedicated to the Somersett West Park and 48% to other Parks within the District.
  4. As of December 2014, $365,000 was available within the Somersett West Park Fund. Based on the $1000/unit value, approximately 210 new residential units are required to reach the $575K amount.
  5. Park will not be constructed until the entire construction funds are available. No schedule has yet been adopted.
  6. The original Park concept called for a picnic and play area along with a community garden. To view Park layout, click on the following: Somersett_West_Park_Concept. The City may make reasonable changes to the plan if in the public interest and would be coordinated with the SOA BOD. Substantial changes would require City Council approval with possible budget modifications.
  7. Acquisition and construction costs for the new Sierra Park (the old Northgate Golf Course property) will have no affect on funding or construction timetable for the Somersett West Park

In a poll taken by this website in February 2013, Park theme preference was: 50% Dog Park, 30% Community Garden, 18% Sports Field and 2% Skateboard Park. However, the sample population was relatively small.

Comments?

Home Security When Away

Somersett UnitedThe following is from a “Mike Mail” sent recently to Sierra Canyon residents by Mike Agular, Executive Director Sierra Canyon Association.  The content of which is equally applicable to the rest of Somersett.  Although crime in the Somersett Community is very low compared to the rest of Reno, one should not be complacent.  A point not covered in the Mike Mail is the propensity by some to use social media to let all know where they are and what they are doing, one needs to be careful here.

“Last weekend there was another burglary within Sierra Canyon in Village 11 (the first one was in Village 12).  The Reno Police Department is investigating and we are working on setting up a meeting to have the Reno Police Department come give a presentation on home security. I will send out a “Mike Mail” with date and time for this meeting at the lodge soon.  

The most important tip besides the tips listed below is to let you neighbors know when you are going to be out of town!  I have requested from Somersett that the communities security patrol company “Securitas” make extra trips into Villages 11 & 12 going forward which they agreed to do.  “Securitas” drives the entire community (Somersett and Sierra Canyon) from 9 PM until 6 AM.

Below are some tips to consider to help protect your home when you are away:

Safety Tips for the Home

  • Lock all windows and doors when leaving for any length of time. Keep all entrance points into your house secured while you’re at home as well.
  • Set indoor and outdoor lights on timers whenever you will be away from home. It’s also a good idea to do the same with a TV or radio to make it appear as if someone is home.
  • Never place gifts or valuable items in plain view from any window. Close blinds, shutters, drapes, and curtains to prevent a burglar from seeing what he can get if he breaks in.
  • If you don’t recognize a person knocking at your door, you are not obligated to open up.

Travel Safety Tips

  • Tell a trustworthy friend or relative where you are going and the time you expect to return home.
  • Ask a neighbor or other dependable person to watch your house. Put vacation holds or your mail and newspaper deliveries, or have someone pick them up daily. Papers in the driveway and a stuffed mailbox are sure signs that no one is home.
  • When returning to your vehicle, look inside and around it before getting in. If you see evidence of a possible break-in, call the police.”

Who is Somersett United?

Somersett UnitedIn a recent Comment Mr. Slattery asked some pointed questions about the make-up of Somersett United.  Before addressing them, perhaps some history is in order.

Somersett United (SU) evolved from a meeting of approximately 30 homeowners who were concerned about the perceived self-dealing on the part of the then three person Developer controlled Board of Directors (BOD).  Most notably: 1) non-turnover of the BOD to homeowner control, 2) use of homeowner assessments to repay the Developer $366K for common area construction defects (the “Subsidy Reimbursement Agreement”) and 3) use of home owner assessments at $15/month/owner to subsidize the Country Club’s operating losses ( the “Lease & Management Agreement), this without homeowner vote.  Getting no satisfaction from the BOD, individuals, on their own initiative, stepped forward to file Complaints with the Nevada Real Estate Division Ombudsman’s office.  The rest is history, which along with subsequent issues (e.g., underfunding of reserves, Moana litigation, CC&R Amendments, Country Club Purchase Agreement, equal space requirements for ballot measures, BOD meeting results and director elections, to name a few) have been reported on extensively on this website.

With regard to the SU website, it went on-line in March 2012 as a method of communicating information on community issues to Somersett residents. This was deemed necessary in the absence of any “homeowner forum” provision on the official SOA website.  That is, to provide a place where important issues are posted and open for comment both pro and con. Yes, Somersett United publishes editorials supporting their consensus position on many issues.  Yes, it also accepts, without editing or screening, all comments expressing opposing viewpoints, even those in bad taste. Since inception there have been 175 blog posts, 772 comments and 70,000 visits to the SU website.

To address Mr. Slattery’s specific questions:

  1. Who Controls Somersett United? – Nobody controls Somersett United, see following responses.
  2. Who reads and approves the Blogs? – There have been many different contributors to the Blog articles, which are submitted to the website administrator for publishing. The administrator does perform some editing duties on these articles, but only on form and format, not on content. Reader submitted Comments are also approved for posting by the website administrator but without editing of any kind. In three years of operation only two Comments have been rejected as being in exceptionally bad taste.
  3. Who are the officers of Somersett United? – There are no officers.
  4. What is the Structure of Somersett United – There is no official structure. Somersett United is simply a loose knit group of homeowners that communicate mainly via email. Yes, there is a core group that meets infrequently and unscheduled to discuss issues and propose actions (not always with unanimous consent).
  5. Who funds Somersett United? If some action is decided upon that requires funding, this is accomplished via voluntary contributions.
  6. Is there a membership list? There is no official membership list.

Mr. Slattery may be disappointed that this response does not provide a list of homeowners who have been directly involved with Somersett United activities (for what purpose one can only speculate).

Somersett United’s policy is to focus on issues not individuals.

 

Confidential Information Breach?

Somersett UnitedThe following is in response to a Country Club Member (i.e., see recent comment “Barry on $2.75 Million …”) threatening legal action against this website if we publish any future SGCC member confidential communications.  In this regard we offer the following:

  1. The published communication (i.e., see previous post entitled “$2.75 Million – What to do with it?”) was not distributed as confidential. However, most confidential email disclaimers are not legally binding anyway, especially if the recipient is not a signee to a confidentiality agreement. Also, a claim for breach of confidence typically requires the information to be of a confidential nature, which was communicated in confidence, and was disclosed to the detriment of the claimant. Perhaps the Country Club could explain what was so confidential in the communication, and if published harmed them in any way.
  2. But all the above is beside the point, what in the Country Club President’s communication should one be afraid of sharing with Somerset residents? It simply provides information to a question frequently raised, but unanswered, as to what will the Country Club do with the $2.75M.
  3. With regard to previous assertions that Country Club financials are nobody else’s business and confidential is simply not true. Being a non-profit, the SGCC is subject to IRS disclosure regulations. This is accomplished via annual submittal of IRS Form 990, which must be made available for public inspection. Analysis of these forms for years past reveal the following:
    1. 2010 – The SGCC showed an operating loss (i.e., Revenue less Expenses) of $560K. This is the year the Developer accomplished early turnover to the SGCC Equity Members.
    2. 2011 – The SGCC showed an operating loss of $628K. First year the SGCC was run entirely by Equity Members
    3. 2012 – The SGCC showed an operating profit of $32K. This represents the year the SGCC starting receiving approximately $440K/year in subsidy from Somersett Owner assessments (i.e., $15/month/unit owner). Without the SOA funding, one could assume the SGCC would have incurred an operating loss approaching $408K.
    4. 2013 – The SGCC showed an operating profit of $104K. Without the $440K/year SOA funding, one could assume an operating loss approaching $336K.
    5. 2014 – Financials not yet available. However, the SGCC continued to receive the annual subsidy from the SOA. In the published communication, the SGCC President stated that “For most of the last year the SOA contributions have NOT been included in our budget. Therefore, this Club operated in the black based on a sound budgeting and independent of SOA funds”. Good news moving forward but, as of yet, unsubstantiated.
  4. The published SGCC communication focuses on use of funds to build a clubhouse, something that is direly needed. However, Somersett owners need to be reminded that, under the terms of the proposed purchase agreement, in the event of SGCC default, the SGCC clubhouse and the land on which it stands does not revert to the SOA. That is, the SGCC equity members retain ownership and water rights to this property.

SU will not be intimidated by the likes of “Barry” (who we doubt is a formal spokesman for the SGCC) and will continue to post editorials and articles we believe to be of interest to our readers.

$2.75 Million – What to do with It?

Somersett UnitedThe following communication between the Somersett Country Club president and and its members is provided for SU reader information:

“Somersett Golf and Country Club Members,

            I would like to address questions regarding the direction of the Club. We are anticipating the completion of the purchase/lease which will deliver to SGCC $2.75 million. While the actual date of completion of this deal is not completely certain, the Board of Directors is taking action right now to evaluate the best use of this money to ensure the long-term operation and success of our club. Let me begin by saying there is not a predetermined direction or plan. Rather, it is our intention to examine all possibilities. Our decision spectrum spans from holding onto the money while continuing to operate the club within our current budget to utilizing the funds to expand our existing operations by building a clubhouse and developing additional services to improve our business model.

            This past Saturday, January 10th, the Board of Directors met for over four hours, hearing from Stuart, Robert, Tammy, Dan, and Anna. Each presented the board precise lists of immediate needs as well as ideas for club developments and improvement. Their grasp of management needs and vision is a testimony to why we find ourselves in the fortunate circumstances we are in. It was agreed by the Board that we need to act quickly, to begin generating a focus and plan in anticipation of and in advance of the closing of the deal.

            To this end a committee consisting of both management and members has been established. This committee is charged with coming up with options that will be brought to public workshops that you, both equity and preview members, will participate in. Out of these workshops a consensus will be developed.

            There is some key information which we think would be useful for you to have at this time. First, our club has been operating profitably for the past few years. For most of the last year the SOA contributions have NOT been included in our budget. Therefore, this Club operated in the black based on a sound budgeting and independent of SOA funds. Second, we currently have healthy cash reserves.  Finally, our budget projections for 2015 are cash neutral and the trends in membership development remain promising.

            Because the building of a clubhouse is a significant option to be considered, we believe it is important to examine clubhouse design, construction, and costs at this time. Our plan is to consider at least three options for membership consideration, including the “do nothing” option. The goal is to generate a “consensus facility”. The consensus facility will be drawn up, cost estimated, and included in the membership discussions and vote. We have all the necessary engineering expertise and design skills in our membership so we will not have to subcontract any of this process out, i.e., we are not spending any funds to get us to this point. Repeat we are not spending funds to get us a consensus set of ideas or drawings. Once membership has voted then and only then will we reach out to get a stamped and permit worthy set of drawings.

            Some assumptions we are including are; this facility must be cash neutral on our existing operations. This facility will not be considered a large revenue generator per se, i.e., we are not planning on future weddings and banquets to fund this. The facility needs to be large enough for us to accommodate our membership events on our own property. The existing building currently housing the Sunsett Grille will be used for some office and storage thus reducing the overall footprint of any new facility. We must continue to operate as we have in the past six months without our largest former customer, the SOA.

            We hope you are as excited about our future prospects as Staff and Board members are. We look forward to seeing you at our Board meetings as well as the discussion meetings which will be coming soon.

Glen Armstrong, Somersett BOD, President

Options Committee:

  • Jason Lewis – Chair
  • Wayne Griffin
  • Kent Graham
  • Bonnie Hughes
  • Kim Nunley
  • Matt Rasmussen “

Why Not Acquire the Somersett Developer’s Reverter Rights to the Golf Course Land and Water Rights Directly From the Developer?

 Submitted by:  Somersett Owners Against the SGCC Purchase Agreement

During the Due Diligence period in which the Somersett Board of Directors are considering whether or not to go forward with the purchase of the golf course, Somersett owners should ask the Board to: Simply deal directly with the Developer in acquiring the reverter land and water rights instead of paying $2.7 million to a small number of golf course equity members, some of whom are not even Somersett homeowners.

Somersett owners have potential claims against the Developer for an amount in excess of $1 million for replacement of unfunded reserves, and approximately $1.2 million for the Developer’s action in committing the SOA to pay the Somersett Golf & Country Club, without a vote of owners, under the SGCC Amenity Lease Agreement.  The execution of the proposed SGCC Purchase Agreement means that in addition to giving up the $1.2 million claim, Somersett owners will be obligated to pay $2.7 million to a small number of equity owners of the SGCC. With interest over 15 years, for repayment of the bank loan, our true cost is roughly $4 million.

The Somersett Board has worked with the golf course owners and the Developer in drafting the proposed golf course purchase agreement. The Board has also aggressively campaigned for the approval of the agreement by a vote of owners.  In the opinion of many, the Board’s actions in this regard are a blatant display of bias in favor of a small number of golf course equity owners to the detriment of the great majority of Somersett owners.

Financial Gain is a powerful motivator:   Equity member owners of the golf course have worked hard not only in getting out the vote to stack the SOA Board with Directors favorable to their interests,  but they have also worked aggressively to get out the vote In favor of the proposed SGCC Purchase Agreement.  Who can blame them for pursuing a significant monetary reward, but should the rest of us Somersett owners be the ones to pay for this? We think not, especially when there is such a better and far less costly alternative?

The Urgent question is:  Will the Board move forward with this costly purchase agreement or will they exercise prudent fiduciary responsibility and decide not to go forward using the release of liability for claims against the Developer, and maybe even a modest cash payment of some type to the Developer, in order to acquire the reverter rights (land & water rights) directly from the Developer? This could save Somersett owners millions of dollars that could be put too much better use.

Voice Your Opinion:  Email (soa@mysomersett.com), call, or write the SOA Board. Tell the Somersett Board of Directors they have a fiduciary responsibility to represent the best interest of the great majority of Somersett owners, and not just the interests of a select few.

EMAIL AUTHORIZATION

Submitted by:  Joe Bower, Del Webb Owner and Member SOA

On page 16 of the January/February 2015 issue of Somersett Living magazine it is stated: “If you would prefer to receive electronic mailings in lieu of hard copies for Association DOCUMENTS, please email soa@mysomersett.com with your name and address. In the email body, include the following: “I authorize Somersett Owners Association to send me all COMMUNICATIONS electronically in lieu of hard copies.” “Documents” and “all communications” are not the same.

Please don’t be mislead. State Law NRS 116.31068 states: “an association SHALL deliver any NOTICE required to be given by the association under this chapter to any mailing or electronic mail address a unit’s owner designates.”  However, DOCUMENTS ARE NOT NOTICES and must be US Mailed or hand-delivered. “US Mailed” means to a street or post office address.

The Somersett Homeowner Information Sheet available at The Club at Town Center (TCTC) states under SOA EMAIL AUTHORIZATION: “YES, I (We) hereby authorize the Somersett Owner’s Association and its agents to notify me (us), as the owner of the above property of the Somersett Owners Association, by electronic mail format for all Association NOTIFICATIONS as required by the Nevada Revised Statutes116.3108 in lieu of the US Mail.”

The Info Sheet and the Magazine Statement do not jibe with each other. The Magazine Statement does not jibe within itself. Both need to follow NRS.

In addition, State Law NRS 116.12065 states: “If any change is made to the governing documents of an association, the secretary or other officer specified in the bylaws of the association SHALL, WITHIN 30 DAYS AFTER THE CHANGE IS MADE, prepare and cause to be hand-delivered or sent prepaid by United States mail to the mailing address of each unit or to any other mailing address designated in writing by the unit’s owner, a copy of the change that was made.” Note: “Mailing address” means street or post office address, not email address.

Please be aware that our master association made changes to our Aesthetic Guidelines at the August 27, 2014 Board of Directors meeting with an effective date of October 27, 2014. A copy of the changes themselves has not yet been received by owners, except by those making a special request for them. Until owners receive the October 27, 2014 Guidelines by hand-delivery or US Mail the changes contained therein are NOT ENFORCEABLE. All owners, especially those putting in exterior improvements, e.g. landscaping, and their contractors need to be aware.

It is important that the Association get the 2014 Guidelines distributed to owners as there are a lot of changes. The May 18, 2012 Aesthetic Guidelines booklet was 51 pages long.  The October 27, 2014 Aesthetic Guidelines booklet is 58 pages long.  The one-page NOTICE dated September 24, 2014  that unit owners received announcing changes had been made does not take the place of the additional 7 pages fully describing them. A copy of the 2014 Guidelines can be picked up at TCTC. You might call first (775-787-4500) to make sure a copy is available.

Putting documents (such as Guidelines, Policies, CC&R’s, Bylaws, Rules, etc.) on a CD can be cheaper than printing them. The Association should ask owners their preference as to CD or hardcopy when the Homeowner Information Sheet is next updated.

Oh yes, why the hand-delivery option.  Well there are many smaller, especially condo type, associations where the changed document can easily be hand-delieverd door-to-door.

I want of our master and sub-associations to use electronic mail (and CD’s) as much as possible. However, what the law requires to be hand-delivered or sent by US Mail MUST be hand-delivered or sent by US Mail.  The law MUST be followed and the law does not care how much it costs an association to comply. Like the Dez Bryant “catch,” follow the rule/law until it is changed.

THE USE OF SOME CAPITAL LETTERS IN THE ABOVE IS FOR EMPHASIS.

HOAs and Country Clubs Are They a Good Match – Part 2

Somersett UnitedTo further address this issue perhaps it is worthwhile to consider what is going on in our sister community Arrow Creek.  There is currently a proposition before Arrow Creek residents to purchase the Arrow Creek Golf Course.  Although they are currently in a somewhat different situation than we here in Somersett, some of the issues are similar and what Arrow Creek residents are facing is not an improbable situation for Somersett. That is, there is nothing in the Somersett BOD proposed CC&R Amendments and Country Club Purchase Agreement that would preclude a subsequent BOD decision to either provide additional funding to the Country Club or, in the event of default, to assume operation of the Country Club, with either eventuality being financed via homeowner assessments and, depending on the assessment amounts, without a homeowner vote. The current BOD has stated that neither is their intention. However, can they speak for future BOD’s, or alternatively how much trust can we put in this statement.  Given the disingenuous manner in the way the BOD conducted the CC&R and SGCC voting process, this trust is questionable.

To see what Arrow Creek residents are saying we encourage readers to visit the Arrow Creek website at www.arrowcreek411.wordpress.com, wherein many pro and con articles addressing HOA ownership of golf courses can be accessed. Specifically under the “Blog Summary”, “Voices to the Webmaster” and “Online Articles” tabs.

Articles of particular relevance to the Somersett Country Club purchase issue can be found under the “Concerned Neighbors of Arrow Creek Discussions” link.  Under this link, SU recommends viewing the Power Point presentation entitled “Should the HOA invest in a Golf Course”, which can also be viewed on this website by clicking on the following link (this is a very lengthy presentation, so allow a minute or two for download):

Should the HOA Invest in a Golf Course

The above is a very informative presentation. It addresses not only the Arrow Creek Golf Course purchase issue, but alternative options for community improvement that could represent a better use of funds.  Many of the questions addressed in the presentation have been raised by both proponents and opponents of our own Country Club Purchase Agreement.   Questions that, to date, have not been adequately addressed by the Somersett BOD.  Hopefully to be considered before completion of their due diligence period.

It is the  Somersett BOD’s assertion that they are not interested in the Somersett Country Club itself, but only being able to control what happens to the Country Club property and hence, acquisition of  the Developers property reverter rights should the Country Club fail.  Given this, it is fair to question why the BOD did not attempt to negotiate an agreement with the Developer directly for the reverter rights, rather than purchasing the Country Club properties for $2.75M ($4M with interest) to achieve the same result.

Do not be influenced by the BOD’s assertion that, under the proposed Country Club Purchase Agreement, your assessments will not be affected.  Perhaps not immediately, but here are no downstream assurances to this assertion, particularly given the BOD’s apparent bias to support the Somersett Country Club.  Yes, the agreement has now been approved by a majority of homeowners, but it is not yet a done deal.  The BOD can still terminate the agreement anytime during the due diligence period for any reason.

HOAs and Country Clubs Are They a Good Match?

Somersett UnitedControversies regarding whether or not HOAs should get involved with the purchase, operation or mandatory memberships in community golf courses is nothing new.  Failing golf courses, not originally part of the HOA, are looking towards them for salvation.  Pros and Cons associated with the proposed purchase of the Somersett Country Club have been discussed extensively in previous posts and comments on this website.  However, none have taken an outside look at this issue.  If one wishes to delve further into what others have experienced, SU suggests taking time to click on the following links:

Article:  Economist – The Future of Golf

http://www.economist.com/news/christmas-specials/21636688-though-thriving-parts-asia-golf-struggling-america-and-much-europe?frsc=dg%7Ca

Article:  “Why Should Others Pay For Golf Players’ Entertainment?”

WHY SHOULD OTHERS PAY FOR GOLF PLAYERS’ ENTERTAINMENT

Court Decision: Ruling in favor of plaintiffs against an HOA invalidating CC&R amendments that required mandatory membership and levy of fees associated with the local, formerly private, country club.

http://www.ccfjfoundation.net/CourtDecFLIronhorse.pdf

Article: Should Arrow Creek homeowners take risk of owning a golf course

https://arrowcreek411.files.wordpress.com/2014/12/dcs_response.pdf

Article:  “Can Your HOA Make Club Membership Mandatory?”

http://www.hoaleader.com/public/389.cfm

Article:  “Homeowner sues over plan to force Skyline resident to save country club”

http://tucson.com/news/local/homeowner-sues-over-plan-to-force-skyline-resident-to-save/article_7b53a992-5bdf-5ff9-ba41-7f3476ed353c.html

Article:  “Plan to save Skyline Country Club relies on non-member homeowners”

http://tucson.com/business/local/plan-to-save-skyline-country-club-relies-on-non-member/article_9654e718-18ff-57c2-9c2e-69a5a5347e05.html

SGCC Purchase Agreement – Extension Dates

Somersett United
Somersett United

In an email to Somersett residents, dated December 31, the SOA BOD announced an amendment to the SGCC Purchase Agreement wherein the required dates for completion of Due Dilligence activities and Close of Escrow have been extended. (See previous post entitled “SGCC Purchase Agreement – What Next). In their email, the BOD stated that the extension dates were approved via “written consent” of the parties.

Amended dates are as follows:

  • Due Dilligence Period: February 2nd
  • Close of Escrow: February 17th

As discussed in the previous post referenced above, these are dates under which these activities must be completed in order to circumvent automatic termination of the agreement.

The SOA email only addressed the amended dates without an explanation for the extensions, any identification/update on the due diligence activities or where or when a copy of the amendment may be accessed (not yet on the SOA website as of this posting).