January 24th SOA BOD Meeting Results

Following is a recap of actions/approvals taken on the referenced Agenda items at the January 24th SOA BOD Meeting. See previous posts entitled “January 24th BOD Meeting Packet” and “January 24th BOD Meeting Agenda” for all agenda topics and associated details.

3.b Facilities Committee – The BOD approved Glenda Powell (past SOA BOD President) for service on the Facilities Committee. Also approved the issuance of four quest passes to eligible owners for 2018 usage at The Club at Town Center (TCTC).

6.a Legal Update, Somersett Owners Association v. Somersett Development Company, et. al – Civil action regarding Rockery Wall defects are in early stages of litigation proceedings. Defendants are the Somersett Community Developer and currently unidentified “John Does”. The BOD advised that owner notifications and voting process are required and will be forthcoming.

6.c Pool Redesign & Project Management Proposal – Proposals from Ohison Lavole Corporation ($4,500) and Padovan Consulting Corp ($11,600) for TCTC pool redesign and project management services were accepted. This to support construction of proposed pool modifications (i.e., pool slide feature) that can fall within budgetary constraints. Previous approved design resulted in a construction bid of $1.2M that far exceeded the original design cost estimate of $278K.

7.a Ratify Engagement Agreement for Rockery Wall Litigation – The Litigation Agreement between the SOA and its Attorneys (Wolf, Rifkin, Shapiro, Schulman and Rabkin, LLP) pertaining to item 6.a above was approved.

7.b Town Square Snow Removal – Proposal from Signature Landscapes, LLC for snow removal services was accepted. Proposal amount based on hourly rates.

7.d Saddle Tree Trail Common Area Repair – The Nevada Environmental Consulting, LLC proposal of $15,524 for soil erosion mitigation and ditch cleanup work was accepted.

7.e Path/Sidewalk Patching (Sealed Bids) – Bids for asphalt patching of common area pathways, sidewalks and gated area streets were received from the following vendors: 1) Vega Asphalt Paving at $77,584, 2) Vance Brothers at $152,743 and 3) Sierra Nevada Construction at $53,200. The BOD voted to accept the Sierra Nevada Construction Bid.

7.g SGCC Proposed Method for Billing Electricity for Canyon9 – Common pumping stations supply water to both the Somersett Country Club (SGCC) and Canyon9 Golf Courses. The SGCC submitted a proposed allocation of pump electricity costs between the SOA and the SGCC. The BOD was concerned that the proposed cost allocation favored the SGCC and tabled acceptance pending further evaluation.

7.h Computer(s) Upgrade Proposal – Proposal from IQ technology Solutions of $5,750 for new computer equipment was accepted.

7.j 2017 Audit Proposal – Proposal from Hilburn & Lein CPAs, not to exceed $6975, for 2017 Audit services was accepted.

Pre Meeting Homeowner Comments on Agenda Topics

  1. A question was raised as to whether the Rockery Wall Defect litigation against the Somersett Development Company fall under Nevada Statutes requiring notifications, disclosures, meetings and owner approvals. Also will the Somersett Country Club be a party to this litigation as a plaintiff or defendant, given that an estimated $500K of repair work is required on the SGCC leased land from the SOA. Subsequent BOD response was yes to the former and no response on the later.
  2. An analysis of the SGCC proposed billing split for electricity costs associated with pumping stations providing water to the SGCC and Canyon9 golf courses was presented, with the conclusion that the proposed split was unfair to the SOA. Subsequent BOD response concurred that this was a valid concern and action on this item was deferred pending further evaluation.

Post Meeting Homeowner Comments on Any Topic 

  1. A homeowner gave a lengthy presentation on what is considered a significant fire danger due to dense vegetation on common area slopes adjacent to their property and why it cannot be cleared in a timely manner. BOD response was that limited fire mitigation funds are available and, therefore, would first be applied to higher priority areas.
  2. The General Manager Report summarizing SOA activities contained in the BOD Meeting Packet was deemed very informative and the decision to publish monthly and post on the SOA website a good one. It was suggested that the posting of Committee Reports on the website should also be undertaken.
  3. A question as to why the BOD continues to dodge whether or not the SOA will go after the SGCC for Rockery Wall repair costs on their leased land was raised. BOD response was that legal considerations prohibited any reply at this time.

January 24th BOD Meeting Packet

The January 24th BOD Meeting Packet in now available on the SOA Website (www.somersett.org) under the SOA/Committees and Meetings tab. The Meeting Packet provides detailed information in support of Agenda topics. A summary of which follows.

Note: SU apologizes for the lateness of this post. However, the BOD Meeting Packet was not made available until the same day (January 24th) as the BOD Meeting. Hopefully this will not be a standard practice.

3.0 Committee Reports

  • Finance – Looking at a $100K discount for early payoff of the Developer loans for The Club at Town Center (TCTC) and Canyon 9 Golf Course. Under legal review along with the Rockery Wall litigation, see Item 7.a below.
  • General Manager – For the first time a detailed General Manager’s report has been included in the BOD Meeting Packet. This report contains a detailed summary of: 1) Aesthetic Guidelines Committee (AGC) and Community Standards Committee (CSC) actions, 2) the Club at Town Center (TCTC) operations, activities and usage factors, 3) updates on SOA Special Projects, Maintenance, Landscaping and Engineering activities. This is a very informative report that will continue to be a part of the Meeting Packet in the future.

4.0 December Meeting Minutes  –  A comprehensive recap as to what occurred at the December 14th 2017 BOD meeting. A much improved recap over previous administrations.

6.a Legal Updates

  • Rockery Wall Defects – The SOA has filed civil action against the Somersett Developer, Somersett Development Company, and other parties regarding defects in the common area rockery walls. Proceedings are in the early stages with no reported details or identification as to who the other parties are.
  • Northgate Lot Expansion Litigation – Settlement agreements have been reached with twelve of the fourteen Somersett owners who expanded their lot size by purchase of Northgate Golf Course parcels. Litigation centered around SOA control over the added land. Although the SOA Attorney update memo did not list settlement details, it has been separately reported that for agreements currently recorded: 1) owners have agreed that SOA CC&R’s will apply to the lot expansion property, 2) the SOA will waive AGC fees for already performed or planned property improvements, and 3) each owner will receive a $500 settlement amount.

6.b Rockery Wall & Slope Repairs  –  All projects (SBE, Timaru Ct, Trail Ridge) are under construction. The SBE repair work is nearly complete, Timaru Ct 75% complete and Trail Ridge 30% complete.

6.c Pool Redesign & Project Management Proposal  –  This topic relates to a modification of TCTC pool primarily with regard to relocation and expansion of the pool slide feature. The original approved design resulted in a construction cost that was overpriced and well above the budgeted amount. Therefore, an activity is underway to come up with a redesign that is within budgetary constraints. In this regard, a proposal from Padovan Consulting, LLC has been received for consideration. Proposal is for pool redesign and project management services. Proposed amount totals approximately $11.600 which includes both fixed price and T&M services. No estimate as to what the proposed redesign will cost to implement.

7.a Engagement Agreement for Rockery Wall Litigation  –  A proposed agreement, including fees, between the SOA and its Attorneys (WRSS&R LLP) to represent the SOA in its claims against others with regard to the Rockery Wall deficiencies. Fees are as follows: $375/hr for Partners of Counsel, $285-$350/hr Other Attorneys, $160/hr Paralegals and $120/hr Clerks.

7.b Town Square Snow Removal  =  Proposal from Signature Landscapes LLC for snow removal services at Town Center Properties. Required because Reno Green (previous snow removal contractor) will no longer be providing landscape services at the Town Center. The Town Center landscape contract was awarded to Signature Landscape at the last BOD meeting. Snow removal costs are based on hourly rates for type of equipment utilized. Trigger point for services is a 2 inch snow depth.

7.c Town Square Budget  –  The “Management Oversight” expense item (performed by FirstServices Residential) for the newly implemented Town Center Operating fund has been reduced by $700/month (a $8400 annual saving).

7.d Saddle Tree Trail Common Area Repair  –  A $16K proposal for slope erosion stabilization and ditch cleanup work in the common area between Saddle Tree Trail and Placerwood Trail.

7.e Path/Sidewalk Patch  –  Opening of bids for asphalt patching of common area pathways, sidewalks, access roads and gated area streets. Areas effected are described in the Bid Instructions document contained within the BOD Meeting Packet.

7.g SGCC Proposed Method for Billing Electricity for Canyon9  –  A breakdown of the electricity costs associated with the pumps (Mogul and Morgan Pointe Stations) supplying water to the SGCC and Canyon9 golf courses. Total annual costs are approximately $16.7K, of which $6.4K (38%) is the proposed allocation to Canyon9. No explanation as to how the SGCC vs Canyon9 usage ratios were determined.

CITY OF RENO HAPPENINGS THAT IMPACT SOMERSETT

Posted by Geoffrey Brooks  – SOA Member

I attended the 1/9/18 NAB 5 meeting, primarily to find out about Ventana Ridge (166.8 acre site), 85 houses (SF9 lots) proposed within 700’ of the Painted River Trail/Peavine Creek Road. The ReImagine Reno plan calls for a moratorium on all tract development above 6000’. As there were no maps, no elevations for Ventana Ridge, I was curious to know how this would be “nestled” into the hillside and how high.

This part of the meeting was postponed as the builder is making revisions to his plan. On the 6000’ rule, I was told that the City cannot stop someone from developing his property above that elevation, if they choose to do so… However, the City can have a one dwelling/lot rule, and the owner is responsible for the infra-structure and has to pay to have it connected to the city! That is, no tract housing (like Ventana Ridge) up there! Another fact that came out is that developable land is in short supply and “dirt” is selling for $300/sq ft in the downtown area. This has to be added to the lack of construction workers…(who apparently can’t now live here due to the housing shortage).

At the NAB 5 meeting there was a fascinating presentation by the Truckee Meadows Parks Foundation, where private financial support is solicited for new and existing park infra-structure. TM Parks sponsor Park-based educational and recreational programs and act as mechanism through which citizens can advocate for their parks. They raise funding by encouraging residents to join, and better still participate in their “Discover Your Parks Walks” (free interpretative one mile walks for the community at local parks). They run an invaluable “Student Stewards” Program where they use our parks as a “Learning Laboratory”, and a Junior Naturalist Program.

At the November Board Meeting, I recall Nancy Chontos saying that they were seeking additional funding for West Park to supplement the expected $ short-fall from the City of Reno.

I attended the 1/18/18 SOA “Communication Committee” meeting, as Nancy is also a member of this committee as well as the West Park Committee. I wanted to make sure that we were aligned with the Truckee Meadows Parks Foundation. We are. There is a Somersett West Park page on their web site , dedicated to help Somersett raise monies to ensure that it is completed in a timely fashion. (Somersett’s new West Park was not mentioned in the NAB5 presentation)
Toll Brothers, along with their massive excavation/terra-forming program in Village 6, are lending a hand.

Here is a link to the Somersett West Park page in the Truckee Meadows Park Foundation web site.

https://www.tmparksfoundation.org/somersett-west-park

January 24th BOD Meeting

The Somersett Owners Association (SOA) Board of Directors (BOD) open meeting is scheduled for Wednesday, January 24 at 5:30 PM in the Sports Court at The Club at Town Center (TCTC). The meeting agenda may be accessed by clicking on the following link:

January 24th BOD Meeting Agenda

Given that the Board Meeting Packet for the January 24th meeting is not yet available on the Association website, details associated with the agenda items cannot be addressed on at this time. When the BOD Meeting Packet is released, further information will be posted.

Note that a new category “Board Member Comments” has been added as an Agenda topic for the first time. It will be interesting to see what this entails.

Golf Course Knowledge – SGCC

“What does the SGCC do for the Community”

Perhaps Mr. Guderian’s inquiry from his “Golf Course Knowledge” post could have been better phrased as:

“What does the Community do for the SGCC”.

There is no question that the Somersett Golf and Country Club (SGCC) with its lovely green fairways and open space enhances the beauty of the Somersett Community, and possibly, although some may disagree as to what extent, property values as well. Also, as captured under Mr. Retter’s (“yogiwan”) comment, SOA owners do have certain access privileges to SGCC facilities. However, these did not come without a price. A brief history follows:

  • As originally conceived, the SGCC was owned and operated as a separate and independent entity from the Somersett Owners Association (SOA), with no SOA say over its existence, ownership or operation. Hence, Somersett owners originally had no access privileges to SGCC facilities.
  • In 2010, facing financial difficulties, the SGCC owner, Somersett Development Company (SDC), accomplished early turnover of SGCC ownership to its Equity Members, espousing some positive projections in doing so. However, revenue versus expenses for that year resulted in a $560K loss.
  • In 2011, the first year under Equity Member ownership, the SGCC’s financial woes continued, with a revenue/expense loss of $628K. To offset these losses, in December 2011, the SDC controlled SOA Board of Directors (BOD) voted to divert $15/month of owner assessments to the SGCC in exchange for some limited SGCC access privileges (i.e., the misnamed “Management & Lease Agreement”). The agreement was to begin in January 2012 and extend through December 2014 with subsequent three and four-year renewal periods. During this period, revenues provided to the SGCC via SOA owner assessments totaled approximately $1,235,000, which helped to keep it in the black.
  • Needless to say, this agreement sparked considerable controversy within the Community. A complaint was subsequently filed with the Nevada Real Estate Division against the SOA BOD, which challenged its authority to enter into such an agreement without owner vote. Also, citing violations to both the Somersett CC&Rs and Nevada Statues (NRS-116). After a considerable amount of wasted legal and bureaucratic time, the complaint was upheld by the Nevada Attorney Generals office with the remedy being for the SOA (under a now all owner BOD) to modify the original agreement, revise the CC&R’s accordingly and to submit it for owner ratification.
  • In subsequent negotiations with the SGCC, the original agreement was replaced by a “Real Property Purchase Agreement”, the CC&R’s modified to permit such purchase, and subsequently ratified in late 2014 by SOA owner majority vote. Under the approved agreement, the SOA purchased the SGCC land and water rights for $2,750,000 with a subsequent leaseback to the SGCC at a base rate of $1000/year (subject to escalation) plus a fixed rent amount of $1200/year. Lease term is for 50 years with two optional 20 year renewal periods at the sole discretion of the SGCC.
  • Since ratification of the Real Property Purchase Agreement, no subsequent financial dealings between the SOA and the SGCC have taken place. However, there is a potential issue regarding who pays for the Rockery Wall failures occurring on SGCC leased land. Some (including a former BOD member) belueve this liability (possibly as much as $500K) lies with the SGCC under terms of the Purchase Agreement. Currently all repair work is being paid for by the SOA via Common Area funding. Is there litigation in the offing?

SGCC Membership Status

  • After SDC turnover to the Equity Members in late 2010, Equity membership stood at 188 out of a 450-member target. Since then, equity membership growth has been rather slow increasing to 241 at the start of 2017. This does not include an unknown quantity of “Preview Memberships” for those wanting to “test the waters”.
  • Per the SGCC website (www.somersettgolfandcountryclub.com), Equity member dues for 2017 were set at $425/month plus a $150/quarter food and beverage minimum. Preview Memberships were  $250/month plus a $150/quarter food and beverage minimum. Monthly dues do not include golf cart fees. The SGCC is currently offering their equity memberships with “No contribution at this time”. How this may relate to any deferred payment was not published.  Note that the price for an SGCC equity membership ranged from $25K at inception to a high of $40K, only to drop drastically during the recession.

Comments Welcome

 

Canyon 9 Golf Course

The following regarding Mr. Guderian’s previous post of “Golf Course Knowledge” and subsequent reader comments.

The Canyon 9 Par 3 Nine Hole Golf Course is owned and operated by the Somersett Owners Association (SOA) as an amenity available for play by all Somersett residents for a fee. Play is also open to the public at a higher rate (see Canyon 9 Rate Structure at end of article).  Canyon 9 Operations are financially accounted for within the Common Area Operating Budget, which per 2018 contains the following related items:

Expenses:

  • C9 Operations – $320,000 (includes 3rd Party Maintenance Contract)
  • C9 Loan Interest – $20,116
  • C9 Operation Expense – $2,200
  • Other – None specifically identified as a Canyon 9 Expense (e.g., administrative costs)

Revenues:

  • C9 Green Fees, Equipment Rentals & Merchandise Sales – $36,000 (represents both SOA resident and public play)

The proceeding amounts are in keeping with expenses/revenues experienced in past years. As such, they represent a deficit of approximately $300K/year in Canyon 9 Operations to be made up via owner assessments, which amount to approximately $8.33/month.

It is unreasonable to expect Association amenities to be self-supporting, that is what association dues are all about. However, whether or not Canyon 9 serves a significant enough portion of the SOA Community to justify its expense has been put into question. Keep in mind it is one matter to question the financial justification of maintaining Canyon 9 as an Association amenity, but quite another to determine what to do with it should it be shut down.

Note that the biggest expense with regard to Canyon 9 is its maintenance. In the past, this service has always been provided via contract with the Somersett Country Club (SCC), which for the past two years was set at $309K annually. For 2018, this contract was recently awarded to Reno Green at $262K (a $47K annual savings).

In his response to Mr. Gurdrian’s post, Mr. Brooks expressed a concern on how the loss of maintenance revenue to the SCC, coupled with Rockery Wall failure liabilities, could impact SCC’s financial stability. This remains to be seen, as the SOA Board has not yet released any information on perceived SCC liability and/or legal action with respect to the Rockery Wall failures.

Canyon 9 Rate Structure

Seasonal                                                             Winter

  • Residents:  $7 Adult, $5 Junior                   Residents: $5 Adult, $3 Junior
  • Guests: $10 Adult, $7 Junior                       Guests: $7 Adult, $5 Junior
  • Public:  $20 Adult, $15 Junior                      Public: $15 Adult, $10 Junior

Comments Welcome!

 

 

Golf Course Knowledge

The following inquiry submitted by Steve Guderian, BOD Member

I am looking to hear back from the Somersett Community on the following:

  • Who Owns Canyon Nine Golf Course?
  • Who governs the Somersett Golf Country Club, SGCC?
  • And what does the SGCC do for the community?

I have been doing my research into this but I would really like to hear what the community has to say about these things.

Respectfully,
Steve Guderian
SOA Secretary

SOA Bylaws Changes

The following memo submitted by Steve Guderian, SOA BOD Member:

Thanks to SU for posting the info from the last SOA board meeting about the bylaw changes. SU made an interesting point about all of the community owned documents needing updated. A point that I agree with but I am not sure if this is a task that can be undertaken by the board alone in a reasonable amount of time. I also agree with the concern regarding 3 years being a long time commitment. Not only is there a possibility of board member resignations there is also a possibility of less people running for the board due to the 3 year commitment. Conversely, there really is a pretty steep learning curve for new board members and it does take a couple of years to actually get an understanding of NRS and all of the items associated with community. Overall I believe that this is a bylaw worth changing to see how things play out. Similarly, the change for the quorum change is also really needed. I would change it to 51% rather than 60% but either way works.

Over the course of reading SU posts I have seen a number of things about changing the community documents. At the very first meeting of the new SOA board this comes up and I have not seen any feedback from the Somersett Community. I would very much like to hear from the community on;

  • Any changes that need to occur to the community owned governing documents,
  • How much cost should be considered with this change
  • Follow up to cost, Should all of the documents be changed under one mailing?

Regarding cost, for the sake of this cost example lets say there are 3000 homes. This means any changes or denial of changes is going to require 1501 homes to vote. History tells us that it is going to take multiple mailings to reach this number. And there really is a chance that this number will not be met.

So, is going forward with community owned document changes a cost worth effort?

I am looking forward to hearing what the Somersett community has to say about this.

Respectfully,
Steve Guderian
SOA Secretary