December 12th SOA BOD Meeting Agenda

The Somersett Owners Association (SOA) Board of Directors (BOD) open meeting is scheduled for Thursday, December 12th, 2019 at 5:30 PM at The Club at Town Center (TCTC) Canyon View Room. The Draft Meeting Agenda as published by the SOA may be accessed by clicking on the following link:

December 12th BOD Meeting Agenda – Draft

Items of particular interest to the entire Somersett Community include the following:

6.c  Proposed String/Bare Bulb Lighting Policy:  A controversial issue among many SOA owners, which resulted in a policy that was approved in general at the October Board Meeting. It was subsequently referred back to the Aesthetics Guidelines Committee, for some clarifications and incorporation within an official SOA Policy document. Perhaps this agenda accomplishes same.  The policy elements that were approved at the October Board Meeting are accessible via the following link:   Proposed String Lighting Policy

7.b  Rockery Wall Lawsuit – Decision to Appeal Judges Ruling:  It was previously announced that the BOD authorized an initial $15K for the SOA Attorneys to appeal the Court’s ruling issued in favor of the Defendants (Somersett Development Company et al.) at the expense of the SOA. Also that a SOA Attorney would be present at the December 12th BOD Meeting to answer homeowner questions regarding the appeal. Although not directly stated, it is assumed that this is the purpose of the agenda item. Also, it is not clear how the decision to appeal was made.  Certainly not at a previous BOD Meeting. Perhaps via a “Unanimous Written Consent” document? or, will this decision be subject to approval by the new Board?

7.r  SGCC Tolling Agreement – Appointment of an Executive Committee:  This is the Agreement that placed on hold any legal action against the SGCC for payment of the SGCC’s perceived share (~$680K) for Rockery Wall repair costs paid for by the SOA. The current Tolling Agreement expires on December 31st, 2019. It will be interesting to see what the role will be for a “SGCC Tolling Agreement Executive Committee”

Typically, a revised meeting agenda will follow, along with the corresponding Board Meeting Packet. When the Board Meeting Packet is published, an update with agenda item details and comments will be provided on this website.

This is the first open Board Meeting that includes the two newly elected Board members Craig Hanson and Simon Baker. As always, owners are encouraged to attend the monthly SOA BOD Meetings, especially this one, observing the new Board that will function throughout 2020.

Sierra Canyon BOD Error?

The Following Post submitted by Nancy Chontos, Sierra Canyon Homeowner

Sierra Canyon BOD and Management Violate my Homeowner Rights at the last BOD Meeting

At the November Sierra Canyon BOD Meeting, both the BOD and the Management Staff violated my homeowner rights by saying that I couldn’t speak on the topic I was trying to discuss. There is NOTHING in NRS and/or the Rules & Regulations that give them the authority to censor the topics of discussion by a homeowner.

There has been unfair use of POWER from this current Sierra Canyon BOD and Management Team at meetings and also as to how they have implemented ‘punishment’ towards homeowners.

If this is as upsetting to you as it is to me, please consider running for the BOD for 2020 or supporting the candidates that the IMAGINE Sierra Canyon Group will be endorsing. We want compassionate people who will listen to the residents, and do what is in the best interest for our entire community.

If you are tired of what has been going on, please subscribe to our website at https://sierracanyonshare.com/imagine/ and read about what’s REALLY going on in this community.

Let’s bring the power back to the homeowners and away from the self-serving BOD and Management Staff.

Editorial Note: On the surface, it would appear that Ms. Chontos’s rights were indeed violated. NRS 116.31085 establishes the right for owners to speak at Board meetings subject only to reasonable time limitations. No restrictions are placed on subject matter, which is not mentioned in the Post. Perhaps a Sierra Canyon Board Member, Management Staff or Meeting Attendee would care to provide an alternate viewpoint. Also, be advised that SU has no interest in or affiliation with the website referenced in Ms. Chontos’s article.

Thanksgiving Message

SU would like to take this opportunity to extend best wishes to all our readers for a happy Thanksgiving, keeping in mind that, being more than just a dinner:

“Thanksgiving marks the beginning of the holiday season, and represents food, family and moments of sharing and professing gratitude”. Sarah Moore.

“Thanksgiving is a time to give, a time to love, and a time to reflect on the things that matter most in life”. Danielle Duckery,

 

SOA Board of Director Officers for 2020

Following the Somerset Owners Association (SOA) Board of Director (BOD) elections, the new Board met and selected the following as officers for 2020.

President  –  Tom Fitzgerald
Secretary  –  Terry Retter
Treasurer  –  Simon Baker
Vice Presidents  –   Craig Hanson and Joe Strout

BOD Incumbents Tom Fitzgerald and Terry Retter maintain the same positions they have held for the past year.  Newly elected BOD member Simon Baker replaces Incumbent Joe Strout as Treasurer.  This is a good move considering Mr. Baker’s experience as Treasurer for major corporations and may help alleviate the concerns of Mr. Strout being Treasurer for both the SOA and the Somersett Golf and Country Club (SGCC). Given pending issues between the SOA and the SGCC, many felt that holding both these positions could present a conflict of interest problem for Mr. Strout. Newly elected BOD member Craig Hanson also has a strong financial background, who along with Mr. Baker and Mr. Strout provides the SOA Board with significant financial expertise.  Perhaps leading the SOA into a more favorable financial position.

2019 SOA BOD Election

The Somersett Owners Association (SOA) Board of Director (BOD) election ballots were counted at the Annual SOA Homeowner Meeting on Monday, November 18th. Four candidates were running for the two open BOD positions. Vote count results were as follows:

  • Simon Baker  –  566
  • Craig Hanson  –  541
  • Frank Leto  –  458
  • Kathryn Wild  –  409

As the two highest vote getters, congratulations to Simon Baker and Craig Hanson on their election to the Boarrd. Also, kudos to Frank Leto for his service on the SOA Board the past two years, and Kathryn Wild for her unselfish interest in serving the Community.

Also, given that there was not a quorum of owners present, or via proxy, to vote on the SOA’s 2020 Budget, it was automatically deemed ratified.

Once again, it appears that the 2019 BOD elections were not a high priority for most, as only about a third of all unit owners submitted a ballot.

 

SU Negativity?

In a recent circulating email from a Country Club member (Bonnie Hughes), Somersett United (SU) has been accused of creating negativity at “every meeting and online”. Not sure what negativity she is referring to, but assume it relates to SU Posts and Comments regarding the Somersett Golf and Country Club (SGCC).

Well, if the so-called negativity relates to opinions and comments opposing any financial support to the SGCC from the Somersett Owners Association (SOA), then I guess we are guilty as charged. It is no secret that this Blog site, along with many of our Commenters, are opposed to any SOA financial support going to the SGCC. SGCC supporters like to quote that Somersett is a “Master Planned Golf Community”, alluding that it is so described in the Association’s Governing documents. Therefore, there is an implied doctrine that all Association members are obligated to insure the success of the SGCC. Nothing could be farther from the truth. Nowhere in the Somersett Planned Unit Development (PUD), the CCR’s or the Bylaws is the term “ Master Planned Golf Community” used. In fact the only reference to the private Somersett Country Club in the PUD is found on page 2.50-51 under the heading “Golf Courses” , which with regard to the Somersett Country Club simply states:

The golf courses will be a major component of the open space system. Vistas within the subdivisions will be opened to the golf courses and views will be provided to non-golf frontage residences. The 9-hole course will be privately owned and operated by the SOA. The SOA may determine that the 9-hole course can be open to the public. The 18-hole course is privately managed.”

In addition, the SOA CC&R’s under Article VII, Section 5 “Ownership and Operation of Somersett Country Club” states the following:

Declarant, Association and Somersett Country Club owner make no representation or warranties with regard to the continuing existance, ownership or operation of the Somersett Country Club, if any (including whether the Somersett Country Club will be public or private), and no purported representation or warranty in such regard by any person, either written or oral, shall be effective.”

Further under CC&R Article VII, Section 6 “No Right to Use”:

“Neither membership in the Association nor ownership or occupancy of a Unit shall confer any ownership interest in or right to use the Somersett Country Club”

Therefore, in SU’s, and many others, mind, it is clear that the SOA was to have no obligation in any way to provide financial or any other assistance to the SGCC. So why do some SGCC members get their feathers ruffled when owners object to any such arrangements and hence, become inappropriately labeled as being “Negative” or “Anti-SGCC”?   In reality, it has little to do with being Negative or Anti-SGCC, simply a belief that SGCC members need to recognize that they alone are responsible for their own destiny. This rather than adopting an entitlement attitude, quoting questionable property value impacts, and that, as owners, we are all in this together (read financially if it should come to that).

It is also clear that many Somersett owners fear that, due to continued financial stress, the SGCC may attempt to dip into the SOA’s “Financial Well” again with SOA Board support. True, there is no evidence that this is currently being considered (the Rockery Wall liability issue or future Water Facility maintenance activities not withstanding). However, the SGCC could alleviate these fears by publicly acknowledging their responsibilities and that they have no intentions of seeking any sort of financial relief from the SOA in carrying them out. This would go a long way in suppressing the so-called “Negativity” by others.

Perhaps the SOA Treasurer, Joe Strout, who is also the treasurer of the SGCC can speak on this issue at an upcoming open Board meeting.

As always, SU welcomes any opposing viewpoints, or challenges as to where we may have misstated the facts.

Rockery Wall Lawsuit Appeal

On November 8th, the Somersett Owners Association (SOA) sent the following “Rockery Wall Lawsuit”  Memo (dated November 1, 2019) to Assoiation members via email:

 

“Dear Somersett Homeowner:

On October 2nd, 2019, Judge Elliott Sattler ruled against the Somersett Owners Association on the Rockery Wall lawsuit. On October 21st, 2019, the Board met with Michael Schulman and Bradley Schrager from Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP to discuss the judge’s ruling and options available moving forward. The following are bullet points of some of the key items discussed and the responses provided by counsel.

      • Cost to Appeal – Wolf Rifkin has agreed to charge the Association a flat fee for the Appeal Process of $15,000.00 plus nominal court costs. This is a heavily discounted cost provided by our law firm. In the event the Association would prevail and the case be remanded to district court, the Board would be able to negotiate a hybrid contingency fee structure that would limit out of pocket costs for the Association in the future.
      • The Notice of Appeal was filed within the 30 days required after the early-October court ruling. It was noted that filing the Notice of Appeal reserves the Association’s right to appeal, however, we are not locked into the appeal and could withdraw from the process at several junctures in the future.
      • The expected timeline for the appeal process is anticipated to be 18 to 24 months. The first step would be the Supreme Court Mediation process which comes at no cost to the Association. In the event mediation is unsuccessful, briefing would commence at regular intervals for the parties, and we would expect oral argument and a decision to take somewhere in the neighborhood of two years.
      • Bradley Schrager would represent the Association in this appeal. He has handled many Nevada Supreme Court appeals and has argued before the justices on more than a dozen occasions.

Taking into consideration the aforementioned information, the Board feels spending $15,000.00 to possibly win millions, or at least to avoid millions in rockery wall repair costs, is worth the risk, and therefore voted to move forward with the appeal process. Michael Schulman, the Association’s lead attorney, will be available to answer questions at the Board of Directors meeting on December 12th. The meeting will take place at 5:30 pm at The Club at Town Center.

Thank you,

The Management Team”

The above formalizes what was made known (without details) to Association members in late October. However, it still raises the following questions/comments:

  • What is the basis for the appeal? That is, what material facts that resulted in the summary judgement “as a matter of law” are in dispute?
  • The $15K flat fee seems reasonable, and described as a “heavily discounted cost”, but discounted from what? Given all the legal fees collected from the SOA, perhaps pro-bono for the appeal process would have been in order.
  • If we win the appeal, and the case goes back to trial, what would this cost the SOA? What is meant by, “the Board would be able to negotiate a hybrid contingency fee structure that would limit out of pocket costs for the Association in the future”? Bare in mind that the SOA has already incurred approximately $400K in legal fees, without even going to trial. Are we looking at another $400K or more? In the spirit of NRS 116.31088 SU believes Association members are entitled to an updated total cost estimate.
  • How does this affect the Tolling Agreement between the SOA and the SGCC, which put on hold (until December 31st, 2019) litigation against the SGCC for $680K in Rockery Wall repair costs? Something the new Board will have to consider?
  • Given the 30 day deadline to appeal the October 2nd Court ruling, and with the Board not meeting in executive session until October 21st, it is clear the appeal had to be filed before the next open Board Meeting, thereby precluding any owner input/comments and Board voting in public. One might question as to why the Board did not meet on this issue in early October in time for inclusion within the October 16th open Board meeting, or perhaps call a special meeting, which in SU’s opinion would have been the right thing to do.
  • If a formal Board vote was required, how was it accomplished and documented? What was the discussion and how did the individual Directors vote? This is certainly not confidential and should have been addressed in the above memo. That said, it is fair to assume voting was documented via the signing of a written consent document as was used in initiating the original lawsuit. If a quorum of 66% was required, and Director Roland recused himself as previously, then all of the other four Directors (Fitzgerald, Strout, Retter and Leto) would have had to vote for the appeal.

Perhaps all of these and additional questions can be answered at the December 12th Board meeting where the SOA Attorney will be available to address them. As noted in the above memo, “we are not locked into the appeal and could withdraw from the process at several junctures in the future”.

 

Sierra Canyon Board Meeting Agenda Item

The following Post submitted by Nancy Chantos – Sierra Canyon Owner

Sierra Canyon Homeowners and Residents,

On the agenda for the November 13th BOD Meeting is the ‘Appointment of a Board Member’ once they accept the resignation of Steve Gudarian.

Just as Margaret & Rob have adamantly objected to in an email to the BOD and in a post on Nextdoor Somersett, I also am opposed to the board appointing a director to fill the current open position resulting from Steve’s recent resignation.

There is absolutely no reason that would benefit the community by filling this open position this late in the (election) year.
Why?

  1. We still have a quorum for voting on all issues even with this vacant position.
  2. Including the November meeting, there are only 3 meetings left before the new BOD takes over. The December meeting will either be cancelled, or be an open forum with Neoma Jardon — our Ward 5 Councilperson — meeting with us … not official business as usual.
  3. The appointment of a Director for this short remainder of Steve’s term would represent an ‘endorsement of a candidate’ for the upcoming election by the current, seated Board. The appearance of a prejudicial move would be evident.
  4. The appointed Director could then run in the upcoming BOD election as an incumbent, thus giving this individual an unfair advantage in the election.
  5. The BOD can appoint anyone they select – regardless of qualifications – for any reasons.
    BIG QUESTION: Why was this position not advertised to the community and interviews held similar to how all open Committee positions are handled?

What can you do as a Sierra Canyon Homeowner? Please attend the November 13th BOD meeting scheduled for 5:30 PM in the Sierra/Tahoe Room. Complete a form to speak and turn ii in prior to the start of the meeting. Simply state that you are opposed to the Board appointing a Director for the remaining 3 months. Also, if you are the ‘designated appointee’, simply refuse for all of the reasons stated above.

BOD Candidate Craig Hanson Q&A

Posted by Craig Hanson SOA Board Candidate

 SU Note:  Due to prior commitments, Mr. Hanson was unable to attend the “SOA BOD Candidate Night”.  Therefore, he is taking this opportunity to provide responses to the questions asked of each candidate by the SOA Moderator.

Candidate questions (paraphrased)

(1) Are you prepared to spend many hours on board duties?  Yes

(2) Do you have outside influences which would cause you to recuse yourself?  No

(3) Did you access social media to prepare for candidate night?  Was not at the night but I have reviewed our law suits, NRS 116, CCRs and budget documents.

(4) What is the top issue you want to address?  Resolve the budget issues facing the Association particularly the golf course expenditures.

(5) What committee are you interested in?  Budget/Finance and Aesthetics

(6) How long been in community?  2.5 years. I provided a statement on why I was running. Basically to get the Association fiscally sound and less onerous.

(7) Have I reviewed the budget and reserve study?  I have looked mainly at the budget. Reserve will be next. The best resolution is to reduce our debt by examining our current loans which is the bulk of our debt and finding ways to liquidate them via sales of assets. Then you zero base the budget and eliminate any unnecessary items. These amounts are not very large compared to the loan payments. Review of staffing needs would also be reviewed.

(8) Do I understand the sub associations and why they exist? Yes. They exist as cost centers to ensure costs associated just with the sub Association are charged to them alone. This question also asked how I would use the sub associations to create cohesiveness. I would ensure they know what is happening in the common area cost arena so they are not caught unaware.

(9) Do I understand the CCRs and my role as a Board member?  Yes

(10) Are you aware of the aesthetics committee?  Yes but know little of their make-up or duties. I do know of their effects on community relations and believe they should be toned down a bit. It is a careful balance between what looks pleasing and oppressive rules.

(11) How would describe the connection between the Country Club and Somersett?   Strained. The two entities used to be largely separated until the purchase. Now it has become a bit onerous with ever increasing liabilities. The largest expenditures for Somersett are the golf course and related operational liabilities. This has strained community resources and virtually eliminated any new initiatives.

Somersett Golf Country Club Fact Sheet

The Somersett Golf & Country Club (SGCC) has recently sent a Memo to all its members entitled “Somersett Golf & Country Club Fact Sheet”, a copy of which may be accessed by clicking on the quoted title. What is the purpose of this memo? To educate its members? Doubtfull. To provide some “Talking Points” for their members when addressing others in the community? Most likely! Why? Perhaps to gain some support for the SGCC whose image has been tarnished somewhat by the ongoing controversies over Rockery Wall liabilities, Water Facility maintenance and Board Member conflict of Interests.

With regard to the document as written, SU has no quarrel with the “Facts” as stated therein. However, whereas they may be factually correct, for every Fact there can be a supplementary discussion. Therefore, let’s discuss some of these Facts presented in the Memo.

Introduction

  1. Yes, Somersett was designed to be a “Master-Planned Golf Community”, but it consists of separate entities (e.g., the SOA, the SOA Sub-associations, the Public Parks, the Town Center Retail Buildings, the SGCC) all with different relationships. With respect to the SGCC, there is no question that it was originally established as a private entity completely separate from the Somersett Owners Association (SOA), who had no rights of ownership, operation, usage or responsibilities related thereto (see Article VII Sections 5 & 6 of the CC&R’s). This changed somewhat when the SOA purchased the SGCC’s Land, Water Rights and Water Facilities and leased it back to the SGCC. However, the basic tenant of its operational relationship with the SGCC has not (see item 2 below).
  2. Yes, SGCC is a separate business entity owned by its Equity members. The Purchase Agreement only covered Purchase of Land, Water Rights and Water Facilities, not the SGCC Business or its assets, nor the Clubhouse or the parcel of land on which it sits. Therefore, the SOA has no responsibility or obligation for supporting the aspects of its operation. However, as owner of the Land and Water Facilities, the SOA does have the responsibility to ensure that the SGCC is maintaining them in accordance with the lease provisions of the Purchase Agreement.

Purchase Agreement

  1. Yes, in 2014 the SOA owners voted (by a large margin) in favor of the ill-conceived (SU opinion) Purchase Agreement, after being told there would be no impact on assessments and would help to ensure the financial stability of the SGCC.
  2. The statement that “The only allowed use for this purchase is for operating a private, member owned country club” is a SGCC lease requirement and does not apply to the SOA should the land revert back to the SOA.
  3. The statement “The SOA has not provided any one-time payment nor provides any ongoing fiscal support to the SGCC” is true, but only since 2015 when the $2.75M was paid to the SGCC in fulfillment of the Purchase Agreement. In the three years prior to 2015 the SOA provided approximately $1.24M in funding to the SGCC via owner assessments. Primarily to offset its operating deficits. From 2016 to 2018, the SOA’s operating deficit has increased from approximately $53K to $108K. The concern by many being if this trend continues can the SGCC continue to meet its obligations. Will the SOA Board again permit the SGCC to dip into the SOA Well?
  4. The Memo quotes a 50 year lease, but there are two 20 year renewal options at the sole discretion of the SGCC.
  5. The Memo states that “The SGCC pays an annual lease to the SOA…”, but does not mention that this annual fee is only $2200.
  6. Yes, Non-resident members of the SGCC are permitted use of TCTC under Article VII Section 8 of the CC&R’s. This subject to the payment of dues as is required by all other Somersett owners (except for Sierra Canyon). The SOA does not bill these members individually. The SGCC collects the required payments and remits them to the SOA. This does not a represent a significant revenue to the SOA, as it only involves approximately 30 members.

Water Facilities

1. The Memo accurately describes the SGCC’s responsibilities for operating and maintaining the Water Facilities. However, it emphasizes doing so at “NO fee to the SOA”. A little disingenuous seeing as how they are paying practically nothing (i.e., only $2200/year) in leaseback fees.
2. The Memo accurately describes the SGCC’s operational and maintenance responsibilities. These are not in question as they are clearly established under the Purchase Agreement. The concern here is will SGCC have the necessary funds to properly maintain them. This as a result of their improper maintenance of the well providing most of the SGCC’s irrigation water, which has apparently resulted in over pumping of the Truckee River water rights and a concern over how long this can continue.

Rock Wall on Hole 5

  1. The SGCC acknowledges the lower Rockery Wall failure on SGCC leased land adjacent to hole 5 resulted in roughly $680K in damages
  2. The SGCC contends that they are not responsible for these damages because of hillside instabilities resulting from drainage problems along the upper wall on SOA property, which subsequently caused both walls to fail.
  3. The SGCC rejects the SOA commissioned CME engineering report that concluded the lower wall failed first causing the upper wall to fail. However, the SGCC has offered no counter report to substantiate their position.
  4. The Memo states that the SGCC, via the Tolling Agreement, is making a good faith $500/month payment to cover the interest on the loan taken out by the SOA to pay for the upper and lower wall repairs. These repair costs were included within a consolidated 15 year $6M loan at 5% interest. The repair cost portion for the lower wall being $680K. How does this calculate? $680K at 5% for 15 years would result in a payment of $5,777/month. Averaged over the 15 years results in $3,777/month principal and $1,600/month interest. However, we know that the interest portion is usually much higher in the beginning (i.e., starting at around $2800/month). Therefore, the $500/month payment certainly falls way short of covering the interest payment on the $680,000. One could question as to whether or not this constitutes a good faith payment.

Food for thought –  Rather than engage in litigation over the $680K, why not reach a negotiated settlement wherein the SOA and the SGCC agree to divide up the costs?  For example a 50 – 50 split would result in the SGCC paying the SOA $2,888/month toward the loan payment. The SGCC could recover this simply by raising Equity member dues by $10/month.  Perhaps an additional $10/month to accrue some reserves for Water Facility repairs.

It is most likely clear to our readers that SU, among others as demonstrated at Board meetings and social media comments, are opposed to any future SOA financial support to the SGCC. Many, especially some SGCC members, equate this to being anti-SGCC and anti-Community, which is an unjust conclusion and just fuels the “us vs them” narrative.