October 14th SOA Board Meeting

Following is the Agenda for the Somersett Owners Association (SOA) Board of Directors (BOD) Meeting at The Club at Town Center (TCTC) to be held at 5:30 PM on October 14th.

October 14th BOD Meeting Agenda

Given that TCTC is still operating under COVID-19 restrictions, Owner participation will again be via  “Zoom” videoconferencing.

The Board Packet providing background information on Agenda items is available on the SOA Website (www.somersett.net) under the SOA Committees and Meetings link.  Comments on agenda items follow (agenda items noted):

4.  Committee Reports

4.b.  Communications  –  Committee requested Board Permission to release Owner survey data to the community at large. Survey topics and related data are available in the Board Meeting Packet referenced above. Questions centered on opinions and not suggestions, and included the following: 1) Like living in Somersett (76% indicated satisfaction), 2) Community appearance (67% indicated satisfaction), 3) Board effectiveness (28% indicated satisfaction), 4) Management company performance (38% indicated satisfaction) and SOA communications (58% indicated satisfaction). However, since only about 17% of Owners responded to the survey, one could question the accuracy of the results.

4.d.  West Park Garden  –  Committee has submitted a  “Community Garden Policy and Rules” document for Board approval.  Document is available in the Board Meeting Packet.

4.e.  Governing Documents Review  –  Committee has submitted the revised SOA “Articles of Incorporation” and “Bylaws” documents for Board approval. Copies of the revised documents along with a summary description of the proposed changes are available in the Board Meeting Packet

6.  Unfinished Business

6.a  Legal Updates  –  1) Rockery Wall Lawsuit – Appeal briefs are still in the filing process. The defendants have until October 14th to file their answering brief, after which the SOA will have 30 days to reply. Per the SOA Attorney legal update letter, “the matter will then be reviewed by the Supreme Court to determine whether it is suitable for oral argument and whether the matter will be retained by the full Supreme Court or routed to the Court of Appeals”. 2) SGCC Lawsuit – According to the SOA Attorney legal update letter, a bench trial has been set for January 24, 2022 (really?) with a pre-trial conference set for November 2, 2020.

7.  New Business

7.a.  Rockery Wall Mitigation for Main Entrance  –  A Request for Proposal (RFP) prepared by Padovan Consulting to solicit bids for “Phase 1 of the Rock Fall Mitigation Project”, which addresses the ongoing rock fall hazards on the Somersett entrance hillside slopes. The RFP includes an Appendix containing a letter from Black Eagle Consulting describing existing conditions (with pictures), project scope, and RFP guidelines.

7.b.  Community Wide Concrete Repairs  –  A RFP prepared by Padovan Consulting to solicit bids for concrete repairs at designated locations throughout Somersett. Generally dealing with curbs and gutters.

7.c.  Fire Fuel Abatement Proposals  –  Opening of sealed bids

7.d.  2021 General Common, TCTC, Town Square & Gates Budgets  –  Ratification of the proposed 2021 SOA Budget, with assessments as follows: 1) General Common – $107/month, a $2.00/month increase, 2) The Club at Town Center – $89/month, no change, and 3) Private Streets and Gates – $50,month, a $4/month decrease.

7.e.  2021 General Common, TCTC, Town Square & Gates Reserve Study  –  Results of the Browning Reserve Group SOA Reserve Study for 2021. The Reserve Study forecasts the SOA’s ability to repair/replace major components as they wear out in future years. The 2021 study establishes a funding level of 63.8% for TCTC and 116.4% for Private Streets and Gates. For reasons unknown, the Board Meeting Packet did not contain a Reserve Study for the General Common, perhaps an unintended omission or not yet available.

7.f.  Policy Reviews  –  Review/Approval of the following Association Policies: 1) Collection of Assessments – Policy on the levying of assessments and collections, includes a schedule of collection fees and costs, 2) Compliance – Policy for handling violations to the Associations governing documents, includes a schedule of fines, 3) Expense – Policy on expense limitations and bid requirements for Association operations. 4) Investment  –  Policy on investment objectives for Association funds, 5) Executive Board Awareness Form – Not a policy, a required signature form that the Board is aware of all legal requirements pursuant to the applicable laws and regulations.  All of the aforementioned policies are available in the Board Meeting Packet for viewing.

2020 SOA BOD Candidates

It appears that we have five candidates for the three open Somersett Owners Association Board of Director positions currently held by Tom Fitzgerald, Terry Retter and Joe Strout. Of the three  incumbents, Fitzgerald and Retter will be running for re-election whereas Strout has chosen not to run again.

In addition to incumbents Fitzgerald and Retter, the following Association members, along with their candidate statements, have thrown their hat into the ring.

Mark Capalongan  

Mark Capalongan BOD Candidate Statement

 

 

Bill O’Donnell

Bill ODonnell BOD Candidate Statement

 

 

Jacob Williams

Jacob Williams BOD Candidate Staementent

 

 

Each Association member will be receiving the submitted BOD candidate statements in the ballot mailing package. However, these candidate statements are limited to one page and therefore, this forum is open to any candidate who may wish to expand on their qualifications and purpose for seeking a Board position. 

As additional information becomes available on each of the candidates, SU will so publish on this website.

Also, as always. reader comments on any of the above candidates are solicited and welcome.

September 23rd SOA Board Meeting

Following is the Agenda for the Somersett Owners Association (SOA) Board of Directors (BOD) Meeting at The Club at Town Center (TCTC) to be held at 5:30 PM on September 23rd.

September 23rd BOD Meeting Agenda

Given that TCTC is still operating under some COVID-19 restrictions, Owner participation will likely be via  “Zoom” videoconferencing.  When access information is announced by the SOA (usually via email distribution) SU will also post on this website.

The Board Packet providing background information on Agenda items is available on the SOA Website (www.somersett.net) under the SOA Committees and Meetings link.  Comments on agenda items follow (agenda items noted):

2.  Homeowner Comments

If you wish to comment on any of the  agenda items, suggest you send an email to the SOA Assistant Community Manager Bernadette Rodas at bernadette.rodas@fsresidential.com and it will be read into the record by a Board member.

3.  August 26th BOD Meeting Minutes

A summary of what was discussed and/or approved at the August BOD Meeting may be accessed via the following link (some of the Homeowner comments make interesting reading):

August 26th BOD Meeting Minutes

4.  Committee Reports

4.b.  Communications  –  Completed review and analysis of the July owner survey. Prepared a Board briefing with results, recommendations and proposed owner communications, which included the establishment of an “Information Coordination Committee” to accomplish.

4.c.  Strategic Planning & Facilities Committee  –  Working on development of the 2021 Project List to be posted on the SOA website for community feedback and additional suggestions.  Other activities include obtaining proposals for converting TCTC gym stage into a fitness studio (estimated at $60K) and for additional storage space at TCTC.

4.f  General Manager  –  The Fire Fuel Reduction proposals expected for September Board meeting approval have been delayed until October due to the busy fire season. Abatement work still planned to commence by the end of October.  Announced the FSR hiring of a full time Concierge and are interviewing candidates for the open Club Manager position.

5.  Financials

No financial statements were included in this months BOD Meting Packet.

6.  Unfinished Business

6.a  Legal Updates  –  No new developments on the Somersett Development Company Rockery Wall and SGCC Lease Agreement lawsuits, except that for the SGCC lawsuit, the parties have until September 21st to set a trial date.

6.b. Revised AGC Guidelines  –  Approval of proposed changes to the Somersett Aesthetic Guidelines was deferred from the August Board Meeting because of questions/concerns raised by two of the Directors. which were to be resolved in a subsequent “workshop”. Apparently now back for approval/disapproval by the Board.

Note:  For those interested, a full copy of the revised Guidelines is contained in the September 23th BOD Meeting Packet.

6.c.  Revised CC&R’s and Bylaws  –  No backup material in the Board Meeting Packet on this item. Do not expect any action regarding proposed changes to evolve. Perhaps just a decision to either move forward with the proposed changes or to place on hold for the time being.

7.  New Business

7.a.  Unanimous Written Consent #79 – Acknowledgement of prior approval (done outside of a Board meeting) to amend the BrightView Landscape Contract to include the Somersett West Park for an additional $2,000 per month, bringing the BrightView monthly billing amount to $82,048.

7.b.  Unanimous Written Consent #79 – Acknowledgement of prior approval of an Overhead Fire Protection proposal, in the amount of $5,860, to perform fire hydrant testing and repair services.

7.c.  Tennis Court Resurface Proposals  –  Two proposals for repair and resurfacing of the Tennis Courts were received: 1) Beynon Sports Surfacing in the amount of $20,606 plus $13,828 in options, and 2) Zaino Tennis Courts Inc. in the amount of $23,180 plus $3372 in options.  Some amount of work will be required to compare the two proposals on an “apples to apples” basis.

7.d.  Snow Removal Proposal  –  Renewal of the BrightView snow removal agreements based on hourly rates for labor and equipment usage.

7.e.  Insurance  Proposal  –  Renewal of the SOA LaBarrew/Oksnee Insurance policy. No details contained in the Board Meeting Packet.

7.f.  Wellbeats Subscription Renewal  –  Renewal of the Wellbeats virtual fitness class subscription (kiosk only) at $249/month. A streaming access option, at $399/month, was also proposed that could accommodate up to 400 users.

7.g.  2225 Pepperwood Contract  –  Renewal of the Dickson Reality Exclusive Right to Sell contract for the SOA owned property (lot) at 2225 Pepperwood Court for an additional 8 months. Selling price being established at $69,900.

7.h.  Open Access Requirements of PUD  –  A complaint placed on the agenda by a homeowner who contends that the SOA/SCA is in violation of the PUD as a result of the SCA blocking access to a Somersett trail at Firefly Court and Larkhaven.

7.i.  Open Access Requirements of PUD  –  A complaint placed on the agenda by a homeowner who contends that the SOA is in violation of the PUD by limiting access to trails through the Canyon9 golf course property.

8.0  Board Member Comments

With the exception of Board members Retter and Fitzgerald, not usually taken advantage of, or very informative.

9.0  Homeowner Comments

One’s chance to comment pro or con, good or bad, on any other community issue not on the agenda. Same comment as in item 2 above as regards sending an email to be read into the record.

August 26th BOD Meeting Recap

Following is a recap of topics discussed and/or approved at the August 26th Somersett Owners Association (SOA) Board of Directors (BOD) Meeting, held via a Zoom Video Conference with Association members. Approximately 27 members logged in to the conference at one time or another. For background information on the agenda items discussed below,  see SU’s previous post   “August 26th BOD Meeting

Owners were allowed to submit comments, on agenda items or otherwise, via email up to 3:00 PM prior to the meeting. Those that did so had them read by the Board.  Additionally, at the conclusion of the meeting, some video conference attendees were allowed to speak directly to the Board via voice activation.  Several owners commented on a variety of subjects. Paraphrased summaries of which, as interpreted by SU, follow:

  • A strong objection to the proposed changes to the AGC Guidelines on the basis they were not consistent with the design plans put forth by the Developer and the PUD guidelines (among other stated issues). The commenter also expressed a concern over the current structure of  the AGC Committee.
  • A request that those Board Members (Fitzgerald, Strout & Retter) whose terms are up for election announce as early as possible their intent to seek or not seek re-election as it may influence decisions by others.
  • Due to a number of car break-ins in Somersett, a suggestion that high definition cameras, focused on capturing license plate numbers, be installed at the entrances to Somersett. –  Board response was that this is something the Board will be looking at in the not to distant future.
  • Three owners commented on BrightView Landscaping making the following points: 1) Brightview costs appear to be quite high and suggested formation of an oversight committee to monitor landscape costs and performance; 2) Brightview performance in maintaining the Somersett landscape is subpar and the quality of their workmanship is totally unacceptable; 3) Brightview’s work is not being properly managed by the SOA and: 4) based on BrightView’s poor performance, why was their contract renewed without going out for competitive bid? – In response, the Board defended both BrightView’s costs and performance, stating they were a good partner and very responsive to correcting landscape issues and providing meaningful reports.  Also, that their costs and performance were being closely monitored by the FSR Project Manager. The SOA did not go out for competitive bid because BrightView’s contract included a one year renewal clause which the Board activated.
  • A couple owners complained that mask requirements were not being enforced at TCTC especially in the sports court and fitness center areas. – Board response was that per the Governor’s directive, those engaged in high intensity activities are exempt from wearing a mask, but that social distancing is still required. The Governor’s directive will be posted at the TCTC for all to see.
  • A couple comments on the SOA/SGCC Hole 5 hillside repair lawsuit: 1) A SGCC member questioned the SOA hostility against the SGCC in the filing of the lawsuit, contending that it was a SOA problem and not an SGCC problem, that the SGCC has paid all its contractual obligations as well as other payments as a good faith gesture. Comments included some pretty harsh (and improper) statements directed toward the Board’s motivation (e.g., the SOA seems hell bent on destroying the SGCC) as well as those owners who support the lawsuit (people who are upset with the SGCC can sell their houses and leave). In condemning the Board’s actions as unproductive and unjustified, the commenter pointed out benefits he believes the SGCC brings to the community.  – Board response was that the Board met with the SGCC on 2-3 occasions to resolve differences (unsuccessfully), that this was a simple contract issue, and if the commenter wanted to avail himself as to the causes of actions, the legal documents are available from a variety of sources. 2) Another owner requested the reading of an email sent to the Board, which included: a request for legal fees associated with the lawsuit, a tabulation of all costs (both SOA and SGCC) associated with the Hole 5 hillside repair, plus additional questions.  – The Board advised that the email has been forwarded to the SOA Attorney for response.
  • Three owners commented on open access violations pertaining to the Somersett Trail System. 1) A denied use of a trail through the Canyon9 golf course, which is a designated part of the Somersett Trail System as set up by the Developer and defined as such in the PUD (supporting documentation was provided), hence should be open for all to access, including dog walkers. The issue being that the SOA has denied access to this portion of the trail system during Canyon9 operating hours (7AM to 7PM), citing safety reasons. – The Board response was an opinion that preventing access during Canyon9 operating hours does not violate any PUD requirements. 2) Sierra Canyon (SC) has blocked access (using trees and boulders) to a connector path to a Somersett Trail at Firefly Court, the stated reason being that SC residents were being adversely affected by bike riders, skate boarders, runners, children etc., and that the SOA and SC Boards need to get together and rectify the situation. – The Board responded that the SC is heavily invested in this blockage and not sure what can be done about it. No current action was identified. 3) The sidewalk entering the Cliffs development is equipped with encoded access, thereby denying outside public access and that all sidewalks in Somersett are part of the Somersett Trail System and sidewalk access through gated communities is required by the PUD.  – The Board advised that this issue has been communicated to Toll Brothers with no response to date.
  • A comment that the Board was going to install more dog waste stations as a result of increased complaints of dog owners not picking up their dog waste or disposing of it improperly. – The Board advised that a map showing waste station locations, that will include an additional ten locations, was in the works. However, regardless of where the dog does his thing, the CC&R’s require all dog walkers to pick up their dog’s poop and take it with them until they can dispose of it properly.
  • A question on the status of potential assessment refunds due to COVID-19 mandated closure of the TCTC and other SOA amenities. –  Board responded that this is a budget topic for Finance Committee review and recommendation. A former SOA Treasurer commented that any surplus generated in this area should be used to replace depleted reserves or to reduce our long term debt rather than being returned to owners.
  • A complaint that the open operating hours of the security gates at Back Nine Trail compromises the neighborhood safety and security that the residents are paying for. Gates are apparently open from 7:30AM to 6:30 PM to accommodate Preston homes construction traffic, which will likely extend for 3-5 more years. Unfortunately, this being the time when residents are away from home and break-ins occur. This represents an unacceptable situation for owners with a suggested solution being for Preston Homes to post an individual at the gates to control construction vehicle access. – Board response was, given the existing agreement in place between the SOA and Preston Homes regarding Gate operation, they will forward this complaint to the SOA Attorney to see if something could be done.,

Although not as interesting as the homeowner comments, the meeting agenda Items were disposed of as follows:

Committee Reports

  • 4.b.  Communication Committee  –  The Committee has been evaluating migration of the SOA website to a different platform hosted by HOA Express (currently the Sierra Canyon’s website platform). They have completed their evaluation, presented a slide show of results at the meeting and recommended moving forward with the HOA Express system as being less costly and more functional than the current platform. This evaluation apparently began as a result of dissatisfaction with the current vendor’s (D4) technical support and costs. The Board approved moving forward with the project.

Unfinished  Business Items

  • 6.a.  Legal Updates –  No discussion by the Board
  • 6.b.  Revised AGC Guidelines  –  Board members Strout and Hanson had questions and  concerns regarding the proposed changes, which were considered too numerous to discuss at the meeting.  It was decided to conduct a “workshop” between these Board members and an AGC Committee representative to address their questions and defered approval, or disapproval, to the September Board Meeting.
  • 6.c.  Revised CC&R’s and Bylaws  –  Basically the same disposition as for item 6.b. A workshop will be held between Board members and the Document Review Committee Chairman to provide additional background on the proposed changes and the cost/benefit to the Community for moving forward. Board member Terry Retter (a Document Review Committee member) gave a roughly estimated cost of $40,000 for legal review and the process for presenting to owners for a vote. Mr. Retter also revealed that the Somersett Developer (Blake Smith)  has declined to participate in the elimination of those sections of the CC&R’s that still provide certain rights and approvals to the Developer.

New Business

  • 7.a. Turn Over of West Park  –  The Board formally approved turnover of the West Park from the City of Reno to the SOA. The SOA now has responsibility for upkeep and maintenance, even though some work (e.g., dog park clearing) still remains to be accomplished.  However, the West Park Foundation has $25,000 available for any needed improvements, which is available to the SOA. The SOA costs of maintenance have been estimated at $2000/month for landscape and  $600/month for bathrooms.
  • 7.b. Unanimous Written Consent $78  –  No action, just a discussion on a previously approved ” Kids Program Liability, Release and Indemnification Form” as required signing by all parents or guardians. Primarily with regard to the contacting of COVID-19.
  • 7.c. Rockery Wall Monitoring Renewal Contracts  –  Renewed the Kane Geotech contract in the amount of $5,500 for equipment rental, inspection and data monitoring services (quarterly reports) for the Crescent Point Rockery Wall and SBE hillside. Extended the CFA contract in the amount of $12,750 for three additional stability observations at four month intervals at ten SOA wall locations. Given that to date there has been no movements detected on these walls, there was a discussion whether continued monitoring was necessary. Renewal was subsequently approved. There was a request by a Board member that the resulting Rockery Wall monitoring reports be summarized in a more understandable format for Board members, particularly with regard to data implications.
  • 7.d. Design and Construction Management  – Approved a  Padovan Consulting proposal in the amount of $8,400 for Construction Management Services pertaining to erosion repair of the Common Area hillside behind 1880 Dove Mountain Ct.
  • 7.e. Irrigation System Replacements  –  Approved two proposals from Brightview Landscape; one in the amount of $50,000 for replacement of 13,000 feet of ¾ inch driplines, and another in the amount of $154,488 for replacement of 32 irrigation system controllers with 24 “Smart” controllers . Discussion centered around the cost/benefit of the replacements and the need for Brightview to include, in a meaningful way, a cost/benefit analysis in their proposals. A comment was made that the positive effect on water savings by using “Smart” controllers could amount to $46,000/year. The motion to approve included a requirement to institute a process that closely monitors water usage to confirm the projected savings.
  • 7.f. Holiday Lighting Proposal  –  Approved three proposals from Lawn Express to install and remove holiday lighting at the following locations:  $11,900 for the  Somersett Parkway entrance cottage, $2,500 for The Club at Town Center, and $1,200 for the Verdi entrance monument.
  • 7.g. Revised Rules and Regulations  –  For consistency with City of Reno ordinances, the Board approved a change for the display of political signs. Signs may now be displayed starting 90 days prior to an election date (was 60 days), and removed within five days after the election date (was 10 days). Which means residents can now put up their political endorsement signs.

Note:  For those interested in the details, the proposed changes to the AGC Guidelines (agenda item 6.b. above and a summary of the CC&R and Bylaws changes (Aaenda Item 6.c above) copies may be accessed via the following links:

Proposed AGC Guideline Changes

Document Review Committee Summary of Recommendations

August 26th BOD Meeting

Following is the Agenda for the Somersett Owners Association (SOA) Board of Directors (BOD) Meeting at The Club at Town Center (TCTC) to be held at 5:30 PM on August 26th.

August 261th BOD Meeting Agenda

Given that TCTC is still operating under some COVID-19 restrictions, Owner participation will likely be via  “Zoom” videoconferencing.  When access information is announced by the SOA (usually via email distribution) SU will also post on this website.

The Board Packet providing background information on Agenda items is available on the SOA Website (www.somersett.net) under the SOA Committees and Meetings link.  Comments on agenda items follow (agenda items noted):

4.  Committee Reports

4.b.  Communications  –  Board Elections are coming up in October and the Communications Committee is proposing holding a ”Meet the Candidates Night” on Wednesday October 21st. Most likely via Zoom video conferencing.

6.  Unfinished Business

6.a  Legal Updates  –  On August 13th, the SOA filed its opening brief on the Somersett Development Company Rockery Wall Lawsuit appeal with the Supreme Court. The defendants will have 30 days to file an answering brief, followed by another 30 days for the SOA to reply, after which the matter will be reviewed by the Supreme Court. For the SGCC lawsuit, on August 14th, the SOA filed a response to the SGCC’s objection to the SOA’s request for dismissal of the SGCC counterclaim. SU will address both these developments in a subsequent post.

6.b. Revised AGC Guidelines  –  A copy of the proposed revisions may be accessed via the following link:

Proposed AGC Guideline Changes

6.c.  Revised CC&R’s and Bylaws –  No related information on this agenda item was contained in the Board Meeting Packet. Most likely just a discussion on the Governing Document changes recommended by the Governing Documents Review Committee. A summary of the proposed changes may be accessed via the following link:

Document Review Committee Summary of Recommendations

7.  New Business

7.a.  Turn Over of West Park  –  The City of Reno has turned over maintenance of the West Park, even though all is not complete, to the SOA.  No details in the Board packet, probably just a discussion item or acknowledgement of the SOA’s maintenance responsibilities.

7.b.  Unanimous Written Consent #78 – Acknowledgement of prior approval of a  Kids Program Liability, Release and Indemnification Form for required signing by all parents or guardians. Primarily with regard to the contacting of COVID-19.

7.c.  Rockery Wall Monitoring Renewal Contracts  –  Renewal of the Kane Geotech contract in the amount of $5,500 for equipment rental & inspection and data monitoring services (quarterly reports) for stability monitoring of the Crescent Point Rockery Wall and SBE Hillside. Also, renewal of the CFA contract in the amount of $29,700 for monitoring wall movement at ten SOA Rockery Wall locations. To date there has been no movements detected on these walls.

7.d.  Design and Construction Management  –  A proposal from Padovan Consulting in the amount of $8,400 for preparation of an RFP and Construction Management Services related to repair of a common area hillside behind 1880 Dove Mountain Ct.

7.e.  Irrigation System Replacements  –  Two proposals from Brightview Landscape; one in the amount of $50,000 for replacement of 13,000 feet of ¾ inch driplines, and another in the amount of $154,488 for replacement of 24 irrigation system controllers along the Parkway.

7.f.  Holiday Lighting Proposals  –  Three proposals from Lawn Express to install and remove holiday lighting at the following locations:  $11,900 for the  Entrance Cottage and six roundabouts, $2,500 for The Club at Town Center, and $1,200 for the Verdi Entrance Monument.

7.g.  Revised Rules and Regulations  –  A change to the display of political signs. Signs may be displayed starting 90 days prior to an election date (was 60 days), and must be removed within five days after the election date (was 10 days).

And The Saga Continues – 4th Installment

A brief summary of previous posts (installments) pertaining to the SOA/SGCC Purchase and Lease Agreement litigation follows, for details just click on the referenced post:

Installment 1  – In our July 22nd Post “SOA Legal Complaint Against the SGCC“, SU documented the civil action that the SOA filed against the SGCC for breach of the Purchase and Lease Agreements  by failing to live up their warranty obligations with regard to Rockery Wall repairs, as well as their liability for a water well pump replacement.

Installment 2- On July 23rd SU published the “SGCC Response and Counterclaim to SOA Complaint“, in which the SGCC denied all the SOA allegations, accused  the SOA of misconduct, misrepresentation and withholding of information (i.e. implied fraud?) when entering into the Purchase and Lease Agreements, and countersued for their own damages and re-formation of the Agreements.

Installment 3 – On August 5th SU published the “SOA Response to the SGCC Counterclaim“, in which the SOA contended that the SGCC allegations were too vague, too ambiguous and lacked particularity to respond to, thereby seeking more definitive statements and a dismissal of their claims.

Which brings us to the latest legal filing, this one by the SGCC, which may be read in its entirety via the following link:

SGCC Opposition to SOA Motions for More Definitive Statements and to Dismiss

In the above filing, the SGCC basically refuted the SOA’s claim that the SGCC counterclaim was too vague, too ambiguous, lacked particularity and hence provision of more definitive statements were not warranted nor was dismissal of their counterclaims.

So how did we get here?

It all began with the ill conceived SGCC Purchase and Lease Agreements, when the SOA paid $2.75M to purchase the SGCC Land and water rights back in August 2014 and then leased it back to them at $2,200/year for 90 years.  Under these agreements the SGCC had certain obligations, which the SOA felt they were not living up to. This came to a head with the controversy over liabilities associated with the Rockery Wall failures adjacent to Hole 5 of the golf course, which involved both SOA Common Area and SGCC leased properties. This liability controversy was placed on hold via a “Tolling Agreement”, under which both parties agreed  to put any litigation on hold pending the outcome of the SOA’s lawsuit against the Somersett Development Company. Under this agreement the SGCC was to pay the SOA $500/month while it was in effect. The Tolling Agreement was terminated December 31, 2019 and a SOA Executive Committee was established to negotiate a settlement with the SGCC. The Executive Committee consisted of SOA Board members Hanson, Baker and Fitzgerald.  This Committee apparently met four times (February 11th, February 25th, March 16th and April 11th) without reaching an agreement. Information derived from the meeting minutes, which were not very inclusive, provided the following information:

  • Feb 11th Meeting  – The SGCC claimed they spent $74K of their own money to repair the golf course. Seth Padovan, SOA Consulting Engineer, recommended that the SOA and the SCGG split the repair costs.
  • Feb 25th Meeting – The SGCC offered to pay the Association $30K, over time, to the Association toward the repair costs. That they have already spent $129K, including the Tolling Agreement, of their own money toward repair costs. (SU Note – The Tolling Agreement ran for 18 months, at $500/month this equates to $9K paid to the SOA, not sure what the other $120K applies to as the meeting minutes were  not very complete).  The Committee then passed a motion to extend to the SGCC a counter offer of a 50%-50% total cost split.
  • March 16th Meeting  – The Committee rejected the SGCC’s $30K offer and extended a final counter offer in which the SGCC would pay half the total cost amounting to $264K, the amount due after all credits and expenses have been applied (SU Note – The meeting minutes did not provide a breakdown of what these credits and expenses consisted of).
  • April 21st Meeting  –  No SGCC representatives at this meeting, only the SOA Board members. They discussed an April 15th letter from the SGCC wherein the SGCC advised they could not accept the SOA’s $264K offer and were unable to provide any counter offer at this time.  The Committee then passed a motion to instruct the SOA Attorney (Michael Schulman) to proceed with litigation.

SU Comments

  • It is a sad situation when one Somersett entity has to sue another, but SU believes the SOA was left with no choice here. The SGCC’s $30K offer was obviously unacceptable given their liabilities under the Purchase and Lease Agreements. In addition the caveat to pay the $30K over time was somewhat laughable.
  • The offer by the SOA to settle for $264K was more than generous, given that, per the Tolling Agreement, the total costs for the hillside repairs was established at $680K. It is still unclear where the $129K in credits and expenses, apparently accepted by the SOA, came from, as $264K is certainly not half of $680K.
  • At $264K, the SGCC could have met this by simply assessing their equity members $1000 each (they had 274 equity members at the end of 2019).  Not an unsurmountable amount, but then again the SGCC has always been willing to take from the SOA, while providing little in return.
  • Unfortunately there is no doubt that the SOA will now rack up significant legal fees in pursuing the litigation. Perhaps encroaching significantly on the $264K the Board was willing to accept as a settlement.  The SGCC will most likely not have this problem as their Attorney of record is also a SGCC member (pro-bono or contingency?), or perhaps the SGCC will yet come to their senses, accept the $264K and we can all be done with it.
  • It is also curious that the SOA Board chose not to apprise Association members of the filing of the civil action and the basis therefore.  An issue clearly of utmost interest to many owners.

Copies of the above referenced Meeting Minutes, including the SGCC refusal letter, may be accessed via the following link:  SGCC Executive Committee Meeting Minutes

Reader comments are always solicited.  Likewise, if any SGCC member wishes to post their own article in response to the preceding, they are welcome to do so by submitting it to somersettunited@gmail.com

 

 

SGCC 2019 Financial Summary

Given the Somersett Owners Association’s (SOA) investment and liabilities associated with the Somersett Golf and Country Club (SGCC) Purchase and Lease Agreements, the SOA has a vested interest in the financial health of the SGCC and hence of interest to Association members. Since the SGCC’s financial data is not made available to Association members through any other media, it has been SU’s practice to publish what what is publicly available, hence the following update.

The following table represents a summary of the Somersett Golf & Country Club’s (SGCC) revenue and expense data for the years following turnover from the Somersett Developer to its Equity Members in 2010. The table has been updated to include the 2019 financials. All financial data contained in the following table are derived from the SGCC’s IRS Form 990’s, which require submittal by May 15th of the following year (July 15th 2020 for 2019 financials) and become available for public inspection. The SOA Revenue Column represent monies provided to the SGCC from SOA funds as indicated by the corresponding “Notes”.

Year SGCC Equity Members * SGC Total Revenue SGC Total Expenses Revenue Less Expenses SOA Revenue Contribution ** Notes
2010 188 1,990,652 2,550,940 -560,288 0 1
2011 152 2,087,950 2,715,815 -627,865 0 2
2012 129 2,645,620 2,613,692 +31,928 435,000 3, 4
2013 115 2,918,754 2,815,109 +103,645 440,000 4
2014 194 2,729,114 2,695,062 +34,052 360,000 4
2015 220 995,670 2,581,250 -1,585,580 2,750,000 5,6
2016 241 2,611,329 2,664,450 -53,121 0  
2017 256 2,957,651 3,030,659 -73,008 0  
2018 293 3,149,162 3,257,636 -108,474 0  
2019 274 3,152,660 3,302,604 -149,944 0  

*  Represents full proprietary membership with voting rights, does not include non-permanent, provisional or preview memberships

** SOA Revenue Contribution does not include Canyon9 Maintenance Agreements with the SGCC which ran through 2017 at then $309K annually. The SGCC no longer provides this maintenance service as it was awarded to others on a cost saving basis for 2018 & 2019.

Table Notes:

  1. In the Fall of 2010, the Somersett Development Company negotiated early turnover of the SGCC to its Equity Members via Member majority vote.
  2. 2011 was the first year in which the SGCC was run entirely by Equity Members.
  3. In late 2011, the Developer controlled SOA Board voted to divert $15/month of homeowner assessments to the SGCC via a “Lease Agreement” in exchange for some SGCC access amenities. This agreement was to run for three years starting in January 2012 with optional 3 and 4-year renewal periods. The obvious purpose being to subsidize the SGCC’s operating losses.
  4. The SOA Revenue column represents revenue the SGCC received in years 2012, 2013 and 2014 from the SOA under the Lease Agreement described in Note 3 above. 2014 was the last year under this agreement after being declared improper by the Nevada Real Estate Board. It is interesting to note that these were the only years the SGCC did not have an operating loss.
  5. As a replacement for the aforementioned Lease Agreement, in late 2014, a SGCC Real Property Purchase and Lease Agreements were approved by SOA owner majority vote. Under this agreement, the SOA purchased the SGCC land and water rights for $2,750,000 with a subsequent leaseback of the land and water rights 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 SGCC optional 20-year renewal periods. The SOA purchase funds were obtained via an ongoing bank loan currently being paid for from homeowner assessments.
  6. The SGCC 2015 negative revenue less expense amount was primarily due to the $2,750.000 sale price income (see Note 5) minus a reported sales expense (asset loss) of $4,294,781.

For those interested in the revenues and expense details by category, the SGCC’s complete 2019 Form 990 may be accessed via the following link:

SGCC 2019 Form 990

Comments on the Preceding:

  1. After five years of moderate equity member growth, 2019 showed a decrease of 19 equity members over 2018. It is unknown what the membership level is to date, but given the COVID-19 scenario, it is problematic that this decrease will by made up for in 2020..
  2. Also evident is that the SGCC’s operating loss has been steadily increasing since the loss of the SOA revenue contributions. That is, from 2016 and beyond. For those interested in comparisons, Prior year SGCC Form 990’s may be accessed via the following links:  SGCC 2018 Form 990SGCC 2017 Form 990SGC 2016 Form 990, SGCC-2015-Form-990
  3. Yet to be determined is SGCC’s financial liability under the SOA lawsuit filed against the SGCC for their share of the Rockery Wall failure repairs
  4. Also, to be determined is the SGCC’s future liabilities associated with required repair/replacement of the Canyon9 and SGCC Water Supply System components, which have been estimated as high as $700K over the next five years, of which the major responsibilities lie with the SGCC.

What does the Future Hold?

Given the SGCC’s apparent current financial doldrum, and given a negative financial outcome (i.e., for the SGCC) with regard to items 3 and 4 above, it is fair to ask what does the future of the SGCC hold?  If indeed the Court rules that the SGCC has violated the provisions of the Purchase and Lease Agreements with a significant dollar liability to the SGCC, and they do not have the resources to pay their financial obligations thereunder, what recourse will the SOA pursue? Does the Board have a plan in place? Not that anyone is aware of.

SOA Response to SGCC Counterclaim

On June 5th the Somersett Owners Association (SOA) filed a legal Complaint (Washoe County District Court Case No. CV20-00872) against the Somersett Golf and Country Club (SGCC or SCC)) addressing two issues: 1) Liability for Rockery Wall failure repairs, and 2) Liability for Water Well Pump repairs.

This Complaint, along with an accessible copy of the legal filing, was summarized in a previous SU post of July 22nd, which may be accessed via the following link;

SOA Legal Complaint Against the SGCC

On July 10th, the SGCC submitted both a Response and Counterclaim the SOA Complaint. The SGCC Response and Counterclaim, along with an accessible copy of the legal filing, was summarized in a previous SU post of July 23rd, which may be accessed via the following link:

SGCC Response and Counterclaim to SOA Complaint

The SGCC Counterclaim was based on the following five courses of action, which were discussed in the SU post of July 23rd referenced above.

  1. Premises/Liability/Negligence
  2. Misrepresentation/Lease
  3. Breach of Implied Covenant/Lease Agreement
  4. Breach of Tolling Agreement
  5. Quantum Meruit

In their Counterclaim, the SGCC basically accused  the SOA of misconduct, misrepresentation and withholding of information (i.e. implied fraud?) when entering into the Lease Agreement, and therefore seeks its own damages and re-formation of the Agreement.

On July 31st the SOA filed its legal response to the SGCC Counterclaim, which may be accessed via the following link:

SOA Response to SGCC Counterclaim CV20-00872

In its response, the SOA contends that the first three SGCC allegations are “Too Vague For The Association To Answer Properly” and that the fifth is “Too Ambiguous That The Association Is Not Able To Respond To Its Allegations” (the 4th item was not included in the SOA response). This is not to say the SOA ignored them, quite the contrary, they provided the basis under which they could not provide a proper response. Basically, that the SGCC did not provide the “particularity” of the circumstances behind their allegations as required by law (i.e., no set of facts to substantiate their counterclaims). The SOA concludes its response with the following statement:

“Based on the foregoing, the Association asks this Court to require more definite statements regarding the four causes of action indicated here; a finding that SCCs misrepresentation claim is not plead with appropriate particularity pursuant to NRCP 9(b); and outright dismissal of the misrepresentation claim for failure to plead the essential element of duty.”

The SOA response makes interesting reading and, in SU’s opinion, paints the SGCC allegations as a desperate act to avoid their obligations under both the Purchase and Lease Agreements.

SGCC Response and Counterclaim to SOA Complaint

In our previous Blog Post entitled “SOA Legal Complaint Against the SGCC”, SU summarized  the Somersett Owners Association (SOA) Complaint (allegations) against the Somersett Golf and Country Club (SGCC) along with an accessible copy of the Court filing document. On July 10th 2010, the SGCC provided its legal response to the SOA’s allegations along with a Counterclaim.  A complete copy of the SGCC’s legal filing may be accessed via the following link:

SGCC Response and Counterclaim, CV20-00872

Response to SOA Complaint

The SGCC response addressed all 103 of the numbered paragraphs in the SOA Complaint, most of which were just boiler plate. With regard to the paragraphs of substance, the SGCC basically denied all of the SOA’s allegations (summarized in previous Post) and offered up the following “Affirmative Defenses” (edited and paraphrased, not direct quotes).

  1. The SOA failed to state a claim upon which relief can be granted.
  2. The SOA’s claims are barred by the doctrine of laches (i.e., unreasonable delay in filing the Complaint).
  3. By its actions, the SOA has waived its claims against the SGCC.
  4. Because of its actions, the SOA should be estopped (prohibited) from asserting its claims, including the destruction of evidence relevant to the SGCC’s defense.
  5. The SOA’s own actions contributed to and exceeded any alleged breach on the part of the SGCC and the SOA’s damages, if any, should be reduced or denied by reason of the SOA’s negligent acts and omissions.
  6. The SOA failed to mitigate its damages and any recovery should be offset by the amount the SOA could have mitigated such damage.
  7. The actions and conduct of the SOA and other unnamed third parties acted as an intervening and superseding cause of any damages the SOA may have suffered, thus eliminating liability on the part of the SGCC.
  8. Defendant has made payments to the SOA ($500/month during the Tolling Agreement period) the amount of which should offset any amounts due the SOA by reason of its Complaint.
  9. The SGCC has expended effort, time and money to repair a portion of the damaged area, the value of which should be offset against any amounts due to the SOA.
  10. Some of the SGCC’s efforts to comply with both the Lease and Water facilities Agreements were impractical, if not impossible – Force Majure (an unforeseeable circumstance that prevents someone from fulfilling a contract).

Based on the preceding, the SGCC is seeking the following Judgements from the Court:

  1. An order dismissing the SOA’s Complaint and directing that the SOA recover no damages whatsoever.
  2. An order determining the value of payments made to the SOA and work performed by the SGCC and offsetting this against any sums due to the SOA.
  3. An order awarding costs, attorney fees and such other relief as the Court deems proper.

SGCC Counterclaim

The SGCC Counterclaim addressed the following Causes of Action ( edited and paraphrased, not direct quotes unless so indicated):

  1. Premises/Liability/Negligence – The SGCC contends that the SOA was aware there were problems with the Common Area above the SGCC’s leased property that constituted a dangerous condition and “failed to take appropriate measures to either discover the magnitude of the dangerous condition and/or make the condition safe and/or warn the SGCC of the condition and potential danger, all of which caused or contributed to the failure of the slope and rockery walls on the slope, a portion of which was upon SGCC’s property, and caused the SGCC to suffer those damages described herein.”
  2. Misrepresentation/Lease Agreement – The SGCC contends that had the “Association disclosed to the SGCC the issues with the adjoining area, the SGCC would not have entered into the Lease or would not have made the warranties concerning the property that it did”. Also “As a proximate result of the failure to disclose the defects in the adjoining area, The SGCC has been damaged in an amount potentially equal to the costs of repair of the entire slope, costs of repairs to its property, engineering fees, loss of business, and attorney’s fees and costs”
  3. Breach of Implied Covenant/Lease Agreement – More causes of actions based on the SOA’s wrongful conduct in not disclosing facts associated with the Common Area property adjacent to the SGCC leased property.
  4. Breach of Tolling Agreement – An allegation that the SOA has refused to acknowledge that the SGCC is to be given credit for the $500/month payments made to the SOA under the Tolling Agreement or to return these payments to the SGCC.
  5. Quantum Meruit – An allegation that the SOA has become indebted to, and refuses to pay, the SGCC for materials and labor expended as a result of damage to its property caused by work performed by the SOA on the adjacent Common Area property.

In its Counterclaim, the SGCC is seeking the following judgements (direct quotes).

  1. For damages equal to the value of the materials and labor expended to repair its Property as a result of the Association’s acts and/or omissions.
  2. For amounts paid to the Association pursuant to the parties’ Tolling Agreement.
  3. For loss of profits to the SGCC’s business as a result of the Association’s negligent maintenance of its property.
  4. For reformation of the Lease Agreement relieving SGCC of its warranty obligations based upon the misrepresentations of the Association.
  5. For reasonable attorney’s fees and costs incurred by the SGCC in prosecuting this Counterclaim, and
  6. For such other and further relief as the court deems just and appropriate under the circumstances.

The SOA has until July 31st to respond to the SGCC’s Counterclaim. When filed, SU will post on this website.

Comment

In January of this year an Executive Committee was formed (Consisting of Board members Fitzgerald, Baker and Hanson) whose purpose was to meet with representatives of the SGCC and negotiate a settlement on which party was responsible for which portion of the Rockery Wall repair costs and how the SGCC would reimburse the SOA for its agreed upon portion.  The Committee was to publish meeting minutes and to regularly report to the Board at Board meetings. Therefore, the  question is; did any of these meetings ever take place and if so, what were the results? If held, one would have to assume that they were unsuccessful and hence the filing of the Complaint by the SOA on June 5th. Perhaps the COVID-19 restrictions came into play here, but this does not excuse the Board from notifying Association members  as to the filing of the Complaint, as the legal fees are likely to be significant. So much for transparency.  However, if a notification was made and SU missed it – Our sincere apologies.

 

SOA Legal Complaint Against the SGCC

On June 5th the Somersett Owners Association (SOA) filed a Complaint with the Washoe County District Court (Case No. CV20-00872) against the Somersett Golf and Country Club (SGCC). The Complaint addresses two issues 1) Liability for Rockery Wall failure repairs and 2) Liability for Water Well Pump repairs. The filed Complaint consists of seventeen pages and may be accessed via the following link:

SOA Complaint Against SGCC, CV20-00872

In summary the Complaint (allegations) against the SGCC is based on the following:

  1. Failure to live up to the Warranty provisions of Section 9A of the Purchase Agreement (whereby the SOA purchased the Land and Water Rights owned by the SGCC), which included a four-year warranty provision, wherein the SGCC agreed, at their expense, to repair damage to or destruction of any part of the purchased property.
  2. Failure to live up to Section 8.1 of the Lease Agreement (whereby the SOA leased back the land and water rights to the SGCC) wherein the SGCC agreed, at their expense, to remedy all damage to or destruction of any part of the leased property.

The Complaint documents the history between the Parties’ leading up to the filing of the Complaint and categorizes seven “Causes of Action” against the SGCC as follows (as paraphrased by SU):

  1. Breach of Contract – The SGCC breached the contractual provisions of the Purchase Agreement, Lease Agreement and Water Facilities Agreement.
  2. Breach of Implied Covenant of Good Faith and Fair Dealing – The SGCC deliberately failed to perform the terms, provisions and covenants required by the Purchase, Lease and Water Facilities Agreements, including failing to reimburse the SOA for expenses incurred to repair the Rockery Wall failure damage.
  3. Breach of Express Warranty – The SGCC breached the express warranty of the Purchase Agreement by failing to repair the Rockery Wall damage.
  4. Unjust Enrichment – The SGCC unjustly benefitted from the SOA repairing the Rockery Wall damage, at SOA expense, without subsequent reimbursement from the SGCC.
  5. Equitable Relief/Specific Performance – The SGCC improperly replaced a failed Water Well pump (i.e., with an undersized pump), which risks under-utilization and abandonment of essential water rights.
  6. Declaratory Relief – A request for a judicial determination on the part of the Court as to the Parties’ rights and duties under the Purchase and Lease Agreements, as well as their rights and duties pertaining to the Rockery Wall failure. Also, a request for an order awarding the SOA the entire amount of expenses it incurred to repair the Rockery Wall damaged area.
  7. Equitable Relief – Specific Performance for Termination and Turnover of Premises – Given that the SGCC has defaulted on the terms of the Lease Agreement, as an alternate remedy, the SOA seeks eviction and turnover of the Premises, at its election, at the time of trial.

In summary, the SOA is seeking judgments against the SGCC as follows:

  1. For general, special, and compensatory damages
  2. Award of attorney fees and costs
  3. Judgement if favor of the SOA
  4. Water Well pump replacement
  5. An order to turn over the premises to the SOA
  6. A declaration of the Parties’ rights and obligations
  7. An award of pre-judgment and post-judgment interest

Note that the Complaint did not include any dollar value associated with the SOA’s incurred expenses for repair of the damaged area caused by the Rockery Wall failures, of which there were two, an upper wall on SOA common area property and a lower wall on SGCC leased property. It is the SOA’s contention (based on an engineering report) that the lower wall failure is what caused the upper wall failure and subsequent hillside damage. In a Tolling Agreement between the SOA and SGCC, which put litigation on hold, the damage repair cost was estimated at $680K. It should also be noted that the SOA had previously proposed to split the repair costs with the SGCC on a 50-50 basis.

The SGCC has filed a response to the SOA Complaint along with a Counterclaim, which will be addressed in a subsequent Blog Post.