LakeHolidayNews

A Summit Prophesy

February 8, 2008 By LakeHolidayNews 1 Comment

At the January 26th board meeting, homeowners Terry & LeeAnn Stevens questioned whether board members actually receive communications from property owners. Based on their sharp words for the board and GM Ray Sohl, our use of the word “question” is a dramatic understatement. Judge for yourself in the following video, in which LeeAnn criticized Ray Sohl’s “half-assed responses:”

With the issue of communications to directors fresh in our minds, we decided to take a look back and thumb through a former director’s original board book. It was chock full of numerous goodies, the kind of things that some directors seem to want to hide from members. One document was a prophetic 2001 email from homeowner Bob Pumphrey to then LHCC President Frank Heisey. Pumphrey asked Heisey to “change the management” and stop condoning “violations of state and county laws….” He offered this cautionary warning:

…if these conditions continue, we will have another Summit war in less than five years. This one will be worse than the last as it will be neighbor against neighbor.

Reading Pumphrey’s email triggered another memory: a Frank Heisey soliloquy to the board in which he was critical of a handful of “uncivil property owners.” He claimed to have addressed those he criticized “personally.” We’ve never received any personal communication from Heisey. We checked with Bill Masters, someone we suspect Heisey might label “uncivil.” Nope, Heisey never personally addressed these issues with him either.

Maybe Heisey finally got back to Bob Pumphrey? It’s only been over 6 years.

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Our Problem Now

February 5, 2008 By LakeHolidayNews 1 Comment

63 days. That’s how long it took for LHCC’s board to flip flop on the utility problem at Lake Holiday, especially when board members started having problems of their own.

As we discussed in our post It’s Not Our Problem Anymore, on 11/26/07 Wayne Poyer said just that: problems with utility service weren’t the board’s problem anymore. He ignored the fact that his predecessor Chris Allison promised members that the LHCC GM would play a central role in resolving utility problems after the sale to Aqua Virginia. Poyer distanced himself from utility issues when addressing problems raised by ordinary homeowners. But at the January 28th board meeting, the story changed when board members started reporting their own utility problems.

John Martel complained that:

Aqua’s customer service has been and continues to be both inadequate and ineffective.

In his view Aqua Virginia engaged in “questionable billing practices.” Martel described his own problems with Aqua Virginia and what a company customer rep told him about it. According to him, she said:

I will send that problem to the billing department but I don’t think they’ll do anything about it.

Martel’s concerns are echoed by directors Steve Locke and Robin Pedlar. Locke characterized Aqua’s conduct as “intentional corporate incompetency.”

Robin Pedlar remarked:

Do we know are there any people here at Lake Holiday that are happy with the service? … I don’t know anybody.

Several directors planned to meet with representatives from Aqua Virginia on Thursday January 31st. According to Martel, Aqua Virginia “finally, finally agreed to a face-to-face meeting.” If that meeting didn’t produce satisfactory commitments from Aqua Virginia, the board planned to complain to the SCC.

We first reported about this situation many months ago. The very same topic is covered in our video clip Crazy Aqua VA Bills (also on our Videos page) from the March 2007 board meeting, now 11 months old. Poyer and the rest of the board didn’t want to get involved at that time. In response to an open forum question from a homeowner with a utility problem, Pat Shields suggested that the homeowner had a water leak between the meter and his house, despite the homeowner’s efforts to establish he had no leak. To diagnose his inaccurate water bills, the homeowner reached a drastic conclusion: “Just don’t flush.” Now, in January 2008, Poyer told fellow board members very matter-of-factly that Aqua Virginia’s meters just don’t work, suggesting he’s known about this problem for some time.

When ordinary homeowners write to the board about their utility problems, Wayne Poyer says “It’s not our problem anymore.” When John Martel has a utility problem, it’s time to “get tough” with Aqua Virginia and start down the path to filing a complaint with the SCC.

We’ve seen no public acknowledgement from the board about utility problems homeowners have been experiencing in Lake Holiday’s newsletter or website. To claim to be a utopia, one must sweep a lot under the rug.

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A Proxy Policy To Battle Dissidents

January 27, 2008 By LakeHolidayNews Leave a Comment

LHCC’s proxy policy was one of the most important topics discussed at the December 27th meeting. The board uses the proxy policy to unfairly restrict the opportunities that LHCC members have to express their opinions in elections. This policy is one of the board’s principal weapons to attack what it calls “the dissidents.” Using characteristic put-downs, the board describes those who vote by proxy as “less sophisticated.”

The most visible sign of LHCC’s efforts to block the use of proxies is right on the ballot envelope itself. In 2005 the ballot envelope didn’t contain any mention of proxies. In 2007, “proxy revocation” is front and center. Compare the 2005 ballot envelope to the 2007 version:

As used by LHCC, the proxy policy is nothing more than an election manipulation tool. Let’s review the 3 most recent LHCC board elections to understand what has changed and why. In each of these elections, the final outcome of who sits on the board would change based on the resolution of these challenges.

In the October 2005 election we solicited proxies almost exclusively from Membership Lot owners. Our success in capturing votes surprised LHCC’s leaders. Several facts from the 2005 election stand out:

2005 Election Facts
#	Fact
#1	M & S builders voted lots they no longer owned and LHCC counted these votes
#2	LHCC counted more in person ballots than there were eligible voters who attended the meeting
#3	LHCC refused to count a proxy, claiming the owner voted in person – despite the person swearing under oath that she did not attend the meeting

The election results were very close, too close from the perspective of LHCC’s entrenched board. Our votes were almost all in the form of proxies. So LHCC apparently concluded it was time to develop a way to disqualify proxies before the next election. If LHCC’s directors could disqualify proxies, they could reduce our votes.

Before the October 2006 election ever took place, LHCC knew we would show up with over 400 proxies. We presented these proxies in the governing documents vote in June of 2006, so LHCC knew exactly what to expect that October. LHCC’s directors had to act, or they might have been voted out of office. Before the October 2006 election, LHCC adopted the policy that submitting any absentee ballot revoked a proxy, even if the proxy were executed after the absentee ballot was presented. This was the beginning of the proxy policy as a political tool.

The 2007 election attracted few candidates. There were 7 announced candidates running for 6 seats. One of the announced candidates was Rick Bleck, who did not meet the 1 year ownership requirement for nomination set forth in LHCC’s Bylaws and was invisible on the campaign trail but was elected anyway. Before the election took place, candidate Bill Masters challenged Bleck’s nomination, based on this simple statement in LHCC’s Bylaws:

All nominees must have been Members of the Association for at least one (1) year.

Bleck closed on his Lake Holiday home on October 12, 2006. The cutoff for nominations was September 5, 2007. Bleck obviously didn’t meet the 1 year requirement spelled out in the Bylaws. This presented a serious problem to LHCC’s entrenched board because it will go to just about any length to block Masters from winning a board seat. If Bleck’s nomination were found to be improper and therefore withdrawn, that would leave only 6 candidates – one of which would be Masters – running for 6 seats, virtually guaranteeing Masters a board seat.

The solution to this problem: pay LHCC counsel Rees Broome to produce a 3 page letter to try to explain that that 1 sentence in the Bylaws means something other than what it says. Reader beware: have a big bottle of aspirin handy before reading Rees Broome’s explanation because trying to follow their logic will cause your head to rotate more than once on your shoulders. Rees Broome has been the recipient of checks totaling hundreds of thousands of dollars, signed by LHCC’s entrenched board.

In the October 2007 we supported Bill Masters, who solicited proxies from Lake Holiday property owners. Masters added a new wrinkle to the proxy debate. Because of the cost of soliciting proxies, Masters solicited proxies good for 5 years. And that apparently scares LHCC’s directors.

So how did LHCC respond? By using association funds and resources to conduct a poorly disguised political attack on Masters. Mailed in an official LHCC envelope with a hard-to-miss yellow sticker claiming to hold “Important Information”, LHCC directors spent Association money to send out in early October what was nothing more than a blatant political campaign letter.

LHCC’s mailer attacked proxies generally and the Masters proxy in particular. The mailer also attacked Masters’ campaign positions. Amusingly, the letter misquoted one of Masters’ own campaign letters and falsely claimed that Masters’ calculation of the expected dam repair cost was wrong. Masters used actual numbers from the board meeting on the dam repair and did nothing more complicated than dividing the estimated total cost of the dam repair by the number of property owners actually paying dues. After misquoting the number in Masters’ letter, LHCC’s response was that “No arithmetic we know of gets to this number.” More simply: LHCC’s directors acknowledged they don’t know how to do basic arithmetic.

Three candidates, who also happened to be incumbent officers or directors – President Wayne Poyer, Treasurer John Martel, and Pat Shields – used association resources to mail out their own political response to candidate Masters, who used private resources to pay for his campaign. Wayne Poyer, John Martel, and Pat Shields failed to separate their roles as officers and directors of the association from their personal interests as candidates for re-election. At the bare minimum, they should repay the full cost of this political mailer. We challenge them to do so.

That’s the background for December 27th’s proxy policy discussion, which we present in 4 video clips:

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At the meeting, all directors except VP Dave Buermeyer favored allowing proxies. Buermeyer continued to be against allowing proxies even though LHCC has a legal opinion from Steve Moriarty, former LHCC counsel, that proxies must be allowed. Pat Shields cautioned Buermeyer that “we need to follow our lawyer’s advice.”

The proxy policy that LHCC’s directors want to adopt is inherently unfair. Directors want an absentee ballot to revoke a proxy, even if the proxy is executed after the absentee ballot. The only way to revoke an absentee ballot is to show up in person at the election site. This is an easy task for a homeowner. But how about for the Membership Lot owner living in California? His only way to revoke an absentee ballot is to show up in person. The burden is very different for a homeowner who could just walk across the street compared to a Membership Lot owner who has to travel across country. Once LHCC directors capture an absentee ballot vote from a Membership Lot owner, they don’t want to let it go. So they make it very difficult and expensive to revoke.

Revoking an absentee ballot also shows a sloppy inconsistency in LHCC’s voting procedures. In September of 2005, LHCC was planning to hold a vote on new governing documents. At that time, we challenged in court LHCC’s refusal to let members change their absentee votes. LHCC subsequently canceled that scheduled vote and revised its procedures for revoking an absentee ballot. Those changes are reflected in the minutes of the 9/27/05 board meeting. The revised policy states that:

Eligible Members exercising their right to vote an absentee ballot retain the option of changing that absentee vote up to the deadline for all voting. Once an absentee ballot has been witnessed, mailed to and logged in by the office or registered agent, to change that vote the Member must attend the Membership meeting called for the purpose of that vote and, providing proper identification, request that the ballot be recovered for the purpose of recasting the vote.

That policy was adopted in the 2005 election. By 2007 it was abandoned. Compare the note at the bottom of the 2005 ballot to 2007’s version. 2005’s ballot says: “If you desire to change your absentee ballot you must do so in person at the annual meeting on October 22nd, 2005.” 2007’s ballot says: “Once submitted, this Absentee Ballot may not be retracted or changed.” The message from LHCC’s directors to members: Once we have your vote, we’re not giving it up.

The proxy policy also is an attempt to modify LHCC’s Bylaws by board resolution. LHCC’s directors would like to require directed proxies, where the proxy spells out how the proxy holder will vote. Requiring directed proxies blocks unannounced floor nominations. If a candidate to be nominated on the floor is announced in advance, LHCC can discourage that candidate from accepting the nomination. But there’s no requirement that proxies be directed in either LHCC’s Bylaws or in Virginia’s Non-Stock Corporation Act. Wayne Poyer clearly understands that the Non-Stock Corporation Act places few restrictions on proxy use. He described the flexibility that the law puts on proxies to his fellow board members: “the back of an envelope is quite fine.” So what’s an entrenched board to do? Amend LHCC’s Bylaws without the required member vote and circumvent the act by passing a board resolution.

Above all else, LHCC uses false claims about proxies. At the December 27th meeting, Wayne Poyer said some voters gave up their vote for 5 years. That’s absolute non-sense. The proxy that Bill Masters solicited from property owners was revocable at any time by the person that granted the proxy. Revocation could be accomplished by something as simple as sending an email to the proxy holder.

The other false claim is that a proxy granter has somehow given up his vote. That view is expressed in the title of the board’s political attack on Masters: “Its Your Vote – Keep It.” Voting is expressing an opinion, and proxy granters have made a decision to express their opinion by executing a proxy. They have elected to work together to improve their chances of winning an election. There are legitimate reasons for voters to work together and vote by proxy. Voting by proxy gives someone other than LHCC’s board the ability to verify the accuracy of a vote. If 400 voters vote individually, the task of confirming that their votes were counted correctly is insurmountable. If 400 voters vote by proxy, that task becomes simple. LHCC’s directors apparently would rather members act in an isolated manner, have no chance of winning an election, and have no chance to independently verify their votes were counted properly. To keep power, try to divide the opposition.

It’s time for LHCC to clean up its elections.

Election Recommendations
#	Election Recommendations
#1	Give every voter a fair opportunity to change his mind and have his most recent vote counted. That means if a proxy is executed after an absentee ballot, count the proxy. If an absentee ballot is executed after a proxy, throw away the proxy and count the absentee ballot.
#2	Don’t make it any harder for a Membership Lot owner to change his vote than it is for a homeowner that lives next door to the polling place. Treat all owners fairly. Let owners undo an absentee ballot easily. A proxy executed after the absentee ballot is one way to do this.
#3	Stop focusing attention on how people vote, be it in person, by absentee ballot, or by proxy. Stop criticizing others who opt to express their vote in any particular manner. A vote by proxy is just as much a vote as that made in person. Someone who votes by proxy is every bit as smart and sophisticated as someone who shows up to vote in person.
#4	Stop all political mailings from the office, period. If candidates want to spend their own money to campaign, let them.
#5	Acknowledge that the October 2007 attack on Masters was a political one, and make the politicians who benefited from it – Poyer, Martel, and Shields – pay for it.
#6	Take the office – controlled by the entrenched board – out of politics altogether. Have the absentee ballots mailed to an independent vote counter. Stop accepting ballots hand-delivered to the office.
#7	Stop hiring armed guards to defend a homeowners’ election. Third-world dictators have armed guards at elections. Responsible community association leaders do not. Its an unbecoming mix of menacing and pathetic, and it only exposes how far some LHCC directors will go to keep power.

Until LHCC’s directors implement these changes to election rules, the community’s elections will continue to take place under a cloud of suspicion and mistrust.

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We Probably Will Not Meet That

January 21, 2008 By LakeHolidayNews Leave a Comment

Back in April of 2007, we wrote about the contingent payments that LHCC might receive from Aqua Virginia. These payments made it on to LHCC’s 2006 financial statements, audited by Kositzka Wicks & Co of Alexandria. They made it on in a big way – in the amount of $794,213. In our April post, Dear Mike Kilmer, we criticized allowing contingent gains that might never be received to be recorded on financial statements. We expressed the view that recording contingent gains was inconsistent with the accounting principle of conservatism and inconsistent with FAS No. 5. Despite this criticism, the only response we received was from Mike Kilmer, which was really no response at all. Through LHCC’s 11/30/07 Balance Sheet, the most recent one we have available as of this writing, the contingent gain remains on the books.

We quote from Kositzka Wicks’ 2006 audit letter:

…we conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made the Association…

2007 is now in the history books, and we don’t think any check is coming from Aqua Virginia for 2007’s contingent payment. Let’s forget what actually took place and consider only the reasonableness of the estimates provided by LHCC.

In our earlier post, we provided a variety of readily available data to show that no reasonable estimate would predict the contingent payments would be received for the next several years. In fact, Aqua Virginia’s publicly available SCC filings from February 2007 show that their accounting entries do not record these contingent payments on their financial statements. If Aqua Virginia’s auditors believed there was a reasonable expectation that these contingent payments would be made, wouldn’t they be recorded on Aqua Virginia’s books?

Did LHCC give its auditors complete and accurate information?

In February, Wayne Poyer told the auditors in his management representation letter:

There are no estimates that may be subject to a material change in the near term that have not been properly disclosed in the financial statements. We understand that near term means the period within one year of the date of the financial statements.

Then, in July Lake Holiday homeowner Bill Masters raised the issue of collecting the contingent payments at a public meeting. Wayne Poyer openly told members:

Mr. Masters criticizes the $76,000 which Aqua America will return to the association, assuming we meet a certain number of hookups. And he’s right about that, that’s part of the contract. He’s also right that during this terrible market downturn we’ve got, we probably won’t meet that.

Here’s an actual audio recording of Wayne Poyer’s remarks:

We. Probably. Won’t. Meet. That.

Evidently, Wayne Poyer convinced the auditors on February 26th that the Aqua Virginia contingent payments would be received. Then he flip-flopped when speaking to members – a little more than 4 months after his representation to the auditors. That seems to fall within the near term time frame, and not getting the money seems to be material.

Maybe not collecting the early year payments that make up the $794,213 is not a “material change” to Wayne Poyer.

Unfortunately, LHCC’s representations to its auditors also raise other questions. Wayne Poyer informed the auditors that “…as of February 26, 2007…there are no liens or encumbrances on such assets nor has any asset been pledged.” Really? Does the $750,000 Wachovia note executed on February 2, 2007 count? Does the deed of trust pledging LHCC real estate count? Those documents are part of the balloon note that Wayne Poyer and John Martel signed to refurbish the clubhouse. Both the loan documents pledging assets and the letter to auditors claiming there were no assets pledged were signed by the same person – Wayne Poyer.

These are simple and straightforward representations to LHCC’s own auditors. Why aren’t they accurate?

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Suzy Marcus, Silent Sitter

January 8, 2008 By LakeHolidayNews Leave a Comment

Rick Bleck, who did not meet the 1 year ownership requirement for nomination set forth in LHCC’s bylaws and was invisible on the campaign trail but was elected anyway, was absent from the December 27th meeting. Rick was the two-time defending champion (if that’s the right phrase) in our Silent Sitter contest. In fact, up to this point, Rick has won every Silent Sitter award we’ve given, since we’ve only given 2. We’re not sure if he was busy or has a strong sense of fair play that required him to give another director the chance to win the Silent Sitter award.

Given a fair chance, somebody other than Rick Bleck did win our Silent Sitter award. That person is Suzy Marcus. Congratulations, Suzy! You’re our Silent Sitter for the December 27th meeting. Ever since we ~~conceived~~ copied the idea for the Silent Sitter award, we just knew that as long as she showed up, Suzy Marcus would put in a strong showing. The video clip Oops We Goofed (also linked in our post Twenty Certified Letters Later… and on our Videos page) pretty much includes Suzy Marcus’s entire contribution at a meeting that was well over 2 hours in length. In other words, if you don’t count silence, she didn’t contribute very much. When you consider that board members get their board books in advance of the meeting so they can show up ready and prepared to contribute, there’s simply no excuse for that much silence.

Suzy was absent from the 11/26 board meeting, at which she was responsible for presenting an “Open Discussion on Realtor Outreach.” Presumably, she was planning to lead a discussion of ways to help market the Lake Holiday community to real estate agents. When she was absent in November, this topic was moved to December. Perhaps she forgot about her own agenda item. We didn’t. Any benefits from a realtor outreach have now been delayed for 2 months. Sellers may not take kindly to a board that talks tough about a challenging real estate market but when it’s time for action only procrastinates. Chalk it up to having Silent Sitters on the board.

We do have sympathy for Rick Bleck, Suzy Marcus, and every future Silent Sitter. It’s very difficult to break out of the Silent Sitter role, as our video Only 3 For the DEC demonstrates. The DEC is LHCC’s Development Executive Committee, and this committee is where the important stuff happens. As Wayne Poyer explained in the following video, the DEC manages the relationship with Miller & Smith, the biggest developer at Lake Holiday. The DEC also handled the initial relationship with potential golf course purchasers and developed the Utility Extension Program (UEP). In other words, it plays a lead role in critical development issues at Lake Holiday before these issues ever reach the board.

After Wayne Poyer described the DEC at the board’s November organizational meeting, a number of directors jumped at the chance to serve on this important committee. Directors Noel O’Brien and Robin Pedlar, two directors who could challenge for a Silent Sitter award in any given month, wanted to serve. But alas, after offering the tease of what the DEC got to work on, Wayne Poyer explained that there are only 3 seats on the DEC. Without further explanation, these potential Silent Sitters who wanted to contribute just had to understand that Wayne Poyer, John Martel, and Dave Buermeyer would take over the DEC. Is it unusual that 3 men appear to just assume they should dominate this committee and 2 women appear to just understand that this committee is not for them?

Why aren’t Noel O’Brien and Robin Pedlar on the DEC?

We’re reminded of LeeAnn Stevens’ comments about former LHCC President Chris Allison’s attitude toward women:

Chris [Allison] has a real problem with women. We don’t have brains. Our opinions don’t matter. He’s not going to give her the time of day.

Silent Sitters like Suzy Marcus and Rick Bleck have to overcome more than any general reluctance to contribute. They’re fighting against a highly concentrated leadership that blocks them from tackling important tasks.

As much as board members may claim to dislike our Silent Sitter award, the powerful few cherish the existence of Silent Sitters like Suzy Marcus.

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Twenty Certified Letters Later…

January 6, 2008 By LakeHolidayNews Leave a Comment

…can the President of LHCC just pick up the phone, call a homeowner, and say “Oops, we goofed. We’re truly sorry”? Apparently not.

That answer was hidden away in a tab of LHCC’s board book called “For Your Interest.” LHCC directors now bury letters and emails from property owners to the board in this tab instead of reading and discussing them during the open meeting. That’s one way of blocking criticism from making its way to video and onto the internet.

Fortunately for Lake Holiday property owners, this “don’t discuss criticism” technique flopped at the December 27th board meeting.

The first example of this involves homeowner Robert Middleton, whose property was hit with a lien of $1800 for alleged violations of Lake Holiday’s sign prohibitions. A hit of $1800 – ouch! As the board discussed in our Compliance Reporting video (it’s in our video gallery on our Videos page), if Middleton violated any sign prohibition, he didn’t do it on his own property. In that video, GM Ray Sohl said that the signs should have simply been taken down instead of placing liens on Middleton’s property. It’s possible that Middleton himself watched the video and used it to support an argument that the liens should be removed, which is something that the board did not acknowledge at the November meeting. At the December 27th board meeting, shown in the following video, the board finally decided that Middleton is “no longer liable for $1800.” It’s good that LHCC reversed course on this issue.

The board discussed how to communicate this good news to Middleton, who apparently refused to accept several recently-mailed certified letters from LHCC. Ray Sohl described that LHCC has sent 20 certified letters to Middleton over this alleged violation, which apparently turned out to be no violation at all. Perhaps Middleton grew tired of seeing his own money spent to send him certified letters to communicate the message “We are 100% right, you are 100% wrong, so we’ve put an additional lien on your property.” An unsurprising outcome.

Some directors were reluctant to communicate with Middleton directly. In the video the best option developed by LHCC President Wayne Poyer was to put a message in a plain, unmarked envelope addressed by hand. That only seems strange to someone who does not understand that the board prefers to sneak their good news to Middleton to avoid having to acknowledge their error. Director Pat Shields even recommended no further effort to reach out to Middleton, ignoring that LHCC decided to remove the lien. Shields tried to focus attention on Middleton as the culprit, rather than LHCC itself: “He’s played the rules since this whole thing started.”

We have a simple suggestion for LHCC: have a senior official pick up the phone and call the man. Try starting the conversation off with: “Ooops, we goofed. We’ve removed the liens. We’re truly sorry.” Stop trying to shift the focus to Middleton’s alleged wrongdoing and away from the fact that LHCC improperly filed liens. We’re sure a straightforward, sincere apology will go a long way toward addressing any bad feelings Middleton may have.

Ray Sohl supported further efforts to reach out to Middleton for a good reason:

…you want to encourage participation of all members. The more participation you have, the more responsible community you have.

The secretive “For Your Interest” tab also revealed the second example of the unwillingness of LHCC’s leaders to admit a mistake. In our post It’s Not Our Problem Anymore we criticized LHCC’s efforts to wash its hands of helping property owners deal with utility problems. Apparently, LHCC has reversed course on this issue. LHCC Secretary Ken Murphy, a former LHEUC board member, has initiated efforts to communicate with Aqua Virginia and the SCC about utility complaints from Lake Holiday homeowners. Judging from the discussion in the video, complaints continue to roll in. We don’t see entirely smooth sailing, based on Murphy’s comment that he has “yet to identify the person at Aqua who will listen to me.” A little more than 1 year ago, LHCC closed on the sale of LHEUC’s assets for more than $1 million, and Aqua Virginia continues to serve Lake Holiday. Given those facts, one would hope that the board identified some responsible people at Aqua Virginia who would listen. One would also hope the board kept the contact information of those people. Nevertheless, we applaud this long-overdue correction.

Burying these 2 fixes in a section of the board book that is not intended for open discussion shows just how hard it is for LHCC’s leaders to admit they made a mistake. When faced with having to admit its error in putting a lien on Middleton’s property, the board preferred to communicate via cold and impersonal certified letters rather than a simpler and cheaper phone call. The personal phone call is both simpler and more appropriate in this situation.

Lake Holiday property owners are justifiably concerned about utility problems, and the board has tried to distance themselves from these concerns. If the board abandoned that effort and plans to play an active role in resolving these problems, that’s a good thing. The proper response to both our post and the complaints raised by others would have been to publicly acknowledge the mistake and openly commit to a new course.

Stubbornly refusing to admit a mistake sends an “I’m unreasonable” message to the world.

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2007 Year In Review

January 1, 2008 By LakeHolidayNews Leave a Comment

Update: In response to feedback, we’ve adjusted the audio track and added a break of a few seconds about halfway through the video.

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It’s Not Our Problem Anymore

December 12, 2007 By LakeHolidayNews Leave a Comment

Frustrated by utility problems and LHCC’s changing tune on its responsibility to resolve them? That’s no surprise in light of some recent comments by board members. After cashing the check from the utility sale, without notice or explanation LHCC’s directors seem to have withdrawn their commitment to support homeowners having problems with utility service.

On May 20, 2006 LHCC held a meeting at the Reynolds Store Fire House to try to sell property owners on approving new governing documents. Then LHCC President Chris Allison and current President Wayne Poyer were in attendance, along with then GM Dave Ingegneri.

Utility issues were raised by a number of owners at that meeting. LHCC and Aqua Virginia filed their petition to sell LHEUC’s assets to Aqua Virginia just 3 months before, and owners were concerned about the consequences of selling the Utility. Before the sale was approved by the SCC, Aqua Virginia was operating LHEUC for LHCC, so property owners got a glimpse into how Aqua would behave as the new utility owner.

Homeowner Duran Field described a problem he had with a lift station near his home. He told Chris Allison that after an initial response from Aqua Virginia, he called 7 more times and never received a single return call. He ultimately had to ask GM Dave Ingegneri to intervene to get the problem resolved.

Field, whose voice is heard first on the audio clip, summarized his experience:

I’m not saying that the long term consequences of selling to Aqua are good or bad. Short term, I’m not that impressed.

Field justifiably wondered about the impact a loss of control would have on utility customer service. At the end of the clip, then LHCC President Chris Allison soothed Field’s concern:

You’ll still call Dave Ingegneri. You will still call Dave Ingegneri. Those people are going to have to be responsive to us.

The meaning of Chris Allison’s comment is crystal clear, especially since he repeated it twice. Even after the utility sale, the Lake Holiday GM, who reports to the board, will be the point of contact for utility issues; the sale would not result in a loss of control because the Lake Holiday GM, paid by property owners, would insure that “those people” (i. e., Aqua Virginia) would be responsive.

Field and everyone else in the room could be comforted by Chris Allison’s tough talk. Or could they?

Fast forward to November, 2007. Much had changed. By this point, LHCC had closed its sale of LHEUC’s assets to Aqua Virginia. It had deposited the proceeds of $1.16 million in its bank account, and it was well on its way to spending most or all of that money. Dave Ingegneri resigned as GM in June of 2006. Ray Sohl took his place that October. Chris Allison was no longer President, having been replaced by Wayne Poyer, who as an LHCC director listened to Chris Allison’s May 2006 comments without objection.

But one thing had not changed: utility troubles were still a top concern for property owners in late 2007.

The video clip is part of a discussion of John Martel’s proposal to hold board workshops from the November 26th board meeting. Board member Jo-anne Barnard, formerly of the US Patent Office, described her thoughts on Martel’s proposal. During her remarks, she pointed out that the information section of the board book included “a lot of complaints about the water company.” That water company is now Aqua Virginia.

Did Wayne Poyer tell Jo-anne Barnard that complaining utility customers should call Ray Sohl at 540-888-3549 x 104 or email him at gm@lakeholidaycc.org?

Of course not. The check cleared. The representations that LHCC board members made to owners before the sale was approved to discourage objections to the transfer were now meaningless. Those representations have been long since forgotten. Owners that remember these commitments made by board members aren’t sticking to the board’s positive agenda.

So what exactly did Wayne Poyer tell Barnard? He said “it’s not our problem anymore.”

Jo-anne Barnard made no attempt to correct Wayne Poyer or recommend a different approach to addressing utility problems. The complaints mentioned by Barnard are now filed away in a tab of board members’ board books, but they are no longer automatically part of the open discussion at board meetings. Why not conceal the complaints when revealing them would only risk greater exposure of the broken promise?

LHCC board members have consistently told property owners one story to overcome objections and manufactured a different, opposite story later. Another example of this behavior occurred in the Utility sale itself. In the August 2000 President’s Report Frank Heisey wrote to property owners that “selling of the utility company would require a 2/3 majority vote of the eligible membership….” Then, when we challenged the Utility sale in court unless it was approved by property owners, Frank Heisey and LHCC filed a response with the court that said that they “deny that the sale requires a vote of the members….” No requirements changed, and no mention was made in court of the discarded earlier statement of what was required.

This conduct is not some recent discovery. We’ve covered this before in our post Deliberate Behind the Scenes Manipulation of Information, the title of which is a direct quote from former LHCC President and current director Pat Shields. Why is this pattern of behavior repeated year after year? Lake Holiday property owners don’t hold their leaders accountable for the flip-flopping.

Changing commitments and concealing complaints to deny a problem. That is the problem of LHCC’s leaders.

The problem won’t go away until owners wake up to the flip-flopping, publicly acknowledge it goes on, and take control of their community away from double-talkers.

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A Culture of Conformity

December 7, 2007 By LakeHolidayNews Leave a Comment

LHCC’s board of directors suffers from a culture of conformity. This culture uses irrational pressure to produce what some board members incorrectly call a “consensus,” which is its way of describing unanimity, possibly achieved by surrender on matters of principle.

The discussion of a proposal for the dam inspection at the November 26th meeting demonstrates all of this and more. On November 12th, LHCC approved its 2008 budget. In an ironic twist, former board member Lou Einstman persuaded Wayne Poyer that the approval on 11/12 would be subject to challenge on the grounds that that day was a legal holiday. As a result, just 20 minutes before the dam inspection discussion, the board re-approved the 2008 budget.

LHCC’s directors budgeted $3,000 for the 2008 dam inspection. This was a drop from the $5,000 budgeted in 2007, and the $5,100 budgeted in 2006. LHCC actually spent over $4,823 in 2006 for the dam inspection (see account 6339 on page 2) and over $1,439 through 9/30/2007. Therefore, when we consider that LHCC’s own Treasurer, John Martel, asks other board members what LHCC spent on this item in previous years, we have to wonder how carefully the 2008 budget was prepared. The proposal considered by the board on November 26th was for approximately $5800, nearly two times the amount budgeted just a few weeks earlier. It took just a couple of minutes to gather the actual expenses from financial reports that have been available on our website for months, something we’re sure regular site visitor John Martel would know.

Our present focus is not what the budgeted amount for the 2008 dam inspection should be or what is a reasonable amount to spend. Rather, we want to highlight the intense pressure put on some LHCC board members to conform, to support a decision that appears to have already been made. In less than 15 seconds after this tab was announced, a vote to approve this expense was underway. This speed is not the result of any editing trick. When you watch the video, you will hear John Martel repeat several times “I want to discuss it” after a vote on the issue has already been called. Several directors responded by giggling like schoolchildren. The speed with which this vote was called and the initial response to Martel suggests that board members anticipated Martel’s desire to discuss the issue and attempted to quash that discussion by rushing the vote.

Martel said that the $5800 proposal before the board “seems to me to be high….” He pointed out that the company slated to perform the dam inspection is expected to do significant other dam-related work in 2008, and wondered if LHCC could negotiate a package deal. Martel reminded the board that the budget they approved contained only $3000 for this expense. Dave Buermeyer supported Martel’s concerns and expressed the view that several line items in the proposal seem redundant in light of work that LHCC has already done or is expected to do in the near future.

For John Martel, the sticking point was the fact that this proposal’s cost is a significant deviation from the budget, particularly when the budget was so recently approved. Martel expressed his voting intent:

Again, the work has to be done. They’re the right people to do it. But since the budget for next year only has $3000 in it, I cannot in good faith vote for it.

We must remember that in the effort to rush this matter to a vote, every other director except Martel supported approving this $5800 expense. Martel himself pointed this out, recognizing that he alone would oppose this. He continued:

I just can’t vote for it. That’s all. It doesn’t have to be unanimous. … To me it’s a matter of principle. It’s a question of voting for something that isn’t in the budget. I cannot do it.

A matter of principle. And that’s when Martel is attacked by Lake Holiday’s vicious culture of conformity. Wayne Poyer rebuked Martel because he “cannot agree to accept an expense that is absolutely mandatory for the continuity of this association and the community.”

Audience member and former board member Lou Einstman also went after Martel by suggesting his refusal to vote in favor of this expense would mean that LHCC will “breach the dam and we’ll have an empty hole where the lake sits.” Einstman, towing the party line, was allowed to speak outside of open forum without reprimand from any board member, a privilege we doubt would be afforded to a board critic. Both Wayne Poyer and Lou Einstman engaged in scare tactics in an attempt to coerce Martel to vote their way. It’s an absolute certainty that Martel’s vote against this proposal would not result in a breach of the dam, because Martel and everyone else in the room already knew that Martel couldn’t block acceptance of the proposal. Moreover, while inspections are certainly important, delaying an inspection to get a better price does not mean the dam will be breached or that the “continuity of this association” is imperiled. We also doubt that Martel was attempting to delay the dam inspection indefinitely.

The scare tactics employed by Poyer and Einstman are strikingly similar to those used by Chris Allison in his February 2006 letter to members. At that time Chris Allison suggested that unless higher utility rates were put in effect, property values would be at “very serious risk.” He suggested that without higher utility rates, the ability of Lake Holiday homeowners to “get water from our faucets, and flush our toilet [sic]” would be at risk. A little more than 2 weeks after Chris Allison made those outrageous statements, the VA SCC ruled that LHEUC’s rate increase and rule change was “defective and should be given no effect.” LHEUC was ordered to refund the overcharges. In October, 2006 LHEUC reported that it produced profits of $65,459 through the 9 months ending 9/30/06 without the rate increase. Both the Chris Allison attack letter and the attack on Martel involve crazy predictions of disastrous outcomes to get people to conform.

At the November 26th meeting, it appeared that the scare tactics of Poyer and Einstman would not persuade Martel. So director Pat Shields tried a new tack: Shields explained that Poyer was really just trying to build a “consensus.” What Shields meant by his use of the word “consensus” was unanimity, because allowing for Martel’s sole negative vote, the vote would have been 9-1. Consensus denotes the opinion of the majority or the general agreement of a group, not unanimity. Even if 2 other directors joined Martel (a very unlikely event), a consensus had already been reached, and Shields knew that. On a practical level, the board wasted time using scare tactics to transform consensus into unanimity.

For most of the discussion, it appeared that Martel would hold firm and cast a negative vote on a topic that for him was a “matter of principle.” But principles weakly held have a way of collapsing. Instead, Martel opted to abstain from voting, rather than vote against the measure.

Martel’s abstention should not escape notice. In its “To Vote or Not to Vote Overview,” the National Conference on State Legislatures states that when a policymaker abstains from voting, he “disenfranchises” the voters that elected him. The NCSL points out that abstention may be necessary for policy makers “when their personal interests conflict with their public duties.” The NCSL includes references to Virginia statutes that govern rules for state legislators, and the triggering event for abstaining is having a personal interest in the matter. What is Martel’s personal interest in a vote on a dam inspection? If he has no personal interest, is he using an abstention as a way to avoid casting a negative vote?

We suspect that LHCC’s minutes of the 11/26 meeting will reflect only the motion and the final vote, from which Martel abstained. We doubt the minutes will include the attempts at intellectual coercion and how LHCC Treasurer John Martel elected to disenfranchise the people that elected him instead of standing strong on what he said he considered a matter of principle.

How true the thought, actions speak louder than words.

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To Build a Class Act Type Thing, You Must Vote Your Conscience

December 5, 2007 By LakeHolidayNews Leave a Comment

Robin Pedlar Arguing Against The RV Storage Proposal...

One of the issues taken up at the November 26th board meeting was Ray Sohl’s appeal of the Architectural Committee’s rejection of his plan to locate boat and RV storage.

Director Robin Pedlar, a member of the Architectural Committee, summarized one of the reasons for that committee’s rejection: “It’s pretty ugly.” Why let a reasonable objection like that stand in the way of what the Board and the GM want to do, when the Board can simply overrule the committee?

Thus, we have the appeal of the Architectural Committee’s decision that’s shown on the following video clip.

In previous posts, we criticized several LHCC directors for their utter lack of meaningful contribution to the discussion taking place in the boardroom. We were pleased to see that at this meeting just about all directors present participated in the discussion at one time or another. Perhaps they didn’t want to win our Silent Sitter award. The absence of Suzy Marcus may have added to the pressure on some board members to contribute. With one of the best candidates absent, it was just about anyone’s award to win.

Director Rick Bleck, who did not meet the 1 year ownership requirement for nomination set forth in LHCC’s bylaws and was invisible on the campaign trail but was elected anyway, came out of his shell and offered these insightful comments:

I guess I’m going to show some ignorance and obviously not knowing the history of it and that’s why I’ve been learning a lot at these meetings and stuff. Is this the only common area that the association owns? To me it’s a real eyesore. You’ve got rusted out campers up there and you’ve got boats in disarray. … I don’t know how long the association’s been around and/or committees but…. I own property down in Orlando. The front of…when you enter the property, it’s got trees, palm trees, and flowers, and you come up here and it’s like holy smokes, who lives back in there? I know there’s some nice houses, nice lake back there, and all of a sudden you come in around the corner. You’ve got these beat up trailers and campers. I don’t know if you have any kind of regulations like if the camper is 10 years old you’ve got to get rid of it if it’s rusted out. I really hope there is a common area maybe in the back of, somewhere in the back where you’re not looking at this stuff. The other thing is I’m just surprised you’d allow this. I mean I’ve got my boats in my yard. That’s where I keep my boats. So, anyway, I’m not really sure about the issue here. But anyway, I was thinking, we need a…actually, the office should be a building with bricks and stuff, and you’ve got this old beat up house. I’m just kind of amazed that all these places I’ve ever had or lived in associations, it was really a class act type thing. This kind of parlays into maybe I’ll start getting active in this now. To entertain something like this, but again, my ignorance. We may not have any other land here and this may be the only solution. I hope someday that…I headed back to this one area, I’m going, I can’t believe that we’d ever entertain this.

When Rick Bleck described the treasured Lake Holiday office as an “old beat up house,” we wondered if we looked more closely, perhaps we might be able to see smoke rising from the other directors’ heads. Apparently, no one bothered to copy Rick on the memo that if you can’t mindlessly focus on positive, un-critical comments, you will be ostracized. We dreamed of a very brief return of Chris Allison. We can imagine his response to Rick Bleck would have created a memorable video moment.

We applaud Rick Bleck’s candor and his willingness to address things that perhaps other directors would like to cover up. Lake Holiday should and can be a class act, and Rick Bleck indicates he’s willing to tackle areas in which it falls short. For his straightforward, on-the-record statement that few of his fellow board members have the courage to make, we could just about eliminate Rick Bleck from consideration for our Silent Sitter award. Just about. But not entirely. And not so fast.

Rick Bleck discredits his own comments by remarking that he is showing “ignorance” and that the present proposal may be the only solution. You can’t persuade others if you can’t convince yourself. Board members need to come to meetings prepared. That means reviewing the topics in their board books and investigating other solutions before the meeting. If every board member does not diligently undertake these steps, the ability of the board to reach intelligent decisions at a meeting is lost. Rubber-stamping the decisions already made by other members is a problem fueled by the Silent Sitters.

Bleck raised a number of serious objections to the plan for boat and RV storage, and just before the vote director Steve Locke advised him that this plan is only temporary. However, Rick Bleck never got responses to his objections or answers to the questions about which he professed ignorance. He never pressed Locke or other directors on what the permanent solution would be, when it would be implemented, and what it would cost.

Rick Bleck Winning His 2nd Silent Sitter Award...

Compare Rick Bleck’s contribution to that of director Robin Pedlar. Our quote above represents nearly Rick’s entire contribution over 2 meetings. In addition to her comments shown on the video, Robin Pedlar weighed in on another topic at the meeting, John Martel’s proposal for board workshops to foster open communication between property owners and the board. We have a mixed view of 2 points she raised in that discussion. Robin thought that it would be helpful to have neighbors get together for coffee and talk about what they like about Lake Holiday, something that smacks of nothing more than a social gathering. But she also was one of few directors who expressed a willingness to listen to whatever complaints members had in an unstructured setting, something we support and that seemed to frighten other directors like Ken Murphy.

The standard for our Silent Sitter award is not purely the lowest number of comments made. We draw a more meaningful distinction than simply counting words. During the discussion on locating boat and RV storage, Robin Pedlar said she and her committee thought it was “pretty ugly.” Evidently, she voted her conscience, because she was the only director that voted against this plan. Rick Bleck, while strongly criticizing the plan, came to the meeting unprepared to discuss alternatives and didn’t press anyone else at the meeting for specifics. When the vote was taken, Rick Bleck voted in favor of a plan that he could not believe would ever be entertained. Steve Locke’s comments would not satisfy a person with serious objections. They would, however, satisfy a Silent Sitter.

For voting in favor of overturning the decision of the Architectural Committee, Rick Bleck is our Silent Sitter for the November meeting.

The question for December: will Rick Bleck three-peat? We hope he’s better prepared, more forceful and less equivocal, and votes according to his concerns, even if that means standing alone.

We support building a class act. To have any hope of doing so, each and every LHCC director must vote his conscience.

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