Residents Voice 1

LWVSeptember 04,

2008Residents Voice

9/4/8

Residents Voice 29/4/8

Communication

The Process by which information is exchanged between individuals.

Residents Voice 39/4/8

Communication -

PCM/Mutual Board Style

ByConrad Grundke

Residents Voice 49/4/8

Why Open Communication?

• It is the primary means of the Directors to provide oversight!– How can a Director fulfill their fiduciary responsibility if

they do NOT know what PCM is doing?– Who is responsible to determine what the corporation

is up to?• PCM

– They have no incentive!• The Directors

– They don’t have the knowledge!

Residents Voice 59/4/8

So! Let’s Review LWV

Communication!

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Phases of PCM Communication!

1. Completely open

2. Completely Hidden

3. Partial truths

4. Tell lies

Residents Voice 79/4/8

Phases of PCM Communication!

1. Completely open – “It’s all in the Red Book.”

2. Completely Hidden – “What they don’t know won’t hurt them.”

3. Partial truths – “Only tell them what we want them to know.”

4. Tell them lies – “The Boards will never know the difference anyhow.”

Residents Voice 89/4/8

Completely Open• They are completely open and transparent. Just

ask the General Manager or Directors!

• All “necessary” financial data, what they want you to know, can be found in the RED BOOK!

• The Red Book has been changed from year to year to prevent tracking many costs.

Residents Voice 99/4/8

Completely Hidden• Credit Cards

– GM & GRF Board would not acknowledge cards to United Board.

• Incentive plan (millions of dollars of bonuses) kept hidden for many years.

• PCM obtains General Contractor License.• Proposed Mulch Contract with Ware Corp.

Residents Voice 109/4/8

Partial Truths• What the GM Tells You.

– Credit Cards are for Emergency use only!– In a Globe Letter to the Editor the GM

referenced a “letter that was going around stating the Management Fee increased by 30% in 2009.”

– He said that the 30% increase was incorrect and that the Housing Mutual’s Fee only increased by 4-5%.

Residents Voice 119/4/8

Partial Truths - cont.• What the GM Doesn’t Tell You.

– There are two parts to the Management Fee!1. The GRF Portion

– Which increased by 33% from $1.97 to $2.54 per month.

2. The Housing Mutual Portion– Which increase 4-5% from $1.97

– The total fee increased by approximately 15%.

Residents Voice 129/4/8

Complete Lies• Paraphrased GM Statement: “PCM Had

nothing to do with the Management Agreements. They were handled completely by an independent attorney hired by United Mutual.”

• The 2/27/7 Signed Third Mutual Management Agreement was a document that was modified by someone other than the attorney.

• The Boards are aware of this and do not correct the GM’s statement.

Residents Voice 139/4/8

Conclusion• With all of the discrepancies that are being

discovered, the OWNERS have justification in losing TRUST in our Managing Agent.

• The lack of OVERSIGHT by our Boards is the primary reason for our situation.

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Solution• Remove all Directors who are aware of the

actions of the GM but take no action to bring those actions to light.

• Have PCM prepare a list of all costs that are not line items in the Red Book and the makeup of those costs.

• Create a financial oversight committee to review all of this Financial Data and GM plans.

Residents Voice 159/4/8

Have You Heard!Can This Be True?

Residents Voice 169/4/8

Who, Where, What

• Marina Pacifica Condos• Belmont Shore• Long Beach

• Fired PCM two years ago• Realized a monthly savings of $10,000

Residents Voice 179/4/8

So?

• $10,000 savings for 510 manors• Equals• $19.75 per manor per month

• If LWV saved $19.75/m/m that would • Equals• $2,912,000 per year or a 3% savings

Residents Voice 189/4/8

What That Would Mean!

• Major Reduction in our Budgeted Assessment for our manors.

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Candidates

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How to pick ‘em!

•Are they endorsed by the same people who got us

where we are today?

•Don’t vote for them!

Residents Voice 219/4/8

The End