The Rancho Santa Fe Association board faced its recent criticism head-on with a highly- detailed, two-page agenda of 14 items at its Dec. 3 meeting, many of the items in response to member concerns and questions.
“This agenda is a testament to the commitment the seven of us have to fiscal responsibility, transparency and inclusion,” RSF Association President Ann Boon said.
There has been public questioning about the board’s ability to operate within its budget and the “clean sweep” of staff members, losing key people such as the manager, CFO, attorneys, insurance providers and auditors.
Boon assured those in attendance that the board has done a thorough review of all Association staff and systems with the goal of running the Association more like a business. She said she also believes that this board has been very responsive to members’ requests for information.
“We’ve not ignored your questions,” Boon said. “Today’s agenda is dedicated to keeping you informed and being responsive to your concerns.”
As two Association members requested the compensation of all the top employees and an organizational chart, RSF Association Manager Bill Overton gave a full staffing update to illustrate that they are not “spending beyond their means” and that despite the fact there are a lot of new faces, it is in the best interest of the Association’s operations.
An annual compensation report was also published in last week’s RSF Review.
Overton explained that as the Association transitioned to the practice of full accrual accounting, Don May was promoted to finance and operations manager and the Association hired two CPAs to serve as controller and assistant controller — Matthew Ditonto and Shawn Roberts respectively.
Overton said it’s a constant challenge to balance service level and fiscal responsibility but as RSF Association Director Kim Eggleston said, the re-organization was a necessity.
“When I walked in, it was not a nice place to walk into,” Eggleston said of joining the board in 2014. “It was a mess, a big mess…Personally I was astonished at the simplistic approach that the Association had been taking all these years. They didn’t even have a balance sheet.”
Eggleston said he found there to be very little institutional accounting knowledge, deficiencies in both insurance and accounting services and to hear complaints that the board is “stirring the pot just to stir the pot” is “disconcerting.” He said no decisions were made frivolously.
“We’re working hard to clean up the mess we inherited from an accounting standpoint,” Eggleston said.
Overton said he has been asked to do a full staffing analysis that he hopes to present in January or February.
RSF resident John Ingalls said that he is disappointed in criticisms he has heard voiced by the RSF Association board about former Association staff members — such as that things were a mess or that they were incompetent or negligent.
Ingalls said the current board could be characterized as “frequently wrong but never in doubt.”
“There is so much information coming out that is frequently wrong,” Ingalls said.
At the meeting, Overton also addressed concerns raised at the Sept. 3 board meeting about the Aug. 7 board retreat meeting — that an agenda had not been posted and that the board was not following the Davis-Stirling Act, the civil code that governs common interest developments.
Overton said at the time he thought they were in compliance with the Davis Stirling Act but did additional due diligence to ensure the Association was following the intent of the code.
“It is correct that due to an administrative oversight, I did not catch that the agenda didn’t make it up to the bulletin board,” Overton said. “That was my fault. We did get it up on the website but that is not literally in compliance with Davis-Stirling.”
While the minutes of the meeting have been posted on the website for many months, Overton went over all that was discussed in the board retreat and had the board ratify the agenda again.
“We have learned from the oversight and I don’t think it’s going to happen again,” Overton said.
Some members have also questioned the board’s use of executive session meetings to discuss litigation. Per the Davis-Stirling Act, the board may adjourn to closed session to consider litigation, matters related to formation of contracts with third parties, member discipline, personnel matters or to meet with members regarding assessment payments. Overton said he believes he has a broader interpretation of what can be discussed in closed session and through speaking with multiple attorneys, Overton said they all think that the Association’s broader interpretation of the act is reasonable. Meeting in closed session preserves attorney-client privilege, he said.
“I think the Association complies with open meeting laws and it is my job to ensure that the Association complies with open meeting laws,” Overton said. “We are in compliance with Davis-Stirling and other common interest acts to a reasonable and prudent standard…We are not hiding from anything.”