Dear Mesquite Owners:

The elections are over for another year and it is time to look forward.

First, we would like to sincerely thank the past Board Members -- Roger Lubin, Gerald Carlin, and Chuck Barbaglia
-- for offering their time and service to us as owners. Although we frequently disagreed with the Board and specifically these members, few of us understand the time and effort required to serve on the Board, not to mention the headaches that go with a position that pays nothing and requires listening to 600 different opinions. Thank you for your service.

The new Board Members are:

President-- David Krubinski (new)
Vice-president -- Enrico (Rico) Pietropaolo
Secretary -- Michael Torhan (new)
Treasurer -- Bob Blum
Director -- Mrs. Frances Scott(new)

It goes without saying that owners have put their votes as well as their trust in this new Board. We hope this trust is not misplaced.

For the past 2 years we have been discussing issues of importance at Mesquite. Some issues have been addressed by the Board over this period of time, and some issue remain. With a new Board and a fresh outlook, we have summarized a Top Ten List that we hope the Board will consider this year:

1. Review our Management and Landscaping Contracts. 
According to an email sent to many of us by owner Joe Massey who analyzed the HOA budget back in October of 2004:

"Monarch receives, in the Budget passed, $146,000 for the management contract, $93,000.00 for the Property Attendants (security), and $627,350.00 for landscaping through their subsidiary or affiliate Estate Landscaping. This means that Monarch receives $866,350.00 annually, or @ 40% of our fees." 

The first thing we should do is verify that Mr. Massey's figures are accurate, in particular the landscaping which appears to be quite high especially in light of the effort we have been making to move toward "desert landscaping"-- which usually means more dirt and less flowers. It is also troubling to award a contract of over half a million dollars to an affiliated company of our management company -- especially when most owners did not know of that connection. It is time to make sure that this is money well spent.

We have been working with Monarch Management for a number of years now. However, to my knowledge we do not know exactly what their total management fees are to us as owners, and what the other associated costs of the contract are such as the salary/benefits of the on site manager. The Board should ask Monarch to spell out this clearly in writing, breaking down the total costs in a simple 8x10 page that will be distributed to owners. They can sign a confidentially waiver if necessary. But if @ 40% of our expenses are being paid to one company and/or their affiliates, it is time to know exactly what we are receiving for our money.

2. Establish a Review Committee for All Contracts.
The easiest way to do this may be to set up 2 separate owner committees:
A. To review the management/landscaping contracts.
B. To review the Attorney, pool, roof, and all other contracts.

The committees should be chaired by one nonvoting Board member, and have a total of 5 voting owner committee members, which could also include one other Board member if desired. It should be odd numbered to discourage deadlocks, and committee members should not be added after the process begins.

Committee members would need to formulate a Request for Proposal (RFP) for all contracts over, say, $1000 per year. These proposals should be received directly and confidentially by the Committee Chairman, not by the on site manager who could be placed in a potential conflict of interest by reviewing proposals that would bid against her current employer. Many owners believe that is why so few proposals have been received in the past -- because vendors did not want to take the time to complete the lengthy bidding process if they thought it was just a formality by the current management company.

Committees would make their written reports public after they were presented to the Board, would present them within a certain time frame of say 2-3 months, and include a clear and accurately reflected recommendation to the Board for the Board's final decision.

Some recommendations may be to simply delete contracts.

For example, we have been paying $10,000.00 a year to a company to "inspect" the roofs each year, plus a fee to fix anything that needs fixing. However, when we had the rains this year we still had many problems that required additional money spent. One solution might be to inspect the roofs every 3 or 5 years. The current contract seems to be excessive.

Finally, won't Monarch be at a disadvantage if we all know what they are being paid when it comes time to bid? They may if they rebid at the current level or higher. However the Board last year entered into an agreement with owners to disclose all contracts to owners over $1000.00. Any future management company would have to operate under the same guidelines. That should be part of the contract now and in the future.

3. Build Up our Reserve Funds. One of the largest criticisms of past Boards is that they allowed our Reserve Funds to dwindle to nearly 90% of what they were supposed to be. That is not acceptable. However, since owners were made aware of this situation last year there has been an effort to build back up our funding. This effort needs to continue. 

That is why it is so critical that we review all contracts to make sure we are getting our money's worth. It is also critical for the credibility of the Board. If we are ever asked again for a special assessment, we want to make sure that one is needed, and that we did not waste our resources by improper planning and poorly awarded contracts. Cut the waste. Demand quality. And hopefully put the savings back into the Reserves for Reserve spending only. We also need to continue to build up that fund by depositing a portion of our monthly HOA fees directly into the Reserves like the rest of us do our savings.

4. Review the Work of our Attorney. We have also had the same legal firm representing the HOA for many years now. In addition to reviewing the contract, which included a lot of money spent on legal fees in the last few years, we also need to review the quality of their work. Who was responsible for the mess with the decks, and the fact that we had to have another legal shootout regarding the responsibility of each vendor again this year -- just a few years after this multimillion dollar lawsuit was finally settled?

Mesquite has been the victim of extremely poor legal advice over the years, starting with the contract with the golf course to use the clubhouse for meetings in exchange for several hundred thousand dollars a year, to the aforementioned deck fiasco, to the secret CC&R inclusions and the refusal of the Board through their current attorney to allow owners to review the results of that vote. We are a multimillion dollar entity. We need competent and fairly compensated representation. One of the first jobs of the new Board should be to determine if we have been receiving that from the firm currently representing us. 

5. What to do with the Buildings? Another major issue that factored in the defeat of the incumbent Board members was how it handled the issue to refurbish our exterior buildings. As you may remember, the old Board voted to paint one entire phase before most of us even knew it had been approved.

Painting buildings requires a paint cycle to be completed @ every 7 years at a cost to us of probably around $1,000,000.00. That would mean we would have to save @ $150,000 per year in Reserves just for future painting.

We believe a better option may be the different types of stucco coating that, when applied, are guaranteed to last up to 25 years. To the Board's credit, they did test several different types of these products on the Guardhouses. The Board should review how they are holding up, and also consult with members of the Painting Committee set up last year, in particular Dr. Lee Christiansen and architect Ralph Ruder. (We hope to have a posting on this subject on the web site in the near future.)

Mr. Christiansen has also advocated testing the much cheaper cleaning of the buildings first to see if that will accomplish the same result. We believe that testing several buildings with this alternative should be the first approach before we spend hundreds of thousands of dollars on other methods. The buildings and all other aspects of Mesquite need to be maintained. But the Board has a real responsibility to determine the best and most efficient and long lasting way to do so.

6. Stop the Abuse of Executive Session. Executive Sessions are permitted by law in California and other states for very specific reasons, mostly the review of personal and contractual matters, with the idea being to avoid litigation. However, it is intended to be on a very limited basis. We believe that past Boards at Mesquite have abused this process. We hope that this Board will finally put an end to this practice.

It is not easy to deal in open session with some of the problems we face as an association of owners. And working behind doors even with good intentions is certainly a lot quicker and cleaner. However as owners we have a right and also an obligation to keep informed on how our money is spent. A good argument can be made if we had done our job and demanded openness a long time ago we would not have had to deal with some of the financial and legal issues that cost us dearly in the past. The old Board finally agreed to a policy of openness. We expect nothing less from this Board.

7. Communications Reform. On our web site-- www.mesquiteowners.com --we have outlined a Resolution for Communication Reform at Mesquite with the goal of making our complex a model for others in the Desert.

This proposal includes allowing owners to sign up to receive emails from the HOA informing them of the Board Agenda's at least 3 days in advance of Meetings, to receive a draft of comprehensive Board Meeting Minutes within @ 3 business days of the end of that meeting, and to also have this information posted in each phase and on the HOA web site.

Other suggestions that we have made include making permanent the Owner's Forum both before and after Board Meetings, making Financial information and documents reader friendly and then have them posted, sent by email, and included in the Newsletter at least once per quarter, creating a "legislative grid" in the newsletter to show how each Board Member voted on issues before the Board-- and if they were present of absent for that meeting, having a contact number for each Board Member in the Newsletter-- email, fax or phone, and compiling a web or advertising supported printed Owner's Directory with contact numbers for each owner so we may be able to get to know and stay in touch with each other all year long, or contact one another if needed.

We should also review and codify how our elections are to be run -- what ballots are acceptable, if a 3rd party may return collected ballots, if faxed ballots are acceptable, if ballots distributed by anyone other than the HOA may be premarked, and other issues that seemed to come up at the last minute by this Board this year.

The final decisions this election were left to the 3 election monitors who did a professional and fair job of deciding which votes were to be counted. However, the correct way to do this is to establish a written policy in advance so we all know what the rules are.

8. Review and Invest in Technology. The world keeps changing and we need to keep pace. It is time to make the most of the HOA Internet site, keep it up to date and informative, and try to use email as an alternative to the costly process of sending out letters.

We should also continue the review of solar power for the heating of our pools and lighting of our common areas. Many of the new panels are quite unobtrusive. One idea might be to mount them on the roofs of our existing car ports.

Again the old Board is to be commended on opening up the dialogue on water reclamation. We are, as we tend to forget, in the desert. Water will soon be an issue in cost if not availability as our population continues to soar. As a major development we should take a leadership position on this issue. Another conservation alternative is the use of drip water sprinklers rather than the older ones that seem to water half of the pavement twice a day. We may also look at planting more year-round plants, and if we continue on the path of desert landscaping then we should make good use of focal points such as the fountain areas, pools, and entry ways to highlight and spend our money to get the greatest results.

We have a beautiful complex with mature trees and plants. What we need now is a cost efficient landscaping service and creative ideas to maintain this beauty, including opening up a dialogue with the new golf course to bring back Farrell Drive to the splendor of the old days.

9. Clear up the Air on the CC&R Vote. For those of you who may be new to Mesquite, about 3 years ago we had a vote on the CC&R revisions here -- the basic governing documents of the Association. The Board wanted to revise them, we were told, to make them conform to a "crisis" in getting insurance. They sent each owner a brief summary of changes they said were made, included a copy of the new CC&R's which were approximately the thickness of the Bible, and told us to make sure we read it before we voted. Even I am not that nerdy! 

There was no "redlined" copy of the old CC&R's to compare the changes to. We just took the Board at their word that the changes outlined in the summary were accurate. We made a mistake.

To make a long story shorter, the CC&R's contained a number of new provisions -- how many we still do not know -- including controversial changes that restricted the rights of owners to rent out their units. After the owners found out this, nearly 40% of those who voted wrote to the Board asking that their vote be rescinded because they believed they were mislead. The Board refused to reconsider and paid the HOA lawyer to stonewall the owner's request to review the ballots to see if the measure even passed in the first place. (You can read all about it on old postings on our web site.)

This measure should be reviewed and owners told once and for all exactly what was changed in the CC&R's. From there we can decide what if anything we want to do. But for the Board to conceal the changes from owners as they did was a black mark that finally needs to be addressed.

10. On Site Management. When Mesquite was originally set up the on site manager was just that -- on site. One of the Guard Houses was used, and if you needed to see the manager many owners did not have to get in their car to go there.

We believe that moving the HOA office back on site would be an important symbolic move by the Board.

We currently have most if not all of the Guardhouses under utilized. The one that may work best for an office would be the unit next to the Clubhouse. It has a large parking lot, easy access to restrooms and our Clubhouse, and it would save us about $8,000- $10,000 a year which could go directly into the Reserve Fund. We might also put 1 or 2 of the other Guardhouses out to bid for Real Estate Companies or others. The more interest that they show in Mesquite the better our complex may be marketed. And that, on a 2-3 year trial basis, would also produce additional revenue for the Reserves.

Finally, we believe that the HOA Manager needs to post regular office hours, and carry a cell phone provided by the HOA (1000 minutes for @ $40/month) when not in the office during business hours. Most of us do that with our jobs, there is no reason the HOA manager can not as well and stay in contact with owners and vendors.

That is our Top Ten List for the new Board. It is an ambitious but also long overdue.

Ultimately it is designed to foster openness for this Board and all future Boards with the idea that if we are informed as owners we can make intelligent choices and decisions.

We are asking the Board to do their part now. Then it is up to us to do ours as overseers.

Cordially,

Timothy Gaffney
Editor
www.mesquiteowners.com