Laguna Woods Village

Changes on GRF Board Reflect Democracy in Action

By Kim Lefner

On June 13th, Corporate Board Members comprised of all the Directors from the United Mutual, Third Mutual, and Mutual 50, held a special meeting to vote on the removal of Golden Rain Foundation (“GRF”) president Larry Souza and GRF treasurer, Heather Gerson, as allowed under the GRF bylaws.
The proposed Recreation Master Plan including new clubhouse
pictured above, was put on hold by the GRF Board majority. 

This special meeting was called because the six-member majority on GRF refused to abide by an amendment passed by the Corporate Board Members which required the GRF to obtain a majority vote from the Corporate Board Members prior to “the construction of additional facilities; [and] the demolition and/or rebuilding of existing facilities.” The Board majority was determined to continue to implement the Recreation Master Plan including the demolition of Clubhouse 2, and the spending of tens of millions of dollars without community approval or support.

A minimum of 5,765 votes are required in order to recall a Board member. When the votes of the Corporate Board Members were counted, 7,956 votes had been cast in favor of recalling both Larry Souza and Heather Gerson.

The election board was then sworn in and took an oath as to their impartiality in the outcome. The Election Board was chaired by alternate member Bob Hatch whose impartiality was called into question when during the open hearing, he admitted his friendship with Larry Souza, saying “I love the guy!”

The numbers were clear after the vote; both GRF Board members Souza and Gerson had been recalled. However, while Bob Hatch certified the accuracy of the ballot numbers, he refused to certify the recall. Instead, he called for an opinion of the four attorneys representing each board (United, Third, Fifty and GRF).

The attorneys for United, The Towers, and GRF agreed with the results of the final vote. However, Third’s attorney protested the final result and was able to push the certification of the vote to a future date. Although there was no question about the votes to recall of Souza and Gerson from the GRF Board., Bob Hatch withheld the final certification.
Third attorney’s decision put the community into limbo for 10 days, which had the effect of continuing the attorneys’ fees for the other Mutuals until the issue was finally settled, and which necessitated the hiring of an outside firm (Martin & Chapman) to certify the vote.

The delay allowed just enough time to commence the demolition of the lobby of the Golf Clubhouse in order to construct a very unpopular bar addition to the 19 Restaurant at a cost of $175,000, also approved without the consent of the community.

On June 23, the Corporate Board Members reconvened. Before the Chair could read a letter from Martin & Chapman certifying the recalls results, GRF Board members Ruth May, Marv Rosenhaft and Linda Wilson joined Larry Souza and Heather Gerson in immediately resigning from the Board. An election will be called to fill their vacancies.

Larry Souza also resigned from the Third Mutual Board rather than being recalled. If a Board member is recalled, he/she could not run for the Board again for at least a year whereas if they were to resign, they would not be restricted by the waiting period.

In the meantime, the majority of the remaining six-member GRF Board voted to cancel the $10 million dollar bank loan that has cost the community $338,000 in interest to date,  and put on hold the $18.7 million Recreation Master Plan.

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