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VOCA Loots Reserves to Fund Restaurants Says Homeowner

Sedona AZ (November 14, 2012) – In a SedonaEye.com Letter to the Editor, a Village of Oak Creek Association lien payer writes that the VOCA Homeowners Board is looting reserves to fund its restaurants:

Few VOCA home owners are aware that VOCA faces a grave and worsening financial crisis! Most owners don’t know that VOCA’s country clubber-controlled board has quietly spent well over a million dollars (yes, $1,000,000) of their money—dangerously depleting its reserve fund in the process—just to build and operate a pair of glitzy, luxurious new restaurants last winter, so golfers and insiders have a pretty place to lounge and eat. 

Not only has the board quietly looted half the homeowner emergency reserve fund, thanks to ridiculously high staff salaries, the two Redstone restaurants have currently been losing a whopping $20,000 to 50,000 homeowner dollars EVERY MONTH all year, with no end in sight! VOCA has a financial tiger by the tail and is afraid to let go.

Yet few members know of this ongoing catastrophe because their secretive board has deliberately kept them in the dark. 

Sedona Arizona’s Village of Oak Creek

Just keeping the restaurants open is currently costing another $100,000 every 2-3 months! Yet not a hint of this disaster can be found in the November VOCA newsletter The Villager! A revolt is brewing among the angry few who have discovered what their board has been secretly doing. 

VOCA is supposed to be an HOA, dedicated solely to protecting its homeowners, but it has long been a front for its greedy country club. I won’t spell out the underhanded backroom schemes that have made it possible for the board to tap into our reserve fund and saddle the whole village with its mindless extravagance. But I will report that an audit of the VOCA books last April revealed that the board illegally overspent in 2011, violating the By-Laws that require member voter approval of excessive expenditures. Clearly, the board didn’t want to give its members a chance to vote on its reckless, ill-advised investment of our precious funds. 

Here are the sorry numbers. In the past 12 months the board illegally spent $670,000 to transform a notoriously money losing golfers café into two glitzy Redstone restaurants. Since then the board has quietly spent another $4-500,000 of our hard-earned dollars just to keep the doors open on these losers! That totals well over a million homeowner bucks lavishly spent on 2 restaurants, just so golfers can relax and amuse themselves in comfort between rounds. 

How did this happen?

A year ago the board somehow convinced itself that refurbishing into two fancy cafes would actually make them money, despite massive evidence to the contrary – the old cafe lost $216,000 in the previous four years. The board ignored the fact that many restaurants had recently failed, that people couldn’t afford to eat out, the telltale foreclosures on every block, and the terrible business climate. Never mind the stiff competition in a tiny market in a crippled economy. It was clearly the worst possible time to launch a pair of new fancy restaurants. 

But they went ahead anyway, because the country clubbers wanted a flossy new restaurant, and because the board believed it could make the whole village pay the bills. They just HAD to have their new toys.

The long-concealed Business Plan actually says a refurbishing into elegance “will dwarf the competition” and make a profit, claiming that booming business would repay that $670,000 capital costs in as little as four years. Talk about reckless and irresponsible action! One wonders what planet they came from!

As I wrote here last January, huge staff salaries doomed the restaurant project from the start. VOCA won’t reveal salaries but there is evidence that both the restaurant manager and general manager each receive over $100,000 annually—insanity in these tough times. No wonder VOCA is going broke and taking homeowners down with it. 

As the former president of a Home Owner Association, I know firsthand that HOAs exists solely to serve and protect their homeowners, not to run fancy country clubs at the expense of captive members. It’s an abuse of power and a clear conflict of interests. Our HOA is supposed to be our friend and protector, but the recklessly big-spending VOCA board has instead become our enemy. 

VOCA has long been controlled by the country clubbers, which unfairly tries—by hook or by crook—to get the Village majority to pay for the luxury they want, pretending these are “amenities” that everybody wants. Not true. There have long been plenty of better restaurants and cheaper golf courses in our area. Village homeowners shouldn’t have to carry a country club on their backs. 

Homeowners only want minimal protection of standards at minimum cost. Period. Country Clubbers, on the other hand, want a palatial clubhouse, fancy eateries and luxury, for which they willingly pay at least $2500 annually in dues. The two are clearly incompatible. It’s past time for them to divorce. Members should demand that the country club be immediately sold so VOCA can once again be a member-responsive HOA.

Recklessly pouring massive member funds into refurbishing clearly should have been openly offered to the members and put to a vote. Instead, members were lulled to sleep by VOCA’s initial claim—see my report of last January 9th—that the cost of badly needed repairs would only be $75,000 so nobody objected. Meanwhile the board was quietly expanding its ambitions. The next thing we knew the board reluctantly admitted that it was budgeting over $600,000 for the expanded project! By then it was too late to put on the brakes.

How does the VOCA board get away with all this? Easy.

Board elections are a bad joke that keep the country clubbers in power. Only one insider country clubber is nominated to run unopposed for each board seat, so few members even bother to vote. Then there’s the board secrecy, betrayal of member trust, member apathy, and lack of owner input. No owner dissent is allowed in The Villager. 

In view of what’s happening, it’s time that my fellow homeowners looked behind the scenes and took action. 

Prospects for 2013 are equally grim unless members stand up to the board and say “NO, close the restaurant to stop the bleeding!” With members still in the dark, the board now proposes to keep both restaurants open by looting another $94,000 minimum from owner reserves. But even that loss depends on overly optimistic estimate of Redstone income in ‘13.

Realistically, the loss could be closer to this year’s gigantic $400,000, which would practically empty the vital reserve fund, which experts say is already too low. This situation cannot continue. Reform is urgently needed. 

WHAT EXACTLY SHOULD BE DONE?

Members who read this should spread the bad news and vigorously protest against the board’s greedy, secret, self-serving deceit and wild spending, and demand that THE BOARD SHOULD IMMEDIATELY RESIGN.

BOTH RESTAURANTS SHOULD IMMEDIATELY BE CLOSED and all staff terminated to stop the ongoing massive salary dollar-drain. General manager Tony’s huge salary should be cut in half. A new strictly HOA interim board should be appointed.

THE ENTIRE COUNTRY CLUB AND GOLF COURSE SHOULD BE SOLD to stop the present abuse of power it wields.

A new pure HOA would then be formed. Proceeds from the country club sale would restore the looted reserves and give homeowner members hefty refunds, while charging minimal dues to run a modest strictly HOA office.

Transparency and openness would again prevail. An open forum page in The Villager would allow members to freely criticize, praise, propose, question, suggest, etc. Board minutes would be posted within a week, not a month or more.

With the greedy costly Country Club gone, VOCA would once again become the homeowner’s trusted helper and friend. 

Sound good? Then spread the word and demand reform. It’s our HOA. Let’s take it back!

Robert S. Wood
Village of Oak Creek
Sedona AZ
 

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16 Comments

  1. D Heguy says:

    I view the restaurant and facilities as an investment in the future, and the golf course and the restaurant as nice amenities available to all of us.

    The author sounds like ‘chicken little’. We need more positive and progressive thinking voices in the community.

  2. John Nolan says:

    In most instances I would agree with you, D Heguy. Investing in our community is very important and a wise move. But I must ask you two questions; why the secrecy and deception? Why wasn’t this information given out through our newspaper? I think that the County Attorney should be requested to do a full investigation into possible criminal charges.

  3. Guy #1 says:

    This guy is ridiculous. This (and other) article of his is basically just a witch hunt in which there are more exclamation points than facts.

    Did you go to any board meetings? Did you do your research properly? Or are you just an upset little boy who uses these articles as anger management.

    If you knew anything about the golf course, you would know that it is not “glitzy” in any way. it is a modest, blue collar country club. Saying the board should immediately resign? Seriously? I suppose if you really wanted to get any REAL action done you would run for a board position eh? I happen to know for a FACT that Tony does not make 100k a year, nor does the restaurant manager (not even close). But since you’re in the “media” it’s your job to write these ridiculous articles and claim you know what you’re talking about. Try writing on something other than emotion for once.

  4. Warren says:

    Are D Heguy’s comments serious? I hope they are tongue in cheek but it is difficult to tell since so many Americans are totally innumerate and economically illiterate nowadays.

    Hey Mr. Wood, I wish you the best. I do not live in the Village but can sympathize with your issue. Here in the City of Sedona where I live we are saddled with the same sort of arrogant incompetence — council members who think they are “visionaries” and “venture capitalists”, something easy to be with other people’s money!

  5. David says:

    I agree wholeheartedly. What an amazing and costly folly Redstone is. Given the financial history of Mulligans, given the fact that only a tiny percentage of truly exceptional Country Club (or hotel) restaurants in the country make a profit, it is clearly an egotistical fantasy to believe Redstone will ever be anything but a huge financial drain. Stop the bleeding ASAP or our VOCA assessment will be going through the roof. I have 26 years experience of restaurant ownership and management. I’ve seen it all – this will not end well.

  6. Gari says:

    Bravo on the article.

    I’d like to point out that ALL roads lead to tony rizzo and Steve Nelson. I would not encourage keeping tony. Ever. I would also love to see the receipts for the renovation, but that is just me. I dont see the expense as i view the properrty. As far as I can tell, the golf course has in the past paid its own way, I’m not in favor or selling however.

    Good job.

  7. It seems everyone wants to argue with the statement but if untrue the board could open up their books and disprove it. Seems like that never happens with these boards so if they refuse you can take for granted that the statement is true.

  8. Rye says:

    Close the restaurant? Who cares about the people who have been striving to make it work right! We have been laying off staff, cutting food cost and any other means to stay open. This kind of negativity is the problem!! If the people of VOCA would actually use this “glitzy” restaurant we would not be in this predicament. As a Redstone employee I pray it works. It is a beautiful resort with a lot of potential!

  9. Warren says:

    @ Rye Brilliant marketing strategy, blame the customers!

  10. Rye says:

    @Warren…..Blame the customers? I blame the people who are NOT customers. You’re just being a troll.

  11. Eddie says:

    IMO it was a mistake for the former restaurant to discontinue their operation out there. However it is my understanding that the good news is the owner of what was Mulligan’s has two other successful restaurants in the area. Another example of “We reap what we sow?”

  12. Alarmed says:

    It’s my understanding that the owners of Ken’s Creekside will be taking over the restaurant next year. I see that as good news, however, it doesn’t address the phenomenal amount of money spent on reconstruction and operation to date.

  13. Even though your repetitive use of words like “secretive” and excessive number of exclamation points make you an obvious reputable news source, I’m sorry to say that you have absolutely no clue what you’re talking about.

    I could waste my time correcting you on your talking points (ie the salaries for the managers which is grossly exaggerated) or explaining to you the actual definition of “ritzy” since you clearly have no concept of the word, but that would require re-reading this god awful word vomit that I’m 97% sure is nothing more than a typed up fit of dementia. Thank you for subjecting myself and the rest of the Internet to your senile view point, Robert, you’re truly improving lives with your dedicated research. Truly.

    And Warren, the next time you want to blather on a public forum, you might want to get a proof reader to let you know when you sound like a complete moron. Because you sound like a complete moron. Maybe you can find some time between cashing your social security check and watching reruns of Jeopardy to fact check.

  14. Rick says:

    Bob, good article & enjoyed the comments. Better than reading after the fact local rag copy rip-offs. Looking for your next expose’ here.

  15. VOCA Call to Action. Follow up.

    On October 9, 2014, there was a special meeting of the VOCA board of directors. At that meeting, the board was presented with a petition signed by 150 association members. The petition demanded that the board allow VOCA members to vote about the decision to change the management from VOCA employees to HOAMCO employees.

    Putting the petition aside and in spite of much opposition, “the board voted to move forward and formalize an agreement with HOAMCO.”

    On October 10, 2014, one board member resigned stating the petition issue and other ethical differences as some reasons she resigned.

    After the meeting on October 9, the board admitted they were required to respond to the petition. As a response, the board mailed a letter and ballot to the membership. The letter states, “…this vote of the membership is an advisory vote only and the result is not binding on the board.” The ballot states, “Your Board recommends
    a yes vote.”

    No opposing opinions were included with the ballot and letter.

    The ballots are due by 10 am on October 29, 2014. The special meeting that the board is required to hold is set for 3:30 pm on October 29. Members can’t even hear opposing opinions by attending the meeting. The ballots are due prior to the meeting. Again, no opposing opinions were included with the letter and ballot.

    Judge for yourself if this is manipulation.

  16. Hay, we recalled the bums from the old SFD someone let me know if there is a group forming to do the same with the VOCA board?

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