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VOCA Faces Restaurant Debt Forfeiture

Robert S. Wood, Sedona Times guest columnist

Robert S. Wood, authors a SedonaEye.com Guest Opinion

Sedona AZ (November 4, 2013)A Homeowners’ Association (HOA) is legally required to treat all its members equally. But the Village of Oak Creek Association (VOCA) illegally pampers its tiny 6-7% Golf Country Clubber minority by quietly pouring millions of our homeowner dollars into its notoriously money-eating golfers’ café, Redstone.

Why?

Because greedy golfers and insiders want a fancy lounge in which to dine and relax between rounds – as long as they can unfairly get the whole Village of Oak Creek to pay for it! And the country clubber-dominated VOCA board has been giving them what they want, at our expense.

Few realize that the whole village pays higher than needed annual VOCA dues so a handful of country clubbers can enjoy ‘cheap golf!’ The board pretends it has a job to provide its members “amenities,” even if we don’t want them. But there are better restaurants and golf courses in the area. I have been an HOA president and HOA-owned amenities always create problems.

The VOCA restaurant lost $216,000 its first four years, through 2011. Then the VOCA board spent over a million dollars of HOA funds – much of it illegally they admit! – to make it so luxurious it just had to be profitable! That’s not a joke, that was actually their distorted self-serving, wishful thinking rationalization!

But by lavishly building it, the VOCA board created a high overhead nightmare clubhouse that costs us $15,000 a month just to maintain – far more than it can ever pay back – revealing what a truly horrible investment that was!

Last fall, the board admitted their management of Redstone had failed miserably but they solemnly pledged to close it down, if it couldn’t be made to show a profit or break even. They have repeatedly broken that promise, without apology.

Last January, the board contracted with a “professional” operator (Steve Bruns) to take over Redstone and run it for the next 6 years. This one-man LLC of dubious and unknown resources contracted to pay VOCA $5,000 monthly rent for the first year, then $6000 a month for the second year, while pocketing all the meal proceeds.

The negligent VOCA board then turned over Redstone to Bruns without even obtaining an inventory of the $100,000-plus furnishings it was providing. That’s inexcusable incompetence!

Sedona Arizona's Village of Oak Creek

Sedona Arizona’s Village of Oak Creek

Starting February 2013, Bruns pocketed all the proceeds while VOCA paid all the bills BUT BRUNS FAILED TO PAY THE RENT! What did VOCA do to collect? Exactly nothing! And that’s what is still happening.

Of course the board illegally, deceitfully, conceals all this bad news from the membership. There’s never a hint of it in the monthly Villager or the minutes of the board meetings, where board criticism is strictly forbidden.

And the negligent board fails to make the candid quarterly reports in writing to all homeowners that are required by its bylaws. The membership is deliberately, illegally, kept in the dark despite the board’s corporation law fiduciary responsibility to put the welfare of its members first.

The VOCA board didn’t even get around to writing Bruns about all the missing rent until last August 2013. (And it has refused to supply members a copy of that letter.) Bruns ignored the plea for back rent but proposed cutting his rent rate from $5000 a month down to a mere $2000!

The board timidly took no action to enforce the contract or collect. Now in November 2013, the only intelligent, halfway honorable, course of action for the HOA board is to cancel the contract for non-payment, close Redstone down, and sue the operator for overdue rent plus 10% penalties – hoping he can pay.

Instead, the board shamelessly continues to violate both state HOA laws and its own Bylaws.  This ethically challenged board has even hired attorneys – at our expense – to defend itself from outraged homeowners who have found out what’s happening at its secret meetings!

That brings us to the pathetic present. To date, Bruns has made just one rental payment all year long – that’s one out of nine. Meanwhile, VOCA has meekly paid all Redstone bills this year, admitting to a $183,000 projected total loss for the year.

redstone grill

Remodeled Redstone at Oakcreek Country Club has failed to attract diners or uphold its rental agreement with VOCA under its new management

That’s throwing away more than half the year’s entire $414,000 VOCA income – and getting nothing in return. Thus the board continues to demonstrate gross negligence, business incompetence, and mismanagement in this financial crisis.

To pay all those bills, the board has quietly looted the HOA Reserve Fund of half its funds to keep its loser restaurant open. Our Reserve balance has dropped from $890,000 in January 2011, to a meager $451,000 in August 2013 – a $439,000 loss in less than 2 years – heading us toward bankruptcy.

Has the VOCA board finally seen the light? Is it ready to finally close down Redstone? No way! Incredible as it might seem, it STILL desperately wants its loser café no matter what the cost, because the golf course is also losing money and golfers must have a café.

This desperate board has just hatched an insane new Plan to reward the deadbeat operator by forgiving all his unpaid 2013 rent and late fees while cutting his rent from $5,000/$6,000 month to a mere $2000!

Why? Because they are terrified that he’ll quit and force them to close Redstone and by giving Bruns our $50,000, they are begging him to stay! Sickening and unbelievable, but true! With this move the VOCA board has come completely unglued.

How, you might ask, can this madness continue? Clearly, it can’t. The money to subsidize Redstone is running out. Probably that’s why VOCA board president, Duane DePaepe, surprised everyone last week by suddenly resigning. He likely saw the writing on the wall, the noose tightening around his neck. So he abandoned the sinking ship. So should we – by selling it.

With this background, it can be seen that supporting the high overhead golf club has VOCA headed for certain bankruptcy – even with a steep rise in homeowner dues. There is only one way out of this nightmare crisis. Happily, it solves all problems.

As I wrote here a year ago, the answer is to promptly sell off the Golf Club and Clubhouse, a win-win arrangement. Despite losing money, it’s a valuable property and there are buyers out there interested. Current golfers would simply join the new club and finally pay their full share.

Proceeds from the sale would refill the looted VOCA Reserve Funds. VOCA’s 43 employees would disappear, going to work for the new country club.

The growing financial burden of the country club would be permanently lifted from our backs. A trim, low-budget VOCA could rent a small office and confine itself to true HOA duties and seriously reduce our annual dues.

So, rise up, fellow VOCA homeowners, and tell the board NO to endlessly supporting the loser country club and its “cheap golf’ any longer. Remember, just closing down Redstone will no longer solve the problem because built-in high overhead costs will continue to devour our reserves. That’s why we must sell.

There will be a Special Meeting at 3:00 p.m. on Wednesday, November 13, to consider the mindless VOCA board plan to forgive the deadbeat’s $50,000 unpaid rent debt and cut his rent to pennies – but they will also consider alternatives, like this one. So here’s your chance to avoid a disaster that would lead to dues increases and certain VOCA bankruptcy. It’s your choice:  support a country club and cheap golf for a few, or downsize to a lean, clean true HOA and a big dues reduction.

The HOA board has asked for questions and suggestions to be sent to it via info@vocaonline.com. Do it! Flood them with demands to sell off the whole money-eating monster, right now. It’s the only way out of this nightmare.

This SedonaEye.com Guest Opinion written by Robert S. Wood, Sedona VOCA resident and lienpayer.
 
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70 Comments

  1. Greg says:

    Mename, you are right and the 60 minute schedule is self-explanatory what the intent and purpose of the meeting will be. I say bring signs that say “Shame On YOU” but they have no shame. They are walking among us like they don’t stink. How do we recall these people and remove their voting power?

  2. bring the comments back on the same page!!!!

  3. Ben says:

    About that reference to RRNews and pleasing the tourists, little surprise. Rick Wesselhoff along with three others is listed as one of four RRNews online publication partners. Significance? His wife, Jennifer Wesselhoff, is President/CEO of the Sedona Oak Creek Canyon Chamber of Commerce, current potential beneficiaries of over one million $$ city tax revenue to promote Chamber members (and the Mayor admits Sedona is already pretty much a worldwide known location.)

    Look on the bright side VOC folks. You are also beneficiaries of Sedona tax dollars which will be paid to advertise your businesses out there and at no cost to you. Hopefully in some small way this will compensate your own recent scandal. Shameful as it is, with what’s goes on in incorporated Sedona it’s a mere tip of the iceberg. We can’t blame it on golfers, only “insiders.”

    It seems there are no boundaries for corruption. Just remain hopeful that it isn’t too late for you. For those of us in Sedona, it appears we don’t have that option. It’s gone too far.

    Best of luck at ousting the bad and locking the barn door behind them.

  4. Linda says:

    click on older comments for the rest they’re still there

  5. As I read the biographies of the VOCA board members on http://www.vocaonline.com/voca-board , I notice that, on paper, they should have the expertise to get the job done right. They need to prove themselves at the special meeting on November 13th or resign and let someone else do what should have been done months ago.

  6. The bio for VOCA Vice President Richard (Dick) Bruns, mentions that he has several sons and one of them is named Steven…could that be Steve Bruns who runs Redstone? Is that a coincidence or an obvious conflict of interest?

  7. Helen says:

    To Robert Wood: in order to help the commenters understand the entire financial aspect of the Board’s decisions and get correct information – will you please let us all know how you got the financial information you have disclosed? It doesn’t look like the Board discloses much at all.

    Am also thinking that John needs some factual way to substantiate what you have written so he can either get your facts straight or ???????????.

    Also agree that the concept of the Board wanting all questions submitted to them well prior to the 11/13 meeting is very Odd at best! that makes them look overly controlling and only wanting to answer what they are comfortable with disclosing…perhaps only after huddling with their attorney?

    I’m not very educated on HOA’s and their State requirements as to how they notice and hold meetings but suggest someone in VOC do some serious research to find out where they are out of compliance…if they are.

    My best to you all and your checkbooks.

  8. Please remember that there are three past presidents involved with this looting. THREE.

  9. And they should ALL be held responsible for the actions they took on this disaster..

  10. Contrary to Mr. Wood’s assertions, his HOA dues of $180 per YEAR do NOT pay any of Oak Creek Country Club expenses. And IF, as he asserts, there are willing buyers of the Golf Course and Clubhouse, the Master Declarations of the Association restrict that buyer from taking title to any property for at least 10 years. Mr. Wood, as he was a year ago when he first wrote to Sedona Eye about the “elite Country Clubbers”, is ignorant of the rules of his own HOA. I believe he is “all hat and no cattle”.

  11. Helen says:

    Wow! 3 Past Presidents have Stolen from your checkbooks to promote and refurbish a losing revenue restaurant business combined with a golf course? And no one has caught on and called them to become accountable in any means to hold their toes to the fire….just pretty much dumfounds me. Maybe the Arizona State Attorney Generals Office needs to become involved?

    HOA’s are held to account via Arizona State Revised Statutes and strongly suggest you all review those specific statutes and then perhaps those of you who are willing will group together to hire your own attorney to stop the madness of throwing money out the window or flushing it down the proverbial toilet! Do not let the Board tell you they will take care of you – they certainly are not doing so!

  12. Interested VOCA dues payer says:

    I’m still waiting for the architect of this disaster to be fired. Tony Rizzo.

    The course is self sustaining.

    Also still waiting for quarterly accounting.

    This article takes a tone of destruction I don’t like. The problems are real. The solution is not to sell the course. But to support the restaurant or reallocate space in the clubhouse and downsize it. Or, give full support to outside event planning and let it be a similar venue to Sedona Golf Resort which is busy with events – booked solid months and months in advance.

  13. Alice, VOC says:

    I want to say this has been an enlightening exchange of opinions and I want to thank my friend Lisa for telling me to get with it and read this news. I don’t get the local paper, my husband and I always thought it a tad boring and self-important like many owners views of Sedona. At 70 young years of age and a part time resident, I find Sedona’s beauty and interest has always been its rocks and peaceful quiet. I will watch with interest the outcome of the VOCA meeting.

  14. Kevin says:

    to the interested voca dues payer – count me in agreement. Selling the property would be insanity on top of this restaurant insanity.

    Downsizing the restaurant to its bar area would be good for now. Someone mentioned inexpensive bar food and drinks – that sounds like a good local idea. Event planning is a good idea – it won’t work for high end weddings like the golf resort but it would work for weddings, HOA events, community events. Getting rid of the restaurant manager and its renter is the best idea & move forward with a decent golfer & community venue.

    That’s my two cents.

  15. It’s not often that talent like this happens. Take a moment and listen to her…It is incredibly beautiful – and she is only 9 Years Old: 9-Year-Old Girl Sings Opera on Holland’s Got Talent or

    http://www.flixxy.com/9-year-old-girl-sings-opera-on-hollands-got-talent.htm?utm_source=nl

  16. Curious says:

    How did the meeting go?

  17. Did everyone from VOCA commenting on this site actually show up cause I did not hear you.

  18. Don says:

    yes we did and we did it publicly HERE, the board heard us because they all talked about what was here (I know) & what they DO will be heard by us, they WILL be voted out of office (& lose friendships), how is that for hearing? If they DO their jobs we’re all fine. If they continue to PANDER we’re not.

  19. Peggy says:

    Who cares about the past 3 boards? That’s silly. Unless they did something illegal what do past boards have to do with today? Fix it now. Stop looking to blame past boards to get this one off the hook of making a decision about rent it didn’t collect and a renter that IT approved. This board is responsible. Get er done!

  20. You don’t know what has happened unless you look back, silly. If money was misspent and a bidding system for construction was not used and correct steps were not taken, it all needs to be uncovered. Your ‘don’t dwell in the past mentality’ does not cut it when almost a million dollars is involved. We need to hire an attorney to look at the action of the past several years. So sorry we can’t be bright and positive but the trusting are running out of money, Peggy.

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