By Cheryl Dowden, May 11, 2020
HSVPOA Special Board Meeting, Part 1
HSVPOA Executive Session actions taken prior to 5-11-20
Editor’s note: The May 11, 2020 Special Board Meeting will be presented in a three-part series. The first part is a discussion/transcription of the first part of the meeting in which Chair Podawiltz updated the community on the actions taken in previous executive sessions. Let’s begin.
Background
- This is the second time the new Board has called for a special meeting since four new Board Members were seated on April 15, 2020.
- Board Director Nancy Luehring was removed for cause on Wednesday, May 6, 2020. At the time of Luehring’s removal, Tormey Campagna also resigned at an Executive Session on Wednesday, May 6, 2020.
- Although we could not find the official Agenda for the meeting on the Explore the Village website, according to last Friday’s HSVPOA Digest, the purpose of this special board meeting was to discuss:
- Executive Session Actions since 4-20-20
- Board Membership Composition
- PPP/Cares Act update by CEO, Lesley Nalley
Meeting overview and some details
Chair Podawiltz began May 11th Special Meeting by discussing Board Actions taken at the previous Executive Sessions. She then discussed Board Composition, during which the Board approved the appointment of Chuck Alvord as the 6th Board Director. Finishing up, a presentation by CEO Lesley Nalley was given on the Paycheck Protection Program and discussion ensued.
Physically present at this Special Board Meeting were Chairperson, Diana Podawiltz: Vice-chair, Lloyd Sherman; Director Tucker Omohundro; Director Dick Garrison; Corporate Secretary and Parliamentarian, Marcy Mermel; Corporate Treasurer, Dan Aylward; Chief Executive Officer, Lesley Nalley, and Chief Financial Officer, Liz Mathis.
Participating via video/audio conferencing was Director Kirk Denger. (After his appointment and swearing in, Director Chuck Alvord also participated in the meeting.)
The Special Board Meeting was live-streamed. The public was not permitted to attend the meeting due to COVID-19 meeting protocol. Click here to watch meetings at the HSV POA Offical YouTube site.
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Below is a transcription of the first part of the May 11, 2020, Special Meeting. I have made every attempt to be as accurate as possible. Headers and items in brackets are not quotations.
Transcription of Actions taken in Executive Session prior to 5-11 Special Board Meeting
Podawiltz: The purpose of this meeting [referring to May 11, 2020 Special Meeting] is to disclose executive meeting sessions that were held since our last public meeting, which we had one held on 4-27 and 5-6. The second agenda topic is Board Member composition. And the third topic is Lesley Nalley and I believe CFO, Liz Mathis, are going to explain and provide an update to the PPP Cares Act and the issues and opportunities for HSVPOA.
Podawiltz: So, I’ll begin now with agenda item number one- Executive Meetings held 4-27-20 and 5-6-20. Under Bylaw 9, Board Responsibilities, Authority and Accountability, Section 3, Board Accountability, Private Board Deliberations are permitted and their confidentiality required in the matter of discussions regarding various topics. Among those topics, the Bylaws specifically state discussions regarding legal matters and discussions regarding Board Member conduct. Furthermore, a Board vote, whether taken privately or publicly and as documented and allowed within these bylaws shall be binding on the organization.
Podawiltz: Board actions taken privately shall be communicated during the next Board Meeting, which that’s today. Our last public Board Meeting was on 4-20 and our discussion sessions are not business meetings.
Rose Law enters into negotiations with CEO’s attorney
Podawiltz: On 4-27-20 we met in executive session for the purpose of discussing legal issues. The following motion was made by Director Lloyd Sherman and seconded by Director Omohundro.
Podawiltz: [quoting Sherman] ‘I move to task Rose Law Firm to enter into negotiations with John D. Coulter of the McMath Woods P.A., the stated attorney representing CEO, Lesley Nalley, for the purpose of the CEO contract currently expiring 3-21-21 [sic] and Board authority.’
Podawiltz: A roll call vote was taken. Those voting ‘yes’ were Sherman, Campagna, Garrison and Omohundro. Those [sic] voting ‘no’ was Luehring. Chair Podawiltz did not vote. The motion passed.
Board Member Conduct
Podawiltz: On 5-6-2020 we met in executive session for the purpose of discussing Board Member conduct. There were multiple areas of discussion. The following motion was made by Director Sherman and seconded by Director Omohundro.
Podawiltz: ‘I move to remove Director Luehring from the Hot Springs Village Property Owner Association for cause.’
Podawiltz: A ballot vote was taken. The motion passed 5 to 2.
Podawiltz: Director Campagna then wished to read a prepared statement into the record. Chair Podawiltz authorized it. His statement began with a subject that had not been a part of the meeting in any manner. Chair Podawiltz said that would not be allowed. Director Campagna said he would go home and rewrite for submittal. He then read some additional parts of his previously-prepared statement, in which he tendered his resignation.
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[embedyt] https://www.youtube.com/watch?v=azFhhKr-PfA[/embedyt]***
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Melinda Noble
05/11/2020 — 1:16 pm
Is Lesley paying for your attorney?
Melinda Noble
05/11/2020 — 1:16 pm
S/B her not your
steve bylow
05/11/2020 — 7:19 pm
Melinda – in situations like this, the employee typically hires and pays for their own lawyer.
In a “negotiations” the employee’s lawyer may request the “final settlement” may include a fee paid to employee’s lawyer.
In some cases, where an employee or a group of employees have been discriminated against, a lawyer may take the case on contingency with the understanding they will not be paid unless they “win” a settlement or lawsuit. Then they get a significant percent of the settlement (30%+).
Most reputable lawyers do not agree to these no fee contingency arrangements because the risk is too great. To go to trial is very expense and the probability of an Arkansas Jury siding with with a CEO making over $200k is a significant risk.
Steve
Patrick
05/11/2020 — 1:44 pm
Let’s pay off her LN Contract and say good riddance!!!
Mel
05/11/2020 — 3:01 pm
What was the executive meeting doing with a an employee present. My understanding is that executive is for voting members
No?
Vicki Husted
05/11/2020 — 6:41 pm
Mel 05/11/2020 — 3:01 pm
The Executive Sessions were held on 4/27 and 5/6. I don’t think any attendance list was given for either session, but I doubt that any employee would have been present.
David
05/11/2020 — 9:41 pm
Why are we in negotiations. The contract stated that six of seven board members could terminate the CEO.
steve bylow
05/12/2020 — 7:09 am
David
My guess is there may be a disagreement about the amount and conditions of a severance.
Steve
Valerie Phillis
05/11/2020 — 11:08 pm
Just watched today’s Special BOD Meeting again. It was nice to see a coordinated effort by all to work thru the agenda.
What strikes me most is the unbelievably horrible financial position we are in. As Tucker stated, if we didn’t get the PPP loan, then we would have to borrow the money to make payroll. DO NOT let anyone convince you this was caused by COVID-19. Look at the numbers, we have a $1.2 MILLION monthly payroll…..LN stated that despite the pandemic losses, the POA is in sound financial condition.
Tom Blakeman
05/12/2020 — 7:40 am
Exactly. We pay out more in salary and benefits than we take in from assessments. That means that to cover any other costs of running the place we need revenues coming in other than those assessments. When you have your biggest “other” revenue generator (golf) operating at about 1/3 capacity and far below breakeven revenue it is an obvious problem. Add to that squandering money on non-essentials like Land and Homes, Gates, CMP, Pool, etc. and the problem becomes a crisis waiting to happen.
So, instead of figuring out how to market that “other” revenue generator properly over the last 10 or 15 years to bring in those revenues our past leaders have buried their heads in the sand. Their solution was to add more highly paid management and soak the residents, first with higher assessments and then with higher fees for everything else.
It’s kind of like Washington DC really. Tax and spend. Grow the bureaucracy. Spend more money. Tax some more. The difference is DC can also print more money when they want to. We cannot. Actually, our leaders thought they would try printing money so they did things like add a “golf surcharge”. Just another tax. Not working out too good either.
Now we have a new set of leaders. I believe they under the problem. But first they have to clean house. Reduce those “fixed costs” of $1.2 million per month. They are just getting started.
Mark
05/12/2020 — 6:02 am
Thanks and best wishes to our board. Look forward to the removal of Nalley. Also need to take a really hard look at everyone she hired or promoted. Too many useless positions and unqualified administrators. The people that are actually doing the work need true leadership.
Gene Garner
05/12/2020 — 8:22 am
The BOD could terminate the CEO for “cause” with a simple vote of the Directors. “Cause” is defined in her contract; “Cause shall include willful failure to comply with reasonable policies, procedures, standards, essential duties and responsibilities of the position…”
She “willfully” filed the Articles of Incorporation in Garland County instead of the county where the main office is located–Saline County.–Gene
Tom Blakeman
05/12/2020 — 8:39 am
She also “willfully” denied access to information from more than one property owner in violation of last year’s court ruling.
Minn Daly
05/12/2020 — 9:44 am
As Gene Garner has stated above “CAUSE” is a defining issue on CEO contract. If all property owners remember COOPER filed his original suit in Garland county & judge Wright stated it must be filed in Saline county so COOPER had to refile in Saline causeing delays for suit to progress. ROSE LAW firm very much aware of this as representative of COOPER at time of suit. I feel certain that our BOD chose the right legal team to get us out of this mess with the CEO without spending part of the monies our POA just borrowed from the government. We have a mess, overpaying top tier staff, constantly hiring staff that is not needed, operating restaurants that POA should not be in, spending monies on CMP, Gates, these are all in the CEO wheelhouse of failed duties. Paying this CEO a $900,000 thousand dollar bonus to go is not my idea of what is needed. Termination for “CAUSE” would totally be an answer for me. Minn Daly
George Phillis
05/12/2020 — 11:55 am
Watching the meeting late last night (5-11-2020) I heard the comment “the Village has lost 1.7 million dollars” due to the “pandemic”.That’s quite a sum….one million seven hundred thousand dollars.
As best I can figure the effects of the pandemic….sheltering in place etc…..started in early March and we are now at May 11. The golfing here in the Village has been down since way last year. There has not been a mass exodus of Villagers. Even if the golfing was zero for the last two months, the difference between the last two months and the last six months wouldn’t put much of a dent in a 1.7 million dollar deficit in revenue.
How about some real accounting and financial statements to demonstrate just where 1.7 million has been lost in a little over 2 months?
It is my belief someone is trying to justify a dismal financial condition that existed well before the pandemic.
In my opinion the meeting of 5-11-2020 highlighted how dire our financial situation is. I watched it once however ran it back so often to catch what was said I may as well have watched it twice. The “Big Elephant” in the room is that our finances are in the toilet despite what the CEO & CFO say.
Tucker made the point, and correctly so….our finances are so bad we can’t pay our operating expenses without a loan. That says a lot about what the CEO and previous boards did to us. Oh yeah we might be able to dig into our reserves, get a line of credit, or cash out investments but I’ll wager it wouldn’t be enough to keep us going for two months. I’ll bet the CEO gave a big sigh of relief we could get a 3 million dollar loan at 1%….saved her bacon. Everyone seems so pleased that we can get this 3 million dollar loan. A loan which is due and payable in two years….plus interest. What are we going to do in 2 more months? If there has not been drastic changes we will be in the same boat as we are now………unable to pay our operating expenses. Hmmmm…..another loan? Simply raising dues and assessments isn’t the complete answer, however it is a factor in the solution. . In part the real solution is reducing our operating expenses, stop all non-essential spending and create a good revenue stream with a professional marketing plan. The new board is taking over a runaway stagecoach without any reins in hand. The direction to the edge of the cliff can be halted however it will require perseverance, good business decisions and support of the HSV community.
A major reason our revenue is in the dumper isn’t because of COVID19 so please do not allow the CEO to use that lame excuse. Had management put together a real marketing plan and heralded all the great things here in the Village…especially golf……to develop a decent revenue stream ….instead of wasting money, time and resources on the CMP we would not be in need of a 3 million dollar loan. The CEO mentioned “Food and beverage” and they “have a plan for that” to raise revenue. Really!? Like the restaurants have been a huge money maker for the POA? Just like the POA real estate office…..which lost money.
Dan pointed out we are 1.9 million….that’s 1.9 million BEHIND our operating profit compared to last year…..and I will bet he is correct. Yet the CEO jumps up out of her seat and hands Dan a hand full of papers and tells him to see if he can find it in her stack of papers…..like that’s proof he’s wrong. Another bully tactic we’ve seen time and again from the CEO.
He can’t in the few minutes he was given, however I’m sure if he went through it the rest of the day he wouldn’t have found it because it’s not in her paperwork…any surprise? If our finances are in good shape as stated by the CEO, why do we need to obtain a 3 million dollar loan to pay operating expenses? Maybe we should have backed off on a 1.2 million dollar pool project as many Villagers were saying BEFORE Weiss, the board and CEO decided to shove that down our throats.
As pointed out by Frank Leeming (in another post) our employee payroll is 1.2 million dollars a month!! One of the numbers mentioned (at the meeting) for full time employees (FTE) was 335 equivalent….that equates to an average annual salary of $42,985 per employee. The truth of the matter is the top 17 management positions comprise over 40% of the employee payroll budget. Think we are top heavy?
We are in a deep financial hole because of pitiful financial decisions by management….not a virus that popped up two months ago. This loan is nothing but a band aid for a patient who is hemorrhaging.
It is time to replace the CEO with a qualified General Manager
HSVP J
05/12/2020 — 3:37 pm
Excellent points!
Hazel Ecyla
05/12/2020 — 4:58 pm
George. Excellent points exactly!!! Cut the overhead high-priced executive positions including ceo & may be the village can come up for AIR !! if a 3million $ loan isn’t needed now, what the hell happens in 2 additional months. Got to cut from the top. Stop the bleeding !!!!!!