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Op-Ed: RA Board Failed to Protect Members’ Interests on Lake House

by Karen Goff May 27, 2016 at 1:15 pm 40 Comments

Lake House May 2016This is an op-ed by Reston resident Ed Abbott. It odes not represent the opinion of Reston Now. Something on your mind? Send us a letter at [email protected]

I attended last night’s meeting of the Board of Directors and witnessed the Board’s approval for funding the renovations of the Lake House.

Cate Fulkerson, the Association’s Chief Executive Officer, gave a Power Point presentation justifying the expenditure of $430,000 similar to the one that she presented to the Finance Committee on Monday.

Each Board member discussed their views after which the Board voted approval for the expenditure. As a result, both the Board and Ms. Fulkerson have failed their fiduciary responsibility in accordance with the Association’s governing documents.  Here’s why:

The Board of Directors of the Association has a “fiduciary responsibility” requiring them to act in the best interest of the corporation. This responsibility is written into the Virginia’s state corporation law. Reston Association is a non-profit corporation and has filed articles of incorporation with the state. Those articles of incorporation comply with Virginia law.

The best interest of the corporation is not well defined but most people use the reasonable person standard.  As an officer in my own corporation, I am familiar the standard. Although vague, understanding the reasonable person standard is not difficult and is often explained by asking a few simple questions.

For example, is it reasonable to spend more money than you have?  Or is it reasonable to continue to spend money on a home improvement that that is 100% over budget without knowing why?  Most people would answer these questions with an unequivocal “no.”

The Lake House is way over budget and the Board does not know with any certainty why. Also, it is not clear that the Association can afford it without significantly raising fees or cutting services.

A reasonable person, if asked to vote on a motion to continue funding the Lake House, would vote “no.” In fact numerous “reasonable” members said just that to the Board last night.

It is clear to me and other reasonable people that the Board and its Chief Executive Officer have failed their fiduciary responsibility.  That is, they have failed to act in the best interests of the Association. Ms. Fulkerson as much as admitted to such in the meeting.

It is very unlikely that the Board will reverse its action in spite of the heroic efforts of Directors Shannon and Wedell.  The Board is also unlikely to take any disciplinary action against the staff given the cavalier attitude of the other Board members.

So now what?  The only recourse is starting a recall of those members who voted in favor of the Lake House motion to continue funding. This is not easy, although the Reston Deed provides for such an action. The members of the Association must start the recall now or face increased fees or reduction in services. 

It is up to us now.  The Board has failed to protect our interests.

  • MJay

    I posted this in the other thread, but I believe it is germane to Mr. Abbott’s conclusion in his op-ed. Mr. Abbott or anyone else, please let me know if it is OK to contact you directly so we can be proactive in taking back the RA rather than just talking about it. This debacle has motivated me to action as we need to act quickly in order to clean up this mess before the current group decides to simply raise our dues through the roof.

    From the other thread:

    As many of us have discussed, the Tetra debacle justifies a shakeup within RA. Based on last night’s comments from the board, the current group lacks vision and common sense when it comes to being responsible stewards of our money. RA as a whole needs to be reigned in.

    To this end, I volunteer to draft petitions to remove the current board
    members–for cause–pursuant to RA’s governing documents. Because I will
    be out of town for reserve military duty for much of June, if somebody
    can provide contact info I will connect with them and send the petition
    draft to them with proposed language. Once the language is finalized, we
    can seek volunteers and ultimately initiate a petition drive where we
    need 10 percent of members from each district, or 10 percent of all
    members for the at-large seats. Once I return from military duty, I will
    certainly assist in the petition drive. Obviously, if we move forward I
    will operate under my true name.

    If we can drum up a group to perform this task, I also want to look at the feasibility per the documents in conducting a simultaneous petition drive for the proposed
    replacement directors. If I recall, only Ms. Thompson’s at large seat was contested during the last election, so we will need to find good candidates for the other positions, and perhaps see if any of the previous candidates wants to seek the position again. I am happy to throw my hat in the ring for South Lakes or at large.

    Here’s a repost from an earlier comment:

    Once the board is replaced, among my initial goals before really getting
    down to business of reigning in the RA’s current scope are 1) remove
    the CEO if she doesn’t resign; 2) begin a search for an RA in-house
    attorney and staff as I believe this can cut the legal bill in half from
    600k to 300k while still being effective; and 3) go line by line,
    employee by employee and start cutting and prioritizing.

    • Mike M

      I agree with what you say, but all the people expressing anger about this mess fail to mention a root cause of this problem: Our neighbors. They voted for the “leadership” and the referendum. Oh, by the way, they vote solid Democrat (and incumbencies) on all local issues where party affiliation becomes largely irrelevant. They are now being asked by the County BOS to pay higher property taxes and a new meal’s tax. Don’t be surprised if our neighbors embrace these too without asking where will the money go and how will it be managed? This is not an outlying case. The County is failing to manage the schools well and there are a few issues in particular they are ignoring. The problem is the zombie-like party affiliation and extended incumbency.

      • RoadApples

        I respectfully understand your points.
        That being said:
        With that somewhat defeatist attitude:
        we would still be Subjects of the British Empire.
        C’mon Mike: step up to the plate. This recall effort could really use your Professional wherewithal, effort and backing.

        • Mike M

          Perhaps we can agree that an ounce of negativity is worth a pound of failure. But the problem here is bigger than the RA leadership. It is the mindset of the majority of voters in Reston.

      • 30yearsinreston

        Keep on topic
        This is a tactic used to deflect action

        • Overrunhell

          I don’t mean to s peak for Mike M, or others here, but the conversation is on topic. Nothing will happen until the voting base truly rallies. Good luck getting that accomplished with Reston’s demographics.

        • Mike M

          I am on topic. I am writing about the source of this and related problems. You can chase symptoms all you like. You can also scold for free in here. But you are deflecting responsibility.

    • Ed Abbott

      My email address is e[email protected]. I live at 2218 Wakerobin Lane. Thanks for your positive comments. I am still working on the steps I need to take to get this done. Any help would be appreciated.

      • MJay

        I live right down the street from you and will contact you shortly. If we are all serious about taking action, I hope others will join me in organizing a pragmatic endeavor.

    • JoeInReston

      In the recent Reston Association elections, two of the three supervisor positions went uncontested. If we vote to remove the current leadership, whose is going to take their place?

      • Greg

        We can jump off that bridge when we get to it, and I am sure there are plenty more interested now that the clothes have been stripped from the empress and her minions, but the current board needs to go.

    • Why do you bother?

      BTW – thank you for your service.

  • Mike M

    I respect your public commitment to action. I’m not sure how you could overturn the democratically elected people and procurement, but good luck. Neglect of fiduciary responsibility duty seems like the best angle, but a very steep one to climb.

    We’ll have to disagree that this is not L vs C issue. I think it is a perfect example. It’s downright microcosmic. Perhaps we can agree that slavish adherence to any one Party as we have in Reston is a bad idea. I think we both know which mindset was at work here.

    • lakeannefan

      Mr. Abbott is talking about fiduciary responsibility and competence, or lsck thereof in this case. Perhaps diffucult concepts for the Party of Trump.

      • Mike M

        As I noted, the parties and their loyal followers are the problem. But, hey! If you disagree with someone, call them stupid. Like Donald. (And put in a typo to really drive home your point.)

    • JoeInReston

      I think such comments are divisive to the cause of rallying support for better Reston Association leadership. Certainly both L and C want quality government/ municipal/ association leadership.

      Mind you, this past election, two of the three positions up for election went uncontested. Voters had no choice. IIRC, several slots in the Fairfax school board went uncontested too.

      • Mike M

        If you are Conservative in Reston, running for election is a fool’s errand. That is one of the main reasons for the uncontested candidates. It’s the voters. The vast majority always want free stuff and they never notice it’s not really free until it’s too late.

        Both both L and C want quality government/ municipal/ association leadership? I disagree. L wants more, C wants less. L has a monopoly here. That’s about the end of it.

        • JoeInReston

          I think you have a reductive and insulting view of local voters and Democratic voters in general. Its not as monolithic block as you appear to view it.

          Imagine if somebody lumped conservative voters using a dimwitted Texan stereotype ala Louie Gohmert.

          • Why do you bother?

            Joel, will you Internet marry me? It’s rare to see reasoned discussion in these comments.

          • Mike M

            Cool, just don’t reproduce and raise kids to paint any argument at odds with there’s as not reasoned (and vote D no matter what).

          • Mike M

            The problem is one party rules because there are too many Ls here. We disagree. You can lump Ls all together. Scroll up.

            Are you disagreeing that local voters go D with consistency. That is an objective statement of fact. They own this as they own the school budget. They own the meal’s tax.

          • JoeInReston

            We’ll obviously have to agree to strongly disagree. The larger issue is the actions of the RA board and discussion thread should focus on that.

            Just wanted to clarify that the dimwitted phrase was not lobbed at you. It was a example to illustrate what reductive stereotyping looks from the other side. The only person that I was insinuating was dimwitted was Gohmert.

          • Guest

            From a former Texan, let me assure you that Representative Louis Gohmert is not an especially controversial figure within his congressional district, nor in his state, which has many Republican office holders which tilt to the hard right. You may think that Texas conservatives are dimwitted, but Texas voters seldom fail to reelect hard right conservative politicians these days to high office. Just saying.

          • JoeInReston

            Just to clarify, I didn’t say Texas conservatives are dimwitted. Ted Cruz is very intelligent man. Louis Gohmert on the other hand, is not as smart as Ted Cruz.

        • letsbcivil2

          Your arguments are devoid of any substantiation for blaming this on Liberals, and saying there were no alternatives to vote for because a Conservative wouldn’t run is a cop out. This kind of L v C argument belongs in the WaPo comments section not here. No one wants incompetent leadership and traditionally those behind development tend to be Conservatives. It’s not that they are Democrats that is the problem, it is that they are incompetent. And please spare me the sophmoric response that they are synonyms. The problem is the lack of willingness of our residents — of our neighbors — to get involved. This area is full of too many people who are “too busy” to pay attention to local issues. So we get poor choices. We need leaders (regardless of ideology) who care about the future of this area and the impact of their decisions on those who live here. I promise you, whatever the candidate’s political persuasion, they would win in a landslide.

          • Mike M

            I ask you then, why are so many running unopposed. And yes. It is my observation that Democrats are far more willing to waste public funds in the name of obtuse principle without regard for basic economic principles. Calling my arguments sophomoric does not refute them. It makes you look that way.

  • Overrunhell

    So, the community is to understand the cost overruns are because the Liberals rule Reston?

    • Mike M

      Well done!

  • Jean

    I’m a Democrat and I voted against the Tetra house and tried to persuade my neighbors to do so. It was difficult to persuade them because of that slick sales piece that RA sent out that showed only the positive. A lot of people seem to think that if RA is for something it must be because they have thought it out and it’s good for Reston.

    • Mike M

      Of course you are a D! You can’t swing a dead cat in Reston without hitting three. And so are you neighbors, and there lies the challenge.

  • Terry Maynard

    I fail to understand why party affiliation may have any significance in this extended conversation. Yes, Reston (& NoVA) is predominantly Democratic, but so what? The issues here are RA fiduciary and fiscal responsibility throughout, honesty in trying to sell the Tetra project to us a year ago, and transparency in all of it. I don’t think Ds or Rs are on opposite sides of those issues at whatever level of politics.

    And, FWIW, I am not a member of any party. Their demand for adherence to whatever the party line is on an issue (called “loyalty”) is absolutely stupefying. I prefer to think about what’s the right vote or the right thing to do and act accordingly. It helps me sleep a lot better at night.

    What we have in RA and the Board is absolutely horrendous management and oversight of RA activities and programs, specifically the Tetra project at the moment. My guess is that most of us don’t disagree on that, certainly not on party lines. (I’ve never asked, “What would Donald or Hillary (or Bernie) think?” It’s irrelevant.)

    • Overrunhell

      You’re neither L or C… great.

      But realize one party rules the house here. (pardon the pun) Your analysis would likely show the ones that voted for Tetra are on the L side of the house (again, pardon the pun.) Until the community works on the voting process and the commitment that goes with it — nothing will happen. Mike M is spot on.

      • LakeNewportLady

        Didn’t this barely pass? That would imply that a lot of Ls voted against it including myself.

        • Overrunhell

          The numbers aren’t there to support that argument. Out of the entire community, 5600 voted and 53% of them were in favor. The majority of the community on the sidelines.

  • Shame.on you

    Nobody.should.get.fired.for.making.the.world.a.better.place.
    Fact is.most.Americans.overspend.so nothing new.here.

  • CTC

    The Community Associations Institute is a great resource for anyone interested in best practices for successful comunity/HOA management. They are a national organization based in Arlington and have lots of resources online at http://www.caionline.org.

  • letsbcivil2

    This is the just latest example of incompetence from our local leaders who resolve every problem they mishandled by further gouging local residents. Run away development in Reston leads to proposals for a “special tax district” to charge residents an extra five percent in property taxes to pay for the traffic nightmare being created by the over development of Reston — congestion that should have been dealt with when the developers’ made their proposals and should have been theirs to pay. Then we get a proposal for a meal tax and now this. Who do you think is going to pay for RA’s incompetence. The posting below is right — they’ll call the jump in dues something else but it will be to pay for this. And dues are already outragiously high.

    Residents wanted neither the metro nor “the lake house” (who was this supposed to benefit anyway?) The answer to all of these blunders is the same — squeeze residents’ more and more. We need to shake up both Reston Association and the Fairfax County Board of Supervisors, starting with replacing Cate Fulkerson and Cathy Hudgins with people who actually care about the impact of their decisions on residents. Hudgins has been in the developers’ pockets for years and Fulkerson is clearly just plain incompetent. ENOUGH!

  • 30yearsinreston

    This Tetra debacle is typical of RA

    The process from the ‘appraisal’ to the purchase was a cover up from the beginning
    I wouldn’t trust RA or Hudgins to run a hot dog stand

  • Pure land

    家族を侍に属する一部の女性は、タントやkaikenとしてナイフを使用して、1ストロークで首の動脈を切断して自殺しました。主な目的は、キャプチャを回避するために、迅速かつ確実な死を達成することでした。女性は慎重に子供のようにjigai教えられた。[要出典]自殺をする前に、彼女の体は、威厳のあるポーズで見られるように、女性はしばしば死の痙攣にもかかわらず、一緒に彼女の膝を結ぶことになります。 Jigaiは、しかし、自殺のこの特定のモードを排他的に指すものではありません。 Jigaiは、多くの場合、1つの名誉を保つために行われました

    • Overrunhell

      Might want to turn your encryption off…

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