RA Committee Agrees to Independent Lake House Review — But it May Cost Big Money

Lake House May 2016Nearly a dozen Reston Association members pleaded with RA’s Board Governance Committee on Tuesday to investigate how the Tetra/Lake House purchase got $430,00 in the hole so quickly.

The RA Board announced in late May that renovation costs at Tetra, now called the Lake House, have far exceeded forecasts. The association purchased the property for $2.65 million in July 2015. At the time of a member referendum in May 2015, RA estimated renovation costs at the 33-year-old building, which it plans to use for community and event space, would be $259,000.

Those renovation costs quickly grew exponentially.

The board voted last month to move $430,000 from its operating fund to cover the deficit — as well as organize a task force to investigate how the overrun occurred.

The speakers at last night’s meeting urged the committee to organize an independent task force. It had been suggested by RA Vice President Michael Sanio, head of the Board Governance Committee, that the task force should be comprised of board members, an RA Fiscal Committee member and a community member.

“It must be completely independent,” said RA member Eric Carr. “To staff it with yourself is a farce. “Whatever conclusion will be a sham and will not be accepted by community.”

While some of the citizens were visibly angry, others said RA should not squander this opportunity to see what went wrong and make changes within the organization to make sure problems like this don’t happen again.

“RA is a homeowners association,” said one resident of Spyglass Cove. “I think you should be servicing the residents and not acquiring property where you do not understand the process. We are in a mess. You are raising our fees and closing pools. You definitely need to regain the trust of Reston’s citizens. Right now it is RA vs. the homeowners. … We are angry, a lot of us, and would like to see some positive changes.”

The governance committee is in agreement that an independent task force needs to convene — the question now is should it be a paid consultant firm, volunteer citizens with expertise in accounting and construction management, or a combination of both?

“RA needs to be as far from this process as possible,” said BGC member and Lake Anne/Tall Oaks Director Sherri Hebert. Hebert said she did some preliminary research and found hiring paid consultants would cost about $350 an hour.

“That’s going to add up very fast,” she said. “I am not sure there is an appetite in our community to spend more money — it may be $200,000.  … Any dollar spent will be reflected in assessments. We still have qualified people in the community. We have the resources in Reston.”

At-Large Director Ray Wedell says that paid consultants should be hired.

“The questions we need answered go back to before the referendum [by RA members allowing purchase to go forward]. How was pro forma developed? How were numbers developed so far off and so far off so quickly? It is very difficult to believe that this just — whoops — kind of happened. “

Wedell says part of the problem lies in a lack of communication — the community was only told how great the purchase would be, and the board was never told and never approved renovations that included “knocking down walls.”

“Never once was any indication given to us that we are revamping an entire building,” he said. “We were to take structure and put it in better shape. We never had a discussion about knocking down walls. [Now] we are in a $3 million hole. …. Why weren’t we told sooner?

Meanwhile, RA CEO Cate Fulkerson suggested that all work on other major projects — such as plans for a $2 million Central Services Facility renovation and the $350,000 makeover of the Pony Barn Recreation Area — be stopped until the Lake House investigation is done.

The committee ideally would like answers by September or October, but said that is an optimistic timeline.

The four-member committee voted to organize a scope of what needs to be investigated, as well as well as seek estimates from qualified consultants. That report will be presented to the full RA Board at the June 23 meeting.

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