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RA Will Look to Citizens to Help Hire Pro Firm for Lake House Review

by Karen Goff June 24, 2016 at 11:30 am 28 Comments

New Lake House Reston Association’s Board of Directors is going to conduct an independent review of the Lake House budget development process.

But first it will call on people in the community to help review and hire an auditing firm.

The board voted on Thursday to establish a Tetra Review Request for Proposal (RFP) Selection Committee comprised of three RA members to work with RA’s Board Governance Committee to review RFPs and help hire a professional firm to do the review.

RA’s Board Governance Committee recommended last week that the independent review be done to determine exactly what caused RA’s 2016 budgeting for Tetra/Lake House to have a $430,000 cost overrun.

RA Attorney Ken Chadwick advised the board Thursday that for the review to be truly independent, it has to be done with committee members who are not on RA’s staff or board.

Several RA board members spoke in agreement.

“If you want something that can be trusted, it can’t be RA members,” said At-Large Director Ray Wedell.

Said At-Large Director Jeff Thomas: “I am not sure of the value of the review. I think we have a pretty good idea of what went wrong. But we should bring someone in who knows what they are doing and do it right.”

RA CEO Cate Fulkerson has said the former owner opting not to rent back ($100,000) and construction costs that came in much higher than estimated contributed to the deficit. RA paid $2.65 million for the 33-year-old building on the banks of Lake Newport last July.

The association will put out a call for candidates to serve on the Tetra Review RFP Selection Committee soon with an application deadline of July 15, 2016. Candidate interviews will be conducted by the Board Operations Committee at a July 18 meeting.

Meanwhile, what RA will asking potential professional firms includes:

1.  A breakdown of estimated charges and a total estimated cost of the contract.
2.  Resumes of those professionals to be involved, as well as the hourly rate to be charged for each one.
3.  Company or group experience in conducting similar reviews.
4.  An outline of how you would propose to carry out the review.
5.  An estimate of the amount of time required to produce a final report, with an expected end date.
6.  Any other information believed to be relevant to the proposal.

RA has a deadline for RFP responses of Aug. 1. The board will hold a special meeting in August to consider the recommendations of the selection committee.

The board also discussed what the independent task force will do. The final report will include: “a review of the processes and internal controls that were followed across the organization in decision making and handling all decision-making, governance, administrative and financial aspects of RA’s purchase, including the referendum, planned use and renovation of Tetra (now known as the Lake House property) that have led to cost overruns and revenue shortfalls,” RA said in a statement.

“The review will include all materials and documents deemed necessary by the consultant and/or were shared with the RA board and the public related to the Tetra/Lake House and may include interviews with RA staff, board members, committee members and others.”

In other Lake House news, the board also voted to approve Fulkerson’s plan to replace $400,650 of the $430,000 moved out of the operating fund. The cost savings will come mostly from not filling open staff positions. The board further directed Fulkerson to come back to its July 28 meeting with savings ideas for the remaining balance of $30,000.

The board voted to direct RA staff to provide documents by July 8 on the Lake House to three RA members who have requested materials.

  • james dean

    the ra cfo told the ra board that having an outside firm like booz allen
    or others would cost at least $80k…sherri hebert suggested it could
    be more like $100k-$200k…why does the ra board continue to waste our
    money? at recent meetings there have been rooms full of ra members who
    expressed willingness to serve on a review taskforce to do this
    work….people who are cpas, construction project managers, financial
    management experts, financial analysts, real estate experts,
    construction experts, etc…ra throws our money away time after
    time…just like bringing in an outside consultant to develop an ethics
    policy…when ra should have had such an ethics policy yrs ago…when
    the ra ceo chairs an ethics day at south lakes hs…some thing has to
    change

    • NeverHappyEver

      Maybe we could hire someone how knows how to use capital letters where appropriate.

      • james dean

        Thanks for that important insight

      • Reston Crimewatcher

        maybe you should learn the difference between who and how…….

  • Rational Reston

    “If you want something that can be trusted, it can’t be RA members,” said At-Large Director Ray Wedell.

    Credit to Mr. Wedell for owning up to larger issues with RA.

    Said At-Large Director Jeff Thomas: “I am not sure of the value of the review. I think we have a pretty good idea of what went wrong. But we should bring someone in who knows what they are doing and do it right.”

    Mr. Thomas does not get what’s wrong with RA.

    While the acquisition of the Lake House is of itself something that irks me with RA, the apparent indifferent attitudes from the RA Board and staff is infuriating. They should be the ones who are looking for answers and faults to correct as a result of their blind stewardship.

    Again Reston, DO NOT relect any member of the board who supported the purchase and the false reasoning put forth. They are not looking out for the people or homeowners of Reston.

    • Mike M

      Logical. But I wonder if the alternatives would be any better? Who volunteers for this stuff?

      • Rational Reston

        Yes that’s definitely a problem. But I’ll gladly go with devils that I don’t know over the ones I do.

        And when they turn out bad, they should get booted out right away. We stop the insanity by not tolerating or making excuses for it.

        • Mike M

          THAT’S THE SPIRIT!
          Think Reston could apply this at RA, and County level?

    • Bill Saul

      I just finished watching all 5+ mind numbing hours of last nights meeting. I offer the following observation. I thought the board struggled in a positive way to do the right thing.

      I didn’t think any of them were indifferent. They all seemed to understand the essence of what needed to be accomplished with an independent review of the Tetra project and all seemed to support the idea. I may be in the minority here but they seemed to work hard at finding a reasonable response that would address the communities concerns. Isn’t that what we want them to do?

      • Greg

        That’s part of it, but firing the CEO needs to be top on the list as well as stopping the hemorrhaging of our money on the boondoggle.

        This is not the first RA wasteful debacle: the pony barn, restating the bylaws, keeping open underused pools (that highly paid consultants all recommended closing), not building a HQ building when authorized to do so in a member referendum, renting an expensive vastly oversized office as the RA HQ, building a pool bubble that ticked off many, planning for (read: spending lots of money on) massive expensive indoor recreation facilities, losing tens of thousands of dollars in speculative stock investments, always raising the assessment far in excess of inflation rates, neglecting an opportunity to assess on an ad valorem basis and rolling in the pool and tennis fees into the general assessment despite a referendum that directed otherwise.

        • Reston Crimewatcher

          I agree. The board members will not answer why they defend Fulkerson. They act like she has done a great job and should not be criticized. With that mindset, nothing will change.

        • Rational Reston

          Greg, you should have gone into more detail how RA hides the expenditures on tennis by rolling them in with pool fees. At least with the pools I see many people enjoying them all summer long (if they’re open), I see a lot of immaculate tennis courts barely being used. Oh and RA has a tennis pro shop!

          • Greg

            You are right. The issue with tennis is that it’s used by a very small percentage of RA assessment-payers. I recall five percent being discussed at one meeting. At least the tennis season is longer than the pool season.

            Although the pools may be better used, they are closed most of the year (9 or more months) and provide no value to anyone during those closed times. Even so, my guess is that fewer than 15 percent of RA assessment-payers use the pools, and we are all burdened by about $100 a year per residence to support these limited-use assets.

      • Rational Reston

        I believe the acronym in play here is “CYA”

    • Reston Realist

      I couldn’t agree with you more…. The entire lake house debacle is an embarrassment. It was so ineptly handled, that it makes no sense to spend any money to figure out “what went wrong”. What went wrong is that RA was hoodwinked into buying this albatross and the negotiations for the purchase terms and due diligence analysis were handled by amateurs.

  • Reston Crimewatcher

    Fire Fulkerson. Why is this difficult to grasp? No where else (besides government) could a CEO fail so dramatically and stay in her job. She is a terrible steward of our money, which should be the most important part of her job. She will never be held to account for this debacle. Ellen Graves is her boot licker. The whole of RA needs to be disbanded. How is it helping the membership? Its not. Its another layer of government that wastes OUR money while paying themselves huge salaries. Its time as come. RAXIT.

  • Guest

    Just a thought: Why wouldn’t the committee decide what questions ought to be asked of candidate audit firms?

    Already RA is trying to shape the response.

  • cRAzy

    “If you want something that can be trusted, it can’t be RA members,” said At-Large Director Ray Wedell.

    No, Ray, it’s just the members of the Board “that can’t be trusted.” Most other RA members are fully trustworthy.

  • Strange that they did not get professional advice before going off and wildly spending money that they did not have. An experienced commercial realtor could have helped some. But it seems it is always easy to wildly spend someone else’s money.in a passion to do something…anything.

  • Why do you bother?

    “If you want something that can be trusted, it can’t be RA members,”
    .
    Truer words…

  • Greg

    What’s racist (vague or otherwise) about Reston Crimewatcher’s post?

  • ItYourMoneyButIllSpendIt

    If the membership knew back then what they know now, would the referendum still have passed? I presume not, although that is a bit of a sketchy presumption. I think it is time to have another referendum to decide to sell that property.

  • Chuck Morningwood

    Instead of spending $200k on an audit firm, why not (1) create a rule requiring any expenditure of more than $50k to be approved by referendum and (2) use the rest of the savings to flatten Tetra and turn it into a Dog Park?

  • Mike M

    Race card? Get real!

  • Reston Crimewatcher

    Nothing I said was racist or threatening to anyone. And I don’t care what you think.

  • Reston Crimewatcher

    What is racist Sally? What is threatening?

  • freestylergbb

    This continuing fiasco is untenable, WRONG and a waste of RA dues-payers’ money. It reinforces why Tetra was a pathetic mistake as so many of us adamantly warned over and over. RA’s power is out of control and this statement on the RA self-promoting website is jive:

    “As part of its management oversight responsibility, the board also makes sure that current and proposed programs are congruent with both the association’s mission and its budgetary resources.”

    Hah!

  • Reston Crimewatcher

    WTF? Again I ask, where did I play a race card?

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