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Op-Ed: Not-So-Independent Review of Lake House Overrun

by Karen Goff August 9, 2016 at 11:30 am 32 Comments

Lake House May 2016This is an op-ed by Reston resident Terry Maynard. It does not reflect the opinion of Reston Now.

Reston Association (RA) is in the midst of soliciting proposals to conduct what it calls an “independent” review of its handling of the Tetra (Lake House) purchase and renovation overrun, a process that promises more of the same poor processes and politicized results Restonians have seen for 18 months.

Most importantly, there’s the matter of RA characterizing this review as “independent.”  It is anything but that.

To be truly “independent,” the RA Board needs to step away completely from this process. Let the three community members named to the selection committee set the criteria for the review, let them then make the actual selection of the review firm and have them receive and approve the final report.

Further, and equally important, the RA staff should have no participation in the review other than to answer questions, provide information (including internal e-mails and discussion notes), and explain processes.   

Contractor Selection. The only element of the review that has even a hint of independence is the selection process for the contractor. It will be selected by a committee comprising a majority of the RA’s Board Governance Committee (four members) and three Restonian volunteers whom RA’s Board Operations Committee has selected. We understand the Reston citizen selectees are Janine Greenwood  (retired counsel to non-profits), Steven Garver (local attorney), and Eric Carr (CIA executive), although we have not yet seen their names announced by RA.

The Request for Proposal (RFP). The RFP has already been prepared and sent by RA to several dozen potential contractors with virtually no community input, so there is no significant “independent” aspect of the substance of what RA is seeking from potential contractors.

Limited Goal. What does the RFP for the “independent” review say RA intends to accomplish? The RFP states: “Specifically, the goal of this project is to identify areas for process improvement, potential changes to internal controls  and/or  modification  to  governance  procedures  to  help  ensure  situations  like  the Lake  House  cost overrun can be avoided in the future.”

So what’s missing in the RFP? Most importantly, nothing in the RFP calls for addressing the issue of accountability of anyone — staff, Board, contractors — for the Tetra debacle:  What bad decisions were made?  Who made those bad decisions?  How were they made?  What should be done about that?  Etc.

In short, there is nothing that looks at the roots of this debacle.  Not so much as an acknowledgement that “mistakes were made” either organizationally or individually, intentionally or inadvertently, appears to be desired in this “independent” report. Certainly nothing suggests that the reviewing consultant should identify potentially illegal or unethical activities, or even improper actions under existing RA processes or procedures by staff or Board members, much less simply stupid decisions and actions.

The RFP is looking only for a whitewash of RA’s and the Board’s actions over the last two years with some suggestions about potential processes and procedures for the future.

Unrealistic Schedule. According to RA’s schedule, by early September RA will select and hopefully sign a consultant for the task of reviewing the Tetra mess. It expects a final report by the end of October — a mere seven weeks later. That is not enough time for a serious review of all that has occurred (see Reston 20/20’s list of eight key issues), much less the preparation of well-founded and appropriate recommendations about the future.

The Board’s explanation for that short schedule is that the report’s results will be needed in November for consideration in the 2017 budget cycle, although there is virtually nothing about the stated goal of developing new processes and procedures that generates much budget impact — ever.

Moreover, RA budget amendments are fairly routine at any point of the year. The review contract itself will require a budget amendment late this year that has not yet even been proposed to the Board, much less approved. RA just made a $430,000 budget adjustment mid-year to cover the cost overruns in renovating Tetra.

The 2017 RA budget schedule is no excuse for the limited timeframe the prospective contractor has to carry out this “independent” review. The contractor should have 4-6 months to do a thorough job.

No External Oversight. As it stands now, only the RA staff will be guiding the contractor’s work, no doubt with some offline kibitzing from insider Board members, but nothing the Reston public or even some Board members will know about. It will be providing guidance as to what work it expects (and expects not) to be done along the way and what the final report should address.

Nowhere in the very short period permitted for this review is there an opportunity for the community to know, much less to influence, what will be in the report. That could be done in an RA-sponsored community meeting or two — an opportunity for the consultant to both present early observations and describe its processes as well as listen to the community’s reactions and ideas. That could lead to a more “independent” review and would be “transparent.”  Instead the contractor will be led by the nose by RA staff and Board insiders.

A small bit of good news is that the RFP calls for the consultants to “meet with individuals and organizations from Reston, to ensure the concerns of the community are addressed in the review.”

Still, how much of what the contractor learns from those people and groups will show up in the final report or be dismissed by inane RA explanations will be driven by RA. It will have the last word, and it won’t be “independent.”

Information Access. RA will also control what information the contractor has to work with although its RFP generally states in a weird way it will make requested information available.

Here is how the RFP makes that statement: “The review will include all materials and documents deemed necessary by the consultant and/or shared with the RA Board and the public related to the Tetra/Lake House.”

So the accessible information includes Tetra-related information shared with the Board and public, but how about information within the staff and its contractors working on Tetra, including communications with RA’s two contract attorneys?

How can the consultant deem materials “necessary” until it knows they exist and reviews them?  How would RA respond to a blanket request for ALL existing information about Tetra?

And that access probably does not include unofficial communications among RA Board members, staff, contractors, and counsel — “personal” phone calls, private meetings, private e-mails, text messages, etc.

“Independent?”  So, please, if anyone can, tell me what is “independent,” much less “transparent,” about this review of the Tetra debacle. As the preceding suggests, there are several ways RA could make the effort more independent, more transparent, and more useful to Reston’s needs even at this late date if it wanted to.

While RA at its Board still has an opportunity to make this review responsive to community needs, more transparent to RA members, and truly independent from RA control, don’t expect it. Restonians should stand by to be soaked with a big consulting bill, little new information, virtually no improvement in RA or the Board, and absolutely no accountability for the continuing disaster that is Tetra.

Terry Maynard

  • jvb11

    I don’t know. My first concern is whether or not we should conduct a full scale audit of this process by hiring a group to conduct it. I am concerned with the kinds of costs that the RA will incur by soliciting proposals and conducting a full audit. Maybe just a review by citizens that would do it for free would do the trick. You don’t want to spend $50,000 – $100,000 or more hiring lawyers or accountants to put reports together where that money might be better spent elsewhere. It just makes the situation worse.

    • cRAzy

      It will be worse than that. A HUUUUGE bill and a useless report.

      • CE

        Do they really want to know where the problem is? Probably not.
        Is this ‘Independent Review’ just some sort of ruse? Probably yes.
        Will the finding of this ‘Review’ be that they didn’t have enough information to inform the members the magnitude of the purchase? You heard it here first.
        Basically they made a mistake spending other people’s money so they’ll spend more of other people’s money so people believe they are trying not make the same mistake again.

        • jvb11

          It may be time for RA to be replaced by a City government. It may be time to incorporate. http://www.dhcd.virginia.gov/commissiononlocalgovernment/PDFs/Ch%2036%20Town%20Incorp.pdf

          • CasperTFG

            So we go from little corruption to big league corruption?

          • jvb11

            No, I think it gives us a chance to have elections with a lot more people participating in the future of Reston and more debate about the issues. I think one of the problems we currently face (as compared to those with city councils) is that members in Reston are elected with 1,000-2,000 votes in any given race in an area where we have 60,000 residents. I think our local representatives should be on the ballot during regular elections.

    • Nyla J.

      An independent review by citizens, specifically excluding any RA staff or board on the committee was motioned by VP Sanio, seconded by Director Herbert and then shot down by President Graves, Vice President Sanio, Secretary Thompson, and Directors Thomas and Wedell. Not sure why Sanio suggested it then voted no, but maybe someone kicked him under the table or something.

      Seems to me they want the appearance of an investigation without actually looking into anything of substance.

  • Mike Collins

    Seems like a lot of hullabaloo, by RA and certain community members, over an overrun that would cost all of $20 per household if it had not already been covered with cuts from other budgets. That said, I have always believed that RA does poor job of forecasting construction costs, so some forward looking observations would be helpful. On another note, what is the basis for suggesting there is even the “potentially illegal or unethical activities?” Do you really think someone associated with RA may have sought to benefit personally from this admittedly flawed process? That’s quite an insinuation.

    • cRAzy

      Do you really believe they didn’t? That’s quite naive.

    • Terry Maynard

      Mike–The full cost so far of Tetra is $3.3 million–purchase plus reno. Nearly half of us think that none of that should have been paid. That cost works out to about $150/household, not counting interest on the mortgage, further upkeep, a bevy of other overhead costs, and–yes–offset by some operating income sometime in the future.

      Reston 20/20’s calculations last year–during the referendum period–using RA’s then-standing assumptions about costs and revenues showed that RA’s net cash flow through 2050 (35 years) would be MINUS $19.9 MM. Anticipating some growth in RA membership over that time, that works out to well over $700/household–and added $20 each year for more than 3 decades. And that’s using RA’s horribly understated cost assumptions.

      Tetra will cost Restonians for decades.

      • Hi school student ok

        I am willing to pay $150 now if that pays off the whole tetra mess, but under one condition. That is the whole board steps down and a new one comes in.

        • Overrunhell

          The Reston Recall cabal still only has 53 Facebook likes with the Petition still stuck at 22 signatures.

          • John Farrell

            Interesting choice of word: “cabal.” That word has a connotation of illegally.

            Why not alliance, coalition or consortium?

            Is it anonymous Overrunhell’s intention to suggest that it is illegal for people of similar opinion to coordinate their political action?

          • Overrunhell

            Not at all… But, I’m very comfortable using the word. If you have a better label for a small group of conspiracy theorists let me know.

            They have openly commandeered the conversation, and it’s a darn shame.

      • Mike Collins

        Well a majority of voters, by a 7% margin, agreed to buy the place, knowing that it would not be profitable. Personally, I doubt the outcome would have been different if the advertised cost had been 400K more. I’m aware of only one RA asset that makes money – boat storage – and that’s just because it is nearly cost free aside for a bit of staff time. Members seem to understand that RA is not a business. Again, I ask what makes you think someone acted illegally or unethically?

        • John Farrell

          RA membership should have had all of the cost information when they voted.

          A decision was made by RA staff and Board not to obtain that information before the referendum was submitted to the members. That was malfeasance.

          Whether knowing that the costs would approach $5 million for a property assessed at $1.25MM would have shifted the few hundred RA members to defeat the referendum is a matter of pure speculation.

        • cRAzy

          Sounds like Collins is running for the RA Board again next year–and following the same failed policies of the current one.

      • Guest

        “On another note, what is the basis for suggesting there is even the
        “potentially illegal or unethical activities?” Do you really think
        someone associated with RA may have sought to benefit personally from
        this admittedly flawed process?”

        Read Reston 2020’s Tetra “key issues” paper. (http://reston2020.blogspot.com/2016/07/key-issues-in-ras-planned-independent.html) Issue #8 highlights the delay in announcing the renovation cost overrun from when it was first known (not later than February) until after the RA elections (May). That has got to be a violation of procedure, if not law, and it clearly benefited all the incumbents running for re-election.

        Yep, that’s YOUR RA BOARD!

    • John Farrell

      You don’t?

      How about one of the three homeowners across the inlet from the Tetra Building?

      • Billy Smith

        John- how do these owner’s benefit? That’s kind of a ridiculous statement to make and who are you specifically implicating?

        • John Farrell

          Ridiculous? Seriously?

          Having private office property converted to community use with very limited hours isn’t a special benefit for the immediate neighbors?

          Can I expect RA to buy the 7-11 behind my house soon?

      • Mike Collins

        True, but Terry’s insinuation was potential malfeasance by the board or staff.

        • John Farrell

          There was.

          It is now clear that Cate and several on the Board were determined to buy the Tetra property no matter what the cost.

          They manipulated the information assembled to engage in a scare campaign that redevelop of that parcel was an imminent threat when there had been no market interest in buying the land in 10 years.

          The appraisal assignment was manipulated to justify a predetermined price.

          And the enormous costs to renovate were ignored or grossly understated.

          All of this was done to achieve a predetermined outcome.

          That is now obvious to any reasonable person anyone who looks at this.

    • Overrunhell

      Well said. Absolutely agree. Early on I was hoping the community would focus on helping their association see what went wrong and implement corrective actions where necessary. Instead, the infamous five self-proclaimed overseers seized the moment and hijacked the conversation. This has now turned into a useless, reactionary, distraction wasting time, resources and money. What a shame.

      • John Farrell

        Again, interesting word choice: “overseers”

        Isn’t that word normally associated with slavery or evil overlords?

        Which 5 RA members are you referring to?

        • Overrunhell

          “…Isn’t that word normally associated with slavery or evil overlords?…”. Yes, indeed it is.

          Having read the blogs and previous articles and other news items, the five folks are rather obvious Mr. Farrell.

          This matter had the opportunity to be properly addressed collaboratively. Instead, the pitchforks came out led by an obvious small group of people with their own personal agendas. Anyone, willing to read, can see this.

    • 30yearsinreston

      a lot of huillaballo over $4 million and rising

  • Greg

    Sell the (now) white elephant. Only the RA and its incompetent so-called “CEO” thinks that throwing more bad money after bad money is good.

  • CasperTFG

    President Graves and RA = President Obama’s “transparency”

    It’s my perspective that Graves should step down due to corruption. It’s the right thing to do.

  • 30yearsinreston

    Turn it into a dog park

  • 30yearsinreston

    i smell another cover up
    The Reston way

  • Greg

    Only takes on buyer — now that it’s “renovated,” perhaps one will come forth.

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