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Accounting Documents

LCPOA Financial Issues you do not know

* See where the $699,848 from 2023 Budget is Hidden? 
* Withdraw $877,012.38 Reserve money didn't follow the proper procedure ?

Lack of Transparency & Financial Disclosure Concerns

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No financial statements for the current fiscal year have been posted or made available to the membership, despite emailed requests.

The absence of current financial disclosures raises significant concerns regarding compliance with corporate transparency requirements and Davis–Stirling disclosure obligations.  Members cannot reasonably evaluate the LCPOA's financial condition, or the real necessity of a dues increase without timely access to the Association’s financial records.

  • where the $699,848 from 2023 Budget is Hidden?
  • $877.012.38 Reserve fund from May 2025-Feb 2026 without proper notification 
  • Budget Discrepancy: Road repair cost over approved budget
  • Misappropriation of funds:Horse Corsswalk, T. Mause Grading & Paving Snow Removal, Rose Bush replacement
  • Waste Attorney Consultation & Legal Opinion Fee without disclosure to members
  • Overspending on management fees
  • ​Heavy constrution job without multiple vendors bid​s, Same Vendor for 7 years

HOA Reserve Account Legal Description

Let me introduce you to what the reserve account for an HOA reserve account should be. Please feel welcome to view this 2-minute video about a legal regulation of "Borrowing Money" from an HOA reserve, you will realized how wrong that our association still want to raise the association fee.

2023-2024 Financial statement 

Financial overview

Reserve Study

Reserve regulation Civil code # 5515 & 5510 

Dear La Cresta Property Owners,                                   August 21, 2023
                                                                               
This is Director Michael Ghafouri, and I am writing to you again because I’m still very concerned about the continued wasteful spending of your money based on untenable decisions made by the Board Majority, President Cal Westra, Vice President Rick DeAndero, who is running for his fourth term as a director, and Treasurer, James Kramer. 
 
Over the past year, I have endeavored to help resolve several financial issues that directly affect you, some involving what I strongly believe is a fundamental misuse of your funds.
 
  1. THE LCPOA CONTINUES TO HAVE TOO MUCH MONEY
  
Per Treasurer James Kramer's financial report, provided to the board at the August 2, 2023, Open Session meeting, LCPOA has available cash as of June 30,2023, . Pursuant to the approved budget you will be receiving shortly, the association will be another Million Dollars) from you in Assessments, due October 1, 2023. This will bring our total available cash for 2024 operations to ?????
 
Intended uses is to ?? , the membership, that the LCPOA has a financial shortfall and/or will be on the verge of bankruptcy in the, “… next four to five years.”
 
I have repeatedly asked the Board Majority the question, the excuse given is that “…,” although this is not the reality. Keep in mind that we just went through one of the most serious rainy seasons California has experienced, without a failed culvert collapse.
 
Perhaps the real reason for the Board Majority’s aggressiveness to hold onto your money, and the need to hide the “excess” money in our reserve accounts, is their hidden agenda projects, such as Cal Westra and Rick DeAndero’s proposed buildout of a horse trail alongside of approximately six miles of Avenida La Cresta (ALC) at the literal expense of the membership.
 
  1. THE BOARD MAJORITY FY 2023-24 APPROVED BUDGET
 
The Board Majority proposed and approved the budget for the at the June 20, 2023, Open Session meeting and it was prepared solely by President Cal Westra and Treasurer James Kramer. Both directors sit on the ,” created solely to exclude Director Scarpino and I from participating.Historically, the board has worked together on annual budgets during its “regular” monthly Executive board meetings. The proposed budget will be mailed to you shortly, for your review and comments, as required by the Civil Code. and send any comments or concerns to the board.
 
The budget represents in the total expenditure currently needed to with a contribution of to be deposited in our Reserve Account(s), that already has cash in the bank. Please keep in mind that contrary to what reserve funds is for, we do not own assets such as pools, parks, landscaping, club house, fitness center, etc.).
 
The current Budget Reserve contribution of is of our totalAnnual Budget of .Why? Where is the excess money going? What will it be spent on? Again, the reason initially provided is that our culverts are in very poor condition, and they may or may-not ALL collapse soon or at one time.
 
If the above scenario is the reality, and we really do need the money for our roads and culverts, as repeatedly emphasized by Rick DeAndero, then how can he justify recently spending plus on installing a lighted “horse crosswalk?” The horse crosswalk installed on Avenida La Cresta, sees little to no use, due to its location and dangerous conditions.
 
Once again, it is important that you take time to review the submitted Budget Report being mailed to the membership by Avalon Management.I believe the budget document format as written does not accurately reflect how your dues are being applied and allocated.Currently our budget format fails to properly identify expenditures in the proper category under which it was actually spent.
 
I have made several requests for changes in our accounting practices and requests to make additions to the General Ledger (GL) account categories, asking that some be combined.Each request was denied every time by the Board Majority, citing that adding a few new categories would make the budget more cumbersome.The real reason is they don’t want you to know where specific amounts of money are being spent.
 
The word appears to be used as an open-ended term throughout the budget document .The current format is a means of being able to conceal specifically what your funds are being used for.Last year’s budget (2022-23) the plus expenditure on the project recently completed, as a project. This substantial expenditure took place without member involvement. Please see the
 
  1. THE BOARD MAJORITY SHOULD WAIVE YOUR DUES FOR FY 2023-24
 
Last year I again recommended to the Board to waive assessments and collection of annual dues on behalf of all LCPOA Members. Although Director Scarpino and I voted to suspend dues collections for “one year,” Board Majority , and again voted against the motion. As a result, you are still obligated to pay the assessed dues, even though we will soon have approximately in our account(s). Your assessment of per acre, times the number of acres you own, is due by Saturday, September 30, 2023.
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  1. What The Board Majority Wants You to Believe About Our Reserve Account:
 
Director Scarpino and I believe that the board must adhere to and Civil Code Sections 5515 (a) (b)(c)(d) and (e) that allows for boards to “borrow money” from the reserve accounts in times of disaster, if the board follows ALL statutory notifications and provisions associated with “borrowing” money from reserves.
 
Although the Board Majority believes otherwise, the short explanation is that we cannot spend the Reserve money for .We can temporarily from our Reserve account(s) to pay for emergency and replacement of assets, and roads, we are obligated by our governing document to maintain, however, the borrowed money must be paid back in one (1) year, unless an extension of time is needed.Please view the video“Borrowing from Reserves” and make up your own mind what the Reserve account is for.
 
The Board Majority refuses to accept these facts and continues to collect funds and move sizable amounts of your money into our reserve account(s).  Using “Reserve Funds” in place of our “Operation Funds” actually creates a false impression and is problematic.   
 
Rick DeAndero, Cal Westra, and James Kramer all believe the board can use Reserve funds to pay any expenses, such as their special equestrian lighted crosswalk project, just completed, at the expense of $100,000.00 plus.
 
I have seen an increase in expenditures under the heading of “weed abatement” on properties adjacent to ALC.  Those costs have been paid out at the expense of all other members who do not reside on ALC, and who do not receive the same services for the alleged fire protection and safety reasons recently cited by Rick DeAndero during the August 2023 meet the candidate forum.  
 
Our Governing Documents specifically prohibit the LCPOA from owning any assets, yet, the Board Majority approved all recommendations found in the 2nd Reserve Study, including for equestrian trail fencing. Keep in mind, the 2021-2022 FY reserve This is an increase of ?????
 
The information provided is just a few examples. There are several other items of concern that I’ll soon be writing to you about in more detail, as I believe you should be made aware of such matters.
 
Fortunately, there is hope for our community to remain a desirable neighborhood to live in for all members and not just a few. I believe the real power is in the hands of the members not the Board Majority.
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On the LCPOA will hold its Annual Member Meeting to discuss Members issues and to elect three new directors to the Board.By electing the three (3) individuals who hold sound fiscal views, and who will work for membership, you can send a clear message of change to the Board Majority that these injustices committed against the corporate membership will no longer be tolerated, or allowed.
 
The new directors will serve for a two-year term and because of this, Please see the past performance records and flawed decisions made by Director Rick DeAndero, and make your voice heard.!
 
La Cresta deserves Directors who are committed to serving in the best interest of the entire membership and not a few. This can only be accomplished through your voting power.
Sincerely
​
Michael Ghafouri
Board of Directors
 
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"ALL assets should be recorded on the Balance Sheet."

Dear La Cresta members:

Its not “my premise,” I’m referring too, but rather the fact that the ability to own assets is clearly written in the Davis Stirling Act. The exact language from the Act has been read aloud at a past BOD open session meeting by Mr. McLeavy.

There are two asset issues in this discussion. ALL assets should be recorded on the Balance Sheet. They should be depreciated and amortized according to what the law allows. Our Bylaws do not reflect the ownership of any assets, yet we have had a huge asset from the very inception of this POA, the ROADS. We own them, the signs, the crosswalk, etc… along with approximately 5 miles of fencing for our trails. All of these assets should be reflected on our Balance Sheet. The Reserve is specifically for the repair, replacement, or refurbishing of assets and is a completely different issue than what’s reported on our Balance Sheet.

Perhaps if the BOD would allow for an open discussion with the POA’s accountant there could be some clarity in these issues. If true transparency is to be achieved, then the BOD should have an outside audit conducted of our books and the report made directly to the members without the BOD’s interference.

I find it very suspicious, that the BOD always states that it would be too expensive to have an outside audit conducted while at the same time wanting to approve approximately $21k for replacing flowers that isn’t in the POA’s budget. Again, this makes no sense to someone with accounting experience. The BOD brings these suspicions on themselves with their lack of transparency to the members they are supposed to be representing. No recording of meetings, no outside audit, no ability to speak with the POA’s accountant.

This all leads to concerns of what the BOD isn’t telling its members. This discussion also brings up the issue of the vacate of roads. If these roads were built on private land that was subdivided into various plots for sale, then obviously they were privately owned in origination. If that is the case, then why would the POA have to ask the county to “vacate” them at all? This leads to the obvious issue of rewriting the POA’s Bylaws. Not only are they out of date, but they are sorely lacking in the structural detail required of current POAs, i.e. ownership of assets and how they will be maintained.

A deep dive into these documents reveal that the POA has been in noncompliance with its own bylaws for YEARS. It takes a very transparent, honest, and truthful group of people to be able to rewrite our Bylaws with all of the members’ best interest in mind and not multiple personal agendas. There are many members who have expertise in these matters and don’t have a personal/professional conflict with the matters the BOD addresses.

It is unfortunate that these members have been “runoff” by members who are only interested in maintaining their control over the BOD, ie, the money and how it is spent. The personal attacks and character assassination conducted by certain members is just atrocious and has led this POA down this path of self-destruction. These very discussions that have allowed past members who no longer own property to have their opinion posted is exactly what the current litigation is about, ie favoritism and selective enforcement. Certain members and past members are allowed to do what they wish while other members are held to the strictest enforcements of the rules governing this POA.

I’m sure the attorney from the insurance company representing the POA in this litigation would be horrified if he knew that these conversations were taking place. The current issue of the placement of a manufactured home (with an asphalt roof) on a member’s property as an ADU and its noncompliance with the POA’s CC&Rs clearly demonstrates the complaint. Keep going members, you are providing the winning evidence to the plaintiff.

In closing, I highly recommend that the current BOD should review their fiduciary responsibilities to the POA and closely read the definitions of “maintenance,” “asset,” “Balance Sheet,” and “Reserve Account.”

Respectfully

Ron Calisher 
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