WRONGDOING #1 - Landscape

Posted in: Circle C
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LANDSCAPE MAINTENANCE & REPAIRS - MONOPOLY

In the past five years, Circle C homeowners have been charged the following amounts for the landscape maintenance and repairs.

2004 $575,375
2003 $539,960
2002 $528,030
2001 $568,247
2000 $469,140

Circle C Landscape was started by the Developer, Gary Bradley?’s company ?– Alien, Inc. in 1985. Alien, Inc. had two employees who were also the board members of CCHOA. These two employees were Steve Bartlett and Susan Hoover.

Steve Bartlett was the president of Alien, Inc. for more than ten years and is also the vice president of Phoenix Holdings, another Developer?’s company. Steve Bartlett also served on the board as the vice president of CCHOA since its inception in 1988 through early 2004.

Susan Hoover was the special projects manager for the Developer for about nine years from 1992 to 2000, and she also served on the board of CCHOA as the treasurer for about ten years from 1991 to early 2001.

Based on Susan Hoover?’s own revelation, Circle C Landscape (Alien, Inc.) became Circle C Landscape L.L.C. in 2001 with three partners; one of which was Susan Hoover herself. The other two partners were Brad Beutel (Gary Bradley?’s cousin) and Lazarus Exempt Trust (Gary Bradley?’s Saving Account). In November 2002, Susan Hoover bought the whole company and became the sole owner.

During the last nineteen years, Circle C Landscape operates as a monopoly in Circle C Subdivision. From 1985 to 2004, the landscape contract has only been open for bidding just once in 1999.

In March 2004, CCHOA elected a new management team. In September of 2004, our new board conducted a so-called bidding and evaluation process. What a shame that the monopoly shamelessly remains. Both the old board and the new board used tricks to help Susan Hoover, the former Treasurer of the Association, to retain this lucrative contract at the expense of Circle C homeowners. Here is how the tricks work:

TRICK #1 was engaged by our old board; it is called ?“Comparison Bid?”. This so-called comparison bid was used by comparing the size of the common areas and other raw land in the Circle C Ranch with other subdivisions. Since every subdivision has its own unique landscape, comparing by the size is like comparing apples with oranges. Circle C Ranch has a lot of non-irrigated raw land covered with the weeds; this raw land does not need maintenance at all. When the raw land and common areas are combined together and then averaged out, of course, it makes the maintenance cost of each acreage looks much lower than other subdivisions.

Our old board said, ?“?…..bidding costs the Association a significant amount of funds, so comparative data has been used to determine contract prices. This act alone probably saves the Association over $15,000 per year?…..?”
That is totally and completely untrue. To my knowledge there are a lot of landscape companies eager to offer free estimations for the possibility of obtaining new business. The board has used this as an excuse in order to retain the landscape contract year after year.

TRICK #2 was designed creatively by our new board; it is called ?“Contract Review Committee.?” All three evaluators serving on the committee are insiders. Our new directors let this Contract Review Committee do the dirty work for them, so that the directors themselves can avoid being accused of rewarding the contract to Susan Hoover. Our new board has gone to great lengths to help our former treasurer and Developer?’s employee retain this lucrative contract at Circle C homeowners?’ expense.



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WRONGDOING #1 continued


HOW TO VALUE CIRCLE C LANDSCAPE BUSINESS AT THE TIME OF THE SALE TO SUSAN HOOVER:

If Circle C Landscape did not have customers other than Circle C Subdivision, the actual value of the business at the time of the transfer from the Developer/Partnership to Susan Hoover should be the total fair market value of the used trucks, lawn mowers and other landscape equipments if the Developer/Partnership owned those items. However, if the trucks and landscape equipments were leased by the Developer/Partnership or owned by the landscape crew itself, the basis of this business should be considered as ZERO. Any amount paid by Susan Hoover over zero should be considered as the premium paid for the monopoly.



HOW TO ASSESS DAMAGES IN THE LAWSUIT:

In the summer of 2001, I started openly investigating the Association?’s financial scandal after my discovery of the association fee overcharges earlier that year. Coincidentally, later that year Circle C Landscape, which was at the time 100% owned by Developer?’s Alien, Inc., became a partnership with three partners; Susan Hoover was one of them. In late 2002, Susan Hoover became the sole owner of this business.

I strongly believe that up to this day the Developer is still benefiting from this landscape business in some other ways. I don?’t believe that the Developer would give up this lucrative business without wanting something back from Susan Hoover in return.

STEP #1
I will ask my lawyer to conduct an audit of Circle C Landscape L.L.C.?’s books. The Developer has either sold this monopoly of landscape business at a premium or has shared the profit from the operation. An audit of the books will be able to reveal the whole truth.

STEP #2
I will request my lawyer to obtain at least three or more outside landscape maintenance bids. The lowest bid should be used to figure out the overcharge by percentage in comparison with Circle C Landscape L.L.C.?’s Year 2005 contract. This same percentage can be used to calculate the overcharge of all the previous years?’ landscape expenses.

In addition to the above, we, the plaintiffs, could also recover Exemplary Damages.



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