Hiring of a New EVP & DFS Good Job! We were lucky!

The hiring of Dave Humpton and Bill Blum Now the Story Can Be Told

Congratulations are in order!

The Montgomery Village community enters 2008 with a collective upbeat sense of relieve, hope and optimism with the experienced and capable leadership team of Dave Humpton and Bill Blum on board, in place and in charge as the Foundation’s Executive Vice President and Director of Finance and Administration. Congratulations and acknowledgments are in order.

Thanks!

To the ad hoc Personnel Selection Committee, for their time, effort and personal sacrifice that brought about such a successful outcome. The committee was able to perform despite distracting challenges to its legitimacy, make up and competency.

To Bob Hydorn in his second meeting as MVF board president calling for board approval of the appointment of the ad hoc Personnel Selection Committee after 288 days or 9 ½ of inaction after Zakian and Barber’s resignations. 9 ½ months is more than enough time to make a baby and fill a key position. But in both situations, someone has to start the process. Although it wasn’t pretty Bob Hydorn’s courageous leadership got the process started.

To Katherine Gray, Jim King and Scott Johnson elected to board in March of 2007 for delivering on their promise to “restoring confidence in Montgomery Village by hiring the best executives we can recruit to be the next MVF executive vice president and a new director of finance”. In their role as members of the board and the Personnel Search Committee they made the difference.

No Thanks!

To the hold over members of the Board of Directors of the Silliman-Wright-Zakian-Campbell era, who after the passage of the motion to establish and authorize the ad hoc search committee to move forward with the search, publicly criticized and questioned the judgment and legitimacy of the board’s actions. As in the past they have contributed little while taking credit for a lot.

And no thanks as well to those Homes Corporations’ tribal leaders whose childish attempt to bully their way to an undeserved seat of power at the search table.

How it happened - Now the Story Can Be Told.

While we celebrate the favorable results now, during its 6 months of intense deliberation, the committee experienced a continuing series of disappointments and set backs. The silent consensus among its members was that a favorable result was very much in doubt.

The Search Begins

At the initial organization meeting of the search committee Pat Huson provided the Executive Vice President’s position descriptions and a status update.

The recently elected members of the board and the home owner representatives on the search committee silently wondered why after almost 10 months there appeared to be little evidence of preliminary staff work, preparation, planning and off course progress made on these 2 important positions.

It was assumed the Foundation would have in place an automatic standard employment process for identifying, attracting, screening, qualifying and evaluating each job classification group when a vacancy occurred. This would be especially true for supervisory and management level staff openings.

Pat assured the committee that indeed was the case. There were already many experienced and qualified applicants for the Director of Administration and Finance position. Lois Campbell was keeping Treasurer Katherine Gray apprised. The Executive Vice President opening had for sometime been made know through trade and executive personnel placement contacts and sources.

Through the spring and summer the committee met frequently to review and discuss applicants and conduct group telephone interviews with candidates. In August the committee presented for board consideration 3 candidates.

Headlines in The Gazette’s September 19^th edition trumpeted the board’s responses “MVF lingers without leader – One board member’s refused to vote leaves hired in 4-4 tie”. The ensuring articles printed Pat Huson’s assessment of the situation “As far as I know they’re still deadlocked. I honestly do not see at this point how it will be resolved. But I’m sure that it will be”.

As the Village enjoyed the Labor Day holiday weekend there the silence on the Director of Finance and Administration opening signaled more disappointment.

What was going on?

As in so many events that don’t happen in the Village the Foundation had once again put into play its policy mandated practice of passive personnel, program and problem solving management style in filling these 2 key positions. That’s right nothing had been done or accomplished.

The application files for the DF&A position lay dormant in Lois Campbell‘s possession including Bill Blum’s impressive resume, his frequent follow up faxes and telephone inquiries.

Other than advertising the position in The Village News there was little evidence that either job was advertised and posted on line in any local, metropolitan, national, trade or employment newspapers or publications. Shortly after the ad hoc search committee membership was determined the EVP opening was posted on the Community Associations Institute “CAI Job Market” internet job bank. This produced the 15 applicants the committee considered and the 3 candidates submitted to the board consideration.

A carefully targeted and managed executive job search for comparable positions, utilizing advertising in the employment sections of metropolitan, national, business, HR and trade journal newspapers and publications and corresponding web postings would normally produce several hundred responses.

How did we avoid the train wreck?

We got lucky, 3 times. First, board member and Treasurer at the time, Katherine Grey had reviewed the initial DF&A applications and resumes received and was particular impressed with the Bill Blum’s experience, background and credentials. Not satisfied with the answers and delays to her frequent inquires and requests, Katherine contacted Bill directly, set up meetings and interviews that lead to his hiring.

The second lucky event was the board dead-locked vote. First it prevented the hiring of yet another MVF EVP selection mismatch. In all probability the rendition of the Village’s pathetic plight as described in The Gazette’s September 19^th edition must have inspired Dave Humpton to say “I think I can help these guys”.

The third component of the perfect storm of luck was Dave’s availability and interest at the Village’s most desperate hour of need.

Financial Report - Mr. Wright you're wrong again!

Mr. Wright is wrong again!

The Village News November 1^st “ Money Matters column by Interim Treasurer Richard Wright reported that “Through 9 months the (financial) performance is essentially on track…with income $301,000 better and expenses $264,000 worse than budget. However, the expenses profile…will wind up slightly negative”.

The remaining narrative was a series of un-intelligible explanations of the alleged income and expenses categories line item amounts and anticipated 2007 year end budget variances. While attributed to Wright, the report was written in the familiar unreliable financial “Lois speak” style prose of Lois Campbell.

The Observer has restated the MVF financial statements through September 30, 2007. While both versions used the exact same income-expense general ledger accounts and cumulative line item amounts, the Observer’s rendition leads to a much different conclusion about the state of MVF’s financial health. (See schedule p4)

Financial Reporting Goals

The effectiveness of the of the financial management budget reporting systems depends on the board’s confidence and willingness to take prompt corrective action and make good financial decisions on unfavorable variations from the budget as indicated by the monthly financial reporting system.

All that said it seem reasonable that the primary goal of the budget and financial reporting system is to produce an accurate, complete, timely, understandable income-expenses budget comparison and balance sheet statements each month.

Inherent in all successful business, non profit and community association organizations is an intuitive sense of urgency about financial reporting, that mandates complete accurate financial reporting communicated thought out the organization normally within days of the end of the reporting period.

MVF Financial Reporting Traditions

In addition to a well planned and deliberate misleading, confusing and convoluted reporting system, the Foundation has developed to a fine art of time stretching from the end of the reporting period to when the MV Village News Money Matters feature fictionalizes the MVF financial highlights.

Because the staff driven bureaucracy has no sense of urgency about completing and distributing MVF’s inaccurate, improperly prepared and misleading financial reports until a few days before the monthly board meeting, any meaningful communications is already 2 to 3 month old.

The Realities of the MVF Financial Report System

The MVF financial statements and reports prepared by staff, presented to members of the Board of Directors in advance of meetings, summarized and reported by the MVF Treasurer at the MVF monthly board meetings and reported in the MV News deliveries an empty message. This results in a distorted and misleading accounting presentation of revenue, expenses, assets, liabilities and equity accounts.

By all indications reporting accurate, complete, timely, financial information is not intended purpose or desire of the senior staff, the Board of Directors and the Audit Committee.

Limited selected financial information is only communicated to create an illusion of favorable financial condition and excellent staff performance as well as to justify past and current board decisions and actions.

Mr. Wright, Prove Me Wrong!

Dick, you may take exception and disagree. If so please set the record straight when you give the Treasurer’s Report Thursday at the December 6^th Board meeting.

Make sure when you report “It (year end budget to actual variance) is expected that the year will wind up slightly negative” discuss and refute The Observer’s projection of a deficit of ($1,002,479) in 2007. (See schedule p4)

When you explain that the Maintenance Activity Fund (MAF) only has a ($42,122) deficit for the first 10 months of the fiscal year please mention that MAF income includes contract income of $603,750 “Fixed Price & ala Carte for Administrative Facility” which isn’t really income but an internal bookkeeping entry . . (See schedule v)

When “Fixed Price & ala Carte for Administrative Facility” is excluded on the 2007 audit report the projected MAF deficit in 2007 will be $1,231,553. (See schedule c)

When you state “Expenses are worse than budget by ($171,016) explain the budgeted line item amounts for “Direct Expenses” accounts used in the budget to actual comparison report are not the amounts approved and published for the 2007 budget.

As you know $674,290 of the direct operating expenses for the first 10 month of the fiscal year was charged to “Fixed Price – Maintenance 5590” which off course is only another bookkeeping entry so no one is really sure if money was actually paid, services preformed or what direct expenses were actually charged. (See schedule i)

When you report that “Through October Reserve spending was $422,000 and Reserve contribution and reserve interest income totaled $276,000” it would be helpful mention the $422,000 “Reserve spending” was not really spent on capital improvement projects but transferred to “Fixed Assets” account under “Fund Balances” , (another bookkeeping transaction off course) .

Also remind everyone that $276,000 “Reserve contribution and interest” isn’t really contributed to the “Reserve Fund” because the Designated Reserves fund is no long is classified as a MVF fund type. Why don’t you, Lois, Keith or someone from the Audit Committee explain how the majority of funds budget for “Reserve Contribution”, “Reserve Interest” and “Reserve spending” (via the “Fixed Asset” account) is used to fund the on going annual deficits of the Community Management and Maintenance Activity Fund.

Dick, if you don't feel comfortable commenting in your Treasurer’s report at the meeting please feel free to post your comments on The Observers blog

Budget Crash of 2008!

The Foundation’s Goals and Community Standards

Budgets are the money expression of the goals and objectives of a Common Interest Realty Association (CIRA). The board of directors’ responsibility to approve the annual budget and establish assessment levels places special emphasis on the board’s stewardship duty to allocate control and wisely utilize community resources.

The budget’s effectiveness depends on the board’s willingness to take prompt corrective action on unfavorable variations from the budget as indicated by the monthly financial reporting system, the on going monitoring of property conditions and feed back from the community.

Roles and Duties in the Budget Process

Staff and Management

Based on based predetermine goals, standards and policy the staff and management must prepare, present, defend and be held accountable for the budget it prepares and presents for consideration and approval.

Every major category and classification of income and expenditures has a standard time tested proven method of measuring and determining budget line item amounts. As a minimum, backup budget preparation schedules should be used to calculate personnel, utility, contract, supply and capital reserve cost.

Presentations of the budget for board and community’s approval and consideration has to be professional prepared and include a comparative analysis of historical, current and future revenue and expenditures. The budget must include rational and reasonable explanations and justifications of program recommendations, income and expenses calculations and analysis of trends, variances and conditions affecting costs.

Board of Directors

The Board of Directors is responsible and accountable for the assets, operations and finances of the Village’s. The budget is the financial plan and the primary tool that allows the board to effectively meet these obligations.

Each board member should:

• Understand his or her financial duties and obligation; the requirements, standards and community goals address in the budget and how the budget is prepared.
• Be willing to challenge and questions all aspects of the budget.
• Hold the staff and management accountable for results and
• Openly, effectively and truthfully communicate and engage in a two way dialog and communication with the community on the merit of the budget.

The Membership

Only then can the property owner members in the Village have a level of confidence in the budget preparation and communication process to judge whether those with power, duty, obligation and influence are:

• Preserving, maintaining and enhancing its property and assets.
• Providing maximum value from the assessment dollars.
• Enhancing and contributing to the Village’s quality of life.
• Effectively delivering customer services to the members and
• Impacting positively on the equity value of common and individual property.

The Approval of the Empty MVF 2008 Budget Package

The MVF Board of Directors and staff should feel an under whelming sense of failure, shame and regret for preparing, presenting, communicating, adopting and approving the MVF 2008 budget and assessments at the October 25^th board meeting.

The only community goals and standards articulated were “no new initiatives” and to “raise the assessment ceiling”. The budget did not address plans to improve customer service delivery or a strategy to restore the function, structure and aesthetics to the Village’s neglected common facilities, landscaping, shore lines, paths and lighting to a community standard of maintenance, care and management.

Missing was a sense of urgency, commitment and capital plan that would restore life to the Village’s crumbling infra structure.

The MVF staff’s2008 budget preparation, presentation and performance lacked supporting schedules, understandable calculations, meaningful explanations, valid comparisons, intelligent analysis or valid rational.

The proposed budget was published without any apparent aspect being questioned or challenged internally by staff, the Audit Committee, or individual boar members.

For the last 6 months Interim Director of Finance and Administration and now “Consultant” Lois Campbell in her role as MVF’s chief financial spokesperson mobilized the public relations misinformation surge, not about the merits of the proposed budget, but to promote a campaign to “raise the assessment ceiling”.

Raising the assessment ceiling has always been the only mission of the MVF village leaders and foundation staff. Open, effective and truthful communication in which all parties engaged in a two way dialog with the community on the merit of the budget was never a consideration.

Lois, in her assumed capacity of MVF Communications Czar, authorized unlimited space the Village News’ September, October and November editions to promote a raise in the assessment ceiling to the over 10,000 Village households.

A willing force of contributors from The Village News editorial staff, former Interim EVP Pat Huson, as well as tenured board members Keith Silliman, Richard Wright and Gerald Donovan contributed articles skillful avoiding the details of the proposed budget.

Questions and concerns raised by those in attendance of the September 25^th budget information meeting and the October 18^th meeting of MVF representatives were dismissed as not germane to the vote to raise the assessment ceiling. The questions covered:

• A comprehensive examination of the budget by line item,
• A plan to contain cost,
• MVF existing budgeting and spending philosophy,
• Accounting and reporting credibility,
• Cost effectiveness of Village wide spending programs

“Letters to the Editor” of The Gazette from Jane Hatch, President of the Board of Northgate Homes Corporation, and The Village News from Eileen Fishman a resident of Northgate, Michael Sheib a resident of Normandie on the Lake II and Mark j. Firley, President of Board of South Village Homes Corporation cried out for :

• Greater accountability and efficiency from MVF operations
• Stopping the abuse to those who dare to question the accelerating demand for money by the Foundation and,
• The abusive comments to those who express a contrary opinion.
• A need for civility and a cease to neighbor to neighbor hostility.
• Current year actual to budget results and detailed line item budget justification before budget decision can be made.
• A reexamination of 2007 results and the 2008 budget assumptions early in 2008.
• Accountability and explanation to residents of condominium communities of the cost of Village wide spending programs.

All the letters were received with silent indifference except to Michael Shieb’s letter in which then Interim EVP Pat Huson’s responded “When people do not acknowledge and support the efforts of the Foundation, they not only do a disservice to MVF, but to themselves and the community as well.”

Mr. Shieb you must realize that there is a long standing MVF board approved policy that when any person publicly express a comment, opinion and/or concern or asked a question about MVF financial matters or services preformed they will be ignored, deionized, patronized, judged unworthy, treated rudely and declared a disloyal enemy of the Foundation.

Relying on the staff prepared and presented 2008 fiscal year budget with the endorsement of the Audit Committee, the board with only Katherine Gray and Scott Johnson voting against, approved a defective financial non plan destined to follow the rocky road to “The MVF Budget Crash of 2008”.

Financial transparency and public comment and approval had been successfully hi jacked and held hostage as ransom in return for a raise in the assessment ceiling.

Budget Crash 2008 The Observers’ Projections and Predictions

Despite the refreshing and open leadership of Bob Hydorn, the good intension and efforts of Hydorn and fellow board members Scott Johnson, Katherine Gray and Bob King to effect financial reform and the hiring an Executive Vice President and Director of Finance and Administration the approval of the 2008 fiscal year budget indicates little progress has been made.

The events over the past 90 days were a series of missed opportunities. The hold over board members from the Wright-Silliman-Zakian-Huson-Campbell regime are still in control promoting the corrupted MVF financial, operating and governing policies and practices of the past quarter of a century.

The most amazing revelation is that Lois Campbell, 3 months after William Blum became the Director of Finance and Administration and 2 months after Dave Humpton was hired as Executive Vice President, in her new capacity as “Consultant” is still in control of Foundation’s communications and financial operations and exercise unchallenged influence over board and committee deliberations. John Zakian, as much of a control freak as he was, exercised less power and control and in The Observer’s view, wasn’t not nearly as dangerous.

If the Foundation embraces the MVF 2008 fiscal budget and continues its past financial policies and practices The Observer predicts the following will happen:

1. There will be a shortfall in non-assessment income of $1,439,549. The assessments only account for 56% the $ 8,585,527 expenses and reserve contribution budget. The Foundation has a history of substantially under estimating non-assessment income and 2008 will be no different. (See schedule C)

2. The Foundation will end up the 2007 fiscal year with a financial deficit in excess of a million dollars, and if the Board of Directors does not take appropriate action the 2008 fiscal year deficit is project to be $ 1,532,636.(See schedule A)

3. The combined deficits from the Community Management and Maintenance Activity Funds will be $$1,415,594 in fiscal year 2007 and $1,533,636 in fiscal year 2008. (See schedule J)

4. These deficits will be funded, as in the past, from funds intended as contributions to the Reserve Fund and curtailing spending common property maintenance and capital expenditures.

5. At the urging of the Audit Committee and influential board members Lois Campbell will be continue to retained as a paid financial consultant to further educate Bill Blum, Dave Humpton and newly appoint Treasurer Darcy Bingham on MVF financial policies, traditions, accounting and reporting practices, produce the November and December 2007 financial reports and work with Regardie, Brooks & Lewis on another “Clean Audit” for the 2007 fiscal year.

Budget - Just say no to a raise in the assessment ceiling!

Just say no to a raise in the assessment ceiling!

It’s the budget first It is the board’s responsibility in approving the budget to exercise due diligence in such a way as to ensure it effectively allocates, controls and uses the community’s resources. Only when that is accomplished can or should the board establish assessments levels. However, a deliberate and careful budget process on the merits of budget has been ignored to engage in a public relations campaign to raise the assessment ceiling.

The proposed ceiling increase won’t work As has been the practice over the years the 2008 budget includes 2 income line items that are not recognized as revenue in the annual audits. “Assessment Collection Fees” and “Fixed Price & ala Carte for Administrative Facility” are accounts which are offsetting income and expenses transactions are not income. These are bookkeeping entries and not actual MVF revenue.

When these budget transactions are included as income in any budget draft or financial statements, the total income is inflated and misrepresented. When adjustment are made to the 2008 budget proposal eliminating these non revenue bookkeeping entries and not changing the expense budget a projected deficit of $1,363,419 is created. Consequently, to balance the 2008 budget $1,363,419 in reduced expenses must be identified.

The expense budget for 2008 of $8,585,527 is $1,753,265 greater than the 2006 audited expenses. The 2008 proposed budget assessments of $4,825,785 is only $750,030 over the 2007 $4,075,755 assessments. To be preoccupied with the assessment ceiling and not the merits of the proposed budget makes no sense. And off course, neither does the 2008 proposed budget. (See schedule C)

History of Over Estimate Expenses and Underestimating Income The Board of Directors of the Foundation has a history of approving annual budgets that substantially over estimates non assessment income and under estimate operating expenses creating a severe cumulative budget deficit condition. (See schedule N)

Unfortunately, the board and senior staff live in the state of permanent denial, stubbornly pursue inadequate and poorly administered remedies, have not been forthcoming with the financial and property condition realities and are unwillingness to take prompt corrective action on any of the adverse financial and facilities condition problems facing the Village.

History of Loss in CM and MA Funds There has been history of losses and deficits over the years in the Community Management (CMF) and the Maintenance Activity (MAF) funds. These deficits were funded using money designated for capital reserves while neglecting maintenance and landscaping services to the public areas. (See schedule Q)

Arguments for Raising the Assessment Ceiling

Quality services will not be provided – When has the Village ever had quality service? For decades there has been general deterioration of the Villages’ parks, streams, and lakes’ natural resources. Can “Those people who are close to the organization and who appreciate its value” see the crumbing walkways; dying, crippled and diseased tree life; eroding and inadequate turf coverage being conquered by invasive and wild plants? Have they not noticed eroding soil washing into the adjacent lake and streams? Have they been aware of the temporary and inadequate stop gap shore line repair measures Lake Whetstone has endured for years? Have the not observe the neglected physical structures, the absence of normal care and maintenance routines and the ever growing backlog of capital needs?

It’s not about the ability to continue providing quality services it is about why these conditions exists, what happened to the millions of dollars collected from past assessments to maintain and preserve Village assets and how to create awareness of these conditions on the part of the board and senior staff so we take corrective action and do a much better in the future.

Reserve funds will not be available for need capital “Reserve Contributions from Assessments” (The board of director’s approved policy mandates it be equal to the annual depreciation cost) and “Reserve Interest” (Interest on reserve investments) are required budget line items that equal the annual funding source for the Reserve Fund. A small fraction of assessment and interest income budget for capital reserves has been credited to the Reserve Fund.

In addition, other than capital expenditures on Landscaping and Public Works equipment, there is little evidence that capital expenditure from reserves were ever spent to improve common property assets. Assessments and interest income designated for capital reserve have funded deficits in other fund types.

The embezzled funds don’t count The June 6^th edition of The Gazette reported “There were 21 other fraudulent transactions from the summers of 2004 and 2005 ranging between $75 to $3,500 for 7 employees, for whom Buttry created false payroll accounts in years when those employees did not work and deposited the wages into her personal account. A former lifeguard who was being audited by the IRS for wages supposedly paid to her in 2005-a year she did not work put investigators on the path that led to the $86,000 theft-scheme charge”.

In managing and operating a multi pool facility department it is incredible that MVF has never had a workable and effective payroll administrative control system. The ease, consistency and skill which Laura Buttry could steal substantial funds from the payroll system and go undeterred for so long a period is just one example of MVF’s long standing and continuing out of control financial and personnel staffing operations.

If you don’t favor the increase; good governance, Village activities, effective management control systems and the appearance of the public areas are unimportant to you and Montgomery Village is not the place for you to live. So move!

No Lois, Pat, Gerald, Richard and Keith, it’s not those who oppose the raising of the assessment ceiling who should go. We need to stay to clean up the mess!

Financial Report - The truth about The August 3, 2007 MVF Financial Reports - It's not good news!

The Village News Has Arrived!

Lois Campbell in the Village News “Money Matters” feature (October 12^th edition) reports in her signature euphemistic “Lois speak” the latest MVF financial good news. Rivaling Alan Greenspan’s secret language of opaque and convoluted dialect Lois writes that “Through eight months, the performance is essentially on track; …Expenses are over budget by $247,000…however, the expenses profile for the remaining months of the year has some uncertainties”.

Follow is the Observer’s restatement of MVF financial statements through August 31, 2007. Although both reports used the exact same income-expense general ledger accounts and cumulative line item amounts, the Observer’s rendition leads to a much different conclusion about the state of MVF’s financial health.

The following are the differences in the 2 versions.

Overhead Expense Allocation The overhead expenses allocated the various accounting funds equals between 20 to 23 % of the total expenses. For this year the budgeted allocation cost is $1,508,605 and $1,804,561 proposed for 2008. These overhead costs are not allocated prior to the preparation of the monthly financial statements.

Consequently, the MVF financial statements do not include detailed comparative reports of expenses and income categories, individual line items or fund types. The Observer has made the cost allocation and has reported by operational groups within each fund type.

Unrecognized Income “Assessment Collection Fees” and “Fixed Price & ala Carte for Administrative Facility” are income accounts which are offsetting income and expenses transactions not recognized as revenue in the annual audits.

When these budget transactions are included as income in any budget draft or financial statements, the total income is inflated and misrepresented. The Observer has excluded “Assessment Collection Fees” and “Fixed Price & ala Carte for Administrative Facility” from its version explaining the $498,787 variation in income between the 2 versions.

Summary Reporting The “Income/Expense Summary” and “Balance Sheet as of August 31 2007” as reported on page 12 of the current Village News only displays total income ($5,345,936) and expenses ($5,300,098).

The Observer’s Income - Expenses comparison report presents a detailed comparative of expenses and income categories and fund types and comparison of the MVF balance sheet information with the December 31, 2006 audit balance sheet.

Financial Analysis Narrative There is no factual basis for the MVF narrative analysis and conclusions that are printed in the Village News and the financial statements provided MVF board members in advance of monthly MVF board meetings.

The “Money Matters” columns only publish a total summary “Income/ Expense” and “Balance Sheet” and does not include a detail of sub categories, fund types and income-expenses categories for the periods being compared and analyzed. However, the oral and published narrative and explanations refers to and compares unrevealed financial data.

Consequently, you either accept the staff’s analysis and conclusions on blind faith or assume what is being presented is fiction, fantasy or fraud.

Income and Expenses

Expenses exceed revenue by $495,271. The Community Management (CMF) ($74,117) and Maintenance Activity Fund (MAF) ($306,377) deficits account for 76.8% of the operating deficit through August 2007. The 2007 year end projections indicate a possible MVF 2007 fiscal year deficit of $1,224,637, CMF a $76,306 deficit and the MAF a $1, 3281,175 deficit.

Revenue

Projected income for 2007 fiscal year is $960,222 lower than the approved 2007 budget. “Assessment Collection Fees” ($132,000), “Disclosure Income” ($64,500), “Class and Courses” ($25,200) and “Fixed Maintenance MVF Maintenance Contract Income” ($724,500) account for this revenue variance.

Expenses

Projected expenses for 2007 fiscal year are $239,418 higher than the approved 2007 budget. Payroll expenses ($246,622), Utilities ($39,974), and “Audit” ($35,268) account for this expense variance.

There are many confusing aspects of the MVF financial budgeting, accounting and reporting system. The most confusing and difficult to explain or understand is the treatment of direct expenses incidental maintenance, landscaping and snow removal services on common property provided by the Maintenance Facility and Public Works department.

The individual line item direct expenses budget amounts for current, year to date and 2007 budget displayed for directed expenses are substantially different than the approved budget. Each month $50,572 is charged as a direct expense to account 5590 Fixed Price Maintenance. Under this different schedule of budget expenses the annual budgeted amount for account 5590 is $606,861. (See schedule I)

Consequently, when the current through August expenses are projected through the end of the year “Grounds, Landscaping, Lakes and Streams” is under budget by $427,755 while “Maintenance, Repairs and Supplies” will be over budget by $603,218.

Balance Sheet

The balance sheet does not show an amount in a number of account classifications. Balance sheet accounts such as “Accounts Receivable” and “Accounts Payable” are normally updated to the last day of the reporting period as part of a standard accounting “close out” preformed to the books and records prior to producing the financial reports. This raises questions to the accuracy of the published financial reports.

The balance sheet shows a reduction of “Cash & Equilvants” of $339,433, $471,717 in “Total Assets”, $501,913 in “Current Liabilities and $232,665 in “Reserve Funds from the 2006 Audit balance sheet reports as of December 31, 2006. (See schedule P)

Please stay posted to the Montgomery Village Observer’s Blog and website for more bad news about the MVF 2008 proposed budget and the awful truth about raising the assessment ceiling.

Budget - The MVF 2008 Budget Process - Let the Games Begin!

6/28/2007 Approval of the 2008 Budget Preparation Guidelines

At the June 28^th MVF board meeting the board officially kicked off of the MVF 2008 fiscal year budget countdown. As reported in the July 13^th Village News in its “In the News” column staff reporter Mike Conroy reported under Money Business “On the heels of the positive balance for the 2007 budget, Lois Campbell presented the Board with the 2008 Budget Guidelines, as the time to start the budgeting process is right around the corner.”

At the meeting the board acted on 3 staff recommendations necessary to move the budget process forward. First, the board approved the 2008 budget preparation guidelines after agreeing to fund the reserve contribution assessment to a 75 percent level (as recommended by the reserve study report) by a 4 to 2 vote, agreed to consider a raise in the assessment ceiling and third, it set the 2008 budget timeline as follows.

Thursday June 28^th - Set guidelines and authorize preparation for ceiling increase.

Thursday August 16^th - Joint Board and Audit Committee draft review meeting.

Thursday August 23^rd – Board of Directors meeting – Approve draft budget for publication.

Thursday August 31 - Publish draft budget the Village News.

September 1^st to 27^th – Public Commentary period.

Thursday September 27 - Board of Directors meeting – Approve assessment rate and adopt budget for 2008.

Using the 2007 budget as a starting base for calculating the 2008 budget, the guidelines methodology consisted of only 4 steps:

1. Add to “Wages and Benefits”, per the Personnel Committee’s recommendations, 3% for merit raises and $144,000 for new staff positions not included in the 2007 budget.

2. Increase non personnel related operating expenses 3.5% to compensate for inflation

3. Increase “Inter Company” expenses from $724,000 to $900,000

4. Budget $715,000 as “Contribution to Reserves” (Note: this is 75% funding of the amount recommended by Advance Reserve Solutions in its July 2007 reserve study report).

The guidelines present more questions than answers.

Budget to Actual Comparison Is it reasonable to use the 2007 approved MVF budget as the foundation for the 2008 budget? How is the 2007 budget matching up in the monthly financial statements when compared to the actual income and expenditures by fund type and ledger accounts against the budget? In her July 13^th 2007 “Money Matters” column :Preparing for budget season” Lois Campbell wrote “A well-developed budget enables management to measure performance during the year and to make adjustments as needed. The “traditional budget vs. actual” is the gold standard for management success or failure.”

Based on what has been communicated by senior foundation staff, reported in the Village News and shown in the monthly financial reports made available to the board members each month, the 2007 actual expenditures through July compare favorably to the approved budget.

At the June board meeting Lois Campbell was quoted “that the Foundation continued its (favorable) trend from April …the budget still looks to be on track to stay balanced.” After hearing the positive outlook, Board member Jerry Donegan was “encouraged by our bright future.”

However, when budget and actual expenses and income operating categories are organized and compared by fund type a somewhat different picture appears. Using the July 2007 monthly financial statement provided board, the differences emerge:

• Substantial over estimating of income and under estimating of expenses.
• Widespread line item variation between published 2007 budget amounts and what is shown as the annual budget in the monthly financial statements report to the board
• Inclusions of inter fund income fees that record no corresponding expense or negative income offsetting from other fund types. These types of transactions have not been recognized as revenue in the annual audits
• Inter-Company Expenses” equal to the total foundation maintenance and landscaping cost is included as income to the maintenance activity fund. Income from these type sources have not been recognized as revenue in the annual fiscal year audits.
• As has been the pattern for the past several years, there have been significant losses in the community management and maintenance activity funds.

In the opinion of the MV Observer, building next year’s budget solely on this year’s numbers as presented to the Board is burying MVF’s fiscal future on a foundation of quick sand.

Budget Preparation Policy Will the 2008 guidelines as presented supersede the existing established board policy that outline the methodology for preparation of the annual budget and establishing assessment levels?

In a series of articles on the budget process was published in the Village News in the spring and summer of 2006, John Zakian in one of his Executive Vice President’s Message column discussed at length the principles and concept of Zero Based Budgeting (ZBB) as the basis of MVF’s budget preparation policy.

In the June 16^th 2006 Montgomery Village News front page story headlined “Work to begin on Drafting 2007 budget” it was stated that “Zero-based budgeting principles will be in use for drafting the 2007 budget, which means that all programs, services, activities, and staffing levels will be reviewed top to bottom as to need, purpose, justification and appropriate level of financial support.” In Lois Campbell’s July 13^th “Money Matters” column referenced earlier she stated “In short a well-articulated (budget preparation )concept prepared with care results in the ability to exercise management controls over the corporation by measuring progress against financial bench marks and corporate goals”.

An effective resolution that establishes, defines and implements the community’s board approved policy should do the following:

• Set forth in a public statement the community’s commitment that becomes an integral part of the association’s governing documents
• Establish this commitment in a framework that will ensure compliance with the law, the association’s governing documents and the association’s unique and specific requirements and the board’s fiduciary duty
• Allow for consistency in purpose, procedures, best practices and principles
• Insulate and protects against short-term pressures, conditions and occurrences that should not affect future related decisions and attitudes.
• Protect the policy from erosion and poor practices over time as the board, management, vendors and staff membership and viewpoint change.
• Ensure continuing, effective, reasonable and professionally performed practices.

In our view, it was not wise for the board to agree to use the “2008 Budget Guidelines” as budget policy rather than one based on Zero Based Budgeting (ZBB) as John Zakian inferred was policy in 2006 and which Lois Campbell intimated in July of this year was to continue to be the 2008 policy.

8/10/2007 2008 MVF Draft Budget Delivered

Although the board members waited with great anticipation for the arrival of the staff proposed 2008 budget their attention during the interim 7 week period following the board’s approval of the 2008 budget guidelines the board was very much occupied with other matters.

There was a protest from the residents of the partitioned community of Picton directed towards the independent kingdom of EVHC “to tear down that wall”. In attendance at the July 28^th MVF board meeting were District 14 representatives of the Maryland General Assembly.

On July 30 a Dispute Resolution Hearing was held concerning the board’s actions in appointing a treasurer and the composition of the EVP Search Committee. After meeting for more than a dozen times the EVP Search Committee became deadlocked over a final selection.

On Friday August 10^th the MVF 2008 budget draft was delivered in a hand addressed plain brown envelope propped between the screen and front entrance doors of MVF board members. The envelope contained the proposed budget in a 3 ring binder together with an explanatory covering letter.

With only one week to study the document before the August 17^th joint meeting of the board and the audit committee time was essence. The budget was quite a homework assignment for even the most knowledgeable and experienced MVF budgeters.

The joint meeting of the board and the audit committee was held as scheduled with no changes recommended.

8/16/2007 Presentation of the MVF 2008 Fiscal Year Budget

The August 17^th edition of the Village News “Money Matters” feature by Lois Campbell contained an edited version of the summary cover letter of explanation to the 2008 Draft Budget delivered one week earlier to the board members. Following are the direct quotes from both sources.

Balancing the Budget

“This budget is balanced and includes assessment increases for both the MVF and a Designated User (DU) funds…every line item in every department has been examined for excess. No new initiatives have been added and no services have been cut. However the assessment ceiling must be raised in order to avoid a deficit budget. Community Management and Landscaping and Public Works are at breakeven in this budget. Income is estimated conservatively and expenses have been carefully examined.”

“The current year (2007) budget is a balanced budget after two years of deficit budgets. Years 2005 and 2006 were back to back deficit budget year that were made worse by poor accounting practices and inadequate financial oversight. Primarily, the cause was the reduction of assessments in 2005 followed by no increase in 2006. If the CPI and cost of living increase had been applied to the 2005 and 2006 budgets and the assessment ceiling had been raised, many of the current difficulties with budgeting would not exist today. It will take time and effort to recover financially from the mistakes of fiscal years 2005 and 2006.”

“This 2008 budget will either be a deficit budget once again, or the ceiling must be raised. Both the MVF and the DU rates must be increased.”

Mistakes of the Past

“In addition, commitments to services clients were added, often without a thorough understanding of the cost and without receiving sufficient income to cover the cost. Furthermore, there was little financial oversight until late in the year.”

Contribution to Reserves

“The 2007 budget was balanced by including a reduced contribution to reserves. In 2006 there was no contribution to reserves as there were no funds available to make that contribution. For 2007, a MVF assessment ceiling and a responsibility to MVF members and Designated Users rightfully limited corrective action. Thus, the 2007 budget was balanced by limiting the contribution to reserves to $118,000."

“The assessment ceiling cap on the MVF Fund was reached in the 2007 budget. This was not sufficient to cover the full contribution to reserves. Had the contribution to reserves not been reduced, it would have been a deficit budget for a third year.”

Longer Term Issues

“The future has its challenges; the assessment ceiling has been reached and specific plans for financial revitalization have not been drawn up. These challenges deserve some further discussion. Financial resurgence requires the Board to take action. This action not only includes raising the assessment ceiling, but restoring the operating fund balances to positive territory. Financial health will not occur without intervention. Efficiencies in management and services are being sought throughout the organization and can be foreseen in the future but not until existing structural problems that have been developed over the last three years are corrected”.

“A final word on financial health it take time to undo the mistakes of the past. While great strides have been made to restore the accounting system to an acceptable state, this is not sufficient. Sound financial management is required. It cannot be accomplished in just one year, but this draft budget is the first step in the right direction.”

In her Executive Vice President’s Message titled “Reflections on the year” Pat Huson wrote “During this past year a number of tasks involved restoration of former standards and policies, which were by-passed or changed to the detriment of the organization…In the area of finances, an intensive effort has been made over more than a year to bring the financial record keeping and reporting back to excellent condition. Internal controls have been evaluated and updated to an effective level. Several new staff members are in place and are doing an excellent job. Monthly reports are being produced, and a proposed budget for 2008 has been prepared for review by the Audit Committee and the Board of the Directors. An assessment ceiling will need to be raised to fund the budget.”

8/26/2007 Board Considers 2008 Budget

As reported in the Village News August 31 edition “Interim Director of Finance and Administration, Lois Campbell, presented the 2008 draft budget. Campbell noted that although there had been financial problems in the past MVF’s current situation is such that the accounting problems had been corrected by the end of 2006 and proper financial management had been in place since August of 2006 due to her own efforts and those of Pat Huson.”

What was not reported in this edition of the Village News or in the August 29^th edition of the Gaithersburg – Montgomery Village Gazette was that the Foundation Board failed to approve the 2008 Draft Budget by a 4 to 4 deadlock vote. The board did agree however to publish the 2008 draft budget and the remaining budget schedule dates and events.

8/31/2007 Campaign to Raise the Assessment Ceilings

The previously published 2008 timeline approved at the June 28^th board meeting showed September 1^st to 30^th as “Public Comment” period. Now as announced and prominently displayed in a bold border frame on page 5 of the August 31^st edition of the Village News, “Raising the assessment ceiling of is the one and only mission of the MVF village leaders and foundation staff.

Schedule for raising the assessment ceiling

Wednesday, September 5^th - Send notices and information to homes corporations, condominium and multi-family MVF representatives on meeting schedules to vote on the assessment ceiling increase.

September & early October - Board members promote ceiling increase with Homes Corporation and condominium presidents.

Tuesday, September 25^th - at North Creek Community Center (20125 Arrowhead Road) – Village wide meeting to educate MVF representatives and alternates.

Thursday September 27^th – MVF September board meeting.

Thursday October 18^th at Lake Marion Community Center (8821 East Village Avenue) Vote taken on increase in assessment ceiling.

Thursday, October 25^th or Thursday November 8^th at North Creek Board Room (20125 Arrowhead Road) – 2008 Budget approved and MVF and DU assessment set for 2008.

Friday November 2^nd or Friday November 16^th Assessment announcement in Village News and notices sent to owner prior to Saturday December 1^st.

The preparation of the 2008 Draft Budget by the staff is no longer a step in the overall process that allows board members with due diligence and forethought, to carefully craft a board budget for public release.

As Lois Campbell and Pat Huson confirmed in the September 14^th Village News financial transparency and public comment and approval have been hi jacked and are now being held hostage as ransom in return for a raise in the assessment ceiling. There is no indication from anyone on the Board to the contrary.

The question is do we allow the Foundation Board to raise the assessment ceiling or we raise the roof on the MVF financial house of cards?

Keep posted much more to come!

Money - Act Two Déjà vu all over again -May to July 2007

Act Two Déjà vu all over again

Act Two Scene 1 Media News

The Initial MVF Response

On Friday May 25^th , before finalizing his May 30 edition story headlined “Embezzler faces new charges – Investigation uncover scheme in which an additional $86,000 was stolen from the foundation”. Sebastian Montes called MVF board president Robert Hydorn for his comments. The latest allegations were that over a period of time covering 6 fiscal year “clean” audits, Laura Buttry used her unchecked access to MVF bank accounts, payroll records, wire transfer codes and general ledger accounting system to at will reach into any foundation fund and/or cost center and steal cash.

Bob’s 15 months on the board have been quiet an education. For his first year he was many times a lone concerned voice of one questioning MVF’s failed financial, operational and personnel policies and practices. On his first day on the board, Hydorn was declared an “enemy of the foundation” and appropriately ignored over the last year and a quarter.

Hydorn was elected president, only 61 days prior, by a fragile 5-4 vote with support of the 3 newly elected reform candidates. The board’s voting majority had agreed to what it thought was an appropriate “Media News events plan” but in no way were they prepared for the scope, extend and seriousness of this new disclosure. Quickly recovering his composure Bob placed in motion the emergency plan by:

• Telling Monte he needed to check on the details before commenting.
• Discussing with MVF senior staff what they knew and when they knew it
• Notifying via e-mail all board members, Village volunteers elected and/or appointed positions of responsibility, duty and obligation including the presidents the village’s homes corporations, community associations and condominiums of an eminent “Media News” event.
• Engaging Fay Jacobs formerly MVF’s director of communications to prepare his statement to the press over the Memorial Day holiday week end.
• Releasing this carefully prepared and verified official MVF Board statement to the press and publish to the community in the June 1^st edition of the Village News.

It was a valiant effort and a proper way for the MVF board to:

• Speak with a united voice,
• Draft and issue an accurate statement,
• Show proper concern about the serious of the event and
• Promise complete and accurate updates when additional information becomes available.

What Hydorn failed to realize that the newly elected majority transparent, accurate one voice “Media News events plan” had in no way been accepted by the “minority” on the board, senior staff and the brotherhood of Montgomery Village spokespersons (BOMS). Bob was still an “enemy of the foundation” and in accordance with its “Code of Communications” must be treated as such. In all probability Sebastian had already reached senior BOMS Lois Campbell for comment before connecting with Hydorn. Lois was quoted in The Gazette’s May 30 edition “throughout the investigation foundation staff divulged details “strictly on a need-to-know-basis”. Unfortunately for the president of the board and other enemies of the foundation on the board there was a lot they “did-not-need-to-know”. Bob and his fellow voting majority board members still didn’t know what they didn’t know.

For those readers not totally familiar with the Village’s governing structure a brief explanation may be in order. There are 2 distinct dominant viewpoints among the various MV homeowners, stakeholder groups and organizations know as the “Reformits” and the “Traditionees”.

The Reformits feel there are serious built in deficiencies in delivery of basic services, personnel staffing and organization as well as maintenance of foundation’s facilities. The Reformits think past boards have failed to exercise adequate oversight and supervision over staff, contracts and the foundation’s finance and fiscal matters. The Reformits’ believe reform of the MVF’s governance and operation is needed now and that Traditionees are in denial and usually deploy and ineffective decision making management style.

Reformits believe the MVF board of directors is the duly authorized elected policy and decisions body. Based on its powers and duties as outlined in the governing documents the board establishes policy, committees’ advice the board on policy and management and staff implement policy.

The Traditionees content that over the years and currently, MVF is as a well run community with superior recreation facilities and a strong sense of community pride enhanced by numerous Foundation sponsored programs. The Foundation’s facilities are cost effectively maintained at acceptable community standards and that cost and fees have remained low without adversely affecting maintenance, operations or capital funding for future needs.

The Traditionees believe in a decentralized consensus form of governance and system of checks and balances. Under Traditionee’s rule certain committees can determine binding policy guidelines within its committee charter and a plurality of homes corporation representatives can exercise power to delay, alter and/or table indefinitely MVF board actions, goals or initiatives.

The March MVF board election the 3 Reformits candidates received 81% of the votes cast leading to its fragile voting majority.

However, as Nancy Pelosi and Harry Reed have learned a voting majority is not sufficient unless you can control the decision making, governing and communication processes; have the loyalty, support and compliance of the staffing organization and are synchronized and in concert with the committee organizations.

From the News Report

As reported in the May 30^th and June 6th editions of the Gazette and the original warrant of felony theft filed on there were 6 types of cash theft schemes encompassing individual and total employee 401 k retirement funds, payroll bank accounts, MVF operating fund bank accounts, fraudulent charges and credits entries postings to the general ledger accounts maintained by MVF financial services department, forgery and identity theft. As outlined in the Gazette reports:

Retirement funds “The earliest dates to March 28, 1999, when Buttry allegedly withdrew $15,000 from the 401k retirement of a long-time foundation employee who had already retired. Buttry made another multi-thousand dollar withdrawal from that account a year later”.

MVF fund accounts “and when the retiree tried to access her retirement funds in 2004, Buttry used other foundation funds to cover the missing money”

General ledger accounts “…and then created a fictitious entry in the foundation’s expense records for nearly $32,000”.

Forgery “…Buttry also allegedly altered two foundation checks totaling more than $29,000 in 2004 and made herself the payee according to the charging documents”.

Payroll and identity theft There were 21 other fraudulent transactions from the summers of 2004 and 2005 ranging between $75 to $3,500 for 7 employees, for whom Buttry created false payroll accounts in years when those employees did not work and deposited the wages into her personal account. A former lifeguard who was being audited by the IRS for wages supposedly paid to her in 2005-a year she did not work put investigators on the path that led to the $86,000 theft-scheme charge. The Gazette 6/7/07

“Police now say a former employee of the MVF embezzled nearly $100,000 from the nonprofit over five years …when a former life-guard for the foundation notified Village officials she was being audited by the IRS for income from 2005, a year she did not work for the group…Buttry recreated the 2004 payroll account for 2005 and deposited the fraudulent wages into her own bank accounts…investigators discovered 6 similar fraudulent payroll accounts.” The Gazette 5/30/07

Act Two - Scene 2 Setting the Record Straight

As bad as “The Groundhog Day” exposure of the first week of February, these latest allegations concerning the troubled state of MVF financial recordkeeping, reporting and communications are much more complicated and far reaching. On the surface it could be the end of the Traditionees’ rein of power and influence.

Not by a long shot. Although they were no longer a voting majority, the Traditionees was not going to loss face, have their honor disrespected and/or give up their rightful power and status.

The board’s voting majority were not the only ones with a “Media News events plan”, as the Traditionees were surprising well prepared. It involved a 4 pronged “surge” strategy:

Expanded beyond the print media message blitz by the Brotherhood of Montgomery Village Spokespersons (BOMS), including activating the BOMS reserve forces, and

From all areas and organizations in the Village recruit a Traditionees coalition of support

Attack and discredit (A&D) all initiatives and actions by the Reformits on the MVF board.

By any means maintain control of the Village finances, budget and audit processes and senior accounting staff.

Media message blitz The BOMS’ expanding from its “Campbell-Huson-Silliman” core to include Mike Conroy, acting director of communication, board member Dick Wright and by providing them with limited misinformation, board president Bob Hydorn and newly recruited spokesperson Jay Jacobs. Several members of the BOMS’ reserve forces recruited from the Traditionees’ Coalition contributed through the surge.

As was proven during first “Media News” event the first week of February, there was no reason to let “Public Concern” to gain momentum this time either. The “Setting the Record Straight” strategy of quickly, aggressively, continuously and religiously following the VVF financial “damage control plan” and the BOMS’ “Code” of communication the strategy worked very well last time. After 91 days of being on message the “Reasonable Answer” was accepted as fact. From all indications even Sebastian’s columns parroted the code’s scripted chant as the voices of the dissidents quieted as more and more regulars at the various board and committee meetings in the Village showed up with traces of purple lips from exposure to the Village News bi weekly printed cool aid.

The updated “Set the Record Straight” messages themes about the latest “Bump in the Road” included

“Forensic audits raised-awareness, educated staff and will help avoid future thefts”

“If stolen funds are accounted for – that’s a good thing”

“Reformed financial department, present loyal-hard-working management, staff and supervision is better than ever”

“The perpetrator will be punished”

“Internal controls and MVF’s finances and records have never been better and are too numerous to mention.”

“Auditor, hard-working-loyal staff, police prevented further losses”

“Avoid the details of the series of felony thefts, Legalities prevent us from informing you at this time”

Recruit coalition Traditionees reinforcements would be recruited from the entrenched committee power structure; close personal associates, friends and family of those opposed to change; MVF staff who fear accountability as well as reaching out to tribal leaders of the village provinces.

Attack and discredit (A&D) Inspired by Karl Rove political strategy, attack and discredit the opposition regardless of the merits, advisability or correctness of their position, the Reformits voting majority initiatives and/or public statements must be attacked and discredited.

Financial control Place and keep in placeTraditionees in all financial related positions of influence, obligation, responsibility and duty within the board, committee and staffing operational and governing structures.

The Surge

In record time Friday June 1^st The Village News “Set the Record Straight” timing was perfect following only by 2 days The Gazette’s May 30^th regular Wednesday publication date. The MVF media research department had determined most of the Gazette’s MVF stories were emerged in a sea of multiple advertising inserts and seldom seem, read, understood or noticed. In addition, the research confirmed that 73 % of Gazettes’ Wednesday 12,000 copies delivered in the Village was deposited directly to the Village’s Thursday recycling trash pick ups. In contrast the Village News Friday’s door to door delivery more than likely made it inside for bathroom reading for several days before ending up with the Gazette as part of the Wednesday evening “putting the trash out” ritual.

The June lst Village News included 5 articles addressing the latest good news about MVF finances.

During June and July, The Village News stories faithfully spun a favorable “Set the Record Straight” message. Lois Campbell, Pat Huson, Keith Silliman and Dick Wright were in attendance and presented the favorable financial condition news at the President’s Council meeting early in June and the June 21^st Audit Committee meeting. Mike Conroy, of course, was in attendance to cover everyone’s comments for subsequent Village News editions.

Despite the Reformits landside election victory and temporary board voting edge Traditionees sentiment remains strong among Village faith based institutions. A motivated and willing coalition was recruited from the membership and supporters of the powerful and controlling Audit Committee; Homes Corporation communities which have remained investors in the MVF’s failing and cash draining Community Management and Maintenance Services Funds; family and significant others of threatened senior MVF staff and the recently empowered insurgent President’s Council.

Coalition cell members quickly responded to A & D the board decisions made at its May meeting to appoint Katherine Gray Treasurer and establish a Reformits dominated EVP search committee. Letters to the editor, written by the BOMS reserve force quickly followed in the Village News’ May 18^th edition “A&Ding” the board members who voted affirmatively. Spokespersons for the President’s Council issued a subpoena to MVF President Bob Hydorn to appear at a meeting of the Council and justify and explain the Board’s decisions.

Financial control by theTraditionees seemed secure as Keith Silliman and Dick Wright were reappointed to Audit Committee, Katherine Grey announced her intention to step down as Treasurer and Lois Campbell approaching her first year anniversary as Interim Director of Finance and Administration. With the surge sufficiently distracting everyone, few noticed that Lois was firmly in charge of the search for a permanent DFA and posting the “Mission Accomplished” banner over the entrance to the MVF Financial Service Department.

As amazing as it might seem TheTraditionees’ 4 pronged “Set the Record Straight “surge” strategy has exceeded expectations.

Stay Posted for Act 2 Scene 3 The details of what really happened