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