Caring Homeowners recognize that the vote to purchase Copper Health (CH)

was based on inaccurate information. We have financial concerns for the future!

 

THE FINANCES & THE FACTS

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~ Prior to the 2022 Vote to purchase the Copper Health property, all Residents were told by the Board: "We need more space." and "The Welcome Center is 30 years old…it's a modular building that is structurally unsound". "It consists of 4 double wide trailers”. "It needs to be razed and if rebuilt the cost will be $4.6 million." "Buying Copper Health would avoid this and save $2,085,000." *Document proof available.

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~ This information changed however, after the vote. Leadership requested a structural report on the Welcome Center (WC) in May 2023. Then in August the GM & Board Pres. informed Residents that the building "was not modular" after all and has "structural integrity." They stated the offices can remain at the WC. This eliminates the $2,085,000 alleged savings. The CH purchase plus the costs to move clubs and renovate vacated buildings now will likely COST the Association over $7-$11 million. The GM stated he did not have this knowledge of the building's construction prior to the May 2023 study. Our leadership ought to have confirmed the WC's structure.prior to the vote.*Document proof available.

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~ One year prior, a November 2021 Engineer’s report* received by the GM and Asst. GM stated the WC was "slab on grade" and "did not reveal any signs of structural issues" needing only minor repairs. While it is possible that a modular building could be placed on a slab, it is unlikely and would not be consistent with typical US construction methods. This information was not revealed or confirmed prior to the CH vote. *Documents available.

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~ We now own 2 buildings: the 22,660 sq. ft. CH and the 11,000 sq. ft. WC with their associated costs to maintain, clean, insure, heat, cool and renovate. Administration projected TEP Copper Health costs at $6000 per year. The June and July 2023 TEP bills* for the empty building were $4,900. This does not include water, gas, grounds and building maintenance and repairs. The actual annual costs to maintain the building will likely be over $50,000. *Document proof available.

~ The cost of the acquisition of the CH building including its required renovations, in addition to upgrades required at the Artisan Center and the WC could total up to approx. $9 to $11 million. That does not include costs for new hard courts, pool improvements or any other capital projects. Any new projects, upgrades or maintenance in our Community will likely need to be delayed for many years.

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~ Per our governing docs, any present or future Board can, without a Resident Vote, approve up to a 15% increase in HOA Dues &/or charge Assessments up to 5% of the prior year’s gross revenues. *Documents available.

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~ June 2023's Total Cash & Investments was $8,153,616 - down from June 2022's $13,420,830. There are worries about our Finances for replacing the $2 million in the Capital Fund. It's projected to take 4 yrs. to even get it to a negative $100K balance. And there are concerns the Asset Reserve Fund is not being funded well enough.

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~ HOW CAN WE COPE WITH A $7,000,000 + project primarily to expand a few Clubs and do some upgrading?OUR REQUESTS:

We don’t know how the Vote may have turned out had we been given more accurate information about the ‘state of the WC’ and predicted expenses. Given the differences in Pre-Vote & Post-Vote, we request the following:

1. A NEW VOTE to determine whether or not to sell the Copper Health building.

2. The Association/BOD commit to KEEP THE COPPER HEALTH BUILDING INTACT as a medical facility until the vote is held AND the lawsuit is settled.

3. We ask for appropriate due diligence when giving accurate facts to our community for informed consent when making decisions.

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THE LAWSUIT DUE TO BUYING COPPER HEALTH

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~ Daniels Holdings, LLC (the first buyer who is suing our Assoc.) claims that our Leadership interfered with the purchase procedure of the CH building by making an offer/negotiating during a 'protected time period' and that discriminatory, negative remarks were made against their intended client patients.

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~ Over the past year Residents have not received timely and accurate facts about this 'Copper Center Lawsuit'. As a result, 'Caring Homeowners' have kept abreast of the actual facts on a weekly basis through court documents available on the Pima County Courthouse's website.

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~ At first our Leadership denied the lawsuit, then told us we were not named and then told us not to worry because we were insured and they called the suit "frivolous.” But they were not exactly correct.

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~ A concerned Homeowner read a letter dated March 9, 2023 into the record at a Board meeting on 3/28/23 from the plaintiff Daniels Holdings' attorney to our attorney. It stated - if we continued to pursue the purchase, Daniels Holdings would file a Lawsuit specifically naming us. At the meeting, the presenter of the letter had a sincere concern but was vilified, dismissed, and treated rudely (some of us witnessed it in person). Instead of treating him respectfully, no appreciation was given for his homework and for presenting an important troubling fact. That very same day our Leaders purchased the building, followed immediately by the predicted Lawsuit.

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~ Our Board has $1,000,000 of Directors & Officers (D&O) insurance coverage if they are personally sued, but we, the HOA Association, may have no coverage if found liable, as far as we are aware (and per the Board's letter of September 9th). This lawsuit is not "frivolous".

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~ The plaintiff, Daniel Holdings is asking for punitive damages and attorney fees, which can be quite costly if assessed. We could win. But, what if we lose? Punitive damages could be in the hundreds of thousands or millions. Mediation is scheduled for Dec. 15, 2023 and the trial is set for Apr. 24, 2024.

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~ This is worrisome to us. We have been asking for contingency plans at a minimum. What we are told is, "Don’t worry, being found guilty is not likely to happen.” Thankfully, the Board finally sent out a letter in early September giving some further updates on the Lawsuit. This effort to communicate with Residents was appreciated. However, their reassurance about not having known about the plaintiff's 'Letter of Intent' (LOI) during the plaintiff's 'exclusivity time period', may be debatable. They had admitted in the 'Answer Document'* to having reviewed the LOI on November 16th, which was during this 'exclusivity time period' - a fact they did not tell us. *Document proof available.

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~ If we don’t prevail, where would the money come from to pay for the plaintiff’s attorney fees and the monetary and punitive damages for this Lawsuit, if there is not enough coverage, or if our insurance does not cover these costs at all? Might we need to sell the CH building to pay for these potential court assessed damages?

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We are concerned that the Association can’t afford all the costs going forward. We now have a $2 million deficit in our Capital Fund with little money left for upgrades and other projects sought by Residents & Clubs.

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Per the 'Capital Fund 10 Yr. Projection' it' will take 4 years just to build back up to a negative $100K balance.

Where will all the needed money come from? Are higher Dues increases

& Special Assessments in our future?

 

We are 'Caring Homeowners' who have dedicated hours of hard work and research

on these matters. We have much official documentation to support what we say.

We worry it's likely that higher HOA Dues & Special Assessments will be imposed!

 

Stay informed! Attend meetings! Ask questions & expect answers!

(Per Supreme Court rulings & AZ HB #2158, email & door to door distributions are permitted.)