1. June 09, 2009Residents Voice Conrad Grundke 06/09/2009 Residents Voice 1

2. Topics for Tonight To Tell The TRUTH ! TOO MUCH TRUST ? Saddleback Community College (SBCC) 06/09/2009 Residents Voice2 3. To Tell The TRUTH! 06/09/2009 Residents Voice 3 4. A Search for TRUTH! General Manager Comments at 6/2/9 GRF Board Meeting referencing the PCM Incentive Plan; He advised residents to not believe what youread in the Orange County Register. He called them the biased words of a reporter. He stated that OC Register articles are anInvitation for a lawsuit. 06/09/2009 Residents Voice4 5. So! Where Does One Go? General Manager will use the following to get the TRUE information out to the public via his Communication Team.; Channel 6 The Globe LWV Website LWV Publications (?)06/09/2009 Residents Voice5 6. Example of a Source of TRUTH? So! Channel 6 should most certainly be unbiased and a good source for getting out accurate data (Right!?). For example; Interview of Milt Johns by Rob Merritt Q: - What was purpose of Staff Credit Cards? A: - EMERGENCY USE ONLY!06/09/2009 Residents Voice 6 7. Credit Card EMERGENCY Uses! User Date Description Amount Price12/01/06 Sees Candies$1,316.00 Storage12/18/06 Claim Jumper$ 981.87 Lee12/22/04 Lawrys Five Crowns $ 834.31 Storage12/17/05 Dave & Busters$ 811.12 Johns12/18/05 Las Brisas$ 713.77 Residents Voice made the public aware of the above data, and yet, RobMerritt never questioned Milt Johns when he stated on Robs interviewthat the cards were for emergency use only. The Orange County Register reporter questioned Mr Johns answerin public, to Mr. Johns dismay. Which reporter would WE want providing us information on what ishappening within our walls and gates? 06/09/2009 Residents Voice 7 8. Per Mr. Johns ! The Incentive Plan has been thoroughly VETTED; By all the Board Members. It is included in the Management Agreements. It has been Audited by our Auditors. 06/09/2009Residents Voice 8 9. What He Doesnt Say! The General Manager is adept at utilizing half truths when he doesnt tell you; The CRITICAL TIME LINE. The Incentive Plan came to light in late2006 when it was unintentionallydisclosed. 06/09/2009 Residents Voice9 10. In Light of This! From 1996 thru 2006 the Boards were unaware of any Incentive Plan. From 1996 thru 2006 there was no mention of an Incentive Plan in the Management Agreements. From 1996 thru 2006 there was no Board Action taken to implement an Incentive Plan. 06/09/2009Residents Voice10 11. What the Boards Know! There is no line item in any financial report identifying Incentive Plan Expenses. There is no breakdown of the Incentive Plan Savings vs Expenses. They were not involved in any justification of the Savings that were supposedly incurred. 06/09/2009Residents Voice 11 12. A Classic Case OF: Locking the door after the horse is stolen!06/09/2009 Residents Voice12 13. What the Resident Owners Know About The INCENTIVE PLAN ? 06/09/2009 Residents Voice 13 14. TOO MUCH TRUST 06/09/2009 Residents Voice 14 15. Consequences of Blind Trust Increased TRUST = Decreasing OVERSIGHT!100%75%50%25% 0% Sit 1 Sit 2Sit 3Sit 4 Sit 506/09/2009Residents Voice 15 16. Where Are We Today ? The Boards Trust PCM 100%. There is almost 0% Oversight. What does that mean? The General Manager has stated his priorities are:1. PCM (his boss)2. His Employees3. Laguna Woods Village Residents 06/09/2009Residents Voice 16 17. PCM Priorities Development of our land: If PCM can benefit (directly or indirectly) thatwould be in their interest. Avoid by having independent monitoring of landdevelopment by someone who has the ResidentOwners as their 1st priority. 06/09/2009 Residents Voice17 18. Are Independent Auditorsthe Answer ? Auditing firm was hired by Board of Directors of large company (to ensure independent auditor?). $746 million class action suit on behalf of investors. Investors are MFS Premium Income Fund. Auditors are KPMG Does anyone care to guess who KPMG is? 06/09/2009Residents Voice 18 19. Other KPMG Activities Significantly involved in large number of high- profile collapses. $200 million claim by Australian Securities & Investments Commission on collapse of Westpoint. Allco Finance Group classified $1.9 billion of current liabilities as non-current liabilities. KPMG paid $3.1 million for audit work.06/09/2009 Residents Voice19 20. Other KPMG Activities (cont) $1 billion lawsuit over New Century Collapse. $200 M paid to Rite Aid and Oxford Health. RMB300,000 to Suqian Wahaha Beverage Involved with Ernst & Young in Tax Shelters that cost clients $5.7 m in auditor fees. Etc. Etc.06/09/2009 Residents Voice20 21. Employee Priorities Increased Labor Costs: Labor contracts have evolved to the level wherewe are charged $40.00 per hour by PCM for ourlandscaping. General Manager is involved in the contracts. What is his objective? High Rate for his employee, or, Low Rate for our assessments06/09/2009Residents Voice21 22. LWV Priorities Reduced Assessments: Retain our land! Reduce labor costs! Who Looks Out For Us? The General Manager/Boards HA!06/09/2009Residents Voice 22 23. SaddlebackCommunityCollege 06/09/2009Residents Voice 23 24. Saddleback Community College A true symbiosis arrangement Saddleback College Provides: Qualified/Certified class instructors. Equipment. Administrative personnel. LWV Provides: Space. Equipment. Administrative personnel. 06/09/2009 Residents Voice24 25. Conclusion Information that comes from PCM (and many of our Board Members) is often untrue and cannot always be trusted.The Incentive Plan required concurrence by a majority of the Board members, and without that, the plan has been ILLEGAL since 1996. 06/09/2009Residents Voice 25 26. Conclusion (Cont) By blindly trusting the General Manager, we have evolved to Boards that feel threatened when a Board Member questions the actions of either PCM or a Board. This is evident in the treatment of Mike Curtis onthe United Mutual Board. We Need More Mike Curtiss! 06/09/2009Residents Voice 26 27. Conclusion (Cont) Many residents utilize the Emeritus Classes and without the college, the costs would be excessive. Lets continue to enjoy our time living in Laguna Woods Village.06/09/2009 Residents Voice27 28. The End 06/09/2009 Residents Voice 28