Proxy votes, levy discounts and misunderstanding pertinent issues
- Aug 8, 2022
- 6 min read
Updated: Aug 12, 2022
Photo: Tengyart (Unsplash)
The worldwide economic crises as a result of Covid-19 and the War on Ukraine has impacted on global food and fuel security and has led to hefty price increases. In South Africa the situation is exacerbated by Government’s inaptitude to deal with the legacy of the Zuma years and the Eskom woes.
The vast majority of South Africans have had to revise their monthly budgets to ensure they pay for necessities. The employed and unemployed (with many on basic government grants) are reeling from the astronomical food and fuel prices and coupled with the recent increase in the electricity tariffs and bond interest hikes, many households have been financially crippled and can ill afford to pay for other expenses like school fees, security- and garden service costs, etc.
Social media abounds with messages from individuals who must choose between transport costs to get to work or food to feed themselves and their families. Sales at takeaway outlets, grocery stores, furniture stores, clothing stores and nurseries are down, to name but a few, leading to the closure of many of these establishments and the downsizing of business models. The knock-on effect is adding to the already high unemployment rate and for those fortunate enough to have jobs, many are experiencing salary cuts or no cost-of-living increases.
Here at Pecanwood Estate however, the Homeowners Association Board and Management are convinced that residents have deep pockets into which they can dip at will to fund ambitious projects planned for this time of crises and uncertainty. In addition, employment numbers have risen to a record level with hefty salary increases for staff. As all maintenance and security requirements are subcontracted out by the PHOA, this begs the question as to why the number of employees total 66. Of further concern is the familial and previous business relationships between some of these employees and the fact that their jobs were not advertised to the general public.
At the recent Special General Meeting (SGM) held on 30 July 2022, there was an unprecedented attendance of residents who arrived to voice their dissatisfaction with the status quo. Residents are still reeling from the 8% increase in monthly levies implemented on 01 June 2022 after the 5% increase implemented on 01 September 2021, and are faced with yet another arbitrary increase in the form of a special levy implemented by the PHOA from 01 August 2022 which increases the levy and water bill to R10k per month.
The PHOA Board and Management preemptively charged the special levy on statements sent to residents in the first week of July, before the SGM of the 30th of July. Clearly the members of the Board have no regard for the rights of residents to vote on costly projects and are incapable of managing the organisation’s budgets and expenditure effectively.
The Directors have no qualms in lying to residents to further their agenda. In the minutes of the November 2021 AGM residents are informed that a 5% levy was approved and implemented from 01 September 2021, based on a budget that included R6 million for projects and that the largest portion of the allocation was for the “egress and access control” system. This upgrade has now morphed into a facial recognition system requiring a special levy with no mention of the initial budgetary allowance that we started paying for in September 2021. See AGM minutes attached to this article.
There is a clear assumption on the part of the PHOA Board that in addition to the perceived deep pockets of residents, that they are dealing with a majority of ill-informed and ignorant people who will turn a blind eye to their doings. This is further evidenced in their refusal to make the lease agreement between the PHOA and the Malaysian listed company Country Heights Berhad public, and to renege on promises to make available to residents the management accounts of the PHOA.
We are aware that the traditional support base of the PHOA Board recently voted in favour of the three so called Capex items presented at the SGM. These supporters are mainly members of the Golf and Boat Clubs and per the voting outcome, are in the minority of residents. These homeowners provide the pool from which most Board members are appointed each year, ensuring that those holding on to power in the PHOA remain in position to ensure costly maintenance and upgrades to the Boat and Country Club buildings and the golf course. Residents who do not play golf or own boats are therefore forced through a corrupt voting process to pay for the facilities enjoyed by this faction.
A few of our members have expressed the opinion that some sort of levy discount and other fee reductions on golf club membership schemes are being offered to these residents to ensure their continued support in these trying times.
For obvious reasons we have been unable to establish the veracity of these comments but believe that some sort of incentive is being offered. We were recently made aware of a 40% discount on food and beverages from the estate restaurants that was availed of by some members of the Board, Management, and their families, and the general workers on the estate who received free meals from the Club house kitchen. The 40% discount also applied to the catering of parties at the two venues, thus enabling board members and management to throw lavish functions sponsored by residents. Of note is that the discount also applied to take away meals during the Covid-19 lockdowns. Evidently this practice was discontinued over a year ago for fear of it being leaked to members.
In view of the above is it any wonder that these restaurants are continuously operating at a loss?
The Chairman of the Board has repeatedly iterated at meetings with residents that Board members earn no fees and offer their services on a voluntary basis. Clearly, considering the 40% discount at the restaurants this is not the case. Board members may not be paid in cash, but clearly other forms of incentives are in place to compensate them for the arduous task of taking decisions on behalf of perceived apathetic and ignorant residents, many of whom trust the Board and Management implicitly because of their standing in the community.
Residents are directed to an item in the annual financials that point to the use of credit cards by the PHOA. To whom has these cards been allocated and what is the policy governing their use? Of further consideration is the high telephone and computer costs. To whom has cellphones and computers been allocated that residents are paying for? What other costs are being hidden in these astronomical costs for a non-profit organisation? The year-to-date costs for May 2021 on "Telephone, database and IT communication" amounted to R994 thousand and for 2020 it was R1.275 million.
The use of proxy votes has become part and parcel of the voting culture at Pecanwood Estate. Many residents are happy to pass the decision-making process to someone else. By handing in proxy votes and giving PHOA board members the right to cast votes on their behalf, those who opt to do this are putting all of us at risk of further acts of corruption. Not only can the document easily be altered in Adobe Acrobat but it is never revealed which stand numbers cast those votes.
At the 2021 AGM proxy votes were manipulated to exclude as directors residents who do not form part of the golfing faction. Pecanwood Corruption Watch is in possession of letters issued by the two parties who monitored the voting process. The letters contradict each other and a third letter, from the PHOA accounting firm is untruthful in that it confirms the election was above board when it was not a party to the monitoring process, but in fact involved in capturing proxies on an Excel spreadsheet before and during the AGM. Back in 2016 when the first special levy was introduced the same manipulation of proxy votes occurred. Have a look at the minutes of that meeting attached to this article for further confirmation. The PHOA Board uses proxy votes to ensure voting outcomes and acts that violate the Memorandum of Incorporation (MOI) of the Association.
Property owners at Pecanwood Estate must be more circumspect with their votes. Ensure that you understand what is at stake, what is being voted for, and its implications before you cast your vote or hand your proxy to someone else. Being ill informed has far reaching consequences not only for yourself but for all residents.
© Pecanwood Corruption Watch
Thanks for the great update.I’m not surprised by the manipulated voting of proxies. So what are your recommendations to address the unlawful running of the PHOA. It’s clear for many years the HOA has not been transparent with the financials despite the chairman confirming that it is freely available to residents, yet they still haven’t provided the financials. How do we take this forward?