The CotoBuzz Journal

Community Journalism, Newsletters and  Blogs Covering South Orange County, CA

The CotoBuzz Journal is a member of Investigative Reporters and Editors (IRE) and NAHJ

June  2007 Issue

We do not make jokes, we simply watch the LA Times, the Orange County Register and the Coto de Caza Board of directors and report the facts!

 CZ Master Association - Varo & Mezger Should NOT Be Re-elected - 11 Reasons 

By former member of the CZ board of directors, Joseph Morabito, and Analysis by CotoBuzz

May 12, 2007

Possible Scenarios and the Keystone Effect

 As a former CZ Board Member and concerned citizen, I can say without condition that Bob Varo and Jerry Mezger should not be re-elected to the CZ Board because they do not understand the foundation concepts of Board Member fiduciary responsibility, ethical behavior and conflict of interests.  To be more specific and to demonstrate what I am saying Varo and Mezger should not be re-elected for the following 11 reasons:

1. Due Increases:  Varo & Mezger raised dues twice in two years because of fiscal mismanagement.  Rather than deal with subsidies going to outsiders, cutting expenses like high priced Consultants and getting our water cost under control, implementing proper competitive processes to bid out contracts and seeking contribution from the county to maintain our Sports Park and pay for the CHP, they extracted more than $800,000 in additional dues from CZ Members through dues increases both of which could have been avoided if these options had been implemented.
2. Manipulation of 2006 CZ Board Election:  In 2006, Varo & Mezger conspired to deny a candidate a Board seat.  They knew very well that Sean Larkin, another CZ Board Member had relocated to take another job; yet rather than ask him to resign before the election, they convinced him to tender his resignation the week after the election so Varo & Mezger could appoint a Board Member of their liking rather than have one elected by our Delegates.  That was despicable. 
3. Firing the CHP:  Varo and Mezger fired the CHP knowing full well of the dangers on our streets from speeders with nothing to replace pro-active traffic patrols in Coto.  They did this to protect their friends at the country club from potential DUI’s.  During the CHP absence, the accident rate went up dramatically and we experienced two tragic deaths on our streets.  Firing the CHP constituted a reckless action.  And, Varo publicly calling the CHP “extortionists” has damaged CZ’s relationship with the CHP so much so that the CHP is not willing to commit the additional hours to Coto that we need.   This will not change as long as Varo & Mezger serve on the CZ Board.
4. Universal Patrol Contract:  Varo & Mezger awarded a $1.5 million contract to UPS without a proper due diligence process.  Joe Aguirre and I saw the materials used to choose Universal and I can tell all from 27 years of solid business experience in supplier selection and management that the process used was bogus.  In essence, Varo & Mezger fired the largest most sophisticated security firm in the world and hired one of the smallest as a result of the smooze factor not a qualitative analysis of data.  One of the UPS Vice Presidents lives in Coto which is no reason to select a supplier.  If this is happening with UPS one of our largest contracts, it is reasonable to assume that proper competitive bidding processes are not being implemented concerning other goods and services purchased by CZ.
5. Keystone Property Management:  It has now been about 6 years since CZ has gone out to bid for Property Management Services even though their fees have gone up since I first took the Association out to bid for these services and Keystone was selected.  This contract and all major contracts should be bid on a regular three year bid cycle to ensure that we are always getting the best contract terms and conditions and pricing in the marketplace as would occur in any business.  There are also new approaches that could be implemented to save us money.  This is the only way to keep expenses under control and avoid pre-mature dues increases.  Varo & Mezger have purposefully failed to put proper Supplier Selection and Contract Management procedures and practices in place that are common in business.  I have offered my help concerning this process many times since I have substantial experience at doing this, but to no avail. 
6. Increased Liability:  Varo & Mezger have increased liability exposure for our Members by their actions.  First, they have co-mingled the affairs of CotoCAN with CZ.  Second, they have converted the Keystone Executive Director into a CZ employee in fact. Third, they have allowed the Oakview/Oakknoll gates to remain open in violation of the legal agreement that was a condition of development of those tracts.  And, fourth, they fired the CHP with no replacement.   All of these actions increase the potential for litigation against CZ and through it our Members.  And, in fact CZ is being sued for a serious accident related case during the period we had no CHP coverage.
7. Subsidies and Give Always:  Varo & Mezger have given away CZ revenues that legitimately belong to our Members.  The money going to CotoCAN for advertising in CotoVoice and the maps at our gates belongs to CZ Members who are the basis for that revenue.  In addition, Varo & Mezger have refused to charge significantly higher fees to non-CZ Members who pay no CZ dues to use our facilities and for transponders and otherwise cause CZ expense which has contributed to the last two dues increases.  Further, at one point Varo & Mezger funded a Keystone staff member to act as Activities Coordinator for CotoCAN which is completely inappropriate.
8. Welcome Home Center Fiasco:  Varo & Mezger implemented an unprecedented Special Assessment that had to be rescinded because they had no deal to purchase the Welcome Home Center .  This is just one example of many of their failure to do their homework.
9. Landscaping Mess:  The river rock work along Coto de Caza Drive does not conform to the overall design palate along that street which is an example of just plain incompetence.  And, there is no strategic plan in place to deal with Landscaping Renovation all over Coto which is a serious issue.   Investment in Landscaping Replacement, a critical Association function,  has actually gone down under Varo & Mezger when compared with the Glisson/Rose years even with the two Varo/Mezger dues increases. 
10. Inappropriate Political Actions:  Varo recently endorsed a political candidate as President of CZ which is entirely inappropriate.  In addition, Varo & Mezger are pushing for formation of a Community Services District, which is both unneeded and would absolutely raise our property taxes. 
11. Conflict of Interest:  Mezger is using the guards that we all pay for at our gates to hand out maps selling his wife’s real estate services to benefit his family income.  No CZ Board Member in the history of the Association has ever used it to advance their personal financial interests.

Folks, it is time for a change.   We need fresh ideas on the CZ Board.  I served my 2 ½ years, made a contribution and that was enough.  Most important, we need CZ Board Members who understand the concepts of fiduciary responsibility, ethical behavior and conflict of interest.  As such and based on all the issues I have outlined, Bob Varo and Jerry Mezger should NOT be re-elected to the CZ Board.   Joe Morabito

P.S.  Other former CZ Board Members who are very knowledgeable about CZ issues are also opposed to the re-election of Varo & Mezger.   That should increase the alarm bells. 

Hi Joe:

We are in violent agreement – but do not see what you suggest to come even close to reality, unless there is a calculated and coordinated effort by independent delegates to take advantage of cumulative voting – this effort should also make sure that for the duration and during election night, the Keystone Effect is neutralized – see below.

As CotoBuzz readers know, we have a perfect record  forecasting results of the CZ board of director’s elections ever since Varo/Mezger got to the board.

Unless there is an organized group of delegates that can coordinate their collective cumulative vote, we are predicting a Varo/Mezger re-election.  At the moment, we can guarantee there is no organized opposition.

So here is a brief analysis with the possible scenarios – (see table below) , worse case (status quo in gray), palatable (in yellow) and best case (in green).

Analysis:

In fact and deed, Yocham and Zipperman have shown that for whatever reason, they have not strayed far from the Varo/Mezger delineated path.  A restraining force (leadership) is required for Yocham and Zipperman to change their alliance.

Zurovski does not seem to have passion or conviction and we are absolutely sure that he will follow the Mezger/Varo line, unless there is a restraining force.

Hylka exudes common sense and conviction – the only possible Varo/Mezger restraining force (and leader) to come along in  the last fours years.

Consider the  “Keystone Syndrome: (“accidents” seem to happen around election time, favoring the house) – The stated reason Mezger does not like direct elections (according to his statement during Candidate’s Night), is that with direct elections, “the board needs to take measures to prevent fraud”, whereas with the current delegate system, corruption is OK.

Hence, because of the Keystone Effect and cumulative voting, the most likely scenario for change is for a coordinated effort (independent delegates should cast ALL their votes) for Hylka.

If there is a coordinated effort with sufficient votes, then independent delegates should case their votes in such a proportion that both Hylka and Zurovski are elected.

  CZ Master Association Boarid of Directors Composition:

Zipperman and Yocham are "safe", Composition of seats 3-4 will be decided by CZ district delegates May 24, 2007.

Legend

Buzz:  I agree that Vince Hylka is the best candidate running this year for the CZ Board and that independent minded Delegates seeking an alternative to Varo/Mezger should cast all their votes for Vince; however, based on the trends I am seeing and hearing about, I do not agree that Varo and Mezger will necessarily both be re-elected.  There is a good chance that Delegates will recognize their serious offenses and not vote for them at all.  If so, there are three other candidates running who could just squeak by.   In any case, it is probable that at least one of them will not win re-election and perhaps both.   And if one of the Bobsie twins is gone, the other will be powerless to wreak more havoc and then perhaps just resign.  I am hearing that people see the need for a change this time around.  As such, your predictions may be off. 

But, if Varo and Mezger were to win re-election, we will immediately have to form a CZ Member Audit Committee to go in and scrutinize the books because they have been playing games with the numbers.   If we want the truth, we will have to go in and dig it out because Varo and Mezger can’t be trusted to tell us the truth.  That has been proven on many issues; Sheriff, CHP, Welcome Home Center, Sports Park Maintenance, 2006 board election, Oakview/Oakknoll and the recent 2006 audit report etc. etc.  Joe Morabito

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