The news that a member of the CZ Master Association board of directors has moved to an association outside of the jurisdiction of the CZ homeowners association spread like a wild fire aided by the Santa Ana winds.  In this case the news were disclosed by longtime board critic and former member of the CZ Master Association board of directors, Joseph Morabito.  The Santa Ana winds came in the form of the Coto Discussion Forum and the board member in question is none other than Jerry Mezger. 

The incident brought memories of numerous questionable CZ Master Association board of directors actions during the Varo/Mezger boards, include the resignation of Sean Larkin immediately after the elections, and the appointment of Lyle Schlieder  way before a call for volunteers went out.  Critics argue that Mr. Larkin and the board should have been forthcoming and letting residents know of Mr. Larkins’ status, prior to the elections.    Instead, the Varo/Mezger board preempted the seating of an independent candidate – so goes the common wisdom coming from the anti-Varo/Mezger camp.

In this case, Mr. Morabito argues conflict of interest, which Mr. Mezger denies it exists:  “Though apparently Jerry thinks he can remain on the CZ Board because they will presumably own investment property/homes in CZ, I must argue that there is no elective office in the United States that does not have a residency requirement.  And, since Delegates must live in the district they represent to vote for the CZ Board, how can we have a CZ Board Member who does not reside in CZ? Property ownership alone cannot be the criteria for serving on our Board because if we allow that as the sole criteria, then that means that a CZ Board Member would not even need to live in Coto to serve on the Board.  Further, Mr. Mezger now will have a major conflict of interest since CZ Members are subsidizing non-CZ Members who pay no dues to support CZ.  Clearly, the CZ Board needs to charge significantly higher transponder and other user fees to Los Ranchos non-members and others to deal with this problem.  Is Jerry Mezger now in a position to represent CZ Members as his sole responsibility when his principle residence is in the Los Ranchos Estates?  I think not!!  Jerry has not done a good job representing our interests even when he did reside in CZ”  writes Mr. Morabito.

Mr. Morabito continues on with a request to Mr. Mezger to resign:  “Jerry, I am calling on you to do the honorable thing and resign.  And, this is not about you.  I would be making the same request of any CZ Board Member who did not have residency in a CZ house.  Obviously, you can no longer be the Delegate for your district since there is a residency requirement to be a Delegate.  Zipperman/Yocham Board, this situation has never happened in Coto history except perhaps when the master developer controlled the Board.   We cannot have carpet baggers on our Board.   You must pressure Mr. Mezger to resign as a result of his conflict of interest.   Until he does, Mezger must recluse himself from any vote that represents a conflict of interest and the could be several issues that would qualify as a conflict.   He is now an investor owner not a CZ Member homeowner.  I will question any Mezger vote that I believe to be a conflict of interest”. 

The response from Mr. Mezger is a “tough”-type of response, eliciting the following from Mr. Morabito:  “Jerry:  No, I won't live with it. We are now going to bird dog every one of your votes as long as you remain on the Board.  Any vote that has the slightest smell of conflict of interest will be challenged.  You are now going to add legal cost to the Association; good for Harkins; bad for our members.  It will make it impossible for you to serve on an equal basis with other CZ Board Members.  You need to RESIGN”

Interestingly enough, the Varo/Mezger boards have never been receptive to the notion of conflict of interest policies:  We forwarded a number of proposals and never received as much as an acknowledgment.  Some of the these conflict of interest policies, specifically designed for non-profit organizations, such as non-profit homeowners association are:

a) The IRS has published a suggested conflict of interest policy. It is included in the instructions for completing Form 1023 (the Application for Exemption under Section 501(c)(3)). This detailed and comprehensive policy is published starting on page 25 of http://www.irs. gov/pub/irs- pdf/i1023. pdf


b) The web site (http://www.crcmn. org) has a link to a conflict of interest  policy. The last portion of the policy is a questionnaire on which  directors annually disclose potential conflicts of interest.

c) The Minnesota sample policy can be found at http://www.smartgiv ers.org/10Aug200 53.html 

d) This  Nonprofit FAQ explains what disclosures nonprofits must make. The policy can be found at http://www.idealist .org/en/faq/ 505-172#coi

e) EXAMPLE POLICY STATMENT:  Nonprofit Financial Center Conflict of Interest  Statement

For Officers, Directors, Committee Members, Staff Members, Institute
Faculty and certain Consultants

No member of the NFC Board of Directors, or any of its Committees, shall derive any personal profit or gain, directly or indirectly, by  reason of his or her participation with the Nonprofit Financial   Center . Each individual shall disclose to the Nonprofit Financial
Center any personal interest which he or she may have in any matter  pending before the NFC and shall refrain from participation in any  decision on such matter.

Any member of the NFC Board, any Committee or Staff who is an  officer, board member, a committee member or staff member of a  borrower organization or a loan applicant agency shall identify his  or her affiliation with such agency or agencies; further, in  connection with any credit policy committee or board action  specifically directed to that agency, he/she shall not participate  in the decision affecting that agency and the decision must be made  and/or ratified by the full board.

Any member of the NFC Board, any Committee, Staff of Institute  Faculty shall refrain from obtaining any list of NFC clients for  personal or private solicitation purposes at any time during the  term of their affiliation.

At this time, I am a Board member, a committee member, or an  employee of the following organizations:

So far, we know of no official response from the current CZ Master Association Zipperman/Yocham pertaining to Mr. Morabito’s request for Mr. Mezger to resign.

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