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The following is an account as told by the Board of Governors of the Scottsdale Townhouses Association. The purpose of this rebuttal is to educate you, the reader, and appropriately inform you of what we believe is truth with regards to the three newspaper articles, which were recently featured in the Daily Breeze regarding the Scottsdale Townhouses Association, the current Board of Governors, and Board President Cyd Balque(Bal-Q). You may ask, why didn’t Balque or the other Board members agree to provide more interviews for Gene Maddaus, Daily Breeze reporter? The consensus was that upon answering the initial questions asked by Maddaus, it was our opinion that he was not being objective and appeared biased towards the disgruntled faction; we did not believe that he was in a position to write an objective story. To the faction members and its affiliates, specific City of Carson officials, staff and others who continue to cast judgment against the current Board of Governors, and Board President Balque, take heed.

“Of course, the article failed to mention that it has been at least 25 years, probably more like 30 years since a quorum was accomplished at an annual election at the Scottsdale Townhouses Association.”

Over the course of the past several months members from the faction have attempted to remove the current Board of Governors and Balque. In a concerted effort to address statements in the newspaper articles, to correct a misconception on the history and dynamics of Scottsdale, to expose the truth about the people behind these attacks, and to inform the homeowners of the facts and the truth regarding the state of affairs of Scottsdale, the Association will address these issues and set the record straight. When asked why he believed Balque was fighting so hard to keep control of the Association, a homeowner for less than 3 years, stated, “it’s money.” Well, it is about money! That is, delinquent assessments amount over $400,000, the minimal $40 increase that’s under protest, and the approximately $4 million plus needed to meet reserve requirements.

We doubt the aforementioned statement of facts are what the homeowner truly intended to convey when interviewed. Wow! What a revelation, Mr. Maddaus! “Cyd Balque has held a seat for 10 years without ever having been elected.” Of course, the article failed to mention that it has been at least 25 years, probably more like 30 years since a quorum was accomplished at an annual election at the Scottsdale Townhouses Association. Several members of the Board that was removed by Balque’s lawsuit filed in 1997, reigned for over 25 years and during their tenure caused enormous damage to the Association. We will explore these areas shortly. So, it by Balque s 7, reigned for over 25 years and eigne fo ove n or ver e ea sh really isn’t a “big deal” or completely out of the ordinary that Balque has managed to hold a seat for 10 years legally due to a lack of a quorum. completely ou th Balque has ’t “big p etel out the e he y l a Under the current Board’s leadership an election has been held for the last 9 years under the supervision of an independent management company. The stat ment made by a homstatement made e current Board’s leader p n el c ion has been he fo the l ur rd s leadership election a rsh le e held for h last eld tate t made eowner that Balque doesn’t let people vote was not only fal e, but also ig Balque doesn’t not only fals but also ignorant. Neither faction member has offered one shred of evidence to substantiate their claims be hat Bal e doesn’t let people vo e t eopl vote nly false, t lso l their claims because there eir im simply isn’t any. As the facts are laid out, their agenda will certainly be made clear; or maybe crystal clear for those of you who have knowledge of the history of Scotts history of Scottsdale. n’t any. As e facts are laid o ny. ac s a out, r agenda w certainly be gend will e i y nda e ge of isto c t There exists a disgruntled group, homeowners and tenants alike, who are ups t regarding the recent $40 increase in Association dues. “As a result of a dispute with the upset sts disgruntled group homeowners and tenants alike, who are upse ig d group, m wners n enan roup ants e p The Scottsdale Townhouse Association, like any other associati n, is operating within its rights and is obligated to every member of Board about his assessment, one other association, peratin sdale Townhouse Association, like any othe ass ation operating wnhous s house io i ther s i the Association to collect outstanding fees. It’s the Board’s fiduciary duty to collect the fees – it’s the law! What these individuals homeowner did not agree with the iation outstanding f es. It’s the Board s fiduc a duty to collect a ding fee t i Board’ duciary conveniently failed to disclose in the newspaper during their interview is the fact that some of them owed thousands of dollars to the ntly in the newspaper during their interview is the fact h spaper urin t p r ing interview h c s he Board’s resolution.” Association. As such, their rage escalated once their accounts were turned over to a collection agency. on. e escalated on e their a o nts we tur d over o s ed once their accounts were turned ver d i ere rn rned

“One member of the faction owes ap- plan with the collection agenc . Let’s give a prop perspective h The fam y me homeowner an with the co ection agency. Let’s giv proper perspective here. The family members that reside with this homeow appear n wit h collect on ency. e give ith ti et’s i oper erspe ti h amily to be able-bodied adults. The people who are delinquent with their assessments wish to sit on the Board of Governors and make o be abl -bodied adults. The people o are delinquent with their assessm able bodied ad adu h people eople del n ue with heir ssessments Governor proximately $9,000.”
difficult financia decisions regarding the affairs of the Associatio . This is abs lutely insane-the irony should not be lo on you. affairs f the Asso tion Association. absolutely lost ficult financial de isi regarding ult nancial decisions egarding c rdin i is abso

One member of the faction ow appro faction extensive One member of the fa ion owes approximately $9,000. The Board of Governors all wed her to enter into an extensiv payment mber r p roximately d of Governors allo overnors allowed

As a result of a dispute with the Board about his assessment, one homeowner did not agree with the Board’s resolution The Board refused to remove him from collections. He with Board b homeowner i Board’s resolution. The Boar Board lt t Board about his assessment, one homeo r did ot e n ome t d resolution. solution coll apparently revolted and began a campaign to overthrow th current Board. Purporte began campaign to over h w the current B rd. P portedly, a the faction’s first unaut unauthorized failed, the h homeowner himself as a y e gn overthrow n e n Board. Purportedly, after t unauthorized election, failed the homeowner identified h led, d legal Board member. He phoned the As ciation’s Certified Public Accountant, identified himself as an accountant and the “new Board President” of the Association an began to phoned th Associa ion’s Certified Public Accountant, identifi d accountant President” and rd e the Association’s i t lic ountant, den u tn accoun a and the coun h d Presiden of n make inquiries and demands of the CPA without the standing to do so. standing uiries ds of the CPA without the s anding to do so. ho o. Similarly, after their second election attempt a homeowner agai made phone calls to the Association’s CPA demanding that the books and records be turned over to him personally. attempt homeowner again made pho calls to the Association’s CPA demanding that the records be turne turned m o owner g gain ad phone ll ga de he A mandi g hat di e d ur ed In addition to the aforementioned, the homeowner ap roached a subcontractor of the Associatio , and once again represented himself as the Board President. The homeo homeowner approache s bc n r cto of the Association, Board President. homeowner allegn wner approached subcontractor r hed e ocia oci tion c once again represented him ne pres nte himself nted m Boar President r siden n edly informed the contractor that his company would not be paid for the services rendered and any checks written by the Association would be canceled. would t e paid f the services rend e and a check written by t Association would services rendered n any checks ritten the ssocia would m med uld ul aid for ic ende itt tte d The Board of Governors und s and the effects the bad economy has had on many residents; however, even years prior to the world’s current ec mic state, the delinqu assessthe d economy h economy has d residents; however, ev years prior to th w current economic delinquent d Governors understand rnor nderst h ono n dent ; owever, even ars rior the world’s curre econom e r o ments reached a staggering amount well o $60 ,000. The current Board of Governors have made available very lenient payment plans only to find that most of the h $600,000. have ma e availab very lenient payment plans only o nd that homeowners ched stagg hed staggering amount m over $600 00 The made available very enient aymen plans n v a r n h had no intentions of adhering to the repayment agre ment. Responsible homeowners having difficulty making their assess nt payment will usually ente into a paymen plan. diffi ulty making their assessment payment tentions f adhering the repayment agreement. R spon n p ym greement Responsible g d ficulty maki thei assessme t payment will usually ente lty akin e k ill ual enter ter While the disgruntled group continues to compl about the common area conditions and submit their grievances to the Daily their Daily e continues complain ues complain the comm n are cond h common area conditions th grievances the D i nc nc Breeze, what some homeowners have failed to acknowledge is their irrespo sibility in handling their obligations and finances; The Association was successful in some failed to their irre ponsibility nances; m i heir irresponsibility their obligations d nances; ei i l i n nces obtaining restraining orders against herein lies the center of the problem. s f the p h problem. m. Our current assessment fees of $240 are 60% to 70% less than comparable associations within a 20-mil radius. According to the assessment $240 are than associations within 20-mile ra s According o the nt a 0 ha ciati within 20-mile radius. m ordi ing in e Corporation Co the Board of Gover Governors on Code, f Governors is within its legal right to increase the monthly assessment by 20%. Prior to the current harassing administrative staff (Case ht to increase the monthly a essment by 20%. Prior the curre nc onth y asses m Prio rent Board’s tenure, th Association suffered gr ss disrepair in the common area. The records ind ate that there were approximat ly 5 Numbers TS012409 and TS012410). suffered gro disrepair the enure, the ur ffered gross e r h a e records indicate that there we approxima c ndicat h t h re were approximately x atel assessment increa es, not more than 20% each occurrence, in th las 45 ye – truly unbelievable In addition, there is no record increases, unbelievable. addition, th re no nt increas s not more , in the last 45 years l e a le. ddition, there itio d of any special assessment hav ng been imposed during the life of the HOA. This has been a lon -standing problem whe e members, despite the obvious needs of the A life f e HOA. T been long-standing problem where members, despite he bv Association, eci l assessment havi cial s ent having ife A This been long-standing proble wher members, despit the obvious a d ble em h s refuse to pay thus resulting from one revolt to another. As wi As witnessed, the Scottsdale Asso Scottsdale Association continues to suffer. pay g m sdale sociation continues suffer. o ontin e nti uffer er.

these individuals, both tenants, for

Prior Boards the 1970 s ed money P rB Prior Boards in the 1970’s tried to save money for the repair and/or re lacement of major common area components, b because s h 1970’s n he repair and r rep ceme t of m o common area com nents but epair and/ replacement major o m i and/or rea components, mpon ts ts, historically larg delinquency rate, and homeowner reluctance to pa increase fees or spec l a sment , no much pay increased s special assessments, not of a historically la ge de nquency ra and homeowner reluctance to pay increased fees or special assessments, not mu was acit l large delinquency omeowner an cre crease ecia n ot complished. comp h complished. m To date, and for the last 10 ye rs Balque and the current Boa d are forced to use operational funds to address the monthl expenses and common area projects – it’s a strenuous and for the last years, Balq and he current Board are forced last years, Balque n urre e oard e operational funds to address e m hly expenses and common area projects it’s perationa unds address o monthly expenses n common r s m rojects t s ject daily task. . In compliance with California law, in December 2008, the Association commissioned a professional reserve study. That reserve study listed major common area comp Association omm ssioned professional reserve tudy ance w Californi l w in December 2008, the Associatio commissioned profession rese ve study. That reserve stu listed majo common area components that nce with California law, i ee 0 00 o t m n s erve study iste major ommon e omp tudy s e o n will require repair or replacement in the next 30 years, such as roofing and decks, painting and related repairs, fen e, paved surfaces (roadways), interior contents (at the clubhouse) years, such related repairs, fence, paved surfaces (roadways), interior contents (at h r repair e lacement re repair replacement in the next 30 years such roofi g nd decks, p inting and related repairs fenc pav surf ces (roadways interior content (a the e c e ars, o d decks, painting g aved urfa oadways) o nts at mechanical and plumbing, landscaping and irrigation, lighting and electrical and other miscellaneous items. other iscellaneo tems. al and plumbing, landscaping and irrigatio , lighting and elect d l m ing, a dscaping d irrigation, ighting n electrical and oth miscellaneous items. g rrig o h e t o The reserve analyst estimated that the replacement cost of the common area components is almost $4,000,000. The reserve analyst analyst estimated h common ve ana yst esti te that the replacement cos the common area components s almost $4,0 ,00 The reserve analyst tima e eplaceme cost m ost o omponents lmos $4,000,000. s ,000 0 0 eserve analyst l estimated that in ord r to be properly funded for reserves for future repair and replacement, the Association should be saving almost order properly unde replacement, h Association should saving most that in orde be prope y funded for reserves for future repair and replacement, the A soci tion shou d be savi almost ded eserv rves r future epair v t ment ociat u ving $230,000 per year and should have put away and saved for future repair and replacement of these components almost $2,000,000. per year and should have put away and saved for future r p and replacement of thes components almost $2 000,000 these components lmost $2,000,000. ear n should ave u y d aved r future repair d eplaceme m h s mpon ts 0 0 As of the end of December 2008, the Association had only $26,443 for reserves. The amount required would have been significantly amount equired u av been significantly end December 2008 the Associatio had only $26,443 for reserves. The amount required would have been sig i can ecember 2008, Association tion y 26,443 e erves. e o ave igni ant greater if Balque and the current Board had not successfully addressed some of the worst common area conditions. The Board Balque and the curren Board h not succe sful addressed some the wor commo area conditions. The Board current Board had successfully addressed ome a que e uc u d e worst common re ondition h o mon diti di ons ar believes that history and administrative/financial records unequivocally prove that Balque and the current Board inherited a brokenadministrative/financial records unequivocally prove that al hat history hat history and administrative/financial records unequiv ally prove tha Balque and the current Board inherited brokena c e ivoc y a d urrent ard nh rit d roken e ited o down Association on the verge of collapsing. verge collapsing. ociation ociation on the verge collapsing.

“...history and administrative/financial records unequivocally prove that Balque and the current Board inherited a broken-down Association on the verge of collapsing.”

always ad The Scottsdale to n homes were constructed ove 45 years ago. The Association has not always had the mon s that ar necessary e Scottsdale tow homes w constructed over yea ago Th Asso iation has not always had the monies that are dale town e were n c d ver years ago. The Association ears o a o a onies h most have e eferr d addition, the Association has been deali with other other for for repairs, and over the years, most repairs have been deferred. In addit mos s h been deferred. In addition, the Association has been dealing with other issues such r h a i n as e dealing e alleged defects original construction, which did not becom apparent until recen as alleged defects in the original construction, which d d not become appa llege f inal onstru r h t become pa eco parent until recently. t cently.

The truth is Balque never independently approved to be reimbursed monies she personally spent on behalf of the Association. The Board did!

Court and accounting records indicate that Balque and the current Board brought the Association out of bankruptcy two years ago. By these efforts and dedication, $258,000 of debt, were paid off.
The Plumbing Problem mbing

Based the Association’s rese e requirements, as the end of 2008, they were on y 1.4% funded Th Associati n Association’s reserve qu rements, 2008, h y er only 4 funded. The Association’s Based on the Association’s reserve requirements, as of the end of 2008, they were only 1.4% funded. The Association’s legal counased c eser e s h n 8 d sociatio o advised Board h while most oci tions e t ully funded, os have least half what he ho d have sel advised the Boar that while most associations are not fully funded, most have at lea half of w t they should hav sel advised the Board that while most associations are not fully funded, most have at least half of what they should hav for future a ciat n d, a e ast as hey av repair/replacement their common e components. Legal counsel informed e a d ha hav having n 1.4% of the funds repair/replacement of their commo area comp n nts. L gal coun e informed the Board that havi only 1 repair/replacement of their common area components. Legal counsel informed the Board that having only 1.4% of the fu necesr mpon u rm ving future e a sary for futur repair d replacement mea the Association wil either not have the mone and will not be able to mak sary for future repair and replacement means the Association will either not have the money and will not be able to make important u epla e t means eans sso iation will either iati ill av h money and l o ne l a repairs Association l Association increases repairs he Associa i n will required levy specia assessment I would e preferable that the Associatio inc e repairs or the Association will be required to levy special assessment It would be preferable th the Association increa assesss equired evy special assessments. would u e v ecia c ents. l fe abl h e le ociation ncre i ments increase the a ount of mone n the designated r erve b k accounts for future repair and replacement th amount mone money future pai ments to increase the amou of money in the designated reserv bank accounts for future repair and replacement of th common e a e sig te reserve bank ccoun ignate ount ture u ep acemen the acement Moreover, e res r study did not take in o account restoring the plumbing. The 45-year-old plumbing problem reserve u y areas. Moreove , the re erve study did not take into account restoring the plumbing The 45-year-old plumbing problem has taken over, o k into ccount estori g he lumbing. u ring ye r-old l mbing problem o bin oble Association’s nan e nances. its toll on the As ciation’s finances. Associ

The Daily Breeze reported that Balque and the Board did not address a homeowner’s plumbing issue. What Maddaus failed to point out is that first it takes lots of money to address homeowner’s pl mbing issue. W a Maddau failed o point out is t t rst it takes lots of m ne plumbing that money y owner ’s plum g ssue What Maddaus failed wn e dda aus i oint i t take o kes the plumbing issues; secondly, the Board has addressed hundreds of plumbing issues in the same location. The Association’s maintenance staff was delayed several mon because bing h o iss issues in the same location. The As ociation’s mainten nce staff wa delayed several mon sam cation T Association mainte ion. o i tena e staf was delayed sev ra months a a e the bank, the owner of the property, would not permit the Association access to the property. Entrance into subject prop the prop rty. Entr n into subjec p operty was necessary because the units in the same lane shared h property. Entrance nto subject property p t b p nec ssary because the units in the ecessary cau e n s the same plumbing line. It is most disturbing that several members of the faction interrupted the process by allegedly int faction interrupted the p oces y allegedly interfering with the maintenance staff that was work onsite. o nterrupted h process rupte e e leged nterfering w the maintenance s f that was working d ng ng ai nce staff a a or The Association’s attorney sent to the faction a cease and desist letter shortly after the incident. Two faction members who were admonished for their participation in th s m after the incident. Two fac i members ho wer adm nished were admo sh participation in this matter were ciation’s f he ident w faction embe dn c b r admonished rt pation ai n also unsuccessful in blocking a restraining order filed against them on another matter The Association was successful in obtaining rest filed matter. T Association was successful in obtaini restraining orders against the indivi these individuals, both ccessful tter The r o i tio a uccess ul obtaining restraining ion cce essf tainin ing hese n tenants, for harassing administrative staff (Case Numbers TS012409 and TS012410). In addition to the delay brought by the bank-owned property, another homeowner on the same line, by denying entry refused to let the Association address the plumbing issue. It wasn’t until the Association formally sent her a letter advising the owner should she continue to deny entry, the Association would have to seek a court action against her to resolve the issue. Subsequent to a court action being filed, the homeowner complied; this delay lasted approximately 3-4 weeks. Moreover, the article was clearly incorrect in that it named an Association employee, as a hired handy man that somehow came to the rescue of the complaining homeowner.The worker was on the clock when these problems surfaced. The Health Department was not contacted by anyone at that time as alleged in the Daily Breeze article. Despite all the obstacles facing the Association, the maintenance staff managed to complete the job. Of course, all of the interference not only caused delay; it caused the Association to incur thousands of dollars in legal fees. Court and accounting records indicate that Balque and the current Board brought the Association out of bankruptcy two years ago. By these efforts and dedication, $258,000 of debt, current bills, and expenditures left unattended by previous Boards were completely paid off. About 12 years ago and prior to Balque’s Board appointment, the Daily Breeze published an article on the courageous efforts of a David Diaz, former manager of the Association. The article clearly presented the severe conditions which at that time were significantly worse than today. Diaz accomplished some good things, but was restricted. Diaz joined Balque as a Board member in 1999. Neither Balque nor the current Board members were serving when the financial problems of the Association commenced.

Another statement endorsed by the faction and seemingly supported by Maddaus, which is Balque unilaterally or independently, approved herself a reimbursement of $30,000. The truth is Balque never independently approved to be reimbursed monies she personally spent on behalf of the Association. The Board did! A derivative lawsuit, such as Balque’s lawsuit, is a legal action that an officer files on behalf of the legal entity he or she is representing, which obviously in this case is the Association who is also the benefiting party. Again, Balque was the legal treasurer when the lawsuit was filed. Scottsdale legal counsel was fully aware of the transaction.
PAID FOR BY SCOTTSDALE ASSOCIATION 23400 South Avalon Bl, Carson, CA 90745 1 of 5

“In 1996 through 1998, the affairs of Scottsdale grew worse. Delinquent assessments exceeded $600,000; accounts payable balance amounted to well over $540,000”

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