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O.C. seniors say firm's spending is out of control

Management staff of Laguna Woods Village say gifts and lunches are rewards for employees. The monthly fee for homeowners is $500.

August 02, 2007|Tony Barboza | Times Staff Writer

Irate residents of a southern Orange County retirement community called on their association board Wednesday to set limits on what they contend has been lavish spending by their property management company.

Residents of Laguna Woods Village, a retirement community of 18,000, said financial records show property management staffers spent thousands of dollars on expensive birthday and holiday lunches and presents over the last several years.

The funds came from the $500 each Laguna Woods household pays per month for the services of Professional Community Management.

The board came to no decision on a policy but agreed to consider the public comments in an executive session in the next few weeks.

Company officials defended the spending as necessary to motivate and retain its 1,000-member workforce.

The company spends about $300,000 a year on staff support, $80,000 of which is used for meals, parties and gifts, said Janet Price, the company's finance director. "We think they're quite reasonable and quite ethical," she said.

About 100 residents attended a boisterous public meeting Wednesday, and 30 spoke, most demanding spending limits be put into place. Speakers accused the property management company of taking advantage of senior citizens, compared it to Enron and even invoked the cowboy's code of ethics.

"These charges were unreasonable and unethical, if not illegal," said Conrad Grundke, a Laguna Woods resident and former IBM data analyst who has spent months cataloging data from credit card statements and reimbursement reports.

Residents said they were surprised at some of the spending by the management company, including $982 at a Claim Jumper restaurant; $811 at Dave & Buster's, a bar-arcade chain; and $2,500 on See's Candies.

Laguna Woods resident Len Peverieri said he had tried to get the records for three years because he suspected the management company was not being frugal with members' money.

"They just thought I was another one of those dumb old people that they could run over," he said.

A change in state law, which allows members of nonprofits access to more detailed accounting records, gave Peverieri access to the credit card statements and expense reports this year. The documents showed tens of thousands of dollars spent on birthday and holiday lunches, gift certificates, carwash vouchers and other rewards.

An expense policy, proposed by the management company, would cap company spending on staff support to no more than 1% of its budget.

But many residents said the guidelines would simply codify the status quo.

"This is a continuation of their behavior," said Lai Lixian in a six-minute speech that earned a standing ovation from the audience, adding that "the employees here are totally inefficient; their mouths have been sealed by See's chocolate."

Price said the $2,500 on See's Candies was paid by 35 employees, who pooled their candy orders with personal checks to take advantage of a quantity discount. The checks were deposited in the foundation's account before she placed the order, Price said.

But not everyone is convinced the expenses are unjustified.

"This is such a small percentage of people trying to find fault with something," said resident Pat Whitson, 79, "I can see them getting out a microscope and going around the laundry rooms looking for germs."

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tony.barboza@latimes.com

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