I would like to take a moment to extend my thanks to each and EVERY memeber of the FOC group.

I know this was a huge effort. I also know that you faced many critiques from the community.

I am hopeful that not only will our Board do what's right, but will also lower our dues because of your efforts.

Unless I am mistaken, this is the first initiaive that has ever lowered our dues in the history of Rancho Murieta.

My hat is off to each and every one of you...but not for long cuz I burn easily

If I signed a proxy, do I need to vote again?  Or does my vote already count.

Scott, your proxy counts and you will not need to vote. If you choose to vote, the proxy will be tossed and replaced with the vote.

...and we thank you for your proxy

I laud the good intentions of the FOC.  They spent a lot time collecting proxy votes and then bringing legal action against the RMA.  If what they say is true, they now have enough proxy votes to force the election any way that they choose.

Remember, that a majority of the RMA members have chosen not to buy a satellite dish.  They, you and I, still subscribe to the RMA cable and RMA broadband internet service. Those dish owners who chose to get more programs now want out of their shared responsibility.

 The FOC vote will likely force a huge cost increase in the monthly service that we pay. That could eventually force our cable system to close down.  I believe that all RMA members have the responsibility to pay a portion of their dues to support the cable infrastructure. Discussions  have shown that some FOC supporters agree with that stance.

I suggest that if you too feel that way, that you revoke your proxy by voting in the upcoming election.  That way, you will be able to see exactly what the proposal is, and then control your vote at that time.

Bill, those who signed the proxy have read "the proposal".  It is printed in large type on the proxy.

All members will continue to support the infrastructure under FOC.  The capital replacements reserve contribution, which funds the replacement of major hardware as it ages and fails and is currently somewhere around seven bucks out of what RMA says is a total cost of $28.58 per house per month, is deliberately not excluded from dues by the amendment, which is intended to be aimed at operating costs.  It is the cost of delivering signal to those who want it. the cost of use, including day to day maintenance to support that use, which is shifted to the actual voluntary users. The big ticket cost of replacing major items which fail is paid from reserves, which we all will continue to pay in our regular dues, which is why keeping the system intact remains assured and thus the MBA is not breached, which was always total nonsense intended to scare off the members.

Here are the numbers from RMA's own 2009 proposed budget:

Total expenses of univeral mandatory basic is forecast as 795,575, or $28.58 per lot per month when you divide that among 2,320 memberships.

The reserves share of that total is shown as 195,216, or seven bucks month per lot.  This notably is shown as about
TWICE what it was in 2006 due to all the investment in system assets
over the past 3 years.

Programming costs show in the 2009 budget as 549,000 (one third more
than in 2006) which divides out to $19.72 per lot per month. Thus over 2/3 of what RMA spends on basic cable is spent on programming.  This is where the huge waste of members' money occurs.  RMA is paying well over $100,000, and perhaps twice that, for programming for homes that aren't using RMA cable but a dish instead.

The other costs in that $28.58/lot/mo. after you subtract the seven bucks for reserves and the $19.72 for programming add up to a whole $1.86 per user.

The seven bucks in reserves doesnt' transfer to remaining subscribers.  it remains a commonly shared obligation of all members.

The $19.72 in programming costs doesn't transfer to remaining subscribers.  For each subscriber RMA drops from the subscriber count it reports to the providers it stops paying those per subscriber fees.

So the remaining quasi fixed costs of a big scary $1.86 is your transfer amount.  According to RMA's own budget figures.  This is going to break the system?  At a 50% dropout rate there is one subscriber left for each subscriber who dropped out.  The transfer amount, the amount you've got to hike that subscriber's payment to break even, is $1.86  Everything else either stayed in dues or stopped being spent by RMA for per-subscriber programming nobody is watching.

Chicken Little is full of chicken feathers.

Wilbur

I'll try again, I tried to type in my response and the whole website crashed.  Was it just me or did everyone lose RM.com for while this evening?

So..Thanks Wilbur.  The reason I posted was that it was unclear to me and apparently to many other people who I have spoken to around town.  Everything from "my dues will be cut $31 a month starting in January" to "The system will close down when the dish owners are excused from helping to maintain the  cable infrastructure".

Has RMA confirmed to you that the numbers you have used here will be the basis for the new cable dues structure?  There is so much mis-information flying around that I was advocating that everyone stop and make sure they knew what their vote really means.

Sorry about the outage, Bill, and your extra work.  It wasn't you -- the site was down briefly early this evening.

What we know is that these are their forecasts of total gross costs of operating basic cable for all 2,320 lots, providing signal to each home and paying out a per subscriber fee of just under twenty bucks for every  house even if they have a dish and aren't using that RMA wire. FOC doesn't increae those total costs; it decreases total costs by that  twenty bucks for each departing subscriber they scratch off the count.

I've told two things to those who ask how much dues might go down:

!)  We chose to NOT try to take the reserves (about seven bucks) out of dues because there  was some logic to the idea that reserving to keep the infrastructure from just rotting away and becoming unusable was appropriately a common expense shared by all members.  So dues clearly wouldn't be reduced by those seven at least, and foreseeably over years that cost will probably creep up.  What we seek to clip out of dues is the operational cost of putting electricity and programming into those wires and running around servicing paying customers.

2) a Bylaws amendment such as this cannot force the BOD to reduce dues by any specified amount.  I looked at that mechanism and dropped it as impossible.  They have the sole right without any member approval to raise dues up to very high limits.  Civil Code section 1366 exempts from any restriction in the governing documents (includng bylaws) their power to raise general dues to "20 percent greater than the regular assessment for the association's preceding fiscal year or impose special assessments which in the aggregate exceed 5 percent of the budgeted gross expenses of the association for that fiscal year without the approval of owners,"  So even if the bylaw amendment specified a dues cut, they are legally empowered to raise them back by merely saying "aye" four times on a motion to do so

So it's entirely up to the BOD how much they drop the dues.  I do know that if I were permitted to drop out (I'm not going to actually, I'm going to try the new system for a year), they save nearly twenty in programming by scratrching me off the count reported to he programming providers.  They could choose to reduce dues by twenty bucks and come out an invisible buck and change ahead.  Everybody would still be paying seven into reserves in their regular dues, keepng that fund healthy for future cable replacement etc. needs.  Programming costs paid by RMA for voluntary subscribers ONLY and the remaining under two bucks in other costs would be paid by the voluntary subscribers.

But politicians are politicians.  If 1000 homes dropped out, enabling them to cut their payments to providers by nearly $240,000 a year, there's a pile of surplus cash there which could fund either a dues reduction, some other priority that needed funding, or quite likely a combination of the two  There will be unearmarked money on the table and you've seen hoiw that goes.  So we have ALWAYS avoided predicting what the dues decrease may be, because that decision will be up to the Board.  And THEY will be accountable toYOU for the decision they make, andhopefully will have a dialogue with the members before imposing that decision.  The members may agree that peeling five bucks off for a community center building fund or some other project is OK with them.  They could give back the whole twenty, or talk with the members about why they'd like to peel part off for a popular project.

As for what the department's budget would like like under FOC, I can't tell.  That's up to them.  Remember, we've been at this for over a year and have given them a heads-up on where it's going all along.  We timed the submission of the petition, which triggers a window period for when the vote is supposed to be held, so that the vote would be completed by August or so, so that they'd know the answer before tyhey started planning this 2009 budget.  But instead they decided to stall and fight us and try unsuccessfully to prevent the taking of a vote, which forcd us to hire a lawyer and get a judge to tell them they were nuts on at least that part of their "ooh it's illegal" theory.  We urged them months ago that they needed to work up the contingency budget for transitioning to FOC, decide what their price structure strategy would like like, consider whether marketing decisions and particularly channel placement in this tier or that might change if Basic is not mandatory but has to be paid for.  For example, if you want to contain the cost of basic basic, why not move channels you're not contractually obliged to put in Basic (many are) into the premium tier?  Golf and Comcast/Kings alone would pull a2-3 bucks of cost out of your Basic price. That advice, unfortunately, seems to be perceived as hostile, and far as I know they have no concrete plan 

The numbers I quote are copied from their own tentative budget which they filed in the lawsuit in their failed attempt to persuade the judge it was illegal to let the members vote in their own meeting called by petition pursuant to the Bylaws and Corporations Code.  Unless they persist in wasting money litigating the theory of a lawyer who has now lost  twice when I challenged her bluffs, the only COST the business change inflicts on that budget sheet is some padlocks to lock the nodes where you unhook the cable going to a house that has opted out.  Everything else is savings from that total cost.  The membership will be collectively paying tens or hundreds of thousands less for programming.  Everybody will keep feeding the reserves so the really big things get replaced with dues money when they break (that's what reserves are for).

Rather than micromanage, the amendment leaves much up to the BOD's discretion.  They can fix the pricing at the market point they desire or need.  They get to determine the reserve amount needs each year.  They get to determine how much of the probable six figure savings to return to the members as a dues decrease.  They get to decide which channels really ought to be in a premium tier to achieve the right competitive pricing offering.

You really need to talk to RMA about those questions. We've tried, but again, we've gotten no answers nor any signs that they're even working on answers. Until last week their apparent plan was to assume the "no election" bluff would work.

Although I do like Wilbur and especially Pam, I still have to say this. Just because Wilbur goes on and on until your eyes cross, doesn't mean what he says is the only word on this. I also talked to many people who felt that many questions about this weren't answered by the FOC and so people signed the poxy in error. So, for those who didn't like the practices of this group, please vote again!!!Myrna Solomon

Thanks, Myrna, for the kind words, but you didn't say a single word about why  people should vote no or why the majority of the membership have allegedly "erred" in voting yes.  Perhaps you can do so without being as long winded as I am.  Tell us, for example, what's wrong with my explanation of how the expenses shown in the budget are allocated under your Committee's budget and how they would be under FOC. 

What is the huge imaginary shifting expense that suddenly raises cable prices out of sight according to the anti-FOC rumor mill?  Where do I find those dollars in your budget?  If it isn't in the reserves which will stay in dues and it isn't in the per-subscriber programming expense each of us already pays, where does this Chicken Little spike in cable fees come from?  Explain, please, where I'm wrong.

Myrna,

When I was collecting ballots, no one I talked with was confused except wondering why we were collecting signatures for a 2nd time.  The response was that the RMA BOD's did not want to act on the petition in the first round when we were working with the BOD to provide them direction in this matter in an advisory capacity.  This whole process really isn't complicated.  Either you want to pay for Cable Basic Service in your dues as a mandatory subscription or you don't. 

The RMA BOD's has acknowledged that the Cable Television Service is the agreement by which they are managing this service and it is for the entire RMCSD Serving Area.  Currently only RMA members are required to pay subscription services as part of their membership dues.  No other person or entity is required, so RMA members are supporting this service for the entire RMCSD Serving Area whether we want to or not.

This service should be managed on a volunteer subscription service and if the subscribers can support the service great.  Someone who owns an undeveloped lot, has a dish, or just doesn't want the service shouldn't be required to pay for the service.  The Cable Television Agreement and RMA's governing documents do not support subscription as a mandatory requirement.  RMA requiring some subscribers to be mandatory while other are not is unfair and could easily be challenged by itself.

When these signatures were collected, everyone who signed was more than eager to sign the proxies.  Don't fool yourself into thinking that people will change their mind.  Also keep in mind that we didn't reach every household, so there are many more people that would have signed if we contacted them.

Myrna, I've decided you're right.  My explanation is too long winded.  I'll try to spoon-size it.

Put all the expenses in shown RMA's own Cable budget in 3 piles:
Reserves = seven bucks
Programming costs = almost twenty bucks
EVERYTHING ELSE = $1.86

Under FOC a member who drops out keeps paying his/her own share of reserves.  That doesn't move.

NOBODY has to pick up what they're no longer paying for programming.  RMA simply STOPS SPENDING that $20.

The only thing left for remaining subscribers to cover is "Everything else."  RMA, not me, estimates that as $1.86/mo/house.

50% dropout is the easiest ratio to understand.  If half drop out, each remaining voluntary subscriber picks up that $1.86 a month for ONE dropout.  The voluntary subscriber's basic cable cost rises from the 28.58 forecast in RMA's budget  to 30.44.

The half who want it pay $1.86 more than RMA intends to charge everyone in their dues.

The half who don't want it save up to twenty bucks.

The savings comes from stopping the waste of twenty a house buying programming for hundreds of houses who don't want it.  That's members' money RMA currently pours down the drain.  FOC stops that waste.

Hello Wilber!

The issue with FOC saving the member $20 is actually a bit misleading. As you have stated in past posts it will be the BOD that will decide on the issue of lowering the dues if the FOC amendment passes. In fact if I am not mistaken the FOC position is strictly the amendment thus purposely avoiding the issue of requiring a mandatory fee lowering along with the amendment. Pleae correct me if this is wrong.

My personal opinion is I do not think any fees will be lowered. Thus the $20 bucks will still be paid each month with or without cable service but now just reallocated towards other purposes. There will be no net savings (my opinion) to any member.

Thanks!

Todd 

Todd, I don't see how it can be "misleading" to have repeatedly told the members, as you note I have done, that the amount of dues reduction is up to the Board.

The members cannot restrict the Board's decisions about dues levels by bylaws amendment.  That's the law.  The industry made sure of that by getting the provision in Davis-Stirling which says the BOD can raise regular dues by 20% AND impose a 5% special assessment on top without member approval no matter what the Bylaws say.  We didn't" purposely avoid" the issue of requiring a dues reduction.  It's simply impossible to enforce, as a matter of law.  Had we included a promise of a dues reduction in the amendment, knowing that it couldn't be enforced, we would be rightfully accused of misleading the members.  I disagree with your assertion that instead telling them the truth about that is "misleading."

I also disagree with your prediction that there will be no dues reduction whatsoever.  To keep all twenty in the dues as a slush fund would be equivalent to a twenty dollar dues increase.  Our boards have actually tried pretty hard to keep dues low, sometimes in a penny-wise, pound-foolish way (not reserving for the cable system for many years comes to mind.) While I understand the causes of members' cynicism, trying to hold on to the whole twenty when they don't really have expenses to apply it to is contrary to past behavior regarding dues containment.

What we do know is that applying FOC to RMA's budget would put the budget nearly 22 dollars out of balance with excess revenues after paying all expenses in the budget.  Which is why I say, just as an example, that even with a twenty dollar dues reduction they'd still come out a buck and change ahead.  The budget has to balance, so they have to put that nearly 22 somewhere.  The members will be watching with great interest.  I don't believe avoidance of a substantial dues reduction is a viable option.

Hello!

Let me clarify my position.

I completely agree that you have been very consistent in your statements regarding the BOD having to deal with the dues issue if the FOC amendment is drafted and enabled.

However the point I was trying to make in my post is there are really two issues at play –not one. I separate the issues as follows:

1. The FOC is trying to change the bylaws, nothing else at this time
2. The BOD will decide the dues issue at a later date

Therefore to make the claim that the FOC will be saving members $20 bucks/month in your post is a little “misleading” since there is no guarantee any money will be saved or monthly dues reduced by any amount due to the FOC amendment.

On the second post I again think the issue is not clearly separated. From a legal standpoint amendments can be introduced into the bylaws to reduce the fees. That is not illegal and thus to make that claim that it is “legally not enforceable” is misleading. However you are accurate in that the BOD does have the option at anytime to increase the dues to a maximum 20% (without community action) but that would be a clear and separate act versus the “reduction of dues” amendment. They are not inclusive of each other as your post seems to infer.

With all of this said I am possibly splitting hairs here with my posts. I mean no disrespect but it is just how I view the topic. However, please note I am still standing by my statement that the BOD will not reduce fees $20 bucks if the FOC passes. I just can’t see that happening personally. We can bet a beer on who is right…heheh

Todd

No offense taken, Todd.  It's appropriate for these questions to be examined.

I've avoided predicting that there WILL be a twenty buck dues reduction, for the reasons explained.  What we know is that FOC moves twenty-one and change in expenses out of the regular assessment trough in the budget, "orphaning" that excess dues revenue.  RMA would have a twenty-one and change PER MEMBERSHIP surplus in the budget if they shifted basic cable operating expenses to a voluntary special assessment, such as they do on the  broadband and premium cable pages of the budget, and didn't reduce general dues revenues correspondingly.  I don't know that the reduction will be the full twenty but I'd bet a case of beer it will be at least 10 or 15.  They have to put that twenty into something, either a dues reduction or some expenditure which does not presently shown in the budget.  I just can't see them wanting or daring to initiate some huge new spending program.  But peeling a piece off to, say, increase rainy day reserves, increase our hedge against rising dues defaults, or start an earmarked building fund, seem plausible occurrences.

You and I agree that even if the amendment mandated that dues increase the BOD could by simple motion raise the regular dues right back to where they wanted them. I agree with your observation that this would be a seperate act.  But either way they could not put that money back into basic cable under the FOC amendment.

Putting a dues decrease mandate into the amendment would, in my judgment, have been misleading and contrary to the objectives of making the amendment as simple, flexible and understandable as possible.  The language would have to allow for the fact that every year they do have to raise dues some to keep up with inflation in other expense lines in the budget.  This is a bylaws provision which has to work right year after year.  Writing something which plugs the holes you'd want to plug yet leave them appropriate discretion about other lines in the budget, if do-able at all, might take a page of legalese.  Then you'd have a long, complex petition and amendment nobody wants to read and which invites criticism that it unreliably and misleadingly promises a specific dues reduction. We didn't think it was workable, and wanted to keep it simple and hew closely to the same language the members approved by a 78-22 landslide margin in the advisory vote.

There's another rather hypertechnical reason which is difficult to explain without becoming long-winded again. (Over)simply put, FOC employs a statute which lets the membership subject specified corporate decisions, in this case any infusion of regular assessment revenue into basic cable operations, to an approval vote of the membership.  But the Civil Code section on dues canonizes a policy decision in state law that the members cannot tie the Board's hands re: dues levels by Bylaw.  Unlike the silliness on which RMA's attorneys just lost on in court, a dues reduction amendment could be vulnerable to at least a significantly less laughable legal attack as being 'unlawful', i.e., beyond the members' power to impose.  Another unnecessary and unwanted complication and point of vulnerability.

While I imagine some members' support of FOC imay be all about the dollars, to me what matters more is the principle of ending forced socialized television and forcing RMA to deal with cable as a business, operating in a cost-conscious way and maintaining an accurate separate set of books.  This will encourage a diligence regarding cost containment and documentation of expenses which has been lacking and which is essential to not losing our shirt in an audit of the charges should we ever actually be required to serve the New North under the MBA and its audit and price reduction provisions.  RMA can be as casual as it wishes in how it documents and characterizes expenses within its own budget and as to its own captive market, who have no control and no choice about dues.  As a business selling to others under that "at cost" contract and and its enforcing audit provision, RMA cannot be so casual but must actually keep track of the nickels to protect itself from audit.  Only by taking cable out of the general slush fund and forcing it into self-sufficiency can you instill that business discipline, in my opinion.

Excellent post....we agree on the points and I understand the reasoning of keeping it simple and straight forward. It is just far easier to get to second base if you already are on first. The FOC amendment gets you to first base.

The bet is on, a case of beer that the BOD doesn't reduce the fees after the FOC passes....hehehe

Take care!

Todd