I AM AN OWNER & RESIDENT OF WESTAGE
NOTICE
TO WESTAGE UNIT OWNERS:
My name is Ed Peruta and I am a Westage unit owner (37C, 37D, and 9B). When I was the Westage Board Treasurer, I asked many questions about finances and Dan Zak’s property management company, Metro Property Management LLC. The other Board members voted to remove me as the Treasurer, but I remain a member of the Board and have concerns about the Board’s lack of transparency with the Westage unit owners about Westage finances.
WHY SHOULD WESTAGE UNIT OWNERS BE CONCERNED ABOUT THE MONTHLY FEES THEY PAY TO WESTAGE FOR PROPERTY MANAGEMENT SERVICES?
As many of you know, Westage “contracted” with Dan Zak to perform property management services for Westage from October 1, 2021, through September 30, 2024. (Contract attached, Appendix A)
A Westage Board of Directors meeting is scheduled for February 20, 2024, at 5 pm. The meeting will be held remotely, by Zoom only. The meeting agenda is attached with directions for participation. (Agenda attached, Appendix B)
These are just some of the questions I have asked of Dan Zak, Attorney Ryan, and other Board members:
QUESTIONS (#1)
Why has Dan Zak, who contracted to charge $65 per hour for labor, been charging the Westage unit owners $95 per hour for labor? How did the Westage Board and the auditor miss this overcharge? Why hasn’t Dan Zak produced all the invoices and receipts for his work? Dan Zak told me on December 2, 2023, that the records were in “storage” and he would bring them to the next Board meeting. He has refused to produce the invoices and receipts for work performed since October 1, 2021. Has he been overcharging for all this time? What is the total amount overcharged?
A treasurer’s bulletin that I prepared for 2022 transactions shows that Metro received $8,833.33 each month for grounds maintenance and snow removal, $3,573.36 each month as a management fee, and billed Westage for General Maintenance/Repairs in the amount of $173,684.86. In total, in 2022, Westage paid Metro $322,565.14. Treasurer’s Bulletin 23-3 was provided to the Westage Board with all this information and more. (Treasurer’s Bulletin 23-3 attached, Appendix C.)
QUESTIONS (#2)
Why didn’t the Board or the Westage Association attorney review the contract with Dan Zak to make sure it was signed by Dan Zak? The retainer between Dan Zak and Westage states that the hourly cost of labor is $65. Now, since the contract was never signed, the Westage Board is calling the $65 hourly charge a mistake because Dan Zak really meant $95. Why does Unit Owner and former Westage Board president Dan Tucker remember it differently?
As a former member of the Westage Board of Directors (aka BOD) involved in the discussion to hire Metro, the Board of Directors meet with Dan Zak, President of Metro LLC, on or about August 21, 2021 in front of the Westage Pool complex. During this meeting Mr. Zak informed the BODs that Metro had professional licensed staff within multiple areas of building construction, renovation, plumbing, electrical, and other areas. Mr. Zak said Metro can provide these services to Westage, in lieu of contracting out, for an hourly rate. The question was raised as to the hourly rate and Mr. Zak replied $65 an hour.
(Dan Tucker’s statement attached, Appendix D.) [1]
QUESTIONS (#3)
Why is Westage paying Dan Zak a monthly fee of $8,833.33 for grounds maintenance and snow removal at an annual cost of $105,999.96 when the Westage bylaws require that any contract in excess of $3,000 be put out for bid? Why is Dan Zak doing work that should be put out to bid? Have the insurance policies that cover Westage been put out to bid?
These questions (##1-3) have all been submitted to the Board’s attorney and the Board over the past three-four months. (Emails attached, Appendix E.)
SOME BACKGROUND
When Lois Peruta, Unit 37C, saw an invoice from Metro in the amount of $440.98 for replacement of weather stripping and a door sweep to the front entry of Building 37, she questioned the bill because she knew that the fix was simple and inexpensive, weatherstripping, door sweep, and screws for probably $30 at a hardware store and less than 30 minutes for labor, especially professional labor.
She questioned the invoice because it did not show the cost of the materials, the time required to do the work, or the number of people who did the work. (Invoice attached, Appendix F.) Lois found out from Metro that two Metro employees had done the work at an hourly rate for labor of $95. Lois went to Home Depot and priced the weatherstripping ($15.27) and a door sweep, including screws, ($14.93) at $30.20 plus tax.
Westage’s contract with Metro began on October 1, 2021, and ends September 30, 2024. The contract specifically states that the hourly rate for labor is $65. (Contract page 17, Appendix A) The Association has an attorney, Chas Ryan of Pilicy and Ryan, P.C., responsible for reviewing contracts.
When the $95 hourly rate became an issue, Ed Peruta, a member of the Westage Board, asked to see the signed contract between Metro and the Association. It turned out that there was no signed contract. Westage has been paying Metro a $3,573.36 monthly professional fee and a $8,833.33 monthly grounds and snow removal fee without a contract since October 1, 2021.
In addition, in 2022, Metro charged Westage $173,684.86 for general maintenance and repairs at the $95 hourly rate. To fix this problem, the Board now wishes to modify the contract from $65 to $95. An Agenda for the February 20, 2024, Board meeting says it was all a misunderstanding and the Board seems prepared to allow Dan Zak to change the contract to $95, which would approve the overcharges since October 1, 2021.
Attorney Ryan, who has placed Westage in this terrible position, by not reviewing the contract with Dan Zak to make sure it was signed, has submitted his own revised contract to the Board raising his rate. The Board seems prepared to accept the $95 rate for Metro and the new rate for Attorney Ryan. All this has occurred, but an accountant, Dan Levine, has performed audits for calendar years 2021 and 2022, finding no issues. He now wishes to do the 2023 audit for a fee of $4,000 despite never addressing the issue of what happened to the Westage surplus of funds. Where have they gone since 2021? Absolutely no one has any idea of whether there has been a surplus, a shortfall, or exactly the amount of the surplus or shortfall for years ending 2021 and 2022.
To approve the proposed 2024 budget, the treasurer must establish the surplus funds or shortfall, if any, existing at midnight, December 31, 2023, midnight, December 31, 2021 and midnight, December 31, 2022, as surpluses and/or shortfalls extend into the next year.
(Treasurer’s Bulletin, Appendix C, page 2 ¶ I(B)) Despite this, the auditor says everything is fine. In response to my questions to Mr. Levine about how he could have missed these issues, he said that the type of audit he performs does not extend to looking for fraud. Attorney Ryan and the Westage Board have not asked anyone to perform a forensic audit. According to Mr. Levine in an email to me on February 16, 2024:
Hi Ed,
Thank you for your call. To recap the different accounting services, we mentioned:
1. Financial Statement audit:
a. This deals with providing assurance that the financial statements present fairly, are free of material misstatements, with the accounting method presented.
b. This uses the concept of materiality where an item could be quantitively or qualitatively misstated.
c. These are governed by statements on auditing standards.
2. Agreed Upon Procedures:
a. These are governed by SSAE which stands for statements on standards for attestation engagement.
b. Like an audit it is an attest engagement, but unlike an audit it is usually much more limited in scope.
c. The accountant and client agree on certain procedures which are then performed, and results reported back to the client as a final deliverable.
d. Some clients have hired us for this service to test certain things during a year in lieu of, or outside of, a typical financial statement audit.
Lastly you mentioned a forensic audit which is much more in detail then the two procedures listed above. The procedures test in detail many more transactions as part of the scope of that work.
If you need further information, please just let me know. As stated on the call happy to attend any meeting to discuss further previous engagements. Thank you.
(Email communications, Appendix E, page 12
I’m attaching these documents to this letter:
- Appendix A
Pages 1-3, 17, and 23 of Contract between Westage and Metro Property Management, including page 17 stating $65 hourly rate for labor, painters, plumbers, and electricians
- Appendix B
Agenda for February 20, 2024, Westage meeting
(The Board voted to conduct all meetings remotely. I do not agree. My opinion is that Boatd members should attend Board meetings in person and that Unit Owners should have the option whether to attend by Zoom or in person.)
- Appendix C
Treasurer’s Bulleting 23-3
- Appendix D
Dan Tucker Statement about $65 hourly rate under contract with Metro
- Appendix E
Emails regarding Westage finances and Dan Zak
- Appendix F
Invoice #915-5283 for 37 Carillon entry door
- Appendix G
Court case where judge assesses Dan Zak’s testimony about financial matters.
More information is located at or call me, Ed Peruta, 860-978-5455,
[1] See Appendix G at pages 2 and 3 where Zak’s representations about a loan are not believed by the court.