Management Agreement Summary C. Grundke 3/22/07

Definitions “Agent” – Professional Community Management. (PCM). “Owner” – Corporation, Board of Directors, Resident Owners??? “Management Agreement” – the 4 contracts between PCM and the 4 LWV Corporations. “General Manager” – the person provided by PCM to provide the services listed in the Management Agreement. “Management Fees” – the cost to LWV for the General Manager who is provided by PCM.

Objective Provide a working agreement between the “Agent” (PCM) and each unique Laguna Woods Village Corporation: –Golden Rain Foundation & Trust –United Laguna Hills Mutual –Third Laguna Hills Mutual –Laguna Woods Mutual No. Fifty & Trust

Purpose? In very general terms, it defines the scope of the service to be provided by the “General Manager.” Identify the general Service Levels to be provided to the owners. Define the cost for the Service.

Managing Agent If Limited by Manpower

Managing Agent If Limited by Workload

Some Comments Who do you think owns the “Property” we call Laguna Woods Village? –The Resident Owners

Comments Who has control over the “Property?” –Resident Owners –Corporate Members Bylaws control sale/joint venture via change last year –Boards GRF United Third Fifty

Comments Who hires the “General Manager?” –PCM

Comments Who approves the hiring of the “General Manager?” –GRF, United, Third, Fifty, Resident Owner? –Only GRF by written approval – majority? –United removed this from their Contract. –Third???

Comments Customer Quality Check! –The “Agent” has sole control. –It is provided, “in accordance with the terms and spirit of this Agreement.” –How do you measure this?

Comments Who determines the methods by which project is managed? –The “Agent” has sole control. –The “Owner” has no control.

Comments Can “Agent” hire people who do not work exclusively for “Owner?” –Yes!

Comments Who pays for employees who are not working exclusively for “Owner?” –The “Agent!”

Comments What are the Measurements for performance of “Agent”? –There are none – other than the Budget. –The “Agent” defines what is satisfactory.

Comments Is there a performance evaluation of the “General Manager?” –There MAY be a yearly written evaluation by the 4 Board Presidents. –I have never seen one. –Should the “Owners” see the evaluation?

Summary The “Owners” will have to rely on the “Boards” to define the measurement of performance by “Agent.” We have an increasing need for Maintenance and are expending an every increasing time on Development. The “Agent” decides how his time is spent between “Maintenance” and “Development.”

Conclusion The Management of the Contract by the Boards is beyond the capability of most Directors. Requires a Performance Evaluation by a competent outside source to ensure that we are really, “in accordance with the terms and spirit of this Agreement.”

The End