(Editor’s note: Since this meeting, the RCSD has held a special meeting to address some of the concerns listed herein. The results of that meeting are summarized at the end of this report.)
The Rossmoor Community Services District is without a budget for the next fiscal year as the district’s Board of Directors split right down the middle over spending concerns and the compensation package of its General Manager.
At the Board’s July meeting, the Board voted 2-2 to approve its operating budget after a rather erratic discussion that saw an outburst from Director Michael Maynard so alarming that President Jo Shade asked him to “be respectful.”
At issue were the allowance of voting from Italy for former Director Mary Ann Remnet, and the simmering concern from two Directors over the salary being paid to General Manager Sharon Landers.
Remnet announced her proposed August retirement earlier this year to move overseas with family and was allowed to vote from Italy during the June meeting.
Some email messages from residents chided the Board for allowing Remnet to call in from “a hotel in Europe” to vote since leaving the country in April.
Remnet has since then officially emailed from Italy on July 12 to expedite her resignation.
Resident Laura Tanner said in her email that Remnet sold her Rossmoor home on March 25, which was recorded on April 17. Remnet has long been in Italy and thus should not have been allowed to vote, said Tanner.“A non-resident tourist in Italy cannot vote on how our local Rossmoor property taxes are spent,” said Tanner. “Any votes she casts will be illegal,” Tanner suggested.
Another email, from attorney Cherol Katz, on behalf of her mother, longtime Rossmoor resident Piri Katz, and numerous taxpaying residents, who Katz suggested “feel silenced and deeply distressed by the flagrant violation of the district’s governance in California public agency law,” by allowing Remnet to long-distance vote.
“We acknowledge GM Sharon Landers’ recent email stating that Mrs. Remnet has suddenly submitted her resignation effective immediately,” said Katz. “While her immediate departure solves the crisis for the Board meeting, the General Manager’s defense of Ms. Remnet’s residency status completely misrepresents California law and cannot be left uncorrected on the public record,” she said.
“The District’s attempt to treat her permanent location as a temporary absence is a severe violation of the Ralph M. Brown Act,” said Katz in the email.
Landers said later that another director was allowed to vote traveling on business, so Remnet should be able to do the same thing from a remote location,” the GM said.
Katz’s email made several demands on the Board and its legal counsel regarding Remnet, including an audit of all votes Remnet participated in from Italy and that they should be formally “brought back to the board to be cured.”
Katz also demanded any stipends or reimbursement “be clawed back.”
Remnet’s vote on the Board often provided the so-called “swing vote” to the majority favoring Nathan Searles and Jo Shade, and now gone from the Board, Directors Tony DeMarco and Maynard both voted against this year’s proposed budget, blocking its approval.
DeMarco, who for many years had previously served on the RCSD’s Budget Committee, had been replaced by Remnet by the majority. Nevertheless, DeMarco had deep concerns about the budget presented to the Board.
“We did a revamping of all of our salaries,” he said, looking at the budget. DeMarco said the current GM was getting paid twice what the former GM Joe Mendoza was paid.
“We’re just a bit top heavy,” he said, suggesting but not specifically calling out the GM’s pay package.
Before Landers arrived, the District’s GM was a retired government services executive who was paid less than $100,000 per year. Following a six-month trial, the board approved Landers GM contract on a 3-2 vote, with DeMarco and Maynard voting against.
The new contract paid Landers $140,000 per year, plus benefits, including cost-of-living adjustments, deferred compensation, etc.
DeMarco looked at the district’s receipt of sales tax revenue from Orange County and said it was steady but not increasing. Salaries, he said, have been revamped and recategorized to where pay increases “are just automatic.”
Landers argued that the proposed future increases were not automatic but based on merit.
Overall, DeMarco expressed concern with the district’s growing expenses.
“We’re spending a lot of money,” said DeMarco, “just spending a lot of money.”
He told the board “we are not a city,” protesting what he perceives as automatic rate increases and deferred compensation now budgeted for employees.
Looking at the proposed budget, DeMarco said, “We are not a city, and I don’t like all of these automated city-like expenses where the board doesn’t determine. Look at what our insurance did,” he said. The district’s insurance went up about 20 percent.
Compared to budgets of the City of Los Alamitos, approaching $30 million, and Cypress, approaching $70 million, the district’s budget hovers at about $2 million per year.
DeMarco said if the District has a big problem four or five years into the future, and if property taxes don’t increase, the District may run into trouble.
One member of the community, a former candidate for the board, Konya Vivanti, said during open communications that she was concerned by the “increase in total salaries and benefits” of the district since 2024.
“Chiefly,” she said, “due to the largest increase in the general manager’s salary and benefits.”
Board member Nathan Searles dismissed the criticism. He said Landers was doing a terrific job and experts had already examined her pay package.
“We (Board) had a consultant come in and discuss how our general manager was compensated, and they said we’re paying her in the range for the tasks involved. I don’t have an issue with the compensation in that sense,” said Searles.
After the budget failed to pass, Landers pressed the board to understand their concerns.
Following long, tension-filled periods of silence, Maynard said it flat out that he and DeMarco wanted to renegotiate Landers’ contract.
“Okay, the elephant in the room,” said Maynard, “we are a top-heavy organization with your position. I think you should reconsider, and I think it should be renegotiated,” said Maynard.
“It was a two-three decision, and that’s one of the levers here, a renegotiated contract,” said Maynard. “That’s the first thing that comes to mind, and this shouldn’t be a surprise. I’ve been vocal about this,” he told Landers.
At one point, Maynard leaned toward Searles and made a loud noise, which drew the caution from Shade.
President Shade also pushed back against DeMarco and Maynard, saying they were trying to undo a majority decision that went against them reminding them about all of the split decisions they’d won over the years after serving many years on boards where they had the majority.
“I know that’s how you feel, comparing the past two years when the two of you have been on the losing side of many 3-2 votes,” said Shade. “We can go back in history to see how long you guys have had the majority vote,” she told them.
“But it’s all about balance,” she gently reminded them. “We’re all here for the same reason,” she said.
Ironically, both Maynard and DeMarco, in addition to Shade and Searles, have acknowledged Landers is doing an excellent job in the role of General Manager.
With Remnet’s resignation, DeMarco asked to fill the vacant Budget Committee seat and Maynard asked if they could declare an emergency and vote to fill the committee vacancy.
Lona Laymon, the board’s legal advisor, refused to call Remnet’s vacant seat on the budget committee a legit emergency, and therefore, it could not be filled on the spot, especially since it did not appear on the agenda.
The board agreed to call a special meeting to resolve budget issues since they must approve a new budget by September.
Since this meeting, the RCSD board held a special meeting July 28 to discuss the budget. Although the recording is frozen, audio reveals that at that meeting, the board agreed to return DeMarco to the budget committee and appointed Maynard to the Personnel and Contracts Administration Committee.
In addition, the RCSD qualification period for applicants to fill Remnet’s seat has closed and Landers told ENE only that they are working through “multiple candidates” to validate qualifying criteria. The General Manager said the board will soon call a special meeting to discuss the appointment to Remnet’s seat.
Finally, in response to Maynard’s call to renegotiate, Landers said “absolutely.” Landers said if officially asked to do so, she would be willing to renegotiate her employment agreement with RCSD.