Clearwood Homeowners Association Will Ask Members to Repay for Embezzlement Losses, Transfer Capital Reserves


Following the embezzlement of between $300,000 and $400,000, the Clearwood Community Association plans on instituting a new $2-per-month special assessment fee for residents that would last for about a year. 

That’s if resident voters approve the plan through an election later this year. 

Voters will also determine whether or not to increase membership fees by $191 annually for a total increase of $215 when accounting for the new $2 monthly fee.  

The association also plans on transferring about $198,000 from its capital reserve funds, but HOA members wont vote on this issue. 

General Manager Mitch Waterman said homeowners have been underpaying for services in past years and that the increase in membership fees will help the association provide more thorough servicing and keep the homeowners association’s budget in the clear. 

“It’s a two-pronged approach,” Waterman said. “It’s softening the cost to the membership.”

Membership fees for Clearwood are expected to go up to $931, if passed. If not passed, members could see a $326 increase due to the continued deficit, increasing to potentially $1,066 later. 

There is an approximate $198,073 deficit in Clearwood’s general and operations fund. 

The transfer of funds from the capital fund to the operations fund will not need to be approved by voters, but a notice will be posted in the ballot. The board will repay the $198,000 over 12 months, plus 5.5 percent interest, Waterman said. 

This action comes as Clearwood found in the summer of 2018 that a former bookkeeper likely embezzled close to $400,000. The homeowners association filed a lawsuit late last year and plans on pursuing further litigation.

The lawsuit against Dolanna K. Burnett, her husband and their businesses, claims the bookkeeper wrote multiple checks to herself and covered it up in the accounting system dating back to 2014.

Burnett has a previous conviction in 2014 for theft, identity theft and forgery for making counterfeit refund checks totalling $17,000 while working for the Tacoma Health Department and depositing them into her personal account.

She was initially charged with nine counts for the Clearwood case but eventually entered pleas for only three, according to Nisqually Valley News archives.

Waterman said if Clearwood hadn’t decided to hire a forensic auditor, which costs about $200,000, they wouldn’t have to make this transfer. But, he said, it was an important piece for the litigation process. 

“This is recoverable,” he said. 

The projected reserves in the homeowner association’s capital fund is projected to be at $3,150,000 by the end of the year, which includes the transfer, Waterman said. 

Clearwood’s board of directors met Saturday morning, Nov. 9, for about three hours to go over the budget and pass bylaw amendments to give the board the authority to work with its budget. 

“The board didn’t have the authority in its own bylaws to operate a balanced budget,” Waterman said. “They were being hamstrung.” 

Over the last two years, the board has seen a large amount of turnover. Seven new members have come onto the board during that time. 

The Nisqually Valley News asked for preliminary copies of the proposed ballot and budget. Waterman said the association’s staff preferred not to distribute the materials, adding that they believe it is in the best interest to distribute it to members before the media. 

“I think that they should hear from us first before the newspaper,” Waterman said. 

During the Nov. 9 meeting, a small number of copies were reviewed and passed around by the board and a few citizens at the meeting. 

The homeowners association has held town halls in recent weeks to help guide members through the budgeting process. Waterman said the town halls have been well-attended. 

“People came (and) asked hard questions — good questions,” he said. 

Clearwood’s board of directors held a special meeting Wednesday, Nov. 13, at 6:30 p.m. to ratify the budget and review the ballot before sending them off to the printer, and to make final amendments to the association’s bylaws. 

The special election will take place at 9 a.m. Saturday, Dec. 14, at the Lackamas Elementary gymnasium. 


After publication of this story, General Manager Mitch Waterman said claims that the board intends to ask for a repayment of embezzlement were false. This version has been updated with corrected information. 

Waterman also clarified his comments on the board's bylaws for the budget, saying they were hamstrung by the bylaws themselves and not previous board members. 



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