The Desert Chapter of the Building Industry Association is suing its larger trade group sibling to try to stop it from passing a series of bylaw changes that would shift all decision-making authority, assets and cash reserves to Diamond Bar.

The lawsuit, filed against BIA Southern California, has been assigned to Riverside County Superior Judge John G. Evans.

Its objective is to try to stop a series of “sweeping, radical bylaw changes” by the regional office serving Orange and Los Angeles county builders that, if adopted, represents a “total sea change” from the historical chapter-driven structure the trade group has relied on since the 1920s, Desert Chapter spokesman Michael Shepherd said.

Richard Lambros, chief executive officer of BIA Southern California, said there is no legal standing for the action.

“It's a meritless lawsuit,'' Lambros said. “It's like the arm suing the body.”

The lawsuit filed by the Desert Chapter contends that if the amendments are passed, local decision-making authority and advocacy for builders in the Coachella and Imperial valleys would be diluted.

“At stake is the management and governance of Desert Chapter's assets, including its cash reserves, which are collected from local builders and used to support government affairs and community outreach in Riverside and Imperial counties,'' Shepherd said.

The Desert Chapter, with 300 members and a cash reserve of “several hundred thousand dollars,” has operated in fiscal year 2009 with a staff of five under a budget of $1.1 million.

Its proposed budget for 2010 is just over $700,000.

“Although falling reserves stemming from the lack of residential construction activity have rocked the building industry, Desert Chapter prudently set aside funds during the construction boom in order to recover future shortfalls,'' Shepherd said.

“The regional body, meanwhile, has continued to struggle to meet its operating overhead, and faces an uncertain future financially.”

Lambros said it is a challenging time for the building industry, but BIA Southern California leaders are acting in a responsible way by rethinking how it operates.

“We, as a board, have engaged in discussions about the future of the association and how best to survive in our changing industry,'' Lambros said.

“We've seen most of the leaders in the region come together to work together to improve the industry and rethink the BIA. Unfortunately, the Desert Chapter sees these efforts a different way.”

Restructuring finances

Bylaw changes have not been proposed to close chapters, dilute their decision-making authority or take their money, Lambros said. The suggested changes also come amid a series of cuts that include staff reductions of 60 percent at BIA Southern California and a move to lease or sell its Diamond Bar corporate office, Lambros said.

“This restructuring is all designed to put the association — with its six chapters and 11 councils — on better financial footing,'' he said.

He conceded, though, that the bylaw changes set up processes involving the budget, management of reserves and handling of personnel. It's been a summerlong process, he said.

Shepherd said the lawsuit was filed after Desert Chapter's board of directors protested the amendments several weeks ago by the regional body's executive committee.

“The objections were ignored,'' Shepherd said, and the leadership in Diamond Bar pressed ahead with ratification. The second reading was slated for Nov. 12.

Fred Bell, who resigned from the top post at the Desert Chapter in mid-September, declined comment.

“It's active litigation,'' he said. “I don't want to be involved in it.”

With the lawsuit filing, the Diamond Bar-based regional office has 30 days to respond to the litigation from Oct. 28, the day the lawsuit was served.

Palm Desert City Manager John Wohlmuth, a former chief executive of Coachella Valley Association of Governments, on Friday said he's wondering what impact the bylaw change would have on the Desert Chapter's ability to raise funds through dues and fundraising events.

“If I was a member that paid dues, I'd be concerned,'' he said.

The BIA Southern Chapter, with some 1,300 company members and six chapters, has also run into resistance from the Baldy View Chapter serving San Bernardino County and 13 cities in Los Angeles County, according to a letter by Baldy View president Jimmy Previti.

The letter, signed by its board, said the Baldy View Chapter preferred its current governing structure and wanted to preserve its exclusive authority to make fiscal, staffing and operating decisions — particularly with regard to assets.