The Big Canoe POA Board’s creative explanations for the ongoing financial and infrastructure train wreck within the community may have just “Jumped the Shark”. The level of information manipulation has reached a level of ridiculousness that points to the possibility that the end may be near. This lengthy article will address seven (7) issues, including Responding to recent Personal Attacks from Amy Tropfenbaum and the Board on Patricia Cross (and FOBC) – see #4 below.
(1) Ridiculous Explanation Given for the Cost to Repair Lake Disharoon
Buried deep in a recent communication, the Board reported that the total estimate for the Lake Disharoon repairs is now $1.5 to $1.8 Million Dollars (not including the dock replacement later this year). The Board really “Jumped the Shark” and lost credibility when they presented the following:
“This is why the POA had proactively built the replacement of the Disharoon outlet pipe into the 2021 capital plans.”
If you look at the 2021 1st Quarter Capital Reconciliation (Pg 2 of 7 / Line 85), it lists “Pipe replacement at Disharoon dam” at $51,000. They rely on nobody actually reading the reports in order to make these ridiculous statements. To claim $51,000 as proactive budgeting for what has turned into a $1.5 – $1.8 Million Dollar Repair Bill is an INSULT to property owner intelligence.
(2) Comment on the unexpected draw down of almost 28% of our Reserve Cash
In the above section the community learns of the unexpected price tag of $1.5 – $1.8 Million to fix the Lake Disharoon issue. Split the estimate range to come up with a $1.65 Million Dollar Repair average. Our 3 Reserve Funds (Master Plan, Replacement & Reserve) have combined Cash currently totaling $5,940,153. The Lake Disharoon Repairs alone represent 27.8% of the Total Reserve Cash, and they were not even budgeted for in the Reserve Study.
Factor in the upcoming Lake Petit Dam Repairs (also woefully under represented), and I predict the Reserve Funds (all of them) will go negative within 2 years.
(3) Pointing out the “Unfunded” Master Plan Fund.
The POA is showing no signs of backing off of extravagant “Master Plan” Projects, which is weird because when you look at Page 47 of the Reserve Study you will see that the Master Plan Fund is only 0.04% funded this year (2021), and 3.08% next year (2022), and then the Master Plan Fund goes Fund Negative (-) for the next Nine (9) Years! It reaches a Deficit Peak of -103% in 2029. Read page 47!
(4) Responding to recent Personal Attacks from Amy Tropfenbaum and the Board’s Eblast on Patricia Cross (and FOBC)
The 2021 Reserve Study contains a statement on page 3 as follows:
“The basic financial exhibits comprising this reserve study report are the statement of position and summary component list as of January 1, 2021“
Definition: “The statement of financial position, often called the balance sheet, is a financial statement that reports the assets, liabilities, and equity of a company on a given date. In other words, it lists the resources, obligations, and ownership details of a company on a specific day. You can think of this like a snapshot of what the company looked like at a certain time in history.”
Treasurer Amy Tropfenbaum has admitted in her article “That $1.864 million amount is comprised of the balance of the Capital Replacement Fund at the end of 2020: $796,210, plus the exact amount of surplus cash generated from 2020 operations – $1,068,365 – which was to be transferred to the Capital Replacement Fund early in 2021. When the transfer ultimately occurred, for convenience it was rounded up to $1,100,000.”
The $1,100,000 transfer wasn’t even contemplated and approved by the Board until the April 22 2021 Board meeting.
April 22, 2021 Board Meeting / Timestamp 32:29 ~ “so that’s what we’re ….. approving tonight by the board, to move that 1.1 million dollars to the capital replacement fund. so could i have a motion to do that? i would make the motion. okay second. second. okay, all in favor? any opposed? okay, then we’re moving that 1.1 million dollars“
Board Treasurer Amy Tropfenbaum openly tells us that this $1.1 Million was accounted for in the January 2021 “Beginning Balance” of the “Reserve Fund” – 4 months before it was approved by the Board to be moved into that Fund. Furthermore, we learn that the “Reserve Fund” was actually the “Capital Replacement Fund”, which is NEVER referenced by name anywhere in the Reserve Study. You’ve got “Reserve Fund” this, and “Reserve Fund” that throughout the Reserve Study…. but never a mention or reference in the entire 91 Page Document to a “Replacement Fund”. They did manage to correctly name and reference the 2nd “Master Plan Fund” however.
If you are confused, don’t feel bad….. that is the whole purpose of creating three (3) separate “Reserve Funds”, but referencing all of them interchangeably as “Reserve Fund” or “Capital Fund” in random fashion when communicating with property owners through reports and studies. And since they move money around without accountability, transparency or according to accepted accounting standards…… no member ever really knows what Fund is being talked about, or what the actual balances are at any given time in the various reports and studies associated with those “Reserve Funds”. It is called Financial Engineering, and is similar to a Bernie Madoff Ponzi Scheme. You keep it confusing, and keep the money moving around, accounting for it on one date, while actually moving it months later.
You can even watch Amy, Regis, Scott, Candace and Lou babble for 5 minutes on video calling the situation, and the multiple Reserve Funds, confusing and “clear as mud”.
Yet Ms Patricia Cross, and this Newspaper (FOBC), have been accused of failing to see through that mud in their extensive research. Let me go through this newspaper’s summary opinion of those accusations in bullet fashion:
- No property owner reviewing the Reserve Study could have known that the “Beginning Balance” on January 1 2021 included funds that would not be legally approved for transfer in until 4 months later on April 22, 2021.
- A review of available financial reports show the respective “Replacement Fund” Balances on: (a) 12/31/2021 ($796,210); (b) 1/31/2021 ($922,545); (c) 2/28/2021 ($1,030,067); (d) 3/31/2021 ($709,202); & (e) 4/30/2021 ($1,599,137). Why would any property owner reviewing a Reserve Study that showed a Reserve Fund titled “Reserve Fund” with a beginning balance of $1,864,575 assume that a “Replacement Fund” showing the above drastically different Monthly Financial Balances was the account in question?
- The Reserve Study doesn’t reference a “Replacement Fund” at any point. The phrase “Replacement Fund” is NEVER used in the entire 91 page document.
- The Reserve Fund was established by Covenant in 2010, and that very covenant LEGALLY MANDATED the Reserve Study. The “Replacement Fund” was created by convenience through a Finance Committee recommendation in mid 2020. Every Reserve Study previously done used the 2010 “Reserve Fund” as the reference fund. The 2021 Reserve Study at no time mentions that the studies reference Fund (the historical 2010 “Reserve Fund”) was to be replaced with the newly created “Replacement Fund” which would then be identically called the “Reserve Fund”. No review of Finance or Board Meeting Minutes shows such change either (and EVERYTHING was reviewed prior to previous publications). One is left to assume that Property Owners are supposed to mystically channel that information? And make no mistake…. the Reserve Study is prepared for use by both “management and members of the Big Canoe Property Owners Association” (See Pg 4 of 2021 Reserve Study)
(5) Pointing out that the Board still hasn’t addressed 3 other Accounting Discrepancies, even after 5 months.
- Ms Patrica Cross ran a January 31 Article pointing out that the Master Plan Fund was $265K out of balance at the end of 2020. Ms Cross reported again on the $265K in a February 12 Article, and then again in a March 1st Article. The POA Board, and Board Treasurer Amy Tropfenbaum to this day have failed to respond.
- Ms Patricia Cross ran a June 1 Article detailing the discovery that Total Cash was $18,923 out of balance. No Board Response to that yet, nor has Board Treasurer Amy Tropfenbaum gone to print to explain that one.
- In the same June 1 Article as above, Ms Cross pointed out a new accounting discrepancy in the Master Plan Fund totaling $55K. That issue also has not been responded to by the Board or Treasurer.
(6) Suggesting a Solution to the Big Canoe “Financial Ponzi Scheme”* that may be unfolding
A serious and professional group of Property Owners need to hire an attorney. File a simple litigation asking a judge to open up the full accounting records of the community. Explore the possibility of retaining a Forensic Accounting Firm to oversee the review. State law already grants the members of a non-profit the right to accounting records. The Board likes to say that this is restricted to annual audits, but it isn’t. Judges do tend to err on the conservative side, but when presented with just cause will usually open the accounting records to members if a reasonable plan is jointly presented with the request. We are not talking about complex and extended litigation. We are dealing with a simple request for a Judicial Order, that includes presenting just cause via the listing of accounting discrepancies and financial concerns. From out-of-balance accounting, irregular procedures, to unexplained losses (i.e $775K Clubhouse losses) the justification easily exists. Considering the amounts of money involved, I am thinking that $25k – $50K for such a simple litigation is surely justified, and reasonable.
(7) Lastly, Suggesting a Solution to the Board for improving the situation
Clean up your act willingly, or it will be forced upon you. And by the way…. given the available public reports, Ms Cross was spot on when she recognized that $1 Million was missing from the accounting record. Amy Tropfenbaum herself acknowledged that the money wasn’t approved for the account, or transferred in at the time the Reserve Study was dated. You owe Ms Cross an Apology. Most property owners I know are grateful for her extremely well researched, well thought out, and fairly presented articles. She is very respected in this community, and has a lot of fans. If you fail to offer her a public apology, I believe you do so at at great risk of sparking backlash.
And it would be a good thing too. It is time that the normally silent majority of property owners rise up and take control of this situation. People will only be pushed so far.
Peace,
– david / publisher
Focus on Big Canoe, GA
* a publication of The Mountains Voice
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