At the end of this article, I will provide a link to “secret” document(s) that very few people, even board members were aware of when I talked to them. I believe it might explain some of our financial woes in the area of F&B. It will make a lot more sense if you read from the beginning.
Food & Beverage is a big deal in Big Canoe. It has historically centered around the Clubhouse, but also includes the Swim Club concessions, and more recently the heavily hyped Food Truck.
Food and Beverage is currently hemorrhaging money at record levels. The “reported” loss for 2018 F&B was -$625,727. The losses were actually budgeted to be -$413,102, meaning they went into the year expecting to lose that much, but in reality our losses ballooned over the year to an additional -51.4% loss (See Page 13 of the 2018 Financial Statement). It was Jill Philmon’s 1st year on the job as GM.
Fast forward to today, and we have it in our 2019 Budget to lose another -$507,109 (See 2019 Operating Budget), but by the end of June we had already lost -$388,295 (See Pg 10 of June 2019 Financials). This puts us on a current projected track to end 2019 with an F&B loss of -$776,590. This is Jill Philmon’s 2nd year on the job as our GM.
Ms Philmon is receiving an approximate $300,000 Annual Salary & Benefits Package, and with record breaking back-to-back losses, she is seemingly running our F&B Budget into the ground. We can’t afford much more of her expertise. But it doesn’t stop there.
Not only does General Manager Jill Philmon not have any answer to why this is happening – neither does the Finance Committee, nor the Board have any explanation, even though they all say they have been looking at the situation for months.
- April 2019 Finance Committee Minutes: “Discussed clubhouse performance in detail, including Banquets and Events. Although 1st quarter is typically a period of low revenue, results are significantly below expectation. A comparison to three previous years shows significant lag. The committee reviewed a list of items that it felt were important to improved performance for the remainder of the year and asked that the General Manager present a plan for those at the next meeting.”
- May 2019 Finance Committee Minutes: “Jill discussed a set of initiatives in the clubhouse to improve revenue and reduce costs. Jill’s presentation did not include specific actions, how those would be accomplished. Timelines or fixed accountability.”
- June 2019 Finance Committee Minutes: “The primary focus of the meeting as on clubhouse performance to date and management’s plan to get back on track with the budget. This discussion is a continuation of a discussion that started in the April and May meetings. Management presented a set of proposed cost cutting measures in both the clubhouse and across operating departments. These proposed measures were designed to close the gap in total deficit budget performance to date. The General manager was quick to add that additional measures may be required if revenue goals are not met moving forward. Each of the measures were discussed along with supporting data. The board has not had the opportunity to review this proposal.
Editor’s Note: By end of June, Revenues were down $267,030 (21.3%) to budget. That is a BIG miss. - July 2019 Finance Committee Minutes: “Jill presented her updated plan for achieving the overall budget in 2019. This involves cost savings items, some which will need board approval, and some modest revenue increases at the clubhouse due to the food truck revenue and profits. No timeline was presented so that success can be tracked.”
So a lot of talk. Nobody knows what the plan is yet. Nobody knows what the source of the losses is. We are still on track for to lose -$776,590 this year.
I started walking back along memory lane, and thinking of the historical things we do know, most prominent being the fact that the POA has always been obsessed with increasing F&B Revenue. Here are some other things we know, and bear with me, because I am going somewhere with this…
- We know that going as far back as the previous Clubhouse, F&B has always lost money, and there has always been an almost obsessive focus on doing anything possible to increase F&B activity.
- We know that the Declarations and Covenants declare that there shall be “Public Access to all restaurants” (that is a little known fact – that ANYONE can enter the community if they state they are coming in to visit the Clubhouse for dinner/lunch etc. Anyone in Jasper, Dawsonville, Marble Hill or elsewhere is free to come on in! Wonder if that should be publicized???)
- We know that one of the first things almost every GM does when they come in, is try and shut down outside food at the Swimclub so that they can increase POA sales. With John Thompson the excuse was “too many yellow jackets”. With Jill Philmon it was “too many bears”. One thing was very clear…. the Yellow Jackets and Bears obviously didn’t care for POA Food, because that food wasn’t being banned…. not the food being being “purchased” and resold by the POA. (Explore and hold a thought as we move on here…. the focus being on how much food the POA BUYS, as opposed to sells, as being important.)
- We know that the POA fought like hell from releasing the Purchase Sales Agreement in the 2016 Land Deal – the primary reason being given at the time was that it contained confidential information. But when it was finally released, there was only one big area that was redacted….. The Exhibit D (pg 24) “Service Contracts”.
- We know that Big Canoe Company LLC has an SIC/NAICS Code Description as an “Accomodation and Food Service” Company, and is still currently active with the Secretary of State.
- We know that in 1989 the Big Canoe Company AND the Big Canoe Property Owners Association entered into a For Profit JOINT PARTNERSHIP incorporated as the “Big Canoe Food & Beverage Service, Inc“.
- We know that in 1987 there was a Settlement Agreement between the Developer and the POA and one of the documents involved was the “FOOD AND BEVERAGE SERVICE AGREEMENT“ (FBSA).
Here are a couple of excerpts from the FBSA:
WHEREAS, the Company and the Association have entered into a Settlement Agreement…. WHEREAS, a condition of the Settlement Agreement is that a recordable agreement be executed providing the terms under which certain food and beverage operations are to be conducted upon the Common Properties.
The Company shall have an exclusive right of first refusal to provide all food and beverage services now or hereafter provided on any of the Common Properties including without limitation, the Golf Club House and the Swim Club Snack Shop.
Here is what we do NOT know…..
- Is the POA currently, jointly engaged in a For Profit relationship with the Big Canoe Company (via partnership, or contractual manner) ?
- Is the Developer in any way connected to our Food & Beverage Operations?
- Is there a Non-Disclosure in place that has for 32 years kept this information from the Property Owners?
- Will our Board come clean with us on this – OR do they even know the answer to these question?
- Do our elected POA Board of Directors have access to all the documents they need? (I have been told that Board Members have been refused documents, and limited as to what they can see.)
- How large of a part did the Developer play in selecting Jill Philmon as General Manager? (more later)
I am going to leave everyone with a hypothetical concept story…. imagine you have a service contract to supply a community with all of it’s Food & Beverages needs.
And imagine that the person in charge of running the community is giving away Kegs of beer to Golfers and Kickballers, and buying loyalty with free/cheap drinks to their friends….. do you care about the fact that the community isn’t charging for the Beer? Or are you just ecstatic that they BOUGHT the Beer from you, and you made a profit?
And imagine there are extravagant banquets being thrown for select groups of the community, and tons of expensive food is being ordered and consumed, but the community is losing lots of money on the banquet…… do you care about the fact that the community isn’t making a profit on the Banquet? Or are you just ecstatic that they BOUGHT the Food from you, and you made a profit?
Imagine that the community is over budget for a Food Truck…. do you care about the fact that the community is over budget? Or are you just ecstatic that they have created another mechanism to BUY more Food from you, and it is YOUR Profit that will be Over Budget?
And imagine that each new GM follows a secret mandate to shut down outdoor food at the community pool…. do you care about the fact that the young families and children of the community are being milked on crappy, overpriced snacks? Or are you just ecstatic that they were forced to BUY more Food that ultimately you are selling to the community, as you leverage your secret F&B Service Agreement to make money off of every dollar of food sold?
SO…. everything in this story is absolute FACT…. except for the hypothetical concept story. But here is the thing… neither YOU, nor I know whether it too is actually true or not, and not so hypothetical after all.
What we do know is that there is NO rationale explanation for losing $625K in F&B last year; and will probably lose more this year. We know that this “Food And Beverage Agreement” didn’t happen by accident, and we know that the POA & Developer did once-upon-a-time enter into a For Profit Joint Incorporation called the “Big Canoe Food & Beverage Service, Inc“. For the record, the Incorporation didn’t last long (just 4 years as far as I can tell – although there is some murkiness regarding filings at the State Level), and we do NOT know if that is simply because it took a different form. We DO know that it was actually entered into and being contemplated, and we know that the FBA is still in effect – so it seems odd that a company that identifies as a “Food Service” company wouldn’t be leveraging a “Food & Beverage Agreement”.
So many questions…. no answers.
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Good luck getting answers.
Peace,
– david / publisher
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