By now probably everyone, management, leadership and property owners alike, openly acknowledge that Big Canoe food and beverage is stacking up unreasonable and unacceptable losses. What has not been defined is the source of the problem, and further, even the full extent of the problem.
To be fair, the finance committee has issued action plans and ultimatums while management works on generating reports to determine the profitability of various F&B functions.(1a) (2a) Meanwhile, the board sits stone faced and without answers or input other than to assure property owners they are working on the problem. Without any explanations to date, let’s throw out a few thoughts and possibilities while also pointing out some of the other ludicrous decisions being made of late.
Maybe we have a few blurred lines going on here. For example, it has just been learned that “if a department such as Golf wants a keg of beer” (3) that keg is provided at cost. Kudos to the hospitality committee for pointing this out, and presumably that policy is being changed going forward. While this point may appear insignificant, any policy such as this will and absolutely did skew the F&B profitability ratios.
Now, follow the keg. Once the golf committee receives the keg at cost, is the beverage provided to the golfer at no charge? At cost? Or at the retail rate? And if provided at no charge or cost, do other property owners share similar benefits? And if the retail rate is paid, is that profit pocketed by the golf amenity which will in turn enhance their financial bottom line?
And while this documented example might appear small, it becomes much bigger if one considers the number of golfing functions, tournaments and banquets that are actually catered by F&B and include much more than just a keg of beer. These events require extensive planning and menu choices. (4) (5) For example, the recent Member-Guest tournament (48 teams/96 players) not only included golf and cart for each of the three days but also included breakfast and lunch for each day, two dinner meals, one dinner meal for spouse or guest and an open bar for an entry fee of $425 per person ($850 per team). (6) How much of the revenue for that tournament was attributed to F&B and was it profitable? Perhaps it was. Hopefully it was. Irregardless, this is an answer that management seriously should be able to provide to property owners TODAY, and not next month or later when and if other profitability reports are generated. Keeping in mind that this policy has actually been confirmed by the general manager. (1b) (2b)
The importance of correcting this issue should not go unnoticed. As losses in amenity “operations” are subsidized by property owner assessments, it is only reasonable that property owners are able to recognize which amenities are the major contributors to those losses.
And now we also learn that our board has notified “Talk of the Town” that their lease will be canceled at the end of 2020. “The idea is for the POA to use this facility for wedding and event business, effectively making the Clubhouse a property owner facility.” (7) Was this not even a newsworthy event? This property was acquired as part of the 2016 land purchase and actually generates revenue for the POA. In fact, rental income generated in 2018 by the Chimneys property and realty office property combined totaled $116,260. (8)
Management can not control runaway F&B losses or even provide property owners with a reasonable and honest explanation for these losses yet leadership has determined it appropriate to cancel the lease on the Chimneys property and eliminate what has been a guaranteed revenue stream in order to give F&B more facilities and opportunities to rack up further losses. Even more important to note is that there has been no business plan developed by the POA for the assumption of this building. (9) As if this were not enough of an unfortunate development, the Long Range Planning Committee is already discussing the kitchen enhancements and upgrades that will be needed for the Chimneys kitchen. (7) (9) The very same LRPC that determined the clubhouse kitchen was adequate in a 2018 report only to determine it inadequate in 2019. (10) This is all complete nonsensical chaos, and property owners deserve better.
And then, of course, there’s the food trailer . . . yet another kitchen facility . . . which made it’s debut Memorial Day weekend. “It’s big”, “it’s absolutely beautiful”, (1c) “better than the clubhouse kitchen”, (11) and it cost $72,000. It also requires public works personnel to transport and set up between locations. (5) And although, our POA vice-president indicated that the food trailer would be listed on the financial reports as a separate amenity in order to determine if making that purchase was a wise decision, (1d) there was no separation on the May financial reports. What was apparent, however, was that after the addition of the food trailer, F&B revenues were $15K less than the same time last year and losses for the month exceeded budget $48K. (12) And yet, management surmised that “Overall it was a good month for The Clubhouse”. (5)
Management. Leadership. Let’s get real.
Please feel free to distribute, share and pass this on. Likewise, if you have questions or would like further discussion, I can be contacted at thepcrosses@gmail.com.
Patricia Cross
10438 Big Canoe
* You can read all of Patricia Cross’ Financial Letters Series Here.
References:
- May 2019 Board Meeting Video at (a) 25:45; (b) 18:24; (c) 2:48 and (d) 27:20
(See POA Website>POA Login>POA Tab>Meetings>Videos) - June 2019 Board Meeting Video at (a) 20:00; (b) 4:25
(See POA Website>POA Login>POA Tab>Meetings>Videos) - Clubhouse Community Committee Meeting Minutes – June 11, 2019
(See POA Website>POA Login>POA Tab>Committees>Community Hospitality>Minutes>June; Pg. 2 – New Business Discussions) - Big Canoe POA Administrative Report – May 23, 2019
(See POA Website>POA Login>POA Tab>Financial>Admin Report>May; Pgs. 6 and 10) - Big Canoe POA Administrative Report – June 20, 2019
(See POA Website>POA Login>POA Tab>Financial>Admin Report>June; Pgs. 5, 6, 7 and 10) - Member Guest Tournament Informational Brochure
(See POA Website>POA Login>Golf>Big Canoe Golf Events> 2019 Men’s Member-Guest>Event Information>Informational Brochure) - Long Range Planning Committee Meeting Notes – May 6, 2019
(See POA Website>POA Login>POA Tab>Committees>Long Range Planning>Minutes>May 6) - POA Financial Package, December 2018, Pg. 21, Village Core Income Statement
- Long Range Planning Committee Meeting Notes – June 3, 2019
(See POA Website>POA Login>POA Tab>Committees>Long Range Planning>Minutes>June 3) - Letter to the Editor: Financial Woes of Big Canoe Food & Beverage – June 10, 2019
- Smoke Signals, Digital Edition, June 4, 2019 (See Page 12)
- POA Financial Package, May 2019, Pg. 4
(See POA Website>POA Login>POA Tab>Financial>Summary Of Operations>May; Pg. 4)
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