Even though leadership has been unable or unwilling to provide property owners with a reason for the escalating F&B losses, the POA board , as was speculated, (1) is moving forward with a $160,000 redesign of the clubhouse kitchens. The unbudgeted capital project has a scheduled completion date of before Thanksgiving.
A concise explanation was given by one director at the August board meeting to support the expenditure, citing increased efficiency and workflow resulting in improved F&B operations. (2a) It was also mentioned that the addition of equipment in the downstairs kitchen would provide more flexibility to support golf operations. (2b) Perhaps . . . maybe even probably . . . but why now? Why 2019 when we continue to be under budget with F&B significantly so? Why 2019 when no significant deposits to the capital reserve are anticipated? (3) Why not include the redesign on the 2020 budget and stick to our current plan? Or better yet, if it was so woefully inefficient, why wasn’t it redesigned years ago when F&B losses were not as massive as they are today? As an example, F&B operations has already lost more in the first seven months of 2019 ($443k) (4) than the net loss was for the ENTIRE YEAR of 2016 ($193k) (5) while utilizing the same inefficient and “shameful” kitchen. (6) All these questions really do beg an answer.
And perhaps as concerning is the fact that the clubhouse kitchen renovation wasn’t even listed on the board meeting agenda. It wasn’t even discussed the previous week during the board work session that included an update of the master plan. As the POA president would explain, this just came up in the last day or two. (2c)
It was even pointed out by leadership that information garnered in this redesign might be useful in budgeting the renovation of yet another kitchen in 2020 on the Chimneys property. The board’s cancellation of the “Talk of the Town” lease opens the door for even more grandiose plans by leadership for an additional venue in hopes of increasing banquet revenue without any discussion of a business plan or likelihood of profitability. (10)
With this latest project, our board has now committed to fund F&B capital expenditures totaling $320k (7) for an amenity that remains on track to lose $650-700k in 2019. And. . . after months and months of being promised a breakdown on the F&B losses, those questions remain unanswered. This is ludicrous.
We must also not forget that we now have a $170k property owner subsidized marketing department (8) to further promote a parade of non-property owner activities. Never mind that leadership has not been able or willing to document if these endeavors are even profitable. Given the present level of F&B losses, it is entirely plausible to conclude that, in fact, they may not be.
A request was submitted to management regarding many of these questions, and although a response was received, questions were only partially answered, if at all. And . . . even though, specific instructions had been provided by the Audit Committee Chair on how questions should be directed, this writer has been advised to follow Big Canoe Procedure 156.2 (9) for any future inquiries.
Are banquets and weddings profitable? We don’t know. And is the food and beverage provided for the numerous golf banquets and functions profitable? We don’t really know that either, but we do know that until recently, that keg of beer was not. (10)
At this point, it appears that leadership has no intention of ever providing property owners with an explanation or breakdown on F&B losses. Requests by this writer will most certainly remain unanswered, and it is unlikely that further articles regarding food and beverage losses will generate any real productive change. Rather, leadership will only continue as they have in the past while making cutbacks in other areas and departments in an attempt to disguise the real problem.
None of this will ever change without property owner insistence and involvement. If fiscal responsibility from our leadership matters, please lend your voice.
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
References:
(2) August 2019 Board Meeting Video at (a) 22:00; (b) 31:00 and (c) 18:10
(POA>Meetings>Video>August 2019 Board Meeting)
(3) Focus on Big Canoe – Letter to the Editor: New Avenues of Concern, August 12, 2019.
(4) POA Financial Package, July 2019, pg. 10, YTD Amenity Results – Clubhouse
(5) POA Financial Package, December 2016, pg. 9, Income from Operations
(6) May 2019 Board Meeting Video at 23:34
(POA>Meetings>Video>May Board Meeting)
(7) POA Financial Package, July 2019, pg. 16, 2019 Capital Plan
(8) Big Canoe POA – 2019 Budget
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