Really hopeful and expecting the best, the February 2019 financial package was reviewed along with board presentations, committee minutes and Smoke Signals articles only to find further questions and frustrations.
Overall financial results do continue to trend better than budget and exceed income for the previous year by $65k, but it must be emphasized and not forgotten that this has been made possible by the property owners and our additional assessments totaling $130k ($20/month) just since the beginning of the year, and NOT by efforts of management to reduce expenses. In fact, although within budget, in only two months, operating department expenses have actually increased $58k over last year. (1)
As for Food and Beverage … losses continue to exceed budget and out pace last year’s losses as well, but the finance committee chair has acknowledged that there are some issues to be addressed. However, after also noting that clubhouse activities are included in F&B and that the “real costs” are presently unknown, he was quick to surmise that the problem might be with property owner usage of the facilities. It was promised that soon, one day, the data will be presented to the property owners. (2) (3) and (4)
Most property owners probably recognize that the clubhouse has value to the community, but before we go too much further with this analysis, it should be reminded that the F&B losses do not include depreciation expenses of the facilities and equipment, and further, housekeeping, insurance and amenity management appear to be excluded as well. But in the spirit of compromise, F&B will be revisited in more detail when more data and the next set of financials become available.
What we really have here is financial chaos. More examples include:
- Unpopular employee lunches (projected at $73k/year) already “running significantly over budget”. Menu options are being reviewed, but in all honesty, rather than wasting all that time, it might be simpler to just put a $ cap on all meals that corresponds to the original budget with the employee paying any difference. (5)
- Capital expenditures are classified on the capital budget as first and second priority. We began the fiscal year in January with a second priority purchase of a new $50k excavator, rather than waiting to determine if any unexpected capital expenditures might arise throughout the year. (6) (7)
Further, many questions have been asked of the board and management in recent months by myself as well as others without answers. Failure to provide these answers is the classic example of lack of transparency. Just to name a few,
- Why did December 2018 show a net loss ($141k) for the month that was actually anticipated and even budgeted? Specifically, administrative payroll, public works payroll, public works operating expenses and public safety payroll seem to be the largest contributors to this loss. Unusual budgeted losses also occur in December 2017 and 2016 as well. Budgeting such a large loss in a single month seems unusual considering our accounting is based on the accrual method. (8) (9) (10)
- How much was paid to Walter Bland in 2018 to prepare the study on non-native and invasive plants, and how much is contracted to pay Walter Bland in 2019 to remove the plants identified in his survey from POA property. Irregardless of property owner discontent with the revised plant list and wastefulness of our financial resources, this is clearly a conflict of interest for Mr. Bland, and it is unfortunate that the board and management do not recognize that fact. (11)
- Where is the residual budget of $94k for the Chambers Master Plan included on the 2019 Capital Budget and totals? If not included, will the Capital Budget be amended and reapproved to include these items? (6) (7)
And now enter, complete financial and community disconnect as demonstrated by our POA President via his article in the April issue of Smoke Signals. Even though a detailed and concise report was provided to the Board by property owners, Eric & Denise Copeland, regarding the flawed Chambers survey, property owners have been put on notice of the pending Chambers master plan, along with the revisitation of additional property owner funding options. (12)
Frankly, it seems that for now, the entire Chambers survey should be tabled until the board and management can make an honest effort to control escalating expenses, examine the deficiencies in food and beverage and provide answers to our questions. Only then would it be appropriate to look to the property owners for additional revenue.
Property owners have truly done our part and must now insist that the board and management do theirs.
Patricia Cross
10438 Big Canoe
References:
(1) Big Canoe Property Owners Association – Summary of Operations – February 28,2019
(2) February 2019 Financial Package – Page 6
(3) February 2019 Financial Package – Page 13
(4) Video of March 21,2019 Board Meeting (14:50, 15:30, 16:10, 16:40)
(5) POA Finance Committee Minutes – March 19,2019
(6) February 2019 Financial Package – Page 18 (YTD Major Expenditures)
(7) Big Canoe POA – 2019 Capital Plan
(8) Big Canoe Property Owners Association – Summary of Operations – December 31, 2018
(9) Big Canoe Property Owners Association – Summary of Operations – December 31, 2017
(10) Big Canoe Property Owners Association – Summary of Operations – December 31, 2016
(11) Big Canoe POA Administrative Report – March 21,2019 (Pages 2 and 8)
(12) April 2019 Edition – Smoke Signals – (Page 11A)
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