In a special January 4th board meeting, the POA directors voted on a $500 increase (20%) to the $2,500 capital contribution fee (CCF) which is the maximum annual increase allowed per the governing document. According to the fourth amendment to the general declaration of covenants which was approved by property owners last year, these fees “will be deposited and held as part of the Board Designated Master Plan Fund . . . “ .
In support of the increase, the newly elected POA president explained that the fee “helps take the pressure off of property owner monthly assessments.” (1) Absolutely ludicrous. Considering the CCF did nothing to prevent the board’s approval of this year’s $30 operating and capital assessment increase, this statement defies all logic.
And with no master plan budget even approved or presented to the property owners to substantiate the increase, one might ask why? Well . . . because they can.
The vote count was six in favor with the developer director voting against.
(Note: In fact, the board appears primed for yet another CCF increase in 2023 as a special January 3rd meeting has already been added to the schedule.)
Sincere kudos to the general manager . . .
Meanwhile, it appears that this writer’s recent Ask the POA questions have been diverted to a black hole. After failing to receive a response to a January 3rd inquiry, (2) a followup request was submitted that quite oddly failed to even make it past the automated system of ticket numbering. Now how does that happen? No fear, after contacting the GM directly, he was actually able to retrieve a response from the archives of lost mail.
A repeat performance . . .
As for that January 3rd inquiry, (2) this writer simply requested the cash balance in the Master Plan Fund as well as the restricted Capital Reserve Fund, Capital Replacement Fund and operating account(s) as shown on the “POA books” at year end (December 31st, 2021). Unfortunately, according to the POA President’s Response as found here, it seems that leadership either does not know how much cash the association had at year end or they do not believe that a property owner has the right to know the answer to that question until 4- 6 weeks out into the future. Either conclusion, is beyond disturbing.
As a reminder, these accounts are cash accounts, and ANY well run business should know precisely what their cash balances are on ANY given day. And to be clear, while it is understood that those cash balances might be subject to some adjustments (such as interest earned, service charges, etc.) once reconciled to the bank statements, this writer requested the balance only as shown on the POA books at year end prior to bank reconciliation.
Perhaps additional time is needed by leadership in order to determine how to best manipulate the balances and “shuffle the shells” once again much like what was done after the 2020 year end. https://bcmatters.org/imaginary-numbers (3) Rest assured that given the apparent continuance of this POA wizardry, this process will continue to be challenged by this writer.
The fast track to more debt . . .
And yet, rather than allowing the accounting staff to perform their duties as was suggested in the president’s above response, the director of finance was summoned to a “special” two hour meeting of the finance committee on January 11th to discuss refinancing options and “the possibility of obtaining access to additional funds”. (4) During this meeting, the finance director was appointed to a sub-committee that was dispatched to conduct a review of the loan terms as presented by three separate banks. It was recommended that this be done “as quickly as possible”.
Curiously, the association’s long time banking partner since at least 2005 (Wells Fargo successor to Wachovia Bank) is not included on the list of banks. Could this be a red flag?
Likewise, with the existing loan set to mature in less than five years and carrying a fixed rate of only 3.29%, (5) one must certainly ponder the reasoning for the urgency of the situation.
It’s time . . .
Might it be that even after the $30 (10%) assessment increase for 2022 coupled with the $500 (20%) increase to the capital contribution fee, the association’s cash flow has ceased to exist? Probably so.
That said, it’s time for some honesty. Time for some transparency. Time to take another look at some of those expensive, unnecessary and premature capital projects.
. . . . .
As always, please feel free to contact me at thepcrosses@gmail.com for questions or further discussion. Likewise, should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently. Meanwhile, take care and stay safe.
Patricia Cross (10438 Big Canoe)
References:
1) Big Canoe Special Board Meeting, January 4th, 2022 at 9:45
2) AskThePOATicket#5876 , January 3rd, 2022
3) Imaginary Numbers, August 12th, 2021, bcmatters.org https://bcmatters.org/imaginary-numbers
4) POA Finance Committee Minutes, 2022 (POAwebsite>login>POA>Committees>Finance>Minutes>2022>January)
5) POA Finance Committee Meeting Minutes, March 21st, 2016 (Not presently available in the document archives)
I enjoy your comments. You remind me of things that I didn’t know about. We have lived here for 13 years, therefore, we miss the good old days.
Wanda Forman