To be honest, for this writer, 2023 was a disappointing year in Big Canoe. With plunging cash ratios, continued negative cash flow, escalating food and beverage losses, extravagant capital expenditures, more assessment increases and flawed budgets all culminating with a board reaching even further lows by consciously and overtly altering and manipulating official documents in order to advance their agenda, there is no current confidence that 2024 will be any better.
In fact, it’s like Groundhog day all over again. And even though the message has often become redundant, it still can not go unsaid. Perhaps one day it will matter.
Confusion reigns . . .
After a budget presentation by the General Manager that included a slide titled 2024 Assessment Changes (1) (2) outlining a $25 assessment increase for all owners of property in Big Canoe followed by a November 16th board meeting vote approving same, (3) (4) as discussed in a previous post on this site, (5) it seems appropriate to mention that the GM has since acknowledged that there was a “typo” in his original presentation. (6)
And while the lot with dwelling increase remains at $25 per month, assessment increases for a lot only should have been reflected as $16 per month. It is unclear if the board recognized this distinction when they voted to “approve the 2024 Operating Budget as submitted by Management which includes a $25 per month annual assessment increase for Operations”. (4)
Subsequently, it was interesting to open the first POA invoice of the New Year only to find the Director of Finance’s 2024 Letter to the Community (7) containing what appears to be yet another “typo” specifying the lot increase as only $15 per month.
Note: One must certainly wonder how after five months of work, management still can not manage to get it right.
More commingling of funds . . .
In her letter, the Director of Finance also seeks to assure the community that the comprehensive net income which includes the Capital Assessments and Capital Contribution Fees “pays for our debt service and partially funds the replacement capital budget”. This statement is untrue.
Instead, as explained in a previous post on this site, the 2024 budget clearly “fails to generate sufficient revenue to service the Association’s debt”. (5) Capital funds and cash associated with depreciation expense are not available for debt service and can not be “commingled” with the operating account for debt service without a majority vote of the Board of Directors.
Note: Further, Capital Contribution Fees can never be used for debt service pursuant to the 2021 covenant regardless of any board approval stating otherwise.
One must ask, will our newly elected board continue to stand by and permit this distribution of false information to the community? https://bcmatters.org/keeping-with-the-facts/
And then there’s the recently posted November 2023 financial package . . . (8)
With no open board meeting since November 16th and none scheduled until January 25th, the community is now in the “dark period” of financial reporting thereby depriving the General Manager of the opportunity to perform his song and dance by putting his signature spin on the results. That said, numbers only, here goes.
Posting a loss for the month . . .
The Association’s dismal financial performance is reflected in the month’s net loss after depreciation of ($20k). This loss is $40k under plan and $58k less than the previous year’s income of $38k. (8a)
Note: At no time over the previous seven years, has a loss ever been posted for the month of November.
The Clubhouse a/k/a Food and Beverage insanity . . .
It appears that the November loss can be largely attributed to the escalating losses in food and beverage. And even though clubhouse revenue modestly exceeded 2022 totals, a loss of $89k has been recorded for the month of November increasing the year to date loss to $477k. (8b) One can only imagine what the total year end loss will be when the December financial information finally becomes available to the community.
And, unfortunately, while management appears to believe that the over $7 million being invested in this facility (renovations, chairs and tables, china, glassware and silverware) will “improve the property owner experience”, it is not anticipated that the investment will do anything to reduce the ongoing losses. (5)
Note: It must also be remembered that management has projected a 2024 food and beverage loss totaling $596k.
Insanity clearly.
Negative cash flow continues . . .
Even after including the unspent insurance proceeds from the December 2022 freeze event and absent the pending repairs to Lake Petit Dam, negative cash flow year to date stands at ($211k). (8c)
And finally, with an operating account balance of only $740k, cash ratios continue to hover well below one . . . (8d)
Make no mistake. Given the continued less than stellar financial performance by the Association and management’s insatiable appetite for spending our money, it is apparent that continued significant assessment increases will be necessary in the future to fund all of the aforementioned losses and deficiencies.
“In the interest of the Community – an update . . . (9)
And now as a side note, with no formal response from the new board regarding previous decisions to alter and manipulate the LRPC “ Big Canoe Community Overview 2023” in order to fit their predetermined objective and agenda and no updated information on the status of the “repurposing” of the Chimneys facility to administrative office space, one can only assume the project is still “on go” without the legally required property owner vote.
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- That said, how can this be further challenged? Because it must.
- And who will lead the charge or do we as a community simply acquiesce as we have always done before and allow this action to become a precedent for future indiscretions?
For those with suggestions on the subject, please feel free to comment below or reach out in confidence to thepcrosses@gmail.com for additional discussion.
. . . . .
Meanwhile, if you believe the information contained on this site is important, please continue to share and pass it on. And should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently. Meanwhile, take care, stay safe and thank you for your readership.
Patricia Cross
10438 Big Canoe
References:
2) Big Canoe POA Budget Town Hall Meeting, November 9th, 2023, video on Youtube at 50:30 https://www.youtube.com/watch?v=5bo3n0l8OFI
3) Big Canoe POA Board meeting, November 16th, 2023, video on Youtube at 42:57 through 47:20 https://www.youtube.com/watch?v=p7f0LYjR_II
4) Big Canoe POA Regular Board Meeting Minutes, November 16th, 2023.
(POAwebsite>login>meetings>Minutes>2023>November16th)
5) https://bcmatters.org/just-more-of-the-same/
6) Big Canoe POA Annual Meeting, December 2nd, 2023 on Vimeo at 39:40 (POAwebsite>login>POA>Meetings>Videos>BoardMeetingAnnualMeeting2023)
7) Director of Finance’s 2024 Letter to the Community
8) November 2023 Financial Package, a) Summary of Operations, pg. 1; b) Income from Operations, pg. 5; c) Statement of Cash Flows, pg. 5; d) Comparative Balance Sheet, pg. 2
(POAwebsite>login>POA>financials>2023>November)
9) https://bcmatters.org/guest-spot-in-the-interest-of-the-community/
Patricia, thank you for doing this. I too see the red ink and ask, WHY UPGRADE THE CLUBHOUSE? It’s run poorly, that is its problem…No amount of tinkering with decorum will fix bad management.
As an owner and Realtor, I am very Leary of investing further in BC. Our STR on Lake Sconti performs well, so the overall development is sought after, beautiful and serene, but with the POA mismanagement, I have very little confidence in its management.
Excellent article. When I grow up (currently 82) I want to have the gift of expression you have mastered.
The continuing loss at the Clubhouse is disappointing and discouraging. In the two decades I’ve lived in Big Canoe, this has been the song and dance performed by every GM and POA board. We’ve been told every year that it’s impossible to create a profit or break even for ANY such establishment.
Surely there must be country clubs/golf clubs/private communities in this nation that don’t bleed dollars like Big Canoe does. Let’s find them and learn their path to success.
I suggest an evaluation be made of how many property owners actually use the Clubhouse – regularly and consistently, occasionally or not at all. This will give an idea of who we are serving. Of course we have long and short term renters who buy meals or drinks but they do not pay for the Clubhouse, just what they consume.
I’ve done some research and found there ARE private establishments that do make money, or at least break even. One of the reasons they do is online ordering is offered. This saves time, allows for better meal planning and saves on food spoilage. All money savers.
They also offer drive up food service which was tried in Big Canoe years ago but was poorly managed so it failed. This could be done by offering a limited but varied menu. There are times we all don’t feel like “getting presentable” to enter the Clubhouse, even to pick up to-go orders in the pub.
The successful establishments also offered tiered memberships, discounts or perks for heavy users, a pickup catering menu and other incentives.
We seem to be stuck in a rut. A wise person once said something like,
“Doing the same thing over and over again and expecting different results is the definition of insanity.”
Perhaps we need to reevaluate how our Clubhouse is managed so we might finally show consistent improvement. Doing the same thing over and over again hasn’t worked.
There will be some diehard POA cheerleaders who find any constructive observations and comments as being negative and offensive. They are not. Many of us love Big Canoe and want it to be the best it can be. That doesn’t mean differing viewpoints are bad. We simply can’t move forward by increasing debt or accepting losses as inevitable. It’s important to see all sides of an issue to be successful.
Alice….didn’t we almost break even when Bobby Jones was managing the club house?
I don’t recall, Cynthia, but if we did, it shows that keeping track of expenses and revenue sources can be done efficiently and effectively.
I realize it will take time to turn things around but we have to start somewhere.
Have property owners ever seen a business plan for the Clubhouse? That should be the Bible for planning. Seems a lot is loosey-goosey.
Having the tremendous turnaround of Clubhouse staff has to be expensive.
Cynthia, you are correct. The Association lost only $14k in 2021 while under the guidance of BJL. Since that time, losses have continued to escalate under the management of the POA.
I wish I had been elected to the Board
I would have watched and. questioned every bit of spending but maybe that’s why I wasn’t ekectef
To attract people to eat at the Clubhouse, the food must be extraordinary in its quality and preparation, so hiring an excellent chef and staff that stays, would seem basic. This seems an impossible task at Big Canoe. So, the current plans to expand this loser, are even more preposterous. We have had property in Big Canoe for 50 years and eaten in the Clubhouse perhaps 8 times.
Ruth Carter