It’s a mess . . .

And so it seems, leadership’s forewarning of future less than stellar financial performance (1), is now confirmed by the Association’s net operating loss for the month of September. Seeking to assure the community that the board was not concerned with the results, the POA President described the losses as nothing more than an anomaly. (2a)

Attributing the results to weather and “soft costs” associated with the clubhouse renovation, the Association closed out the month with a net operating loss of ($102k) and variance to budget of ($161k). (3a) Clearly, yet another undisclosed consequence of the Renew Big Canoe initiative.

The dumping ground . . .

Originally intended to reflect payroll expenses related to the Clubhouse Manager and now retired Membership Director, the “Amenity Management” category included on the P&L statement now serves as the catch-all for a hodgepodge of unrelated expenses as distinct and varied as a part-time merchandise employee, merchandise sales (4) and now . . . non-capitalized “soft costs” of the clubhouse renovation.

In fact, after noting a ($78k) variance to “Amenity Management” operating expenses, (3b) an itemization of those expenses was requested via the Ask the POA platform. The Director of Finance responded graciously and fully with AskThePOA Response #15210.  (5) As noted in her reply, “soft costs” of the clubhouse renovation for the month of September range from moving expenses and freezer and cooler lease payments to spoiled food and beverage waste.

And although it was confirmed that these “soft costs” are included in the board’s June 27^th approval of the $7.686 million clubhouse renovation, it might be worthwhile and more transparent for management to produce a spreadsheet of all clubhouse expenditures (both capitalized and non-capitalized) in order to more readily ascertain the true cost of the project.

Note: For example, it is currently unknown what additional “soft costs” that may have been been charged to other departments or accounts.

Clubhouse aka Food and Beverage losses zoom . . .

Still another casualty of the renovation, with the Clubhouse and Lakeside Bistro open for only nine days, losses specifically allocated to food and beverage zoomed upward to ($98k) for the month with payroll expenses representing an unsustainable 233% of sales. (3b)

It is also important to recognize that the payroll expenses totaling $94k are in addition to the $14k in payroll to F&B employees that was charged separately to “Amenity Management”.

However, given the positive feedback regarding the new Lakeside Bistro, one must hope that these dire results are indeed only an anomaly that will drastically improve in the future months.

About those draws . . .

Meanwhile in the second pseudo-open meeting recorded live without any property owners present, https://www.youtube.com/watch?v=ul_PCsZfOtc (2b)  management did at least provide a more succinct and detailed accounting of the draws against the credit line for the Choctaw and clubhouse initiatives.

Unfortunately, discrepancies remain.

As an example, even though the POA President has assured the community that each draw request would be approved by the board and signed by the President and Treasurer, (6) no evidence can be found in the board minutes for the approval of the September draw totaling $355k.

Needless to say, the mandate for board approval must not be overlooked or disregarded.

In contrast, the approval of an additional draw #5 in the amount of $698k was recorded in the September 23^rd closed board meeting minutes (8) although it was not included in the September results.

One must ask, was there a delay in Wells Fargo’s processing of that draw? Will it instead be reflected in the October results?

Note: The Renew Big Canoe initiative is a massive endeavor for this community which should demand exemplary attention to procedure, detail and accuracy.

The Clubhouse . . . a gutted shell . . .

Also included in the October 31^st recorded board meeting, was a video of the ongoing construction at the clubhouse. (2c) Although appreciated, it was shocking to see the basically gutted interior of the clubhouse.

• • One must wonder, for example, whether the walls, the flooring, the wine room and any other demolished components have been fully depreciated prior to this renovation?

• • If not, will the disposal of those components be additional “soft costs” of the renovation?

The consequences of unchallenged decisions . . .

And by now, most property owners probably recognize that the important discussions affecting our beautiful community generally take place in the privacy and secrecy of the board’s closed door sessions only to be rehearsed and followed up with a dog and pony show known as the regular board meetings.

Just as predicted, since the board’s unfortunate, unchallenged decision to move forward with the clubhouse renovation without a vote of the property owners, (7) the board has become more and more emboldened in it’s disregard for the governing documents.

And now, unlike all previous years and in direct conflict with Board policy no. 104, (requiring open meetings whenever a scheduled vote takes place), the 2025 operating and capital budgets including any assessment changes have already been approved in a 5-1 vote taken during an October 21^st closed door meeting of the Board of Directors.

Seriously . . it’s a done deal.

We must now only wait for the General Manager’s scheduled performance on November 14^th to learn the details of what the Board has already privately approved.

Note: It might be noteworthy to mention that the developer director was the dissenting vote.

In closing, a few loose ends and other factoids . . .

• • Despite the construction funding and despite improved cash flow, the cash ratio continues to loom significantly below 1 at only  .74. (3c)
  • This 2024 Board has spent twenty seven plus hours in executive session discussing who knows what. Keep in mind that executive sessions are limited to discussions of employee or property owner issues; contract negotiations; and/or pending real estate transactions.

• • Debt attributed to the Wells Fargo credit line and equipment financing stands at $5.7 million as of September 30th. (3c)

And so it goes.

…..

If you believe the information contained on this site is important, please continue to share and pass it on. Should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently. And as always, feel free to contact me at thepcrosses@gmail.com for questions or further discussion. Meanwhile, take care, stay safe and thank you for your readership.

Patricia Cross

10438 Big Canoe

References:

1)    “Catching Up”, October 9^th, 2024, bcmatters.org, https://bcmatters.org/catching-up/

2)    Big Canoe POA Board Meeting, October 31^st, 2024, video on Youtube at a) 42:18; b) 37:04; c) 16:50; https://www.youtube.com/watch?v=ul_PCsZfOtc

3)   September 2024 Financial Package, a) Summary of Operations, pg. 1; b) Summary of Income from Operations, pg. 9; c) Comparative Balance Sheet, pg. 2

(POAwebsite>login>POA>financials>2024>September)

4)  AskThePOA Response#15016   

5) AskThePOA Response #15210   

6)    Big Canoe POA Board meeting, August 29^th, 2024, video on Youtube at 41:25 https://www.youtube.com/watch?v=xkiCNeV4z1U

7)    “Shameless”, July 22^nd, 2024, bcmatters.org, https://bcmatters.org/shameless/