Looking back at First Quarter 2020 . . .

Wow . . . the first quarter of 2020 has already come and gone in Big Canoe complete with elections, sweeping changes to management via BJL, a pandemic and year to date net income from operations of $250k. But before delving into any financial observations, the cursory mention of a few governance details might be in order. 

One of the most significant decisions made by a POA Board since the developer relinquished governance of Big Canoe in 2005 . . .

Specifically, it was announced by email in February that the Board had engaged the services of Bobby Jones Links to manage the entire operation of Big Canoe.  However, this action has not been documented for posterity as there is no mention of the approval of this decision in the board minutes.  (1)  One must ask on what date was this vote taken?  Further, BCPOA bylaws require (2) as well as Georgia law states that consents should be included in the minutes for filing with the corporate records.  (14-3-821)  That being said it would certainly appear that some action should be taken to correct this omission.

Also as mentioned in previous articles, it should be noted that for whatever reason, POA board minutes have not been approved since January 2017.  Utilization of this generally recognized parliamentary procedure might be useful in preventing significant oversights such as this in the future.   

As for the March financial package . . .

It was certainly encouraging to learn that net income from operations exceeds the previous year by $41k.  This increase was primarily due to $19k additional revenue from property owner assessments, $14k improvement in overall amenity losses and a $6k reduction in depreciation expense.  (3a)

Confusion regarding Master Plan projects . . . 

Conflicting information is found regarding the status of the $200k Master Plan project to expand the parking at the Wellness Center.  It is noted in the March minutes of the Long Range Planning Committee that the project will not be done because there would be far too little parking relief to justify the cost (4), yet it is reported later to the Finance Committee  that engineering work for the project is ongoing.  (5)  It would certainly be good news if it could be confirmed that the project has indeed been terminated as noted by the LRPC, albeit unfortunate that more than $17k was wasted coming to that conclusion.

Of additional interest, capital reports indicate that $58k (6) (7) has now been spent in engineering and permitting costs prior to the property owner vote for the Creek  nine renovation. 

Unrealistic expectations . . . 

And given the attention and emphasis that has been placed on  the 2019 F&B losses totaling $775k along with the fact that those losses appeared to be a catalyst for the BJL decision, this writer would be remiss not to address the year to date F&B financial performance.  Keeping in mind that the clubhouse was closed on March 20th due to the pandemic, F&B beat last year’s performance by $33k.  (3b)  Unfortunately, much of this improvement is a wash as amenity management expenses increased $22k.  (3c) 

Likewise, given that F&B losses through March already total $241k, it is probably unrealistic for the board to expect that 2020 losses would be only $250k as has been noted by the leader of the BJL due diligence team.  (8) 

Bobby Jones Links could be a good thing . . . 

And yet despite the unacceptable circumstances surrounding the engagement of BJL during the eleventh hour of the last board’s tenure, it should at least be acknowledged that there could be some genuine benefits gained by having access to their expertise in the areas of management, food and beverage and golf.  And although a sigh of relief and certain level of comfort can be found in the board’s decision to retain our employees for the present time, the reasoning and necessity for that decision opens up additional areas of concern and new challenges.  Key to the success of this endeavor will probably lie in the board’s ability to step aside and allow BJL to manage while also applying the appropriate benchmarks to measure their effectiveness.  

Live stream the meeting . . . 

In conclusion, it certainly appears that the finalization of the agreement with Bobby Jones Links is going to sail through without a hitch.  A closed session vote to approve the agreement is already planned to occur on May 7th with summarized results to be provided afterwards.  In the spirit of transparency and given the magnitude of this decision, perhaps this session could also be live streamed since we now have that capability.  It would be interesting to hear the individual comments made by each director in support of their yes or no vote. 

***** 

Please feel free to share your comments on this site regarding these suggestions or contact me at thepcrosses@gmail.com for questions or further discussion.   Should you like to see additional articles posted in the future, please subscribe for an email notification.  Meanwhile . . . continue to take care and stay safe. 

Patricia Cross (10438 Big Canoe) 

 

References:

1 POA Board of Directors Meeting, Minutes, February 29, 2020 (POAwebsite>login>POA>Meetings>Minutes>February2020)

2 2004 Second Amended and Restated Bylaws, Article III, Section 3.9 (POAwebsite>login>POA>documentarchive>BoardofDirectors>BigCanoeBylaws>10-2004BCPOABylaws)

3 March 2020 Financial Package (a) Summary of Operations, pg. one (b) Amenity Results – Clubhouse, pg. Six (c) Amenity Management, pg. 11 (POAwebsite>login>POA>Financials>SummaryOfOperations>March2020)

4 Long Range Planning Committee Minutes, March 2^nd, 2020(POAwebsite>login>POA>Committees>LongRangePlanning>Minutes>March2020)

5 Finance Committee Meeting Minutes, April 21^st, 2020(POAwebsite>login>POACommittees>Finance>Minutes>April2020)

6 2020 Capital and Master Plan (POAwebsite>login>POA>Meetings>BoardDocuments>Capital2020Update)

7 2019 Capital Plan (POAwebsite>login>Financials>Budgets>2019CapitalExpenditures)

8 POA Board of Directors Meeting, April 2020(POAwebsite>login>POA>Meetings>”SubscribeToOurYouTube . . .>at 1:34:00)