It has been a long, unusual and challenging year in Big Canoe for sure. And honestly, most anyone can find comfort in any news spun with optimism in difficult times, but healthy doses of truth and reality can not be cast aside if we ever hope to establish that path to honestly addressing the issues facing our community.
That said, when considering leadership’s glowing accolades of their 2020 performance sprinkled throughout every available media form along with a forward look at 2021 already fraught with inconsistencies and conflicting information, this writer is given pause. (1) (2) It is as though Big Canoe exists in two alternate universes . . . the propagandized universe and the universe of reality.
However, one thing is absolutely undeniable. Big Canoe as we know it has been fundamentally changed in the previous twelve months with no signs that leadership has any intention of putting on the brakes. In fact, as the following information will demonstrate and despite all the impressive power point board presentations containing style over substance, one might reasonably conclude this to be the most secretive and non-transparent board in recent history.
Bobby Jones Links . . .
With the year beginning like no other in the memory of Big Canoe property owners, the first two months were spent under the extended tenure and governance of the previous years’ board due to prior election irregularities squarely attributed to the poor judgment and oversight of that board and it’s election committee.
During that two month extension, the board made the bold decision behind closed doors without any property owner knowledge or input whatsoever, to turn the management of Big Canoe over to Bobby Jones Links (BJL). Despite the magnitude of that decision, no documentation in the minutes of the Board of Directors or signed Consent Agreement can be found referenced or posted to the POA website. That arrangement was later finalized in late May and became intertwined with the current board and many of the changes that would follow.
Unconventional financial reporting . . .
For those property owners interested in perusing the POA financial information each month, it may have escaped notice that the quantity, much less the quality, of financial detail has been substantially reduced throughout the 2020 year. In fact, only weeks after property owners blessed leadership with the approval of a $2.3 million project, the financial package was severely reduced from the customary 22+ page report (3) to a paltry 5-6 pages. (4) Whether this is the modus operandi of present leadership, the introduction of BJL or both is unknown, but it is disappointing and concerning to say the least. All transparency is out the window.
Further, rather unconventional financial reporting has ensued with the introduction of the new general manager. Performance is now reported as a variance to the budget that was reforecast in June rather than any utilization of the actual numbers or comparison to previous year’s performance. Bizarre financial reporting indeed. And even though the fact that current income has significantly exceeded ($724k) those new projections provided by the GM and BJL (5) and will be used to partially determine the amount of any BJL incentive, it is viewed by the board with applause rather than any questioning of the accuracy or reliability of the projections.
Also, unlike previous years, the monthly report covering capital expenditures was extended to quarterly reporting and subsequently all itemized detail pertaining to those expenditures was eliminated entirely effective September 2020. (6)
2021 Operating and Capital Budgets . . .
And now to look forward a bit, leadership also commends management and BJL on the improved efficiency of the budget process while boasting that the 2021 budget approved in late November has no increase (a good thing indeed) in property owner assessments. Yet no acknowledgment is made of the fact that 2021 net income is projected to be $256k less than 2020 (Covid year) and $532k LESS than 2019 prior to any management changes. (7)
And although the outgoing POA president notes future F&B losses are projected to improve over 2019 approximately $402k, (1) he fails to mention that any improvement will be consumed by a whopping increase in amenity management of $203k along with an increase of $546k in operating department expenses. Given these statistics, one might realistically ask are we really making progress or are we simply shifting expenses to other categories? More disturbing is the following:
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While the board stipulated to management that sufficient income should be generated to service the debt (now that should have gone without saying), they apparently did not believe it important to specify that net income also be sufficient to cover the capital budget without generating negative cash flow.
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Perhaps even more disturbing, management as indicated in the December issue of Inside the Gates clearly states that the 2021 budget will generate a “net income of $4.1M to cover loan and capital replacement budget”. (8) This statement is incorrect. In actuality, after subtracting debt service and the capital replacement budget, cash will be reduced approximately $537k.
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One must ask . . .
Does anyone do the math anymore? Actually, if representation of the 2021 budget later posted to the POA website had been presented in the same format as previous years to include deduction of capital expenditures, (9) (10) this $537k deficiency would have been immediately apparent.
It should also be mentioned that projected 2021 master plan capital expenditures, (such as the $2.3 million Creek 9 renovation), have NOT been included in the capital budget, and will, therefore, reduce cash even further (approximately $1.3 million even after allowing for the additional revenue from the $25 additional assessment imposed this year.)
As for that Capital Budget . . .
Just as an itemization of this year’s capital expenditures has not been provided, the detail is also excluded from the approved 2021 capital budget. (11) Using the limited information provided:
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It is impossible to determine where or even IF the $250k proposed bocce court construction is included on the capital budget as noted by management. (12)
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And lastly, although management specifies that “twice the normal amount of paving” at $1.2 million has been budgeted for road paving, (8) (12) it can not go without mention that reserve study recommendations in the past and actual expenditures in most years have actually exceeded $800k per year.
Big red flags . . .
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In the quest for financial information which had been available previously, this writer submitted a request to AskthePOA for trial balance reports (basic accounting report from which all statements are produced) only to be denied as “not entitled to review” . ( AskThePOATicket#846 ) After pressing for the information further, a response was received advising that the denial was based on the recommendation of BJL. (AskThePOATicket#846Followup ) Honestly?
Once again, a request was submitted to AskthePOA for an itemized breakdown (as provided to the community in all recent history) of all capital expenditures included on the 2021 budget. This request was also denied with the general manager stating that “Bobby Jones Links does not publish financials at that level in any of their communities”. (AskThePOATicket#2007&2077 )
Just recently, additional requests (citing Georgia Code requirements) for trial balance reports and itemized listings of 2020 actual and 2021 budgeted capital expenditures were once again submitted via AskthePOA and copied to the current POA president. Unfortunately, no response has been provided to either of these requests.
These examples absolutely scream non-transparency but also wave big red flags of alarm. And regardless if these decisions were made by the general manager and/or BJL, our elected board has the full authority, and responsibility actually, to rectify this unacceptable denial of information to the property owners immediately.
Realignment of Committee Functions . . .
And gone are monthly presentations and Q&A to the community by the Utilities Inc. representative. This practice was discontinued at the time of the water rate increase and publication of the water trust deed in April 2020. (18)
Some months later, rather than reporting to the board, supervision of the AECC, Water and Finance committees was transferred to the general manager and presumably BJL. Remarkably, only one director saw the obvious inappropriateness and vocally opposed this (specifically the Finance Committee) transfer of power. Using the Finance Committee as the example, one single entity (GM and BJL) now has oversight of the purse strings, the budget process and the actual Committee chartered to oversee itself. Considering this reporting structure combined with all the previously mentioned weaknesses and red flags, this scenario is untenable at best.
No sunshine in Big Canoe as 2020 board embarks on routine closed door work sessions . . .
Although leadership seems to believe that maintaining notes of these closed sessions is a demonstration of transparency, (2) they fail to acknowledge that true, honest transparency would dictate that these sessions should be open to the community. In fact, prior legal counsel cautioned against this policy, (19) (20) and the 2011 POA board introduced and approved policy mandating that all meetings be open excepting executive session. (a point of view not apparently shared by the present board or current legal counsel.) This policy was somewhat revised by the 2015 board to specify that only those meetings where “the board is scheduled to vote on Association business” must be open. However, even after relaxing that requirement, it appears that some votes are actually taking place during closed sessions in 2020.
Along the way, Big Canoe property owners saw other changes as well . . .
Sale of Hubbard Road property at a loss of $34k: Property was originally planned to be donated to Dawson County for the construction of a community center that “never materialized” only to have those same discussions reopened with Dawson County later in 2020 while speculating the possible use of another landowner’s property also on Hubbard Road.
Ask the POA: With over 2,100 questions generated since late July, there has been obvious property owner interest in the concept, yet . . . NONE of those responses, much less lack of responses or denial of information, have EVER been publicized by leadership. Consider (excepting those property owners who might request confidentiality) how publication of the responses could improve efficiency and assure accuracy while also being a commitment to transparency.
Petit Lake Dam: One site has been deemed unsuitable for future Post Office construction due to the property’s location on the Petit Dam flood inundation map, (21) and no publication of that map and supporting Emergency Action Plan (as amended May 2018) has been published by the POA as required by the Safe Dams Program of Georgia. One might also ask if other property owners in affected areas were similarly advised by the POA of this hazard prior to construction of their homes? And could the withholding of this information not place the POA and it’s directors at risk of potential liability?
And just one more item of interest: In his parting words, the POA president indicated that the association would be “on the path to be debt free in early 2026”. (1) Indeed that would be a wonderful objective, but given the fact that the POA has now leased (rather than purchased as done in the past) all golf carts and is already contemplating converting the $543k fire truck purchase to a loan upon delivery, it is misleading and unrealistic to contend that Big Canoe could become debt free in 2026.
In conclusion, it’s been a busy and eventful year, but considering all of the above, maybe it’s time for the property owners to decide if this is the Big Canoe we really want to be.
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If you would like to see additional articles posted in the future, please check back frequently or subscribe for an email notification. Likewise, please feel free to contact me at thepcrosses@gmail.com for questions or further discussion. Meanwhile . . . take care and stay safe.
Patricia Cross (10438 Big Canoe)
References:
1) The President’s Report, “Notable 2020 POA Accomplishments aid 2021 Progress”, Smoke Signals, December 2020, pg. 3a
2) The President’s Report, “There will be many opportunities for property owners to participate as POA moves forward”, Smoke Signals, January 2021 edition, pg. 3a.
3) September 2019 Financial Package
(POAwebsite>login>POA>financials>financials>September2019)
4) September 2020 Financial Package
(POAwebsite>login>POA>financials>financials>September2020)
5) October 2020 Financial Package
(POAwebsite>login>POA>financials>financials>October2020)
6) Capital Report, September 2020, (POAwebsite>login>POA>financials>financials>September2020,pg. 7)
7) 2021 Operating Budget (POAwebsite>login>POA>financials>budgets>2021OperatingBudget)
8) POA News, “2021 Budget”, Inside the Gates, December 2020, pg. 12
9) Big Canoe POA Budget, 2020
(POAwebsite>login>POA>Financials>Budgets>Operating Budget2020)
10) Big Canoe POA Budget, 2019
(POAwebsite>login>POA>Financials>Budgets>Operating Budget2019)
11) Big Canoe POA 2021 Capital Plan
(POAwebsite>login>POA>Financials>Budgets>2021CapitalBudget)
12) Meeting of the Board of Directors, November 19th, 2020 at 1:10:59
14) AskThePOATicket#846Followup
16) AskThePOATicket#2177AskThePOATicket#2177
18) “Lets talk about our Water”, April 13th, 2020, bcmatters.org
20) “Let the Sunshine In”, July 20th, 2020, bcmatters.org
21) Long Range Planning Committee Meeting Notes, October 5th, 2020
(POAwebsite>login>POA>Committees>LongRangePlanning>Minutes>October)