One would think that while presenting details of the 2023 budget to the community for the third time, the GM could have gotten it right and at least attempted to refrain from spouting untruthful information to the property owners. But alas, during the December annual meeting, the GM continued to erroneously insist that the association’s debt service is included in the $4.2 million net income before depreciation. (1) Again, as stated in a previous post, it is not there. (2) https://bcmatters.org/self-inflicted-chaos/
With debt service estimated by the GM at $1.3 million and net income after depreciation budgeted at $956k, this scenario creates a budget deficit of $344k. Call it what you like . . . a budget deficit . . . an unbalanced budget . . . negative cash flow. Keeping it simple, regardless of the definition assigned, it is clear that management’s budgeted net profit will not pay all the bills. (3)
Reaching out to the board for clarification . . .
Perplexed and wondering could it possibly be that the GM was not only misleading the community but the board as well, this writer reached out in an email addressed to each member of the current board.
Shockingly, the board’s apparent designated spokesperson (last year’s POA President) responded with information that not only clearly contradicted the GM’s assertions and confirmed the deficit but also presented a completely different narrative regarding the 2023 budgets. (4) With her reply to this writer containing the notation that “all members of the Board were apprised of this response”, it seems only appropriate that every property owner should be apprised as well.
That said, it is now learned that the board instead plans to use the monthly capital assessments directed to future capital projects to partially cover the principal payments on the Association’s present debt, most of which was acquired seven years ago via the 2016 land loan.
Without fully debating the inappropriateness and legal issues regarding this action in this article, suffice it to say that the responder staunchly defended the Board’s right to grab these property owner dollars and divert to purposes never intended.
Of further note,
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The response confirms that adequate funds for debt service were never there as proclaimed by the GM, and
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Capital assessment dollars were never included in the GM’s 2023 operating budget.
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On the contrary, capital assessment dollars are deposited each month to the Master Plan Fund which can only be used for the purposes designated by covenant. (5) Debt service is not a designated purpose.
Note: Thus, whether unintentional or otherwise, the GM has misled the community regarding the 2023 Operating Budget.
And with all due respect, one must ask, is the board’s plan to use capital assessments for debt service the real budget? And if so, why wasn’t it presented as such?
And then there’s the Capital Budget . . .
It was also noted by the respondent that the funds necessary to cover the $3 million deficiency in the 2023 Capital Budget (2) (6) could be transferred from the Master Plan Fund by a majority vote.
And where does the rest of the board stand on that vote to transfer funds? To be fair, it is somewhat unclear. However, speaking not only as the designated spokesperson but apparently as proxy for the remainder of the board, the respondent has assured this writer that the Board “is prepared to do so.”
Note: Again, if this was the intent to transfer and deplete cash from the Master Plan Fund for the Capital Budget, why wasn’t it presented and approved as such at the time?
And why are the newly elected directors being called upon to rectify the deficiencies of a prior board’s budget?
Where is the truth and factuality of this budget? . . .
Neighbors . . . this is not okay. We deserve the truth, and we deserve it upfront rather than after the fact. Afterall, it is our money.
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Should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently as more “facts” are soon to come. Likewise, please feel free to post comments below or 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) Big Canoe POA Annual Meeting, December 3rd, 2022, video on YouTube at 1:16:20 and 1:24:10
2) “Self-inflicted Chaos”, bcmatters.org, November 30th, 2022, https://bcmatters.org/self-inflicted-chaos/
3) 2023 Operating Budget, (POAwebsite>login>POA>Financials>Budgets>2023OperatingBudget)
4) Email responses from board designated spokesperson, Amy Tropfenbaum, dated December 13th, 2022 and December 19th, 2022.
5) Fourth Amendment to the Covenants, dated January 4th, 2021, Article VI, Section 14, 1(e) (POAWebsite>login>POA>GoverningDocuments>Covenants>CovenantsCCF2021)
6) 2023 Capital Plan (POAwebsite>login>POA>Financials>Budgets>2023CapitalPlan)
https://theweek.com/…/how-solve-wells-fargo-problem
Wasn’t one of the directors connected to Wells Fargo? Hard to remember. Wells Fargo does not appear to have good ethics when dealing with loans and secured fundings….. makes uneasiness dealing with them.
It is hard to believe that property owners accept and / or tolerate the reckless spending of the Gm / staff and a board that obviously does not represent its constituents.And of course yet another annual assessment which includes not a single include amendity… or as head by property owners regularly. “ nothing is free in Big Canoe “ with our ever increasing assessment. Finally , I’m am convinced the election of board members is a waste of time as they do not represent the property owners
Ms. Cross- I appreciate the time and effort involved in your research. I count on you to sort through the subterfuge . Please continue your good works.
I have some thoughts for consideration-
1. BC is in desperate need of a long overdue forensic audit. The financials are a “ train wreck “- managed by individuals markedly unqualified to guide a $20 million dollar plus business and shielded from accountability.
2. The fact that 200 plus property owners would unite and sign a document requesting more financial accountability from their elected board, only to be summarily and rudely dismissed, without consideration- should alert all owners to how their representatives view their obligations to owners.
3. BC is currently grossly mismanaged. Again, a $20 million operation is worthy of a professional- a qualified City Manager- not a used to be electrical engineer who owns a maid service franchise. Mr. Auers primary skill is self promoting which is invaluable to him in explaining the over and over failures, everyday excuses in BC.
As the elected Board has a commitment to present a united front- no matter what- how could owners expect their voices and concerns to be addressed. Please continue your efforts, Ms. Cross. You are a welcome voice to many.