Given that the last two posts on this site have garnered over 3,000 views, (1) (2) sincere appreciation is extended to the many friends and neighbors for your readership and to those of you who had the courage to share, post links to FB groups and/or further distribute the messages.
Unfortunately, this readership alone has not discouraged leadership from forging ahead with their ill-fated and unauthorized $7.68 million clubhouse renovation plans while also promoting blatantly inaccurate and manipulated financial information to the community.
Meanwhile, it was learned at the July 13th Town Hall that required repairs to Lake Petit Dam are now estimated at $9 million over the next 2-3 years.
To be completely frank, Big Canoe has reached it’s fork in the road and to allow leadership to move forward with the clubhouse renovation may be this community’s point of no return.
Truly, the future of Big Canoe is in our hands, but that window of opportunity is growing smaller.
That said, perhaps it would be appropriate to reemphasize and discuss these areas of concern that warrant immediate intervention while concluding with a realistic acknowledgment of the options.
The manipulation of financial information . . .
First, to reiterate an important point that might have been missed in a recent post. (2)
It appears that the Association is keeping two sets of books. One for the community and one for the accountants/auditors.
This became clearly apparent by comparing the internally prepared year end (2023) financial statements (3) (posted to the POA website on or about March 25 and subsequently removed with nothing posted in its place) to the financial statements audited by Mauldin & Jenkins. In fact, it was that comparison that revealed food and beverage actually lost $721k in 2023 rather than the lesser amount disclosed by the Association. And although the POA Treasurer was quick to eblast the community applauding management for the “clean” audit results, it is obvious that the accountants/auditors could not have possibly been looking at the same set of numbers that had been provided to the community.
This is not okay. In fact, it may not be legal.
New year-end financial package reveals continued discrepancies . . .
Then, just days after the July 8th post on this site, (2) a revised year end financial package was surreptitiously posted to the POA website. (4)
As for comparisons to the M&J audited financial statement, while some previously noted discrepancies were corrected (year end income and property owners equity), other key discrepancies remained. For example, the year end financial statement provided to the community by the POA continues to include overstated food and beverage revenue, overstated depreciation expense and overstated principal payments on debt.
Note: As a reminder, Mauldin & Jenkins has repeatedly emphasized that the information in the audited financial statement was provided to them by POA management.
Has anyone in this community reached out to the top brass of M&J to alert them to these concerns?
100% accurate? Not hardly . . .
As a side note, during the March 28th open board meeting, the General Manager proclaimed that the year end financial statements that had just been posted to the POA website were 100% accurate, (5) which of course they were not. Further, the revised year end financial package posted to the website on or about July 11th revealed that the Association’s operating cash had been reduced $28,684!! One must absolutely ask:
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- Why did it take management more than three months to determine that operating cash was actually $28k less than originally believed?
- And where did those dollars go?
- The same place as the $100k food and beverage inventory?
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Has anyone in this community asked their personal accountant if these and other discrepancies warrant concern?
And then there’s that ill-fated and unauthorized $7.68 million clubhouse renovation . . .
With the total cost of the clubhouse renovation project now increased 21% over and above the $6.35 million approved by the community, leadership has attributed that increase to a change in scope, incomplete plans and inflation. And when asked during the June 27th open board meeting if there would be a revote, the POA President responded emphatically, “No”.
Emboldened and almost defiant, the POA President stood before the community in the July 13th Town Hall declaring that (despite these changes in scope and cost) the August 2023 property owner vote actually meant, “We (the property owners) approve the funding. Keep going”. (6a)
No Mr. President. I don’t think so.
Lets be clear, absolutely nothing in our governing documents (specifically, covenants or bylaws which supersede policy) gives the Board of Directors the authority to proceed with a capital project of this magnitude without specific property owner approval. Nothing.
Note: In fact, Article VI, Section 13 of the covenants clearly infers otherwise.
The community did not approve the change in scope of this project, and the community did not approve an increased cost of $7.68 million.
Has anyone in this community asked their personal attorney if the Board of Directors (collectively or individually) could have overstepped their legal authority by voting to proceed with this project?
The precedent . . .
It is also important to mention that failing to challenge the Board’s authority to proceed with the clubhouse renovation without a revote from the property owners for the increased costs and altered scope could establish a precedent leaving the community with no control over future capital expenditures.
And now about that dam . . .
Although probably shocking to the rest of the community, it came as no surprise to this writer to learn that Georgia Safe Dam’s required repairs to Lake Petit dam will total approximately nine million dollars. These concerns have been posted by this writer and others for years as leadership steadfastly insisted on and budgeted for drastically reduced estimations.
Well of course they did!
After all, leadership had the “Renew Big Canoe” (“RBC”) initiative to think about knowing that no informed property owner would ever initially support the “RBC” projects much less support the project in a revote if they knew the magnitude of the Petit Dam repairs looming on the horizon.
But now, only after the board’s June 27th decision to forge ahead and execute contracts for the Clubhouse renovation and with all of the $15 million credit line virtually spoken for in “RBC” projects and rolled over balances, the Board made the announcement at the July 13th Town Hall regarding the Lake Petit dam repairs. (6b)
These repairs are not scheduled over an extended length of time. They are immediate and scheduled to take place within the next 2 – 3 years.
With the credit line spoken for, how will these repairs be paid for? . . .
The POA Treasurer stood to assure the community that the $9 million for dam repairs is accounted for in the Cash Flow Projection Model (6c) . . . and yet, the Board has refused to release a copy of the projection model as requested by this writer. (7)
The response stated that the model was “an analytical tool used in decision-making by the general manager and his senior management team, the Finance/Audit Committee and the Board of Directors.” It went on to state that the tool would not be released to anyone outside those parties. (8)
Note: These repairs could not possibly be included in the Cash Flow Projection Model as stated by the POA Treasurer without substantial reductions in other capital expenditures, significant assessment increases, and/or proposals for a special assessment. Do the math.
Further, should recent history repeat itself, the Lake Petit Dam repairs could arguably exceed the $9 million estimate.
The trainwreck . . .
It is unconscionable that our Board would advance the Clubhouse renovation knowing that the community is facing $9 million in Lake Petit dam repairs. Absolutely shameless.
Considering this required and immediate outlay of our money for Petit Dam repairs, has anyone asked if the Clubhouse contract with Macallan has a termination clause? Surely it must.
Note: However, do keep in mind that fellow property owner, Wayne Huey was told by the POA President that he would not be allowed to review that contract. (1)
And now, so many of you ask, what can we do? . . .
Realistically? With such rampant madness and an unresponsive and unyielding Board of Directors, property owners are left with a very limited list of options.
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- Acquiesce. Do nothing and pay the price.
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Remove some or all members of the board as outlined in section 3.10. (b) of the 2006 bylaws.
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- Join together as a group to immediately request an injunction and/or file a lawsuit.
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It is most unfortunate that leadership has chosen to manipulate and withhold important financial information from the community.
And it is beyond disappointing that our Board continues to make reckless and unwise financial decisions contrary to the best interest of the community that will ultimately not only affect our checkbooks but also our property values.
Think about it.
Apologies are extended for the foreboding drama, but then there isn’t really much more for this writer to say.
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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) “Guest Spot: Wayne Huey on the upcoming Clubhouse renovation train wreck”, July 10th, 2024, bcmatters.org, https://bcmatters.org/guest-spot-wayne-huey-on-the-upcoming-clubhouse-renovation-train-wreck/
2) “Spread the news”, July 8th, 2024, bcmatters.org, https://bcmatters.org/spread-the-news/
3) December 2023 Financial Package, originally posted to the POA website on or about March 25th, 2024 retained in PDF format
4) Revised December 2023 Financial Package, posted to the POA website on or about July 11th. (POAwebsite>login>POA>financials>2023>December)
5) Big Canoe POA Board meeting, March 28th, 2024, video on Youtube at 1:31:00 https://www.youtube.com/watch?v=9-2mBzllukQ
6) Big Canoe POA Town Hall meeting, July 13th, 2024, video at a) beginning at 1:53:50; b) 1:50:00; c) 1:51:45 (POAwebsite>login>POA>meetings>videos>2024>July Town Hall Meeting)
8) AskThePOA Response#13965
Has anyone asked what this could cost us the homeowners? Who gave them a blank check?
Initially wasn’t the RBC $2.00+?
It would be interesting and good to know how the original promised $2 monthly property owner increase has changed with the adjusted Renew Big Canoe (RBC) figures. No surprise assessments needed. We should have complete and valid figures showing how the budget has changed and where the additional costs are allocated. After all, property owners are footing the bill.
Since losses at The Clubhouse are so excessive, what has been proposed to increase revenue when the renovation of The Clubhouse is complete? Is there a valid marketing plan in place? Can this plan be made available to property owners? Does it include opening The Clubhouse to outside events and weddings? What will be the financial return from this $7+ million dollar venture? This has not been adequately addressed.
Will we just have a pretty place to sip a glass of wine without showing how spending borrowed dollars will help our bottom line?
I have been following this exceptional website for months, as I was considering purchasing a second home in BC. I have friends who have homes in Highlands and the “wedding industry” has really taken a toll on that community-homes turned into BnBs, influx of weekend folks who do not respect the town. I watched the RBC presentation months ago and was struck by the GM’s promotion of weddings. Perhaps the Board sees this as a solution to the revenue problem. Please be aware.
How do we fire the GM. Scott must go. The 100k++$$$ missing clubhouse inventory, the 2 sets of books, the dam, the renovation- all the more reason he’s got to go from BC.
The roster of GMs at Big Canoe reads like a rogue’s gallery, sorry to say.
The first GM we knew was a kindly retired accountant named Jim Cook from the early 80s. Since then, Elmer Stephens that followed was let go for using staff to build his home, next competent manager became terminally ill and we had the fill-in Leadbetter fiasco, then a board member took over until a competent German was hired who died unfortunately two weeks into the job, then followed by someone whose name I don’t remember but was woefully under qualified, then a nice lady named Jill who then got replaced by Scott Auer who, when you address him with a query tells you that you have mistaken information.
Whew! Have I covered all of that?
Big Canoe has consistently hired unqualified managers. Or those that had potential met unforeseen circumstances. End of. And I have no confidence this will be corrected.
Yet this a good paying job with lots of benefits and the added attraction of living in such a pleasant community. Surely there are qualified people out there that can make a match to competently manage Big Canoe.
Nancy, thank you for the history of GM’s. I hope enough ppl have had enough of this situation and the personnel problem. This should be investigated as the missing inventory could be any number of ppl and scenarios including the Top brass being involved in running BC.
In this “Shameless” article, there were three actions proposed for property owners to take to slow down or stop the runaway actions of the POA board and General Manager.
First option, maintain the status quo and go along with monetary increases as they pop up. This is the easy way out and possibly the most harmonious if everybody felt this way. But, many don’t. With today’s uncertain economy, it’s prudent to watch where our dollars go, whether it be planning household or personal budgets or monitoring how our dollars are spent in our community. If life is going well for us, it’s easy to go along with this option and ignore red flags that wave furiously.
The second option is to recall board members, as a whole or in part. This could be tricky. Many board decisions are made behind closed doors and property owners don’t have the opportunity to hear the board’s pro and con arguments. It’s difficult to know where individual board members stand and why. The monthly public board meetings often seem to be a summary of what may have already been decided.
It’s important to remember only the board can hire and fire the General Manager. The property owner population has no say in this process. Essentially, the buck stops with the board.
The final option is to take legal action against the board and GM to halt, at least temporarily, important decisions made without property owner votes.
This can get very expensive. Many want a forensic accounting to examine Big Canoe’s finances and financial projections. Generally, there’s a $350 hourly fee for such a service, obviously this could add up to be a monumental bill. The same goes for legal services. Because this action would be property owner driven, individuals or a collective group would foot the bill.
In a perfect case scenario, a certified forensic accountant or attorney with experience handling such cases would offer their services pro bono. So far, such professionals haven’t stepped up.
In Patricia Cross’s article, she noted Big Canoe’s CPA firm, Mauldin & Jenkins (M&J), stated their staff works with the figures the POA provides. Maybe this is where the two sets of books comes in.
I propose a less expensive option to get the attention of our board members. I have a feeling board members, at least some of them, read comments from property owners on Facebook or subscribe to Big Canoe Matters. If they do, they must be aware of the growing concern about where our governance and management is headed.
I suggest property owners send emails to all board members expressing concerns. It might take more than one email. The volume of sent emails would certainly require acknowledgment and hopefully action.
I also suggest forwarding the “Senseless” article to key players on the staff of M&J. They may not be aware of the concerns Big Canoe residents have. M&J is a reputable firm and surely would investigate, especially if two sets of books are being used.
Keep in mind, all the facts and figures presented in various Big Canoe Matters articles are taken directly from verified POA documents and meetings. Patricia Cross is an excellent researcher and double checks every fact and figure before publishing.
We can bring accountability back to our board and management but it will take effort and consistency. Property owners are a powerful force but it will take a concerted effort.
Wow, you hit it perfectly! Our past boards have often hired inappropriate General Managers. I’ve lived through many of them and while some GMs made good decisions and had the best interests of the community at heart, some did not. Firing a General Manager is very costly and is disruptive
to the community. Over the years our revolving door of GMs has cost us dearly.
Our POA Board is comprised of volunteers with little, if any, experience running a community. It’s not the board members’ fault that our standards don’t require the experience and knowledge necessary to direct a community as large as Big Canoe.
Many board members may have had illustrious careers but still don’t know about running our little town. Being an executive in a corporation is a much different animal than making decisions for a community.
We pay our GM more than double (plus perks and a bonus) what other City Managers make annually. No wonder we have money problems!
I’d like Big Canoe to hire a professional management team (independent of “friends” in Big Canoe) to get us out of the mess we’re in now. I suspect it would cost less than the salaries we’re paying now and the revenue losses that seem to grow every year.
I would support OPTION 2 and/or 3
2: Remove some or all members of the board as outlined in section 3.10. (b) of the 2006 bylaws.
3: Join together as a group to immediately request an injunction and/or file a lawsuit.
Excellent article. I must say that when I heard our Board/GM state in the last board meeting that 1) we’re moving forward with the ever increasing projected cost of the club house rennovation without seeking POA membership approval, and 2) that we have nothing to worry about re the required multi-million dollar dam repair, because the Board’s confidential “cash flow model” proves that it can be accomodated – but there was NO explatation or discusssion at what cost? Each of these positions was a slap in the face to our POA members, but when viewed together, I find them both repulsive and financially irresponsible. It’s time we take action!
I agree 110%
I support option 3. It seems like no matter who we elect to the board, they continue to repeat the same bad behaviors so I don’t know that changing them will make any difference.
How do we go about making this happen?
The unqualified GM must have his feet held to the fire. I would rather have the disruption of hiring a new GM than sticking with the man driving us off a financial cliff. As it is we are flying on autopilot now & fuel is running out. Maybe it will take a massive increase in our monthly assessments when the damn dam bill comes due, and it will. I’ve been hearing about this scenario for 23 years. How do we proceed from here? Petitions, lawsuits…what?
All good points made but I don’t believe that there are enough owners who see the spending as a problem. I think there are more people who want the improvements and as long as the monthly POA fees are less than $1,000.00 a month, they’re okay with what’s taking place. Many people have moved here in the last ten years that came from places where it cost more to live. As long as the fees are lower than what they’re used to spending, they’re not concerned with what the POA board & GM do. I could be wrong but that’s what I have heard from a lot of folks that I have met here. I don’t agree but I don’t see it changing unless enough people hire legal counsel to advise.
I’ve also chatted with those who feel it’s a bargain to pay what we do in monthly fees. It is, at first glance.
However, upon further discussion, it was discovered that many amenities were included in that $1000 monthly charge other communities have. One example: pools were open to property owners and their guests for no charge. I recently invited my family up for a day at the Beach Club. It cost a small fortune to get everybody set for a day of fun. No bargain there.
To join our amenities brings a hefty charge, even with discounts. Granted, residents aren’t forced to join amenities so money could be saved there for those folks – the only amenity we aren’t charged to use is The Clubhouse but that experience often is disappointing. Now with The Clubhouse being closed for a year, we won’t even have that amenity.
Throw in our extremely high water bills every month and property owners are getting mighty close to paying close to $1000. I know the POA has no control over utilities but it still comes out of our pockets.
I sense many might not care or be affected by upping our monthly tariff but we still don’t like to be duped or taken advantage of.
With over $100,000 in missing clubhouse inventory, a revolving door of disgruntled employees coming and going, voting on only a projection of costs involved in Renew Big Canoe and then being denied the opportunity of a revote when the financial structure of the project changed, property owners began to wonder what’s going on.
This is a wonderful place to call home and we appreciate all Big Canoe offers but we want honesty and full disclosure from our board and General Manager.
That seems to be lacking at times.
“… honesty and full disclosure …” – right on!
We agree that changes must be made—and very quickly. The entire RBC fiasco has been pushed through without approval of the residents who will foot the bill. It feels like “bait and switch” tactics which are illegal in our society. Given recent revelations by the Board and GM, a new vote would likely halt the train wreck Wayne Huey predicts. We desperately need to stop this madness. Two votes from our house to find a new GM and board members who actually represent the property owners! Surely there is a lawyer or retired attorney in BC who could help us file an injunction now. My husband and I would support this action.