It has certainly been a busy month in Big Canoe. From the unfortunate draining of Lake Disharoon to changes in the board meeting schedules and the March financial results, there is much to talk about both good and not so good.
Food and Beverage and the Big Canoe wedding venue . . .
We are told that only those weddings that are property owner sponsored will be scheduled in 2022. At last, what a positive and rational decision! With the clubhouse often closed to accommodate these events, there have been significant property owner complaints.
Leadership’s defense has always been, but they are so profitable. Yet without the previously requested breakdown of food and beverage expenses by category, that profitability has always been questionable. While the GM has projected a nominal $100k net profit in these venues for 2021, (1) information provided by the long range planning committee noted a net profit of only $11k. (2)
Now, just imagine, with no planned weddings in the future, we might even be able to reduce the ridiculous $258k marketing budget. (3) Regardless, permanent cessation of these events could be a positive step forward and worthy of the new strategic planning committee’s serious consideration.
Disintegration of the Disharoon outlet pipe . . .
Although Geosyntec’s senior engineer noted that the September 2020 inspection of the outlet pipe “did not spot anything that hinted at the current issue”, (4) the GM has explained that the pipe “disintegrated” during the draining of the lake. (5a) One must certainly hope that the similar 2020 camera inspection of the Lake Petit lower level outlet will prove more reliable than the Disharoon inspection.
Additional debt on the horizon . . .
Meanwhile, as management continues to spin reassurances to the property owners, it is patently and purposefully misleading to insist that the POA does not plan on incurring additional debt. Rather, according to the quarterly capital expenditure report, (6) it appears that management and/or the board plans on exercising the option to finance $510k upon delivery of the new fire engine. Apparently, cash flow is not as plentiful as the GM and Finance Committee would have us believe.
Extreme variances . . .
And after all the accolades given to BJL and management for ease and efficiency of the 2021 budget process, it appears that the 2021 budget has been padded. Without detracting from any improvements that may have genuinely been made, a 650.7% positive variance in the first quarter net income is unrealistic. (For example, with F&B payroll as a percentage of sales reaching the 55% range in late 2020, budgeting F&B payroll at 145.73% is unacceptable and obviously contributed to these extreme variances.) (7) (8)
Before jumping to conclusions echoing the GM’s own hoorays and while remembering that incentives are based on financial performance to budget, leadership might take a closer look at the actual accuracy of the budgeted figures. Surely BJL management can get closer than this.
The government spending mentality . . .
The recent board meeting also saw the approval of the unbudgeted $118k sports court. While replacement of the previous court demolished by the bocce construction was arguably needed, it must be noted that upon completion, the POA will have an unbelievable $501k invested in the “preeminent” sports and bocce courts along with the previous botched bocce construction site.
Interestingly, management’s rationale for approval of this $118k capital expenditure was the fact that three vehicles budgeted for replacement this year were actually purchased in late 2020 thereby replacing or “substituting” those dollars with the sports court approval. (9)
Further, the long awaited paving contract was awarded to a new contractor/low bidder at a $275k savings from the 2021 plan. (5b) YET, rather than actually saving those dollars for future paving needs or directing that amount to the capital reserve fund, it will be spent on other projects undefined at this time. Spend, spend, spend. And we still have the Disharoon problem. And the Lake Petit dam issue.
Given this “use it or lose it” logic, it appears the board is actually approving a total dollar amount for the annual capital budgets rather than looking to the actual capital components included.
And who’s running the show?
Based on a request from Bobby Jones Links and the GM, the board voted and approved to move the scheduled board meeting to the last Thursday of each month “to allow more time for review of monthly financial statements by management and Finance Committee”. Let’s also not forget that this same management team could not find the time to even reconcile the bank statements at year end. (10) https://bcmatters.org/revisiting-that-balancing-act/#more-814
Also keep in mind that we as property owners are not privy to any financial details until after the scheduled board meeting, therefore, further extension renders the financial information even more untimely. It is, frankly, surprising that the board would honor this request while also discussing dialing back the services provided by BJL.
One must ask who is running the show here? The board? BJL? Or the GM (under the direction of BJL) and/or the Finance Committee (under the direction of the GM)? Our leadership (aka “the board”) should remember that only they were elected to ultimately call the shots. Not BJL. Not the GM.
And given the consulting fees plus incentives that are paid to BJL coupled with the hopefully appropriate salaries of key employees, it is not unreasonable to expect our leadership to establish boundaries and expectations of those involved.
Property Owner and Group Presentations . . .
And finally, with elimination of the open monthly board work session in favor of continued closed door sessions, we find ourselves excluded from the real-time discussion of important business at hand as well as the interesting presentations by other property owners and groups that never get to see the light of day. For example, recent presentations during the closed door sessions have included discussions regarding the board election process, standing seam metal roofs and goals of the wellness collaborative.
The solution to this dilemma is so very simple. Practice transparency. Open the meetings if only via the Zoom feature. Executive session will always be available for any discussions of confidential nature.
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Patricia Cross (10438 Big Canoe)
References: https://bcmatters.org/wp-content/uploads/2021/04/References-So-much-to-talk-about.pdf