Speechless . . .

Not one of our better times, the first month of 2022 has been filled with unfortunate events and broken promises as the level of secrecy and non-transparency exhibited by our board of directors continues to escalate to new levels. And while just weeks ago, this writer tried to envision the next fifty years of Big Canoe, (1) we now know that for the next eighteen years, we will be burdened with debt.

Access to millions without accountability . . .

For those who have not listened to the January 27^th board meeting, the six property owner directors voted unanimously to secure a fifteen million dollar loan collateralized by the community’s common property.

In addition, the association will retain it’s $3 million line of credit and also acquire the additional flexibility of $2 million in lease financing. This arrangement gives the association access to at least $20 million in credit without a property owner vote or little say so on how it will be spent. Wow. Just wow.

The narrative suddenly goes off script . . .

That aside for a moment, something is seriously amiss. For reasons unknown, the timeline and narrative provided at the January 27^th meeting regarding the steps taken by the association to secure that loan are in direct contradiction of the facts documented in various Finance Committee minutes and this writer’s previous post. (2) https://bcmatters.org/always-needing-more/ Unfortunately, because of that altered timeline, past and future readers might render this writer’s previous post as invalid and thus misinformed. Not so. And that misconception should be discarded.

More importantly, the board presentation was either a complete misrepresentation of the sequence of events or information found in the Finance Committee minutes was fabricated and inaccurate.

The minutes . . .

For example, although “funding options” for the acceleration of capital projects had often been discussed in recent various closed door work sessions, there was no documented discussion of the idea moving forward until a “special” two hour meeting of the finance committee was called on January 11^th to discuss refinancing options and “the possibility of obtaining access to additional funds”. As noted in this writer’s previous post, a sub-committee was formed during that meeting and “dispatched to conduct a review of the loan terms as presented by three separate banks. It was recommended that this be done “as quickly as possible”. (2) This information was taken directly from the finance committee minutes .(3) Needless to say, the reasoning for the urgency was questioned by this writer.

However, contrary to the above narrative, the Finance Committee Chair stated at the January board meeting that the formation of the sub-committee took place December 10^th. Yet, a quick perusal of those minutes, (4) reveals that meeting was actually called to discuss $650k in Lake Petit Dam repairs. There was no mention of loan term sheets or the formation of any sub-committee. Further, two individuals appointed to the sub-committee were not even present at that meeting.

So, one might ask, where is the truth? When was that sub-committee really formed? Was it formed over the course of several months or was it in fact hastily formed in mid January? And why has the timeline changed?

Entering the twilight zone . . .

And next, continuing to use the January 11^th FC minutes as reference, this writer also noted that “the association’s long time banking partner since at least 2005 (Wells Fargo successor to Wachovia Bank) is not included on the list of banks. Could this be a red flag?” (2) The three banks under consideration were clearly named in the FC minutes and did not include Wells Fargo. Yet, the FC Chair and Co-Chair both indicate that Wells Fargo (that subsequently returned with an even better offer) was always one of the three banks under consideration.

Regardless, one thing is for certain, these are major discrepancies found in the information that is being provided to the community as leadership moves forward to secure $20 million in financing. One can only conclude that either a falsified time line and narrative was provided to the community during the January 27^th board meeting or the previous minutes of the Finance Committee contained woefully incomplete and/or inaccurate information designed to prevent community awareness of the advancing reality of additional debt.

Details do matter . . .

Now one might ask are these petty observations? Unlikely – as details do matter especially when considering credit of this magnitude. And while it is doubtful that either timeline would have swayed the votes of the directors, it is obvious that information regarding the unfolding of events was either withheld or inaccurately communicated to the property owners.

That said, this writer, and other property owners as well, must be able to trust and rely on the content found in our board presentations as well as that posted in our internal committee minutes. This is hardly a petty expectation. Inaccurate and/or missing information could easily be construed as deception on the part of leadership.

And one more detail . . .

During the board meeting, both the GM and FC Chair went into lengthy explanations about “preliminary” financial statements while noting that the year end financial package would be posted to the POA website in early March. (Note: This is a shift in policy from prior years.) Now surely, leadership would not have us believe that Wells Fargo is willing to lend the association $20 million without access to year end financials? Perhaps property owners might be given the same access to that information as our banking partner.

And now . . . back to the beginning . . .

Remember. In addition to that $20 million, approximately $3 million (in depreciation expense) is transferred to the Capital Replacement Fund each year. Also, property owners should not forget that after the recent CCF and assessment increases, approximately $500k in CCF along with roughly $1.5 million (capital assessments) will be deposited into the Master Plan Fund this year. That’s an additional $5 million per year available to a leadership that has not only removed all property owner approval requirements for capital replacement and maintenance projects but also prevented members from having any say so in the matter or even access to timely financial information.

This is truly an untenable situation clearly created by our 2021/2022 Board of Directors.

And that is the truth.

* * * * *

As always, please feel free to contact me at thepcrosses@gmail.com for questions or further discussion.  Likewise, should you wish to see additional articles posted in the future, please subscribe for an email notification or check back frequently.  Meanwhile, take care and stay safe.

Patricia Cross (10438 Big Canoe)

References:

1) “All for naught”, December 27^th, 2022, bcmatters.org

https://bcmatters.org/all-for-naught/

2) “Always needing more”, January 19^th, 2022, bcmatters.org.

https://bcmatters.org/always-needing-more/

3) POA Finance Committee Minutes, 2022 (file named 2022 1 11 Finance Minutes). (POAwebsite>login>POA>Committees>Finance>Minutes>2022>January)

4) POA Finance Committee Minutes, December 10^th, 2021 (file named 2021 12 10 Finance Minutes) (POAwebsite>login>POA>Committees>Finance>Minutes>2021>December)