This is certainly proving to be both a different and embarrassing election cycle that has not been reflective of one of Big Canoe’s finer moments. Enough said about that. We all know that story.
As for now, of the four remaining candidates vying for a directorship, two currently sit on the Finance Committee. If elected, they will join two other Finance Committee alumni (POA Vice-President and POA Treasurer) on the board.
In fact, the current Vice-Chairman of the Finance Committee and board candidate has created an informative blog site containing several posts wherein he not only attempts to justify the ongoing food and beverage losses but now also mistakenly compares Big Canoe to the private club industry. Further, this mindset appears to be shared by his fellow Finance Committee member and candidate as well.
About those F&B losses . . .
For those who may have missed the previous post on this site, (1) https://bcmatters.org/still-more-of-the-same/ it included a lengthy discussion on the year over year food and beverage losses that the current board candidate (Vice-Chair of the Finance Committee) is seeking to redefine as both an acceptable and expected “subsidy”. (2) https://poa.rogerhackler.com/the-clubhouse-debate-clearing-the-air/
Seriously.
In addition, as noted by this writer in that post, the F&B losses posted by management are not all-inclusive as other costs and expenses have been excluded from the computation and from the candidate’s discussions. Further, and most importantly, all of these additional costs and expenses are generously shared by each and every property owner regardless of their patronage to the facility.
Note: Management’s posted 2025 year to date F&B losses after only eight months total $556k. (3)
And those losses do not end with F&B. Instead, they extend in a very big way to other amenities as well.
Let’s now expand that discussion to all amenities . . .
Management and many members of leadership (to include these two candidates) often attempt to rationalize the substantial food and beverage losses by emphasizing that overall, amenity performance is net positive.
Unfortunately that is yet another fatal flaw and inaccuracy as none of the amenities include the additional costs cited by this writer in the previous post.
For example, using the 2024 totals as audited by Mauldin & Jenkins, depreciation costs totaling $1.7 million have been allocated to the amenities including F&B, (4) and yet, none of these costs have been included in management’s amenity performance results. Had they been, total amenity performance would have reflected a net loss of $1.4 million.
Now if asked, leadership and management will likely choose to dismiss depreciation expense as an actual cost by emphasizing that it is a non-cash expense. Although, it does not involve a transfer of cash, it is still very much a cost.
Note: One might wonder if leadership would prefer to instead allocate the actual capital dollars spent (cash) each year to the specific amenity rather than reflecting the cost over the life of the asset (i.e. depreciation)? Doubtful.
Further, no costs have been allocated to the amenities for housekeeping, interest, taxes, and/or insurance.
And now, a further breakdown of those costs . . .
Without any access to the specific dollar amount attributed to F&B, this writer requested a breakdown of the depreciation allocation via Ask the POA. The Director of Finance graciously responded (5) by providing a spreadsheet (6) segregating those costs. The results proved to be enlightening.
For example, after applying depreciation expense totaling $330k, the 2024 F&B loss now stands at $905k without including other expenses omitted by management such as housekeeping, interest expense, taxes and insurance.
However, perhaps most enlightening was the extent of depreciation expense attributed to golf. At $656k, the amenity reflects a 2024 net loss of $343k despite leadership applauding it’s performance as net positive.
And what does this mean?
It means that those who choose not to partake in these amenities are subsidizing the drinks, steak dinners and golf rounds of those who do. Clear and simple.
Considering this, it might be important to remember that property owners were not allowed to cast a vote for the $3.4 million renovation of the Choctaw course nor the expanded $7.7 million version of the clubhouse renovation.
Note: The Marina and Wellness Center remain net positive after applying depreciation expense.
Looking ahead . . .
And with the renovation of the Clubhouse and Choctaw golf course now complete and the Wells Fargo $15 million credit line now converted to a fifteen year term loan (in May 2025), depreciation expense for those amenities will likely increase substantially thereby increasing the net loss of those amenities at 2025 year end.
Likewise, the interest expense will also increase with the associated interest for the first year on the clubhouse portion of the debt totaling $260k with Choctaw interest expense totaling $120k. And yet, neither of those expenses are currently allocated to the two amenities by management.
And then there’s that mistaken identity . . .
Meanwhile, the Finance Committee Vice-Chair and candidate has stepped out further into the spotlight to now misidentify our beautiful, special community as a “club” by referencing financial data and key performance indicators (kpis) from a benchmarking service covering the club industry as a justification for the Association’s food and beverage losses. (7) https://poa.rogerhackler.com/the-fb-trap-rethinking-the-clubhouse-loss-and-answering-real-questions-about-cost-and-fairness/
This is not the first time that inappropriate industry data has been used by a member of the Finance Committee to advance a financial narrative.
Because of that it is not unreasonable to wonder if this flawed mindset might be representative of the entire Finance Committee, management and the Board of Directors. If so, our community is being steered in a very wrong direction with possible devastating consequences.
The first time . . .
Let’s first briefly regress several years (January 2022 to be exact). While presenting financial information at the open board meeting, the Finance Committee Chair noted that the Association’s debt to equity ratio at .17% was extremely low for the industry.
Unfortunately, the Chair was relying on data from the wrong industry.
Given that several other communities comparable to Big Canoe reflected zero debt, this writer questioned the Chair afterwards by requesting a reference source. The Chair responded that management subscribed to a “national, proprietary database” called Club Benchmarking. Upon review of their website and given that the company’s member database was compiled almost exclusively of country clubs, this writer forwarded a response to the Chair urging caution . (8)
Obviously, the Chair (who has now graduated to the position of POA Vice-President) disregarded this caution and/or suggestion given the latest post by the current Vice-Chair of the Committee and board candidate (7) profusely referencing industry data from the very same benchmarking source.
As before, (8) this writer continues to question the wisdom of leadership making any financial decisions or conclusions based on comparisons of our financial metrics and ratios to entities not within our industry.
Note: As a side note, POA debt to equity as of August 2025 has now escalated to .36%. Further this ratio can no longer be found within any of the Association’s financial documents prepared by management. It was replaced in late 2022 with an obscure irrelevant equity to debt calculation.
A flawed comparison . . .
In fact, one must only look to the member list found on the Club Benchmarking website (9) https://www.clubbenchmarking.com/member-list to recognize that the identity of our community has been misunderstood and mischaracterized by those who choose to define it as a “club”.
Remarkably, it appears that management and leadership now consider entities such as Atlanta Athletic Club, East Lake Golf Club and St. Ives Country Club to be Big Canoe’s peer group.
And this is a perception that will doom this community to disaster.
Leadership can not and should not continue to make financial decisions and conclusions driven by comparisons to entities not within our industry.
Note: Membership in the “clubs” shown on the clubbenchmarking.com website is generally optional requiring both member dues and significant initiation fees which are in turn used to fund their capital improvements.
Additional note: These substantial initiation fees should not be confused with the Association’s capital contribution fees.
Perhaps this behind the scenes mindset and faulty interpretation of who we really are as a community is the driver of often illogical financial decisions fostering the current frustration with leadership.
A disclaimer . . .
To be clear, this writer is not attempting to discredit Club Benchmarking or question it’s data in any way. In fact, the website actually contains a wealth of financial information.
However, ratios and KPIs typical of the club industry do not translate to those of a community association such as ours and should not be used by our leadership as a comparison.
So who are we really? . . .
According to the Association’s annual 990 tax returns, “Big Canoe is a master-planned community designed to achieve a harmonious integration of the natural beauty of the land with those elements most desired in a residential community. It is a community in the true sense of the word, multi-generational, offering a small-town atmosphere”.
Nothing in that description remotely implies that Big Canoe is a “club” or should be compared as such.
And could our tax exempt status be in jeopardy by overtly misidentifying who we really are? . . .
Big Canoe currently carries a tax exempt status of 501(c)4 which is defined by the IRS as a social welfare organization. The definition further states that a “ homeowners’ association described under Section 501(c)(4) is required to be operated exclusively for the promotion of social welfare by primarily promoting the common good and general welfare of the people of the community. “ (10) https://www.irs.gov/government-entities/irc-section-501c4-homeowners-associations
It is unlikely that any of the clubs listed on the company’s member list would fit into that description.
In closing, a bit of Big Canoe 101 . . .
We are not a club. We are that beautiful, special community described in our mission statement, and we should be governed and defined as such.
And to echo that closing message found in the previous post, (1) . . . for those who are not satisfied with less financial reporting, significant F&B losses, closed door meetings and all of the above, do stand up and let leadership hear you loud.
Let’s now all begin by knowing who we are, who we want to be and with a leadership managing our financial affairs accordingly.
. . . . .
Should you be interested in the information found in these posts and 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 directly 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) “Still more of the same”, October 13th, 2025, bcmatters.org, https://bcmatters.org/still-more-of-the-same/
2) https://poa.rogerhackler.com/the-clubhouse-debate-clearing-the-air/
3) August 2025 Financial Package, Summary of Income from Operations, pg. 9 (POAwebsite>login>POA>financials>2025>August)
4) 2024 Audited Financial Statement, dated June 27th, 2025, by Mauldin and Jenkins, Pg. 24, Note 10: Allocation of Functional Expenses (POAwebsite>login>POA>financials>AuditedFinancials>2024)
6) spreadsheet
8) a response to the Chair urging caution
9) https://www.clubbenchmarking.com/member-list
10) https://www.irs.gov/government-entities/irc-section-501c4-homeowners-associations