Some good information leaked out and some good questions were asked at the 2008 Annual Meeting on Saturday resulting in the following analysis:
Information:
1. The most important goal of the corporate POA Board is to protect property values.
2. When the POA has a “positive” cash flow, it is financially strong.
3. The Board has borrowed $675,000 so that they will have a “positive” cash flow this year and early next year.
4. The POA/community is financially strong because it now has a “positive” cash flow.
Analysis:
As long as the POA Board can borrow money:
They can prevent the budget from having a “negative” cash flow.
The most important goal of the corporate POA Board is to protect property values. Therefore, information about budget shortfalls is not “openly” communicated to the property owners.
Note - A ray of hope:
The POA Board is predicting poor financial results for Big Canoe operations in 2009, but they still hope to pay off the $675,000 loan in 2009. (Will this loan qualify for a bailout from the next proposed Capital Initiation Fee?)
4 users commented in " 2008 POA Annual Meeting Observations and Comments "
Follow-up comment rss or Leave a TrackbackI sit in amazement at how poorly this Association has been run.
I will long remember each and everyone of those involved in selling this beloved community down the river.
I know we are suppose to accentuate the positve, but there is a reality to our financial statements and the complete betrayal of the single family home/condo owner.
Positive cash flow comments are comical if they weren’t so sad that there appears not to be an ounce of financial management skill amongst the boys on the Board. I get the impression the Board thinks if they have ‘checks’ they have money. PLease Wachovia cut off our credit line.
Sounds familiar to me:
Your son borrows $10,000 and adds the money to his checking account. He tells you that his bank statement is in the black. Therefore, he is financially OK.
Looks like this is the same creative bookkeeping that our Big Canoe POA Board uses?
I don’t think that Wachovia Bank will cut off the Big Canoe POA Board’s line-of-credit.
Even if Wachovia Bank doesn’t do its due diligence, they still understand that a POA Board has unlimited taxing authority.
Even with the crushing burden of its interest rate payments ($700,000 in interest annually), the POA Board can force the property owners to pay-the-piper.
My biggest worry is that Wachovia Bank will recall the POA Board’s loans or cut off its line of credit, which will require a special assessment of thousands of dollars from each property owner, or will require that the Big Canoe POA go into bankruptcy.