Message to the POA Board, ‘Houston called and the community has a problem.’
Myopically concerned about their vision of the CIF and its failure, the Board continues to ignore the accumulating losses in Food and Beverage that makes one yearn for the losses of the “old” Sconti that we all thought were high.
Published Financial Statement Food and Beverage LOSSES (actual performance is probably worse considering that anything and everything that could be capitalized and depreciated was and still is):
July: Actual Loss $48,201….budgeted loss $20,346
August: Actual Loss $25,391….budgeted loss $16,198
September: Actual Loss $92,192….budgeted loss $12,386
The Trevi has closed and now the IGA express. Other area establishments are having a difficult time. The economy and real estate market are not recovering anytime soon. Years of stagnate growth and inflation are the real crystal ball possibilities. Single family condo and homeowners it is time to speak up about this egregious mismanagement.
Even the Finance Committee is voicing a louder tenor of concern (thankfully) over this obvious lack of management and judgment (my description). From October 20th meeting:
“Total expenses exceeded total revenue by $125,445. There was lengthy discussion focused on Food & Beverage (F&B). While F&B revenue for the month, at $148,404, exceeded budget by 38% and approached the hypothetical break-even point of $150,000 month, costs were well over that amount with combined cost of sales, payroll expenses and other F&B operating expenses reaching $240,696. When depreciation of $27,802 is included, the overall F&B loss for the month was $119,994. It was mentioned that there were some Sysco invoices from prior months, primarily August, that inexplicably did not reach accounts payable for processing until September consequently inflating cost of sales for the month by approximately $25,000. The committee expressed concern that strong controls must be in place and enforced. The fact this occurred could be symptomatic of broader control issues.” (READ: they get it and understand that the losses published are better than actual performance)
And the Sconti came close to its “budgeted breakeven” sales number…total mismanagement, inexcusable and frankly in the ‘real world’ this would not go on without evasive action. How does that happen???? Only at Big Canoe…thanks Board!!
And from the same minutes the voice concern over the 2009 budget:
“The committee expressly voiced concern that the projected annual cash based loss of $199,940 for F&B seemed extremely optimistic considering the loss before depreciation in September was $92,192.” (READ: we are in for a doozy of a short fall and perhaps an operating special assessment.)
The Board recently made the North gate un-manned 5 nights a week. This typifies in my opinion the utter incompetence of this Board and the budgeting process. Community Associations, including the Canoe, should be expense driven. A set of services are defined. We moved here with basic services (security, fire protection, infrastructure maintenance, etc) that we assumed would be maintained. Expenses to provide these services are calculated, totaled (with perhaps a small cushion for unexpected items) and then divided amongst the folks.
In the instance of the North Gate, I will take man/woman (live security personnel) over machine (a mechanical gate prone to malfunction). Do we have to pass the hat to maintain our security?
Instead the Board thinks they are in Congress. They budget via a revenue approach of gathering up the taxes/assessments and ‘divide the pie’ without regard to services we implicitly assumed would be provided.
Smoke Signals characterizes those in opposition to the CIF and the Board as a well financed fringe group as if the POA, HOA and Smoke Signals aren’t. Baloney and shame on you, the single family home/condo owners live in the real world and are tired of all the shenanigans.
By the way, a Smoke Signals’ scribe stated that it was 2237 property owners against and 1517 property owners for…those were votes and not property owners. The defeat was much larger than 60/40 when considering that there were non single family home and condo owners included in the vote (and assuming they voted for the CIF).
We need a professional permanent GM and hindsight tells us that we needed him/her right after Stan left. Instead we were left with an insider that facilitated poor decisions by the Board. A fresh set of un-biased eyes wouldn’t have hurt especially with the dramatic cost overruns on the Sconti, rising debt levels and unneeded expenditures like a leaf vacuum or $75K+ tree cutting to name a few. Sorry Smoke Signals you can’t shade theses facts.
Let’s start a suggestion list:
- Eliminate the Amenity Manager position – we can get this kind of performance from a GM
- Man the North Gate 24/7 before a security incident forces a change
- Sell the Leaf Vacuum
- Reduce the hours of operation at the Sconti IMMEDIATELY (dinner on Thursday, Friday and Saturday only). Let’s wake up and quit pretending we are a high brow club. We aren’t so let’s not act like ‘wannabees’. We can’t even afford a guard at the North Gate five (5) nights a week. Let’s get our priorities in line, live close to within our means and quit wasting money. The financial performance of the Club dashes the naïve ‘Field of Dreams’ mentality the Board had…the Board built an inefficient and over budgeted “club” and the folks are paying through the nose. ENOUGH IS ENOUGH!
- Put CFL’s (compact fluorescent lights) in the exterior post office lights that burn all night and anywhere else to reduce electricity and reduce greenhouse gases – simple, practical and Al Gore is visiting soon.
- The Board needs to concentrate on current operations and not the pie in the sky long term planning committee recommendations (many of which were wants and not NEEDS as well as formulated during the go go days)
Responsible Single Family Condo and Home owners stay united!
3 users commented in " ‘Houston we have a problem…’ "
Follow-up comment rss or Leave a TrackbackA new expense line was added to the September financial information - “Clubhouse Management” Presumably this includes costs related to the clubhouse which should be assigned to other activities such as food and beverage. Check it out.
Good observations by Alley Cat and Red Pencil. I wonder how many of our residents have even taken a look at the financials? Personally, I don’t know anyone who regularly looks at this sort of thing. One individual even told me that there were no cost overruns on the clubhouse. I suppose not if you accept the accounting methods of our board.
I personally find it astounding that we have subsidized Food and Beverage by over $442,000 through September, in spite of the continuing proclamations of how well everything is going. Add to this the $180,000 we have spent on “Clubhouse Management” since this white elephant opened. As Red Pencil points out, “Clubhouse Management” should be apportioned between the F&B operation and the golf shop. At the rate we are spending, we will have subsidized the clubhouse management and F&B by $1,000,000 by year end. I would say it’s pretty certain that Trevi, IGA Express, or Uncle Jack’s didn’t run up this kind of deficit before they pulled the plug.
Common sense says that enough is enough. The F&B operation is highly inefficient as revealed in the financials, and it is obviously not supported sufficiently by the residents to break even. Add to the continuing losses on F&B the cost of club house management and debt service to build this facility and you have the makings of a financial disaster. Maybe it’s time to end the free drinks for regulars in the bar and complimentary champagne and fruit for the Ridgerunners meetings.
As an aside, we must get to the situation where all of the amenities are paying for themselves. Currently, we are subsidizing Swimming by $95,000 through September and Tennis by $25,000. We are spending a significant amount of money on upgrading the facility and adding courts while the number of tennis members is actually lower than it was in 2005. Oddly enough, I find that the same people who support the picking of the pockets of the populace to subsidize the amenities are the same ones who are critical of Obama’s wealth redistribution plans. It’s the same idea, folks. If the people who want it won’t pay for it, cut it back or shut it down.
Not manning the North Gate is another astounding approach to saving money. What happens if there is a fire? I suppose a fire truck could just knock the barrier down, but does this idea make any sense to anyone?
I fully agree that we absolutely do not need an Amenity Manager. Realistically, we have supposedly competent people in charge of each of these operations and a person in charge of the emergency services, and with the expansion of his job description, a number of other areas as well. If a professional GM cannot manage the ammenities, he or she is clearly incompetent.
I also agree that we should be hiring a real GM as soon as possible. While Roger has not done a bad job, he is tainted by the fact that his appointment was an unethical act to place the board’s sycophant in a sinecure as a reward for serving as their lap dog in the implementation of the new order.
Thankfully, John Lipkowitz has withdrawn from the election and John Sefarian won’t be able to run again if he wants to keep his position in the pro shop, unless they make an exception for him. We desperately need new blood on the board.
As far as Smoke Signals as a source of news, a few issues back they basically said they weren’t going to report anything bad or do any sort of investigative reporting. I suppose you can’t really expect anything better from the developers organ. Perhaps the time has come to consider an alternative publication or expansion and publicizing this web site.
Unfortunately, we have a board of directors and a vocal group of residents that feels that any questions, concerns, or requests for discussion or information about board actions are prima facie evidence of obstructionism or worse. The current financial situation alone should raise demands for restraint.
Soon we will be receiving a questionnaire on the Capital Initiation Fund. I hope everyone will take the time to thoughtfully fill this out. I feel that we clearly need the fund but, like most of us, I had to vote against it because of the lack of controls. We can only hope that our elected representatives will pay some attention.
This week, I was discussing this same topic with a friend and golfer from Atlanta.
This question came up:
Why don’t the property owner golfers pay all of their golf amenity costs at Big Canoe?
A while back, I asked a Board Director why tennis players and golfers don’t pay the full cost of their amenities. He gave me the typical response, these amenities add value to everyone’s property, and therefore, everyone should pay for them whether they use them or not.
So go figure, the amenities add value to all of the properties at the so-called similar communities of Hilton Head, SC, but only the users of the amenities pay for them.
I am a tennis player and I am willing to pay the full cost of this amenity, I don’t think that my non-tennis playing neighbors should subsidize the cost of my tennis.