Just Say No...

We must not accept the Capital Contribution Fee proposed by our Board.  We must turn it down by voting NO.

There are several reasons why our community must say NO. First and foremost, our Board has not been forthright in disclosing how funds have been spent and has been inaccurate in its accounting.  We must VOTE NO to enforce discipline on our Board, discipline that has been severely lacking.

Residents must send a message that out-of-control spending, non-transparency, and a lack of accountability will not be tolerated, and the Board must work within budgets that have been accepted and mandated by the community.

The Board serves the residents, not the other way around.  We must VOTE NO.

Let’s look at a recent example of the very poor accountability demonstrated by our Board.

1.      Accounting For Special Assessments

When the community votes and accepts a Special Assessment, it represents an influx of new capital, and the Net Worth of our community increases by the size of the Special Assessment.  This value is referred to as the “Declared Value” of the Special Assessment and is recognized on the Balance Sheet as an increase in Equity or Net Worth.

On the asset side of the Balance Sheet, Cash and Receivables are recognized to total the same amount, resulting in a Balance Sheet that is in balance.

This happens for every Special Assessment declared and voted on by residents. But look what has occurred on the HOA Balance Sheet as of February 28, 2025.

Column one (1) is the Declared Value of each Special Assessment and sums to $4,681,200.  Examining the Equity section of the Balance Sheet, dated February 28, 2025, the Special Assessments are listed as shown in column two (2) and sum to $3,422,821.45, a discrepancy of ($1,258,378.55) and is shown in column three (3).  That is how much is missing, 1.258 million dollars.

Why are these funds missing?  Irresponsible and sloppy accounting would be our first guess.  Is it intentional?  Yes, we believe it is. Here is what we surmise. Funds have been transferred to the Golf Courses by the HOA and have not been properly recorded on the Balance Sheet by HOA accounting.  As cash is transferred, the asset side of the Balance Sheet is reduced, and becomes out of balance. To bring the statement back into balance, Liabilities and Equity must be reduced by a similar amount.  This is accomplished by reducing the Equity Accounts of the Special Assessments.

In fiscal year 2024, $695,271.77 was transferred from the HOA to the Golf Courses.  The LLC recognizes these funds as Capital Contributions.  The transfer of funds was not recognized on the HOA’s Balance Sheet as Advances to the Golf Courses or Investment. The funds were just removed, which required an adjustment to the Equity Account.  We believe that similar actions were one of many reasons behind the failure of the 2022 audit.

Why else would our BOD reduce SPA 2023, with a declared value of $634,500, to a value of only $70,802?  Everyone remembers paying $225?  Our Board recognizes only (70,802/2820) = $25.11 as being paid per resident.

Why else would our BOD reduce SPA 2024, with a declared value of $493,500, to a value of only $78,500?  Everyone remembers paying $175 last October?  Our Board recognizes only (78,500/2820) = $27.84 as being paid per resident.

The Special Assessments are reduced because of improper accounting for fund transfers to the Golf Courses.  That is our opinion.

2.      Discretionary Reserves

Everyone realizes our community must prepare for catastrophic events by putting money away.  Every year, we designate funds for reserves, but instead, our Board spends the money. 

In 2023, $450,000 was earmarked for Discretionary Reserves.  In early 2024, the Board, was asked during three (3) different Open Board Meetings, if the 2023 contribution was made.  They were asked on three (3) different occasions and each time, our Board answered in the affirmative.  The Treasurer answered twice, the President answered once.  Others in attendance heard my questions and heard the Board answer.

Recently, at the Open Board Meeting held 1/23/2025, the Board displayed a slide describing Discretionary Reserves.  The slide stated the following:

        Reserve Fund Balance:

                                        January 2024                  $1,570,000  (approx.)

                                        February 2025               $1,640,000  (approx.)

                                        An increase of               $70,000

The slide went on to say that approximately $110,000 was spent on Milton.  The slide then made a very boastful and factually incorrect declaration:

“This is the first year we have increased our reserve balance in decades.”

See Open Board HOA Presentation dated 01/23/2025, page 22.

This declaration by the Board was puzzling. I made it a point of asking the Board, on three (3) separate occasions, and backed by witnesses, if the Board had made the 2023 Discretionary Reserves contribution of $450,000.  The answer was “Yes”, they had, and now they were contradicting themselves. Did the Board intentionally misinform residents?

Let’s see for ourselves.

By examining the displayed Discretionary Reserve table above, we can see several inconsistencies reported by our Board of Directors.

1.      It is apparent by examining column three (3), a $450,000 contribution was not made by the Board for Discretionary Reserves in 2024 for fiscal year 2023.

2.      For January 2024, Discretionary Reserves were $1,770,505.76, without accrued interest, as opposed to $1,570,000 reported by the Board.  The Board reported Discretionary Reserves $200,505.76 less than the actual value.  It is curious that the Board would report January 2024 balances. The Board provided residents with December 2023 and March 2024 Financial Statements, but not January 2024.  We surmise that management referenced January 2024 statements to prevent fact-checking.  We obtained January 2024 Wells Fargo Statements through an Open Documents Request.

3.      Approximately $341,000 was withdrawn from Discretionary Reserve in September 2024, and the funds were replaced in October 2024.  This coincides with the golf courses having difficulty paying their bills. The Board apparently withdrew money, transferred it, and then replaced it when the Special Assessment 2024 was approved.

4.      There were withdrawals of $146,917.67 in November 2024 and $47,305.92 in December of 2024.  This is significantly greater than the $110,000 the Board reported as spent on Hurricane Milton. Where did the excess $84,223.59 go? More inaccurate and sloppy accounting, which, in my opinion, probably ended up at the golf courses.

5.      Discretionary Funds have not increased from January 2024 to January 2025 as stated by the Board in their January 23, 2025, presentation.  Discretionary Reserves were not increased by $70,000, but reduced by ($134,985.84), for the period January 2024 to January 2025.

We do not condone the actions of our Board concerning their management of our Financial Resources.  In our opinion, they have been careless and irresponsible.  Instead of giving them increased responsibility, we should seek to remove permissions and authorities previously granted.

We ask all residents of our community to VOTE NO for capital contribution fees.  It is our opinion that our Board has been a poor steward of our financial resources and has not been forthright in its spending and accounting. Providing additional funds is not warranted.

We need to send a message.  We need to send a message that the irresponsible actions of our Board concerning our Financial Resources must end.

It is an opportunity to curtail Board authority, not expand it.

Thank you for your time.  Please VOTE NO.