Jayne Hagan, Big Canoe POA’s director of finance, provides a detailed explanation of the community’s 2018 financial as well as the basis for 2019 budgets and financial plans. Photo by Jim Francis
Big Canoe POA 2019 Capital Budget explained
By Jayne Hagan, POA Director of Finance
This article relates to the 2019 Capital Budget approved at the November 15, 2018 POA board meeting. The POA has over $62 million in assets. These assets include everything from equipment, vehicles, and roads to buildings and land.
Annual capital expenditures over the last ten years have been between $725,000 and $3.5 million for capital replacement and improvements. Capital replacements are items that are in the reserve study completed every three to five years as required in the Capital Reserve Fund Amendment to the Covenants. Improvements included replacing four buildings (facilities maintenance garage and bays, golf maintenance building, main gate house, and fire station #3), pickleball courts, driving range, the Veranda, and pontoon boats.
The following is part of the finance presentation given to the Leadership Big Canoe class, new members of the finance committee, and POA board candidates before they start their run for office.
The POA has a capital budget, but that doesn’t mean everything included in the budget is approved.
For items less than $50,000, department heads submit requests for what they need and send their requests to Director of Operations Jason Brownell, General Manager Jill Philmon, and Director of Finance Jayne Hagan for approval. Any item over $50,000 must be approved by the POA Board and any item over $1 million, plus CPI since 2010 currently $1,043,000, has to be approved by property owners’ vote. In every case, the item must be justified as why it’s needed as a capital item.
Last year when the capital budget was approved, the POA’s 2018 Capital Budget was $5 million, including the carryover from 2017. It is estimated that $3.9 of that amount will be spent this year and the POA will carry over approximately $750,000 to the next year, thus not spending $365,000 in this year’s capital budget.
When the capital budget was approved last year, it was approved as a 10-year capital plan. Last year the 2019 capital plan had a placeholder in the amount of $3.9 million. Staff trimmed the capital budget to $2.9 million. Thus pushing more than $1 million expenditures to 2020, not including any initiatives from the Community Master Plan and Golf Course Master Plan.
There was a stream of questions about the capital expenditures in November. See below for the majority of the questions and answers:
• Why do we need electric signs in the amount of $70,000? The cost of the signs is $28,000. This was an attempt to eliminate the “yard sale” signs throughout the property. Staff will continue to work on a solution and present to the board. The signs as described on Facebook are incorrect.
• Why do we need lights on the bocce ball courts at a cost of $70,000? Lights on the bocce ball courts are so the amenity can host social events in the evening. The cost is $20,000. If we wait to do the lights later, it will cost more. Please keep in mind pickleball and tennis at the Racquet Club have lights. We did receive an email that quoted the following: “My friend told me that they never requested new courts and the ones that are there are perfectly fine.” We met with the Bocce Ball Board no less than six times to discuss the new bocce ball courts, even to the point that the board selected their own material to create what they wanted. After the new courts are built, Bocce will be amenity and pay monthly amenity dues. The dues will be $10 per person.
• Golf cart paths and rock walls? These are not new items. The cart paths include fixing holes that weren’t paved a couple years ago. The rock wall refers to repairing a wall that is falling down on the golf course.
• A wine room is not needed. The wine room cooler is an addition to keep Clubhouse wine at a proper temperature and to allow wine bottles to lay on their sides so the liquid touches the corks. This is so wine doesn’t turn to “vinegar.” The wine room is an accompaniment to the new wine list. Marketing wine at the Clubhouse is the reason for the increasing of wine revenue in the budget by $20,000. General Manager Jill Philmon has been hearing complaints about the wine list since she started at Big Canoe.
• We don’t need a food trailer. The food trailer is to be used for events for member functions primarily. It will be used on some Friday nights at Canoe Lodge to offset the inability to serve everyone at the Clubhouse, at the Swim Club on particularly busy days such as the Fourth of July, at the Playfield during events such as the Mountain Twilight Concert, and for events at the Wildcat Recreation Area. An increase in Food & Beverage revenue will be a result of having this additional kitchen.
• Why are we purchasing a catering van? The catering van is a replacement for our current van that is old and dirty. We use it currently to haul food from the Clubhouse to the Swim Club and Canoe Lodge.