Month: November 2018

Beware of the Proposed Golf Course Irrigation Well

A rather impromptu Board Meeting was called for this past Tuesday with an improper notice time frame, i.e. it should be 72 hours and not less.  Now the Meeting is for Friday.  On the agenda is the Golf Course Irrigation Well.  This well has been touted as a money saver for the Residents – really? It would be nice to have a visual showing how the savings will wash out rather than just believing what the Residents are told.  Here are some vetting issues.

  • Was there a written and professional evaluation showing how the cost and use of this irrigation well would save the Residents money in irrigation expenses for the Golf Course?
  • Is the impact of the lost irrigation revenue at Aquarina Utilities been investigated, e.g. could the cost of potable water for Aquarina go up because of the lost irrigation revenue.  This is a public utility, and the Florida Public Service Commission allows utilities to reasonably raise rates to stay in business.
  • In the sale and purchase of Aquarina Utilities, was there a condition that the utility would be promised the Golf Course Irrigation account?
  • Has the cost of digging the irrigation well and its ongoing maintenance been investigated and determined? Was the well construction put out for a cost bid?
  • Does AGI have its own earned funds and the ability to pay on any loan for this irrigation well?  If not, then are the Residents ultimately responsible for the well payment? If the Residents are responsible, then will the Board continue to be non-transparent with the detailed expenses and revenues of AGI, which by State Statute the Residents are entitled to know and see.

These are some of the questions that should be addressed.  The Board continues to spend the Residents’ funds on new common elements of which the Board decides, while the appearance and maintenance of our community suffers, which results in a continuing negative impact on our home values.

Newsletter Comment Part 6 – The Budget Blur

Budgets provide a structure for where and how the expected funds are spent.  It’s directed  by Florida Statute that the Resident owners in an HOA community, like Aquarina,  are shown a prepared Budget for these owners to see how their funds are used.  The Budget compilation and complete disclosure of it are the fiduciary responsibility of the Board, as is the responsibility for any other community funded Budgets, e.g. AGI.

Are the Resident owners shown a true picture of how their funds are spent? A resounding NO.  The Board’s newsletter attempted to explain, with the bonus of graphics, of how the Budget shows where the Resident owners’ funds are implemented in the running of Aquarina. Among the apparent explanations, the newsletter states that nearly half of the Aquarina’s income is generated by the AGI businesses, specifically, Golf and The Brassie Grille.  The other half is from Resident owner quarterly fees.

We know the source of the HOA fees, the Resident owners.  Do we know the source of the AGI revenues? Have we ever seen  Budgets for the Golf Operation and The Brassie Grille? The Aquarina Budget has a line item for an equity transfer of $200,000 from the Residents’ funds to AGI, not mentioned in the newsletter .  This is a subsidy to AGI.  The Residents are not shown any of the itemized expenses and revenues from  AGI, which make up about 50% of the Budget.  In addition, it’s interesting for comparison purposes that all the Resident owners’ HOA quarterly payments are nearly equivalent to the AGI yearly expenses, i.e. quarterly payments of $1,390,000 and AGI expenses of $1,362,000.

Would the Residents be interested in a specific and detailed breakdown of the $1,362,000 in AGI expenses and see Budgets for these businesses?  I would say YES, but these items are not made available to the Residents by the Board.  State Statutes say that this information should be made available upon Resident request.

When you see the graphs, it shows the planned expenditures, other than AGI expenditures, being $1,142,000, and the HOA fees totaling $1,390,000.  That would mean without AGI, Aquarina appears to have $248,000 in excess and, in addition, $300,000 of the $1,142,000 is reserves.

It would appear, and especially with no specific or substantiated data available on AGI, that AGI is Aquarina’s Black Hole for our funds. Remember that the Budget mailed to the Residents showed a $200,000 equity transfer to AGI (the subsidy), which appears to be from the $300,000 in Reserves’ expense.  The Reserves are meant to keep the community’s common elements up and in repair, which it desperately needs.  Instead, the $200,000 went down the Black Hole of AGI.

Because of the covert control of AGI, there begs the question – May a  reduction in our quarterly fees be feasible?  After all, the $248,000 excess, as explained above, already results in about a $155 per quarter reduction in Quarterly Fees, which may be feasible if there was transparency with AGI.

BTW – Budgets should show a balance of all funds, i.e. income, expenses, and possible deficits or excesses.  These graphs add up to a $13,000 excess that is not identified or accounted.

A Bottom Line – it’s unconscionable that the Board will not share or provide any of the itemized financial data and Budgets for AGI, when AGI is allegedly the source of nearly half of Aquarina’s revenues and expenses.