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.