HOW DO YOU DEFINE HONESTY - INTEGRITY?

FRATF has recommended and the Board has approved conducting a vote on "Option 1" i.e., "Fast Recovery."  And now you can witness the roll out of the POA's marketing machine!  Similar to what we experienced when the Two Tier Assessment Increase was crammed down our throats.  The above is true.  Since 2010 our leadership has managed to loss a total of $44.4 million for the above two specified "profit centers."  Had we known this at the last vote, and had the right thing been done, we would not have needed an assessment increase then.  And we certainly don't need it now.  Its been recently said that the unpaid/delinquent assessment over 60 days late are up to $15 million.  Fifteen million from $44.4 million still leaves $29.4 million.     All we had to do was "do the right thing."  Everyone knows the village is only 25% built out, but the amenities are fully built out and being operated as if nothing is wrong!  A quick and dirty approximation of how many new residents "Starting Tomorrow" that we would need to break even on these two centers given current utilization habits would be 5,182 instant new citizens.  Well 5,182 will not make it here tomorrow.  What's most troubling is the Legacy Board's silence on this issue. In fact they just praised the FRATF for the best analysis they have seen in years!!  Even better the FRATF analysis does not even begin to mention the extent of the losses from these two profit centers.  What defines 'Fraud", "Misfeasance," "Malfeasance?"  How can reasonable , honest people overlook this? 

FRAFT instead of recommending the extinguishment of the $4.03 million annual cash loss from these two centers comes up with inane recommendations such as selling the Desoto Club which they say will save $100K in annual operating losses.  And that the Village could sell  it for $500K (we just recently put $2.2 million of new cash {over the objection of many} for its reconstruction) after employee negligence helped destroy it in the first place.  Or how about doing away with the police dept. and save $670K?  You'll be hearing from the trolls in Nextdoor, the Voice, and the copious e-mails from the POA wordsmiths!  All painting gloom and doom.  The average annual loss is $4.03 million which will go a long way to funding the needs of the Village.  A one time special assessment to fund the time period to put the fix in place might be needed, but manageable.

For years I have been calling for a Sarbanes Oxley compliant Internal Control Audit.  Without trust, how can we just accept the Legacy Board's accounting these past 11 years?  In addition don't forget that the FRATF committee is populated from the Friends of Hot Springs Village, the composers of the Legacy Board. 

Our first job is to "VOTE NO" to an assessment increase we do not need.  Then we need to get to work on obtaining a POA responsive and loyal to all property owners that stays out of internal politics, make sure of the accounting and stop the bleeding by cutting back to break-even operations on Golf and Parks & Recreation.  

Over the last 11 years the Village cleared $85.4 Million.  Where did it go.  How many Rainbows chased, how many mistakes.  Confident it is being accounted for?  Did the FRATF talk about this?  As a condition precedent we need assurance we can rely on our Accounting Controls and Accounting System.  We need a full independent Sarbanes Oxley Control Audit by a firm chosen not by the Board but a special "Master" appointed by the people.  If not done before the vote - VOTE NO!

As a condition precedent  by election appoint a special Accounting Master who will chair an independent Audit Committee, with qualified participants, who approve and engage the Association's Accounting Firm, direct the audit, and continuously review and approve management or board changes to accounting controls. If not agreed to before the vote - VOTE NO!

Stop the losses now!  As a condition precedent close sufficient Golf Courses such that positive cash flow can be obtained from the remainders' operation.  Don't use new revenue to support the few - make this a community effort.  ALL PAST INCREASES HAVE IN PART OR WHOLE SUBSIDIZED THE EXISTANCE OF SOME GOLF COURSES NOT WARRANTED TO EXIST.  Golf has always been negative.  Stop the bleeding.  WITHOUT THIS -VOTE NO - since the Board otherwise is continuing to lie about the purpose of the funds.  Truly without this action infrastructure is not their priority.

TO the BOARD - PROVE TO THE PROPERTY OWNERS THAT YOU FINALLY REPRESENT THE PEOPLE, and your allegiance is not to go off and chase rainbows as has every board before you, and as you have preliminarily indicated by your actions so far in resisting to do the right thing for the property owners by shuttering Golf Courses.  TO the People - if they don't - VOTE NO

Amend Articles of Incorporation to give Property Owners the right  to recall Directors.  This will finally break the hold of special interest groups that continuously endeavor to hy-jack control of the Village with Directors out-of-step with the owners.

The Village has had more than four Controllers in the last 11 years, four Accounting Firms, and two Accounting Systems.  Even more auspicious, Leslie Nalley was originally hired to be our controller under David Twiggs management.  She promoted and was granted approval to acquire and install a new accounting system.  She with the aide of a specific special interest group, attempted to alter our entire way of doing business, to include taking on massive development plans for the Village that would have subjected the Property Owners to development risk as co-owners of the Village.  She wasn't completely honest in her dealings with the owners by her statements or representations - yet she had complete control of the installation of the new accounting system, and the establishment of internal controls to assure the appropriate functioning of the accounting  system.  Then it got even worse - she became "CEO!" First year Accounting majors are taught that good accounting starts with Management and that the underpinning of a good accounting system is wholly dependent on the "Tone" set by said top management.  You can't ask owners who are part of an entity with over $40 Million running through it every year to trust the system in such circumstances.  If there are leaks, we need to find them and a control audit is the only real way to do it.  This is especially true if we are to experience what we have in the past - bad management unwisely using the new revenue.    

We can ill afforded another round of massive mis-expenditure (what happened after the last Assessment Increase) due to bad management.  By amendment to the Declaration give the Ownership the right to approve by vote large expenditures.  Or, alternatively limit large expenditures that are not to require ownership vote to specific purposes, such as utility maintenance, existing roads and existing drainage issues.  

Go back to the drawing board and look where the known "non-accounting" major leaks are and address them.  It has taken the Village 50 years to achieve 25% build-out.  This puts unnatural financial stress on everything because the major amenities are built-out.  Specifically, Golf Courses are too many and under-utilized and have always lost money.  We may be getting a "Pandemic" Bump as are current real estate sales and prices, but that is unsustainable.  Because of these Golf Course operating shortfalls, the property owners who do not live on Golf Courses, have been subsidizing the frontage owners who have paid assessments all these years.  And you are being asked to do so again.  Were it so simple to believe and prove that their is such a value boost to living on a golf course.  My early arguments on this have fallen on deaf ears.  The Board's FRATF has consulted with one of our two County Tax Assessors' office and asked one of the tax appraisers - how much Golf Course frontage owners would have to be compensated for the loss of the golf course impact on value.  First this is not a qualified commercial property appraiser, and we do not know of the time period used in this response which by the way was 10 million or so.  What we need to remember is that golf course properties before the pandemic were still suffering greatly from the decline in value due to the 2008 crash.  We don't know how long value will hold up or where we are going with this pandemic. But we do know the majority of property owners should not have to unfairly support losing golf courses just to maintain some mythical value that until the pandemic just wasn't there.  BEFORE WE VOTE ON AN ASSESSMENT INCREASE - LET'S VOTE ON CLOSING THE APPROPRIATE NUMBER OF GOLF COURSES THAT WILL ALLOW FOR BREAK-EVEN AT MINIMUM FROM THE OPERATION OF THE REMAINING.  A small subsidy budget should be devoted to keeping the land of the closed courses cut ,cleared of debris, and restricted from future development, thus maintaining value for the frontage. 

Running an organization the size of the Village is a big job.  It should not be someone else's job but our job.  But this raises some real issues.  We the property owners are primarily retired if we are in residence.  The non-resident property owners are a mixed bag.  Management of us should be by consent, and just geography posits that management best  comes from the resident owners.  BUT, being retired we did not expect to have to go to work when we came here.  We also did not expected to run into the special interest commandos who have botched their last 11 years in control, and marginalized us in the process.  Good management would not be afraid of the Five Points enumerated above.  They are all reasonable under the circumstances.  Due to our past experience and still unknown accounting status, it is absolutely necessary to the achieve the above before new money is granted.  To not do so is a violation of the property owners' interests, and a violation of every good banker and financier who knows "YOU DON'T GIVE NEW MONEY TO BAD MANAGEMENT.''  So, Board of Directors, prove yourselves.  Do the right thing, here, and later hire good municipal type management.

The last time the property owners were shown any respect was over 10 years ago when CCI was still in control. 

Respect can start by striking "MEMBERSHIP" from the Village and inserting "PROPERTY OWNERS."  This was Manager Twiggs ploy to reduce the Property Owners perception of themselves and as the theory goes - make us more manageable.  Give the property owners the right to recall Directors out-of-step with the ownership.  Give the owners the first ever "Control Audit" as defined in Sarbanes Oxley.  Give 'say so' back to the owners over large expenditures.  Give the owners an "Honest" review to include expense control before asking for more money.  Prove that we are not still suffering from "Bad Management" by enabling the Five following steps. 

"Membership" is not "Ownership".  If I can by frequent use of the term convince you that you are a Member, then I'm successful if I am trying to exert control over you.  Ownership conveys substantially more rights in the general scheme of things.  Including the right not to be controlled as a mere Member