A “Corporate” Board – Acceptable or Arrogance?
The current POA Directors have been quoted stating that their primary responsibility is to serve the “Corporation” and not the Property Owners. From a legalistic standpoint this is an acceptable position, but from a common sense standpoint it is entirely ludicrous and exhibits a level of arrogance that cannot possibly benefit Big Canoe.
The POA’s Articles of Incorporation reveal that the POA is incorporated in the State of Georgia as a corporation, albeit a non-profit corporation. All the boiler plate verbiage in the appropriate Georgia Code sections describes the duties of directors and officers as being in behalf of the corporation. However, if this is all the justification the POA Directors are using to support their position, then they are totally ignoring the significant differences between the POA and a typical “corporation”. They are also deviating from the “Property Owner” focus that virtually every previous Elected Director has had, going all the way back to the beginning of Big Canoe governance.
A typical corporation has three major constituencies; (a) its owners (for a public corporation this would be its shareowners), its customers, and its employees. The POA shares these three major constituencies, but as an association, its owners (the Property Owners) and its customers are one and the same, making them collectively the most important constituency by far. For any association board of directors to relegate the Property Owners to a secondary level of importance is to completely overlook the simple fact that the Property Owners are the reason for the association, and, in fact, ARE the association.
The current POA Directors have defended their “corporate” focus by stating that their attorney has approved their position. You should know that this attorney was retained by the Board in the mid-1990’s, and by the late 1990’s most of the Elected Directors had good reasons to question his advice and his tendency to reverse himself when questioned on some issues. In 1999 the Board asked his firm to replace him as the Board’s attorney. For various reasons this was not done, and his performance in the early 2000’s was considered equally as substandard. The 2004 panel of Elected Directors determined to end this relationship, and identified another firm specializing in association law that proved their competence while representing the Elected Directors (and therefore the POA) in the 2004 Governance Transition negotiations. In early 2005 the Elected Directors proposed a Board resolution replacing the existing attorney with the other firm. Unfortunately the proposal was defeated, primarily by the Developer Director votes.
Why any Director would fail to acknowledge, or choose to ignore, the practical fact that the “corporation” (in this case the POA) is simply a transparent entity owned entirely by, and serving only, the collective Property Owners, is very troubling. A “corporate” focus lets a Big Canoe Board conveniently determine what’s good for the POA without having to give Property Owners their due consideration. There is considerable evidence that this may be what is occurring right now and has been occurring for some time. The Property Owner body should demand their rightful prominence in the Board’s deliberations, and should not elect (or re-elect) any Director who would continue to foster this “corporate” arrogance.
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This site is presented as a resource for use by Big Canoe property owners. Information found on this site will often differ from that which is presented by the POA Board, the current administration, and some of the committees. Much of what you will see here is opinion, but the opinions will be formed from the best available information.
As property owners and users of this site, you are urged to bring attention to the good things you see as well as the bad. You are particularity urged to bring attention to acts by our employees when those actions exceed your expectations.
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- Don Wyeth: My numbers as to homes and lots may be slightly inaccurate but are close enough to establish a point....
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- Don Wyeth: By now most of you are aware that the POA Board has , after great consideration , come up with a new plan...
- mark sementilli: Doug, The one area or your letter that strikes me as truly amazing is the purported spiking of the...
- Doug Piggott: “Corporate” Board – Fact or Fiction? You decide. Some would have us believe that this term...
Responsible? Determine the facts and make your decision. The anonymous author states “The current POA Directors have been quoted stating that their primary responsibility is to serve the “Corporation” and not the Property Owners”
The November 2007 Smoke Signals From the Board states the truth.
“The POA Board exists to represent the best interests of the property owners of Big Canoe…. The Board provides value to the property owners through planning, developing policies, providing cost effective services, protecting the environment, ensuring adequate safety and security and overseeing POA Operations…
-The Board represents the property owners
-The Board exists to be accountable to property owners
-The Board’s primary relationship is with the property owners and not the POA staff.”
Challenge #1–find, in all of the Board communications a quote such as the author uses. You will not find it in Board Minutes, Smoke Signals articles, White papers, e-mails or anywhere else at it is pure fiction.
Challenge #2–Provide an example of how the Board has acted in the interests of the “Corporation” and against the best interests of property owners. I have asked several who repeat this fiction and there is no response.
The Board works long and hard, diligently and conscientiously to represent the best interests of property owners who are the corporation.
Other fiction includes–the CIF is a variable rate which can be changed by a whim of the Board. WRONG. The CIF would be a change to our covenants which requires a property owner vote.
There are no controls or restrictions over the use of the CIF. WRONG. The amendment limits the CIF to specific uses, there is a debt limit imposed and safeguards to insure that routine capital is not funded from the capital reserve fund.
These are examples of the misinformation being circulated. The facts will be mailed to all property owners with the ballot. I have complete faith and confidence that the property owners will determine the facts and cast an informed vote for the CIF.
“Corporate” Board – Fact or Fiction? You decide.
Some would have us believe that this term “Corporate Board” is a new term that someone in the community made up to express their frustration with our POA Board’s decisions and activities. NOT SO!
We don’t have to look too far to see that Board members spoke openly about the difference between a “Corporate Board” that works for the good of the Corporation versus a POA Board that represents the property owners, the folks that elected them.
Nine short months ago at the annual meeting the winners of the 2007 POA Elections were announced: Bob Crouch and Terry Bacigalupo. Also at that meeting farewell was said to Billie Ann Rice for her three years of service on the POA Board.
Billie Ann could not be present that day, so she asked Rod Lee, another former POA Board member, to read her farewell address. It is shown below in its full text as printed in the Smoke Signals. I have highlighted the next to last paragraph to emphasize her warning to us.
But, before you read her farewell address, read this short letter Billie Ann submitted to the Smoke Signals for the November, 2007 edition, prior to the election. THE SMOKE SIGNALS REFUSED TO PRINT IT BECAUSE IT MIGHT INFLUENCE THE OUT COME OF THE ELECTION!!
In a conversation today with Billie Ann, she said that the following is OK to quote her:
“Her letter was submitted to the Smoke Signals and they refused to publish it in their Nov. 2007 issue due to election concerns.”
A Message From Billie Ann Rice (POA Board Director) – An Important Issue and More Questions
A Parting Director’s View
Our Board today is trying to decide what it is. Is it a corporation or a Property Owner Association?
Of course, it is a corporation according to Georgia law, but it is also a POA made up of lot owners and homeowners. Some believe that our Board should emulate a corporation where the Board of the corporation is in charge and is not answerable to the property owners while others believe the POA should be directly involved in all decision making.
Probably the most important issue today is:
Should the governing structure of Big Canoe be designed as that of a corporation where the Board makes decisions which are passed down to the property owners, a top down approach, or do the property owners select Board members who try and represent them on Board issues, a bottom up approach?
In the first case, the Elected Directors believe they know what is best for Big Canoe and share information with the property owners after the decisions are made. Whereas, in the second case the Elected Directors consult and listen to the property owners prior to making decisions and try to represent the property owners in all decision making.
Having the President of the Board make decisions without being answerable to the property owners or any other Board members is a new concept to Big Canoe. This is not the way we have operated in the past, but it is the direction that the Board is moving now and maybe into the future. We have abolished the democratic governance structure of the past.
So the question becomes what type of governance do you want your Elected Directors to support, that of a corporation or a democratic POA?
“Should we have a corporate structure where the Board members know what is best for the Association or should the Elected Directors ask you the Property Owners to help them make decisions?”
Before casting your vote, ask yourself what type of governance you want and then ask each candidate where he stands on democratic vs. corporate governance.
End of letter.
Now read her farewell address, and tell me that the issue of a “Corporate Board” is not fact. Tell me that the winners of last years election and the existing board members are not governing as a “Corporate Board” for the good of the Corporation.
I truly regret that we did not get to read Billie Ann’s letter to the Smoke Signals before we got to vote, and I truly regret that we did not heed her warning and wisdom in the following farewell address.
I strongly urge you to restrain from accepting all the “Spin” the POA publishes. And, I strongly recommend you vote NO on the Capital Reserve Fund changes to the covenants.
Billie Ann Rice’s farewell comments
Billie Ann Rice, whose three-year service on the Property Owners Association Board ended Dec. 1, was unable to attend the Town Hall meeting held that same day because her husband, Ken Rice, was being honored as an SEC Legend from Auburn University at the SEC Championship Game. She asked Rod Lee to read the following comments at the Town Hall meeting:
As my service on the POA Board comes to a close, I want to share with you some of my feelings and perspectives with the hope that the Big Canoe community will become even better in the future.
First, let me say how appreciative I am for the support of those who elected me to the Board. In my three years, I can say that whatever decisions I made and whatever positions I took on various issues were always with the best interest of the property owners in mind.
While I am glad for the opportunity provided for me to serve, I am sad in that I wish I could have done more.
There are big issues still facing the community that need to be dealt with. Hopefully the Board will come together, as was envisioned in the transition documents, to address these issues in a more unified manner.
I would hope that the leadership of the Board for next year would strive to be more inclusive of all elected directors. Clearly, those involved in the transition envisioned a Board of some diversity, creating a healthy atmosphere of honest debate on issues open to the property owners.
I would tell you that I leave with great respect for the willingness and commitment of those with whom I have served. The Board has put in untold hours representing the people on so many issues. There is a caution, however, that needs to be said. I firmly believe that we are elected to serve the interests of the property owners, embodied in the Property Owners Association.
Our allegiance should be to the people we serve, the people who elect us to these positions. I confess that I am concerned that there are those who believe that the Board’s first priority is to the corporation. I am fearful that a “corporation first” mindset will lead to decisions that leave property owner input out of the consideration.
We are fortunate to have a good developer here in the Big Canoe Company. They have mostly done a good job here. And, I believe, they will continue to do a first class job in the future. It is, however, a major part of the elected directors’ responsibility to insure that the interests of the property owners (not the corporation) are protected and even enhanced by the activities of the Developer.
To that end, I believe it is absolutely essential that where there is interaction between the Developer and the elected directors on issues, that all elected directors must be included.
Having a select few elected directors interacting with the Developer is dysfunctional to the concept of having six elected directors and results in splitting the elected director group into those who have first-hand knowledge and those who do not. If this is as a result of a request by the Developer, then the elected directors should as a group insist on full participation by all elected directors.
2008 should be a great year for Big Canoe; I am bullish on our prospects for the future. We have good people on the POA staff. I leave you now. I wish us well.
Doug,
The one area or your letter that strikes me as truly amazing is the purported spiking of the letter from Billie Ann Rice by Smoke Signals. I have yet to see a rebuttal so I can only assume that this is true.
Could you or someone at Smoke Signals please provide me the name of the idividual who made this “editorial” decision. I would like to have a conversation with that person so that I can better understand their motives. Smoke Signals has no problem promoting and lauding the current board at every turn but to limit information from a dedicated exiting board member prior to an election smacks of censorship. If true,what a shame, as the free flow of information is the cornerstone of a democracy. It’s bad enough that our press and universities limit debate unless it fits their agenda but to have a community newsletter spike opinion is hard to understand.
I still have had no one explain to me why this no choice,time is running out and the sky is falling approach is being used by the board. If the board truly represents the community why is there only one option to vote on?
My wife and I will be voting no.
By now most of you are aware that the POA Board has , after great consideration , come up with a new plan for funding the CIF/CRF that would correct the situation where, by buying a lot and paying the 3/4 per cent on the lot, the purchaser
would bypass the same payment percentage on the house to be built. This , of course, benefits the
developer who can use this as a sales tool in selling lots.
Their new plan charges for the lot at the same rate, but then tacks on a $0.60 per sq ft charge for the sq footage of the planned house.
Their example was using a lot purchased for $100,000 (CIF is $750)and they discussed building a 4000 sq ft home for a CIF cost of $2400 (4000 x $0.60). Together this totals $3150 .
THEN they talk about a buyer who buys a $450,000
home who pays at $0.0075 for a total of $3375.
At first glance this all seems pretty equitable.
I don’t pretend to be smarter than a 5th grader but I can add and subtract and do simple math.
Lets look at this again-A $450,000 home is the comparison. Along comes a buyer, buys a lot for
$100,000. Builds a home of 4000 sq ft on his new
lot. For true comparison purposes he has $350,000
left to build his home.$350,000 divided by 4000
sq ft is $87.50 a sq ft!!!!!
Let’s talk about what it costs to build a representative house in Big Canoe-one with a roof and siding, please! Let’s use $150 a sq ft (which
may be low) so we are talking $600,000 for a 4000
sq ft house. Add the lot cost and you have a property costing $700,000, not $450,000 as our POA Board would have you believe.
What is the fee for a $700,000 house re CIF?
$5250 would be the fee. What is the difference
between the two situations? $2100
Who still benefits from this deal? The Developer
as he can still claim an advantage in buying a lot.
Is this FAIR? Are the directors doing the math?
Are we concerned as to their other decisions?
I leave that up to you.
So this is the new and improved CIF? What a dissapointing outcome. I don’t want to appear as though I am publically criticizing the work of the board as there are those who believe discord is destructive to the community. Can’t have that as harmony must rule in BC. So without throwing the 1st stone I am only questioning the logic behind the board’s latest attempt at revising the CIF.
It does not generate predictable cash flow which should be at the top of any list when establishing a reserve fund. I consider this basic budgeting and financial planning. Am I missing something here? The proposal appears to be a financial and administrative burden in addition to it’s other shortcomings. Finally I still am confused about the immediate need for the fund. Have all efforts been made to curtail spending or delay projects in these tough financial times? In my business career I was taught that prior to asking for more I must first prove that my budget was realistic and that all efforts had been made to cut costs.
If this is the final choice from the board then chalk up 2 no votes.
My numbers as to homes and lots may be slightly inaccurate but are close enough to establish a point. There are 2000 homes and 1200 lots in Big Canoe. The existing amenity pay-off fund collection is $25/month per home and $16.25/month per lot.This equates to about $840,000 per year
collected by the POA. I believe that we will be paid up by the end of 2010. If this is so and
this collection is left in (or at least a portion of it) then there will be $840,000 +/- available
to cover any CRF needs. Do we really need another collection now???
However, your POA Board has indicated that they plan to move historically expense-related charges
from the operating expense category( such as road repairs) into the CRF honey pot. Businesses do not do this sort of shenanigans. The end result here is that by moving expense items from the expense cvategory to the capital category, you make more room to spend in the expense category.
Importantly, you also deduct from what you claim is your need for future capital needs by reducing
those fund collections paying for expenses instead!! Just another reason to VOTE NO!