TLTAdmin on October 18, 2014
Treasurelaketalk forwarded copies of the financial reports we are seeing from Omni to former Director Wayne Marhelski to get his take on them. This is part of what we received back:
Marhelski: Right from the very start, there is a problem. The numbers as they are being presented do not align with the budget that was presented to the property owners and passed by the board earlier this year. I’ll get into some specifics in a bit, but there were fundamental changes to items in cost centers that were never fully approved by the board. Ask yourselves this, “Was there ever a vote reported to accept the new structure?” There wasn’t one when I was one the board. All I ever heard from Omni, was that Dan Flanders was working on the format with them.
A prime case in point is looking at the breakout of the Lake View Lodge and the “Community Center”. When the budget was passed, there was no “Community Center” cost center. So how did it end up with a budget for expenses? Again, where was the board vote directing that action?
You also have to take a calculator with you and do the math yourself to see the performance of each cost center. The format of the old Favorable/Unfavorable report allowed property owners to immediately see the performance of a cost center or amenity. Why make it so hard for the property owners to see how everything is performing. It’s inexcusable. Even more troubling, is that you can’t see the performance of an amenity over the prior year.
As for making changes to cost centers and the budget that was passed, ask yourself how a restaurant operates without any power, water, natural gas or pest control; just to name a few. It can’t, that’s why Duffers and the 19th hole have these items as expenses. But that’s exactly what they’ve done. Strip out necessary operating expenses and put them into a new and unapproved cost center. Probably while proclaiming how well the restaurants are running.
You’ll also find that there isn’t any interest expense from loans being charged to cost centers either. I guess the plan is to just bury it into the general administration fund so it isn’t apparent if they take on more debt.
The by-laws also state that at any cost center which exceeds budget by 3% needs to be reported to the board of directors for approval. Well, when you change the budget that was approved, that becomes a little hard to do. Of course, there are a few on the board that don’t care either way and prefer to ignore those items they don’t agree with.
Treasure Lake Talk has additional information to provide on this and other topics in the near future.