ECA Board's Financial Failure

In an Eastman Blog posted on 4-5-15 called FACTS OR FINANCIAL FOOLERY click here we referenced an ECA governance document produced to justify the South Cove build-new project entitled "South Cove--a Decision for the Future of Eastman". On page 15 of that document is the following specific commitment to fund the new South Cove building project-

Bullet # 3 states:  

"Increase the membership fee from $3000-$5000 for house/condo beginning April 1, 2009......when a lot is improved, an additional $4000 will be payable to Capital Reserve Fund. Note: if the Council fails to approve an amendment to the Declaration of Covenants and Restrictions required to increase the membership fee in June of this year, the special assessment will increase to $360 per property for eight years or $2880.”

There has been no accounting, accountability or reconciliation on the part of the general manager/CEO (Ken Ryder) of the Capital Funds raised or how those funds were spent by Mr. Ryder because he does not work for the community; he works solely for the 9-member Board period. (see above Blog posting for details) There is an annual accounting for the membership fees paid “source of funds” however there is no corresponding "use of funds”.

The current fiscal year FY 2016, is the final year of the eight year annual $250 special assessment per housing unit payment ($2,000) for the $4.5million  loan taken out for South  Cove. If you look at the FY 2014 Audit Report, you will find on page 11 a reconciliation of this loan's status:

The long-term outstanding debt amount at the end of FY2014 (3/31/2014) was $1,727,683 on the South Cove loan. The current portion ( paid in FY 2015) was $464,871 leaving a long term debt excluding this current portion, of $1,320,906 to be paid in three more installments (FY 16, 17 and 18).

Bottom line—the outstanding South Cove debt as of 3/31/2015 is $1,320,906. The incremental revenue received from the 4/1/2009 membership fee increase NEVER went to pay off the South Cove debt. No Accountability = Member Financial Ignorance and now your ECA Board and Ken Ryder are playing the same tune/deception to the ECA members with the Center:Build New/Renovate funding
shell game.

Contributed by Bob Logan who is the CEO of a consulting practice since 1993 which provides expertise on improved business, financial and operational performance as well as leadership.