Financial Info from the TVPOA Board
There is once again misinformation about Tellico
Village finances being sent via e-mail to Tellico Village residents.
The e-mail contains flawed assumptions and wrong conclusions about
the POA’s financial situation. This problem has existed for several
years. It is a detriment to the Village and a continuing distraction
to Tellico Village residents and the POA.
For example, this past week representatives of a
group that is planning to use the Yacht Club for an event asked if
the Yacht Club was in financial danger and would it be available for
their function. This is the sort of difficulty caused by false
information. We have an obligation to you, the Tellico Village
property owners, to make sure you have the facts to counter or
Your Tellico Village POA is in sound financial condition. As of the
last week of October, we have $551,000 of operating cash and $3.6
million of reserve cash in certificates of deposit at various banks.
The POA has $4.1 million in total cash. The POA also has $300,000
less in total debt now than at the time of a May 2009 newspaper
article containing misleading financial information about the POA.
Many companies would like to have that level of financial security
behind their organizations.
Unfortunately, the property owner who composed the e-mail containing
the misleading information has shared it with a newspaper again. We
have done everything possible to provide the newspaper with
accurate, clear and irrefutable numbers to demonstrate the
inaccuracy of what its reporter has been told. However, we have no
control over what the newspaper decides. What we know is that
inaccurate information about Tellico Village benefits no one.
We will address the inaccurate information point by point:
Delinquent Assessments: Over the past three years, the POA averages
around 700 lots whose owners are delinquent in paying their
assessments. These are mostly empty lots owned by a few large block
property owners. This year those delinquent assessments will total
The POA keeps track of the delinquent assessments,
late fees and interest owed by these property owners. Therefore,
when we either settle or take the lot in foreclosure, your POA knows
how much these property owners owe the POA. Significant staff and
legal efforts are expended to collect these delinquent dollars.
While we show these sums as potential income, they are also shown as
an expense so that there is no net income assumed for delinquent
accounts in the budget. The POA is actually $44,000 ahead of
budgeted net assessment revenue for 2011.
Expenses and Revenue: The suggestion was made that the POA
does not have the resources to cover its bills. The key element that
makes this statement wrong is that it does not take into account the
monthly revenue that flows into the Association. The POA has monthly
expenses of approximately $1.2 million and revenue of approximately
the same amount. Though we have significant normal expenses in the
fourth quarter of the year, we have revenue from assessments, golf,
fitness, water and sewer that cover those expenses.
Line of Credit and Cash Position: The POA borrowed from our
line of credit in September to ensure our cash levels during the
fourth quarter were not only adequate to cover our expenses but also
to ensure a cushion for unexpected events. The $250,000 of cash
borrowed from our line of credit will be paid back by the end of
this year. The end of year cash projected in October of $69,000 did
not include pre-paid amenities (golf, docks, recreation) revenue but
did include the worst-case scenario for fourth-quarter spending. We
now estimate that after paying back the line of credit of $250,000,
paying all fourth-quarter bills and collecting assessment, golf and
other revenues, the POA will have approximately $500,000 of
operating cash at the end of the year. This is a comfortable level
of cash for your POA, and we still have the reserves of $3.6 million
in the bank. Total end-of-year cash is estimated to be about $4.1
If you are told that the POA will have a cash shortfall by the end
of 2011, ignore the doomsayers. They’re wrong. We assure you that
your POA is financially sound and the staff, advisory committees,
and the board made up of fellow Tellico Village property owners are
working hard to keep your POA financially sound. We invite all
property owners to attend our finance committee meetings or our
board meetings to hear first-hand the state of the POA’s finances.
We think you’ll be pleased.
We would also like to repeat our previous announcements about the
POA’s cost reduction restructuring. The workforce reduction of 10
people, while regrettable, was an action similar to those being
taken by organizations around the country. The country’s economic
situation calls for prudence and caution. But those reductions will
not result in any loss in amenities or services to the property
owners. Our amenities (golf, recreation, docks, Yacht Club, etc.)
will see no changes in hours of operation nor services.
If you have any questions please contact the POA office or email
Thank you for your interest in the POA and for being a member of the
Tellico Village community.
Nov. 8, 2011