Our response to TMCC’s recent email to members

Recently we received an email that TMCC Governors sent to their members in response to the information and analysis we’ve posted here. (the email was forwarded to us anonymously via two separate TMCC members).

This is our response for those who have received it. We hope you will find it informative.

Re: Our Anonymity

We believe that providing information, facts and analysis not previously available to MCA Homeowners and TMCC members is a service to the community. Only when we are all well-informed can we have constructive, productive discussions on how to get better. We have discussed past actions of both Boards but have refrained from naming any persons.

We do not seek credit and we do not want personal attacks. “Ad hominem” attacks are a tactic used when people who don’t like the facts, then they attack the people and we have had those via email. TMCC Governors demeaning us because we prefer to be anonymous is a form of ad hominem attack that wastes time and energy and distracts us from the facts. The facts are the facts no matter who provides them or how they are provided. 

We have begun every blog with an offer to correct any inaccuracies. We have not received any requests for corrections from ANYONE.

Re: Disclosure of Financial Information

TMCC’s statement that it is correctly filing its Form 990’s is misdirection to distract you from the point we made: TMCC has not made its financial results (reasonably) available to its members and the public as it is required to do. The MCA Board has supported them in this regard stating that TMCC financial information is “confidential”.

In its own Form 990’s TMCC states it is required to provide its Form 990 and financial statements to the public. But in its recent email TMCC states we aren’t allowed to see them “for business reasons”. In previous budget update communications TMCC has gone as far as telling its members that they should not even discuss the financial affairs of the club. Telling MCA Homeowners they aren’t allowed to have this information when they actually are allowed to have it is not OK (even if it isn’t illegal).

From their email: “The Club undergoes an annual audit by our external auditors, whose report is shared fully with the MCA”. Again, more misdirection: An audit report doesn’t provide any financial information, it is just a report stating whether the financial statements are accurate, not the financial statements themselves. Under the terms of the MCA/TMCC lease TMCC only provides budgets to the MCA and allows review/access to “other financial information” (see section 4. C. on page 3). The MCA Board does not receive TMCC’s financial statements (if they did MCA Homeowners would likely have easier access to them). It is very common for lessors to receive the financial statements of a lessee. So TMCC is leading readers to believe it provides their financial statements to MCA Board, but it does not.

TMCC asks why we “dwell” on financial results all the way back to 2014. We do so because the newly available information clearly demonstrates a long, clear history of large financial losses operating the assets in a private club model. Most MCA Homeowners would not have seen this in cold hard data. The only thing that changed starting in 2019 is that MCA Homeowners are now covering those losses in our annual assessments. We should not be subsidizing a money losing private club when other alternatives are available. 

Re: The Lease

TMCC spends several paragraphs arguing the reasons for the original $10/year 3-year lease. We understand why it is a great deal for TMCC to receive all their assets back for $10. But they consistently do not recognize the cost of this to MCA Homeowners.

As described in A Walk Down Memory Lane, it seemed like a reasonable start in 2018 so TMCC could turn things around. Our concerns start with the 2021 renewal of the lease at the same $10/year after the MCA Board had said the payments would be adjusted at renewal. That didn’t happen in 2021 and the current lease ends on June 30, 2024 so there is a major decision point coming up soon.

We can’t change the past, but we can recognize our errors and it is appropriate to discuss when we haven’t met the commitments that were made. We don’t believe the MCA Board should continue to provide MCA Homeowner assets to TMCC for free, let alone for another 3 years.

TMCC notes that it paid $28 million in expenses over 4 years. Yes, businesses have expenses which are incurred to generate revenues. TMCC never refers to the fact that it generated more than $28 million of revenues using MCA Homeowners’ assets for FREE. Here’s an analogy that may be helpful: Suppose you bought a car and loaned it to a person for free, but they had to pay for the gas and insurance. Does it make any sense that they tell you what a favor they’ve done for you by paying for the gas and insurance, while ignoring that they gave you a car for free and you can’t use it? That is exactly what is happening here.

TMCC also note some recently improved revenues (great!). But TMCC haven’t said a word about their income.  If financial results are so great, lets eliminate the burden of subsidization from MCA Homeowners: drop the Renaissance Access Fee to something better reflects the benefits received and start paying a market lease rate for use of MCA Homeowners $12+ million of assets.

Re: $600,000 Renaissance Access Fee

We’ve covered this subsidy well here already and TMCC’s reply is “reasonable people may disagree”. That may be true in general but a reasonable person cannot look at the timing and “benefits” to MCA Homeowners and conclude that the Renaissance Access fee is not a subsidy initiated when TMCC was on the verge of bankruptcy a second time.

TMCC highlights the “pickleball explosion” and their efforts in this area. MCA Homeowners own the courts. MCA Homeowners will be paying for the 2 new courts. TMCC provides a court booking app which costs about $1,000 per year and a volunteer committee. This is not a TMCC initiative that MCA Homeowners are benefiting from.  

The bottom line

We understand that TMCC’s role is to operate in the best interests of their members (not MCA Homeowners). Having negotiated the lease of $12+ million of recreational assets for $10/year + another $600,000/year subsidy, they have done very well for their members.

If TMCC was able to manage the assets without a subsidy and pay a market rate for use of the assets, we’d all be happy (and blissfully quiet). But they have had every opportunity to find a way to do that and have not been successful. The same unsuccessful trend continues year after year after year.

TMCC makes a lot of references to the relationship with MCA Homeowners as a “strategic partnership”. From the MCA Homeowner view, subsidizing a money losing private club indefinitely is neither a partnership, nor strategic (we are not aware that any alternative approaches have been seriously considered by MCA in the last 6 years). Our A Summary of Where We are Now post describes the current state of the relationship well.

MCA Board’s role is to act in the best interests of MCA Homeowners. It is not doing so by having MCA Homeowners subsidize a private club with no end in sight. If the MCA Board is to act in the best interests of MCA Homeowners, the MCA Board should take the following actions:

1. Form a legitimate committee to investigate alternatives for utilizing our recreational and dining assets in a way that is less costly and more beneficial to MCA Homeowners. This will be a pretty big undertaking. It should be comprised of MCA Homeowners who have relevant skills. Some input from TMCC members would be useful, but only in proportion to their population within the Meadows (TMCC members would be the minority).
2. Do not commit MCA Homeowners to another 3-year lease until the above work has been completed. Renew it for ONE year and it can be reconsidered in 2025, in light of the committee’s work. If TMCC is doing as well financially as they allude to, they should be paying a market rate to lease the assets, not $10.
3. Under the terms of any new lease, require TMCC to provide their full financial statements to MCA. Stop this ridiculous cat-and-mouse game of making them technically available while making it difficult to obtain the information (the IRS website where Form 990’s are published is typically years behind)

Ultimately our goal is to have MCA Homeowners’ assets operated in the best way possible for MCA Homeowners. We’d like to approach it in a rational, respectful, constructive way. By providing information and analysis we’re trying to get everyone on the same page in terms of facts, and then we can have discussions building on that.