High hopes dashed

I was impressed with Mr. Homan’s resume when he applied to be appointed to the Audit Committee. He could have made great contributions. Unfortunately, he has damaged his own credibility by giving biased reports on the performance of IVGID’s golf venues.

Mr. Homan’s recent “full disclosure” does not mention that he is an avid golfer. He downplayed the inequity of the large subsidies needed to support his preferred pastime, golf, rather than look for the reasons behind run-away expenses (even before inflation skyrocketed). To be fair, maybe that’s not the role of an accountant. Rather it is the task of those who manage the “business”. Instead of using his position on the Audit Committee to gather and present unbiased data, he selectively reported information to inflame golfers and convince them the proposed rate hikes were unreasonable.

Golf courses really do require almost $2M/yr in subsidies

In his letter to the Board in May he claimed that the subsidy for golf for FY21 was only $288, 613 (based on figures from the published year end Sources and Uses report which does not include depreciation). He did not include golf capital projects that were listed in a separate fund (Capital Projects Fund) for that year totaling $988,268, bringing the total subsidy for golf to $1,276,891 for that year.

Similarly, he suggested the subsidy for golf was likely “only” $900,000 not the $1,445,115 figure he stated, since it included $556,000 of capital improvements at the Mountain course, primarily for the cart path project. He conveniently omitted the $3M subsidy for FY20.

He only included the 2 years with the smallest subsidies out of the 5 year summary that averaged $1.945M/yr provided in the May 8, 2023 memo co-authored by the Finance Director, Paul Navazio, Community Services Director, Darren Howard, and Trustee Schmitz. Those figures may not have been perfectly accurate, but if there were major errors, shouldn’t our Finance Director have corrected them?

IVGID’s financial reporting currently does not include the cost of IT services as an operating expense of the various business units. Even a very conservative estimate would require an additional $100K or more to be added to the subsidy. Staff will be working on a new, more equitable central services cost allocation that includes IT.

Hopefully the Golf Advisory Committee will receive more accurate, unbiased financial data, so they can make informed recommendations regarding golf rates. Interim Finance Director Bobby Magee is working quickly to address many of the problems he has identified.

A little history

Mr. Homan moved into the District in 2020, so he may not have witnessed the years of IVGID’s outrageous financial practices. He has tried to place blame on two current Board members for the mess that has been long in the making.

Things like denying access to detailed budgets, even denying the existence of a chart of accounts, and secretly selling public property (unbuildable lots with beach privileges) without Board knowledge, all happened before he arrived. But even after he arrived, he apparently didn’t notice management’s resistance to correcting longstanding poor accounting practices identified in the Moss Adams reports. Those practices included, among other things, “simplistic” central services allocation, failure to expense numerous items, and purposefully reporting the facility fee as operating revenue, all designed to make our venues’ financial performance look good.

Of course, we have now learned that IVGID frequently categorized operating expenses as capital expenses, giving the false impression that venues were covering operating costs, when they weren’t even close. Anyone who has ever run a business knows those capital expenses can be a significant part of the cost. And in IVGID’s case, those costs are ultimately paid for by our so-called facility “fees”.

If anyone signed the recall petition on the basis of Mr. Homan’s writings, you might want to reconsider.

The IVGID can do no wrong club

And perhaps unlike the private enterprises where he spent most of his career, government has a responsibility to share the unbiased truth with citizens, even when the news isn’t good.

He points to the recent audits and the “clean opinion” they rendered, as if that were some proof that “all is well”. He never pointed out that an audit of financial statements, as made clear by Jennifer Farr (IVGID’s FY22 auditor), that it would be foolish to think that this type of audit would detect fraud.

Mr. Homan claimed we are “in the midst of a complete accounting system conversion”. As an IT manager in city government, I’ve had hands on experience in implementation of new government accounting systems. We didn’t go live until any significant errors had been detected and corrected in a test environment. That should have happened well over a year ago. And any remaining minor conversion problems should certainly have been fixed in the year following the go live date of July 1, 2022. The Board received few updates on the Tyler system implementation before the arrival of our interim finance director. Had these problems been reported a year or more ago, I could easily have been empathetic. Instead, they were kept a secret and only surfaced either shortly before or shortly after the departure of top management.

It is not surprising that certain former employees did not want the Board poking around, now that a number of serious shortcomings have been exposed.

We’re finally on the right track

I agree, we do owe a lot to the remaining staff who have taken on a tremendous challenge. The board has expressed their appreciation and willingness to bring on whatever additional help is needed, both in the short term, and well into the future. Past boards (most recently the Callicrate, Wong, Morris majority vote) ignored warning signs provided in the Moss Adams reports and refused to accept Audit Committee recommendations or take on any role of oversight. It’s also apparent that management failed to provide timely assessments or to identify or request the need for additional staff. Blaming any member of the current Board is more evidence that Mr. Homan either doesn’t understand or chooses to obfuscate “what’s really happening with IVGID Financials”.

None of this is hyperventilating, hysteria or fear mongering. We finally have some realistic assessments of IVGID’s financials and staffing needs, and a plan to move forward. We have a hard-working and intelligent Board and dedicated staff. Let them do their jobs.