running the store
Gary J Lee
I have been to the club since it was being built. I have enjoyed the entire time and witnessed a lot changes and oddities at the resort:
· The restaurant changing from one we avoided to one we really like
· More gardeners than is needed often sweeping the sand to no end
· Life before beach vendors jet skis, and cruise ships
· Explosion in the number of palapas and the morning race to get the front spots
· Losing the old bulky pool lounge chairs with the odd pillow headrest
· Air conditioning added to all the units
· Slowly but surely the bamboo slats in the showers are disappearing in most units – down to 2 or 3 – what’s the point of that?
· On and on and on. And now another staffing head scratcher. My dealings with Aida were always positive. I cannot say that about all my salespeople dealings.
On a budgetary note, we could never figure out why our store/gift shop is so downright crappy. Always has been. They move no product and have awful stuff and lousy prices. Go next door and see their shop actually having stuff people want and it is full of customers buying things – like a 7/11 store in the US. That must generate some serious revenue. Our attendant is almost always behind her counter fighting off boredom.
Gary Lee
From: 'Lisa Vargas' via Welcome to Club Cascadas De Baja [mailto:club-casca...@googlegroups.com]
Sent: Thursday, June 14, 2018 4:02 PM
To: Welcome To Club Cascadas De Baja; Cabo Friends
Subject: Fw: Re: Aida and the upcoming Board meeting
Answer to my questions from Mauricio at TPI in blue:
1. New Organization Created to Handle Timeshare Sales on Behalf of the Association :
Mauricio at TPI stated that the current Association is a not for profit organization and since the sale of timeshares is a for profit transaction, a for profit company had to be created. Thus, an organization titled Cascadas Vacations, Inc. was created. This corporation is a Delaware corporation, doing business in California. Mark Giddings is this new corporation's CEO, CFO and President and Larry Greenberg is the Secretary.
There are a lot of green squares on the sales grid sheet, which now represent villas that are owned by the Association. So, when each of those villas sells, after sales commission, expenses of sale, IVA tax, etc., a good portion of each sale should result in a sum of profit going into Cascadas Vacations, Inc.
QUESTION: Where/how is that money then transferred to the Association? THE FIRST AND MOST IMPORTANT ITEM IS THAT THE PROCEEDS FROM THE SALES OPERATION SUBSIDIZES THE CLUB'S BUDGET. HOW? THE CLUB HAS 5,650 POTENTIAL MEMBERSHIPS, FROM WHICH ROUGHLY 20% ARE UNSOLD AND THE BUDGET IS BASED ON RECEIVING 100% OF THE MAINTENANCE DUES TO BALANCE THE BUDGET TO ZERO. SALES MAKES UP FOR THE MAINTENANCE FEE ON THE UNSOLD INVENTORY, WHICH IS SOMEWHERE AROUND A MILLION. THE SALES OFFICE ALSO PAYS A LEASE TO THE ASSOCIATION AND MAKES CERTAIN EXPENSES ON ITS BEHALF. SHOULD THERE STILL BE A SURPLUS, IT CAN BE TRANSFERED BACK TO THE ASSOCIATION THE FOLLOWING YEAR AS A DIVIDEND.
Looking at the 2018 Approved Budget (copy attached), in 2017, the Association anticipated income from "Sales Commission - CDR" of $40,000. In 2018, the amount if ZERO. CORRECT, A SMALL PERCENTAGE WAS PAID BY THE DEVELOPER TO THE ASSOCIATION ON "FRESH SALES". SINCE THE ASSOCIATION NOW RUNS THE SALES OPERATION THROUGH ITS SUBSIDIARY, THIS LINE ITEM NO LONGER EXISTS
QUESTIONS: Where is the anticipated profit/income from the sale of the now Association owned villas in 2018? What amount of sales is anticipated in 2018? What is the anticipated income to the Association in 2018 from the sale of villas? What amount of money is anticipated from the rental of owner villas? Where are these income line items on the budget. WHILE CVI IS A WHOLLY OWNED SUBSIDIARY, IT HAS ITS OWN BUDGET FOR INCOME AND EXPENSES AND PAYS ITS TAXES ACCORDINGLY. IT ISN'T PART OF THE ASSOCIATION'S BUDGET. YOUR BOARD OF DIRECTORS AND THE THREE DEVELOPER SEATS CURRENTLY CONSTITUTE THE CVI BOARD. UPON THE NEW BOARD BEING ELECTED, THE CVI BOARD WILL BE UPDATED ACCORDINGLY. TPI IS HIRED TO HANDLE THE ACCOUNTING AND BOOKKEEPING OF CVI, WHICH IS PAID DIRECTLY BY CVI AND PROVIDES MONTHLY FINANCIALS AND DETAILED REPORTS TO THE BOARD.
QUESTIONS: Since the new organization Cascadas Vacations, Inc. is a wholly owned subsidiary of the Association (all the owners), are the records and books available to view by each interested owner? Will an accounting of the profits and expenses of this new organization be made available to the owners? Why not? THIS WILL BE DISCUSSED AT THE UPCOMING BOARD MEETING NEXT WEEK THE DAY BEFORE THE ANNUAL MEETING, I WILL PROVIDE YOU WITH AN ANSWER SHORTLY AFTER AND THIS TIES IN WITH YOUR PREVIOUS QUESTION TOO.
2. New IVA Tax
Several owners have been scolded and harassed for listing their villas for sale/rent and not collecting the 16% Mexican tax (IVA tax). Owners have inquired about this "new" tax and have been told that this new tax is required now that the Association is not an American company, but now a Mexican company? This clearly is misinformation because the Association has always been an American company and the new sales department is also an American company.
QUESTIONS: What is the "new" tax? Why weren't the owners told about it before 2018? IVA TAX ISN'T NEW AND YOU PAY FOR IT BASICALLY FOR ANY SERVICE OR PRODUCT IN MEXICO, WHETHER YOU EAT AT THE RESTAURANT, BUY CLOTHES AT THE MINIMARKET, PURCHASE A UNIT, TAKE A WHALEWATCHING TOUR, ETC. CVI IS OBLIGATED TO REPORT AND PAY IVA TAX TO "SAT" (MEXICO'S EQUIVALENT TO THE IRS) OR WE'D BE AT FAULT AND IT CARRIES LOTS OF LIABILITY. I CAN'T SPEAK FOR BEFORE, BUT THIS IS WHAT WE HAVE TO DO NOW, NO MATTER WHERE THE FUNDS ARE COLLECTED OR WHERE THE TRANSACTION TAKES PLACE
QUESTION: On the 2018 budget, the expense for IVA expense shows $392,069 in 2017 and decreases to $255,404 in 2018. Why the large decrease? IVA IS PROPORTIONAL TO THE EXPENSES PAYROLL IS NOT SUBJECT TO IVA, NOR ARE US EXPENSES OR THE RESERVE FUND
3. New Board and Meetings
Cascadas owners are electing a new board this year. In the past, the developer had the right to vote for each of the developer owned villas (green squares).
QUESTION: Now that the "Association" owns the unsold inventory, who gets to cast a vote for board members for each of those unsold villas? NO ONE, THE UNSOLD INVENTORY IS ONLY UTILIZED FOR QUORUM PURPOSES DURING ELECTIONS
4. Restaurant and Store at Front
QUESTION: Who owns the restaurant at Cascadas and the store at the front near the lobby? THE RETAIL CENTERS AND RESTAURANT HAVE OPERATED UNDER A LEASE FOR MANY, MANY, MANY YEARS
QUESTION: Who is RemiMar? Why is this unknown company running the restaurant and the store? My information shows that RemiMar is owned by AJ Jackson, a prior owner of Trading Places. NOT UNKNOWN, IT'S THE SAME COMPANY WHO HAS OPERATED FOR MANY YEARS. IF I MAY, THEY ARE A STORY OF SUCCESS AND INDUCED POSITIVE CHANGE TO TURN IT INTO WHAT IT IS TODAY
QUESTION: On the 2018 budget, it shows rent from RemiMar of $86,250 in 2017 and ZERO in 2018. RemiMar is also included on a different line item under "Mexico Revenue/RemiMar/Util Reimb." The amount of this item for 2017 was $35,752 and in 2018 increases to $158,036. Why the large increase? THE ASSOCIATION USED TO RECEIVE LESS DUE TO WITHHOLDING TAX BY BOOKING THE LEASE PAYMENT AS US REVENUE, IT IS NOW PAID IN MEXICO, MAXIMIZING THE BENEFIT TO THE CLUB
QUESTION: Why doesn't the resort itself manage and run the restaurant and the store? ONGOING DISCUSSION
5. Other Budget Questions:
a. The 2018 budget shows a line item for "GM Invoicing" under Wage and Salaries. In 2017 this amount is zero, in 2018, it is $96,016. What position are we now paying almost $100,000 for? THIS IS NOT ONLY THE GENERAL MANAGER'S SALARY, ALL COSTS ASSOCIATED TO THE POSITION SUCH AS HEALTH INSURANCE AND BENEFITS ARE BUNDLED INTO THIS LINE ITEM
b. The 2018 budget shows a line item for "Bonus Week Booking Fee." In 2017 it was zero, and in 2018, it is $143,000. What is this category and where does this money come from? THESE ARE THE BOOKING FEES FOR BONUS WEEKS FROM THE SALES OFFICE, THIS ITEM WAS MOVED INTO THE CVI BUDGET LAST NOVEMBER
c. What categories of income fall under "Other Income?" DAMAGED ITEMS, LAUNDRY SERVICES, LOST KEYS, CURRENCY EXCHANGE, ETC.
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