What's Wrong With Sun City?

Nobody wants to go back to the 60's and black and white TV and Commodore computers, but with that said and with the advancements in computer technology, there's no reason why the members should be kept in dark!

And the Board doesn't own the corporation either! Nobody owns a non-profit, but if it weren't for Members, why else does the corporation exist! It's beginning to look like they've turned themselves into a corporation for-profit with all the dollars they've stashed away?

Well, that's not true either, and it has nothing to do with the law, and everything to do with the way the Members once had a say in the affairs of the corporation. The Advocates want the entire Membership to serve as the 10th member of the board. The Members deserve to know where every dollar of their assessment goes.

The Advocates mission statement is Communicate, Educate and Participate.

 

Not to be argumentative easy breezy, but like FYI, I’m not sure what laws you are referring to? We are still a not for profit corporation with virtually the identical articles of incorporation that were in place when the RCSC was established in 1972. The purpose of the organization is as clear today as the day it was founded, to serve the membership. The real changes have been made to the by-laws and i would love to have the discussion; did the bulk of those changes happen in the past 15 years? I’m sure you know the answer as well as i do. If not, i will be happy to provide you with a 1993 copy of them. I’ve already shared them with several current board members.

As far as the advocates goes, we aren’t the 10th member of the board. As someone pointed out, it was arrogant and as we looked at it and talked about it, we agreed. We changed the description on the advocates page stating the membership should be the voice, the 10th member. We have freely admitted to being a work in progress and will change how we function and what we do as time goes by. Heck, after the next board election, we may not even exist.

I want to be perfectly clear about why i talk about the past. We can never go back, we can learn from it. I won’t bore you with the trite old saying, but the successes from those early years were stunning.. Virtually everything was a trial and error, some good some bad. The one thing we can do is try and instill a sense of ownership, accountability and responsibility in those buying here. We’ve spent 15 years pushing people away, there’s nothing in federal or state statutes that made us do that. It was a vision for the community that i happen to think was short sighted.

I might be wrong, but after attending and then watching the member/board exchange from last Monday, i sense more and more people feel the need to become involved. I suspect you would agree that’s a good thing.

 

AHA! Your last paragraph shows the fallacy of the group. The Board of Directors, by virtue of state law (and I think Federal law as 16 different states have the exact same language), CANNOT put members before the corporation. The Board of Directors does NOT represent the members in any way. They represent and have a fiduciary duty to the CORPORATION, and yes, that's in state law. I believe it's also in tax law, though I'm not sure. So, even if your group were to elect all of the members of the Board, they could be shut down by the Attorney General or the ACC if they were to try to put the members ahead of the corporation. That was one of the "changes" in the law that I spoke of.

 

I think you're missing the whole point. It's not State or Federal law we're complaining about, it's the fact that at one time those living in Sun City has a say in what happened. What we're basically asking for is transparency so we know where our dollars are being spent and the opportunity to express our opinion in a manner that will actually be considered by the Board and RCSC.

 

Restated Articles of Incorporation

Article III
The general nature of the business in which the Corporation is engaged is as follows:

To do anything and everything lawfully necessary in the interest of the Members of the Corporation, including, without limitation, the following:…
https://suncityaz.org/restated-articles-of-incorporation/

 

The fallacy of our group? Interesting. I have sitting in front of me the By-laws from 1993 and the by-laws from 2009. Would it surprise you easy B to learn your often cited Article 5 Section 6 didn't exist anywhere till the recently departed GM stuck it there and then convinced you loyalty to the general manager was the same as loyalty to the corporation? Come on, brother, you're smarter than the silly hype she fed you all. Every board member has an obligation on every decision to make up their minds based on the best information they have available. The problem was she spoon fed you everything and you all just went along with it.

You know as well as i golf was supposed to be self-sustaining. Yet when questioned board members who did know that argued it was just a little off. Now with the 990's, we know 25 million dollars was used from the general ledger accounts to subsidize golf in the past 12 years. That alone should be embarrassing enough.

BTW, can you post that link to the statute we were violating for the first 50 plus years of our existence. Thanks.

 

It gets even better. I asked for a copy of the 2018 By-laws and low and behold the language easy B is referring to isn't in there either. It was added after that. So you all know what he/she is talking about is in Article 5 Section 6, 1.4 under Board Authority: It says this: "The Board's fiduciary duty requires the Board of Director's to act in the best interest and for the benefit of the Corporation. The duty requires Board of Directors to avoid conflicts of interest and of acting out of self-interest; and to act as reasonable people in conducting the affairs of the Corporation."

I've mentioned before, i worked with an organization that taught trustee's from both management and labor their fiduciary responsibilities. The obligations are the same for trustees of the funds we managed as the board's in Sun City. There's boiler plate aspects when you serve in those capacities. I quickly scanned the board policies for the RCSC from years back and i didn't find this exact language anywhere. That said, the mere fact someone stuck it in the by-laws so they could point trustees to is suspect at best. Whether it says it or not, they do have an obligation to make decisions in the best interest of the corporation.

The bigger question really goes back to the Articles of Incorporation. That is where everything the RCSC does comes from. It defines their exact reason for existence. The Articles can only be changed by a vote of the membership. It's hard to do and one of the reasons there's been virtually no substantive changes since they became the RCSC in 1972. On the other hand boards or in the last 15 years, the general manager rewrote so much of it. The only people that had to agree to the changes were the board. I can't recall a single time the board argued against her changes.

Perhaps they should have, because the Articles of Incorporation clearly state the By-laws cannot be in conflict with them. They are, all-be-it a convoluted mess.

Look, i get it. The gm was hired and found all of the trappings of running a community based decision making machine a challenge. Committees got in the way, membership meetings with a quorum of 100 got in the way, following strictly structured board policies got in the way and so to just do things, everything had to change. There's nothing wrong with the GM having a vision for what she wanted/thought Sun City should be. If in fact, she had engaged the membership with her views, perhaps they would have bought into it. She didn't do that, she took the shortest most direct route to get done what she wanted.

And so we are clear easy B, there is a MASSIVE difference in loyalty to the corporation than there is loyalty to the general manager. The gm isn't the pope, isn't infallible, isn't above questioning and challenging. And in fact, one of the responsibilities of the board is to do just that. The tragedy is, we know two board members who did just that and the response was to fire them.

OUCH!

 

And you are 100% correct in that one eyesopen! What you need to realize is that Article III of the Articles of Incorporation talks about the CORPORATION. It does not talk about the Board of Directors. The two are totally separate bodies. Yes, the Corporation works in the interest of the members. The Board works in the interest of the Corporation. And state law backs that up. These are two entirely separate issues.

 

Please forgive my ignorance here. I don't believe I have ever cited Article 5, Section 6 in any post I've made. Where did you come up with that one? As far as posting the link, it's in there...but you want me to do your own homework??? C'mon! As far as golf (how did that ever get into this conversation?), I'm not sure what we're talking about there. Again, I've never said a word about golf. Can you please enlighten me how that got into the conversation?

 

Whew! OK...I would agree with you that there is a massive difference in loyalty to the corporation and loyalty to the general manager. The latter doesn't have any legal basis, and you're 100% right about that person not being a pope or infallible. And again, I'm a little new here, so you'll have to forgive my ignorance about two board members being fired? Not sure how that fits into the conversation, or what it's all about. As I mentioned in a previous post though regarding the Articles of Incorporation (which deal with the corporation and the way it runs) and how the board of directors operate are two entirely different entities. Please do not confuse the two. The Articles you're referring to never mentions the board of directors, only the corporation, and as eyesopen said, the corporation is to serve the members. You'll get no argument from me on that one!

 

Easy B you cited it in your first post see above last paragraph “Article 5 Section 6 of the By-laws.” Hoping that helps jog your memory.

 

Lot's of newer folks coming through TOSC these days, so how about a quick story. Back around 2010 or so, the Independent Newspaper had a website called Newszap. It was a bugger of a blog where most of the stuff posted was political and nasty in nature (cartoons of black people was really hot item). Like always, i signed up using my real name. I understand why people like to remain anonymous and respect their right to do just that.

That has nothing to do with my story, it's just the setup. The site was heavily saturated with folks further to the right than most and they hated Obama and the fact he was their president. Back then i was a little more aggressive and dare i say sometimes even confrontational (i know, had to believe). I was relentless in my responses and my new online friends, many from Sun City Grand, grew to dislike me.

So much so, they would contact the administrator in New Jersey and whine how mean i was. Damned if i didn't get kicked off 9 times. Each time i came back, i had to create a new email address, no big deal, and after the first time i was kicked off, i had to come back with new identities. Hate to say it, but creating the new me was as much fun as the crap i posted. I know, kind of juvenile but what the heck, it was the wild wild west eh?

But enough about me. Tomorrow i will be happy to come back to easy B's comments regarding golf and other related topics and we can try and drill down and sort out what fiduciary responsibility means. Should be fun

 

Dang, by the way, in that you are new here Easy B, the Articles of Incorporation has several sections dealing with the Board of Directors including this biggie from Article 8 #4 which states quite clearly:" The Bylaws may be amended, modified, revised or revoked by the Directors or by the members. In the event of a conflict concerning the Bylaws as amended, modified, revised or revoked by the Directors, the action of the Members shall prevail."

Hoping that helps sort out some of the challenges for newbies.

 

I’m still mystified by Easy B’s reference to all the laws he said forced Sun City to add the new language to the bylaws sometime after 2018. He said above he/she had linked them but i still didn’t find them. To be fair, he may have, on the old site the links would appear in a different color, now they are kind of a muted tone.

I did point out where he/she made reference to Article 5, Section 6. I was surprised when he/she threw that into the mix, we had a former poster who used that same argument; being loyal to the corporation and all. Thankfully Easy B didn’t cling to the idea the GM deserved the loyalty as well and readily agreed loyalty to the corporation is wholly different than loyalty to the GM.

When i was elected to the board (2012) a former board member’s wife gave me a copy of a book on Fiduciary Responsibility. I quickly glanced through it and darned if it wasn’t all the same things we taught. Good to see there was consistency. Board members are obligated to make decisions in the best interest of the corporation (loyalty). They also have the doctrine of the prudent man theory, which simply states they must make their decisions on the basis of what makes sense using the information they gather, and not just the information the GM gives them.

Easy B said he/she didn’t know anything about the two board members were fired and why that mattered. I guess being new and all was the reason. Anyway, both Karen and Barbara were fired because they questioned decisions made by the GM. Barbara in 2020 as she had questions regarding financial data, Karen because she saw imminent harm to the community by reducing the number of pickleball courts when Mountainview closed their 7 courts.

To help Easy B understand, board members questioning a GM’s actions is actually an obligation under their fiduciary responsibilities. They weren’t being disloyal to the Corporation, they were questioning what the GM was saying and whether it helped or hurt the corporation (community). It is exactly what board members are elected to do. It’s why loyalty to the GM isn’t part of their fiduciary obligations.

The golf part gets a little more tricky. To understand how the golf courses were purchased from DEVCO, one would need to actually see/read the documents. I know when i asked for them while on the board, i didn’t get to see them. I was told they were somewhere in storage boxes scattered about across various locations. I didn’t press it, i knew golf was supposed to be self-sustaining.

Board members, to be able to do their job correctly, need the information necessary to make prudent decisions. If they don’t have it, then they end up making decisions based on only what they do know. In fact, that’s part of the GM’s job, to make sure the board has all of the information.

It has been suggested to me i want golf to fail, to go away. Nothing could be further from the truth. What i do expect is total transparency and for the board to know all of the facts, all of the numbers and then for them to do the right thing. If golf needs to be subsidized, bring it before the membership and let them vote on it. Seems simple to me to make the case that Sun City is a golfing community and we need to help it stay one.

What is not okay is for the board to turn a blind eye and pretend shoveling 25 million dollars at golf in the past 12 years isn’t a problem. If i still had that book i was given i may even be able to find a chapter in there about those kinds of actions.

Anyway, hope that helps clarify some of these points I raised. I know the learning curve for newbies is sometimes a hill too high.

 

Not to jump into the fray here, but I'd guess the following is the applicable ARS regarding the responsibilities of the BOD in a non-profit:

10-3801. Requirement for and duties of board

A. Each corporation shall have a board of directors.

B. All corporate powers shall be exercised by or under the authority of and the affairs of the corporation shall be managed under the direction of its board of directors, subject to any limitation set forth in the articles of incorporation.
​

I would think the Articles of Incorporation statement regarding "... for the benefit of the members..." would qualify as a "limitation" per paragraph B of the statute.

 

Careful IC, the folks acting as the supporting cast to the RCSC like to rely on the Bylaws and forget everything that follows is supposed to flow from them. The reality is they can play around with the bylaws while changing the Articles takes an action by the members. Wonder why they wrote it that way?