Cash Is King...or is it?

Discussion in 'Sun City General Discussions' started by BPearson, Sep 28, 2022.

  1. BPearson

    BPearson Well-Known Member

    I'll be the first to admit it, most readers eyes glaze over when we start talking about financials, bylaws and even the cost of a round of golf (unless of course you are a golfer). It's pretty boring stuff and for anyone other than policy wonks and gad flies, who cares?

    Unfortunately, for me, i do. I pay attention to more than most. It's my curse. It's why when we have these types of discussion, i try and break things down to its lowest common denominator. That typically equates to things that impact those reading this site or following what is going on in the community.

    When it comes to the golf debate, those directly affected, it's about Sun City members/golfers who can't get the tee times they prefer. Or perhaps about members that show up with their out of town guests and there are no golf cars available to rent, and are directly impacted by the full play non-resident passes. It's an irritant. Some members have told me they've gone to the private golf courses and paid the higher price; that sucks.

    This thread isn't about golf. Nope, it's about where we are and how we got here. The other day in the newspaper i read the letter to the editor where the softball members told the vintage car members to suck it up and get in line. They want their new building before the RCSC thinks about trying to keep their car club members from dropping dead in the heat of the summers while working on their vintage vehicles.

    There's also been the mounting pressure from the dog lovers for an indoor training arena. We also know the theater lovers want the Mountain View rebuild; at any price. On the ever growing list is better security at both Duffeeland dog park and real enhancements (cameras) at every rec center. Of course none of that is possible because Sun City's technology is 10 years behind (it was 15 but they are trying to do catch up).

    All of which totally ignores our aging fitness equipment, lawn chairs sorely past their prime around our pools and the collapse of the Life Long Learning Club and no apparent effort to address continuing education. The sum of these problems is really part and parcel of a community fixated on staying affordable. The RCSC has done a really good job of not raising our yearly assessments.

    In a senior community, staying affordable is important. We know the next waive of buyers will be shopping based on reasonable costs. With that out of the way, what would you say if i could tell you all of the aforementioned problems could have been done and paid for over the past ten years. And let me be very clear by shouting this out to you: WITH NO INCREASE TO OUR YEARLY ASSESSMENTS BEYOND WHERE THEY ARE TODAY!

    Yikes, how is that even possible? Stay tuned and i will show you.
     
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  2. BPearson

    BPearson Well-Known Member

    It's important for the membership to try and get their head around the purpose of the RCSC. It isn't that difficult, they exist for one reason and one reason only; to serve the membership. We post it often and the reason is simple: "To do anything and everything lawfully necessary in the interest of the Members of the Corporation." Their job isn't to accumulate money, to set aside millions and millions of dollars. In fact, that concept is foreign to their purpose.

    With that out of the way, i've posted some or all of these figures before. We all know their are two pools of money the RCSC works from. Their yearly budgets, which includes lot assessments and all the other areas they collect revenue from. They include golf, 10 pin bowling, rentals, club donations and the like. The second pot of gold is the Preservation and Improvement Funds (PIF). PIF can only be used for projects that last a minimum of 15 years and cost more than $300k.

    We'll leave PIF out of this discourse, kind of. With the exception of the theater, everything else could have been done from the carry forward money (money not spent year to year from the first revenue stream). It makes more sense to have built the softball field house from PIF, but they easily could have done it from the general ledger account. Better yet, they could have deferred the Willow Brook and Willow Creek golf courses (roughly 10 million dollars) and done them as the PGA had recommended around 2024/2025. That would have left money to build both a theater and the softball building using PIF.

    They could have been investing, every year, in our technology. They were told it needed a major overhaul; top to bottom. A commitment of $200k per year would have put them ahead of the curve, not behind it. They budgeted squat for technology. Along with that, every club could be hard wired or wifi capable so each of them had scanners. We could have our properties secured with cameras, all of our properties. That enhanced technology would have gone a long way in changing the community dynamic when it comes to crime. Instead, we have nothing.

    The RCSC should have been investing in continuing education rather than making the community scramble to find instructors and providing them with wholly inadequate class room space. They could have been investing in regular improvements in our fitness equipment. Much like the program they have for golf cars, regular replacement following them being fully depreciated, we would be at the forefront of fitness and senior wellness programs. Instead we have some gyms where the equipment is so old it's hazardous to use.

    The indoor dog arena is a little more tricky. Finding space is the biggest challenge. That said, there's been an outcry, now will it take 10 years to resolve? We know it was a lengthy battle for them to even get shade screens placed over their outdoor grassed in area. This one too will be difficult. The Vintage Car club should never have had their air conditioning pulled out of the original design. But hell, there should never been a screw-up on the doors and the cost overruns there.

    The car club was already a PIF budgeted item and with more than 31 million dollars in the bank, it should have never been taken out. Literally everything we are talking about could have been done. I will try and be fair here, because no one saw the pandemic coming and the supply chain issues, but the reality is, everything we are talking about is now 30 to 50% more expensive. After market fixes are always more expensive than building it during construction. Trying now to even get the equipment and building supplies is a nightmare.

    I know, it all sounds like Monday morning quarter backing. Sorry, but i have been saying and writing these things before i was on the board, while i was on the board and after i left it in 2014. My thrust always was when you put all of your efforts into one area, the others become neglected. The gm identified golf as her main concern, the gofers on the board agreed. In retrospect it was shortsighted and foolhardy.

    But wait, she's gone. True, but has anything really changed? I have no interest in comparing the past with the present. What i need you to know are the numbers. I always say words matter, numbers matter more. I've written about the Sun Dial roof collapse and the fact the RCSC didn't have the reserves on hand to deal with the calamity. That wrong was righted and now there is a $5 million dollar capital reserve fund for just such emergencies. We'll leave that out of the discussion as well. It's actually at 5.6 million dollars, but that's a really good thing. Just in case eh?

    Let me take you back 1o years: July 2012 the RCSC had $9,231,442 in their cash and investments. (At that point there was only $500k in the capital reserve emergency fund). 10 years later, to the month, July 2022, their cash and investments were an astounding $20,193,717. (At that point their capital reserve emergency fund was the now stated 5.6 million dollars).

    That means they have added more than 16 million dollars from yearly budgets. I've already agreed the capital reserve is a good thing, so lets just look at the carry-forward of 11 million dollars. Imagine what could have, should have been done with that money had they been following their charter under the articles of incorporation and spent the money on the members "to do anything and everything lawfully necessary in the interest of the Members of the Corporation."

    Instead, they felt sticking the money in the bank was more important than keeping Sun City on the cutting edge of the age restricted market place. More importantly, we wouldn't be looking at all these expensive fixes on items that could have been done along the way. That's why it is so important to elect people who understand their role, not just being a shill for the whims of the general manager.
     
  3. BPearson

    BPearson Well-Known Member

    After years of living here, i've become weary of the fight. The RCSC members know so little and are so easily appeased. It's what happens when no one pays any attention. It's what happens when members believe everything they hear. We used to call it position power. It's the least of all credible power bases, but easily one of the most effective. People assume, when you are elected or hired to a position, you know what you are doing or saying.

    There was a time in this country and more specifically in this community, when people were held accountable for what they say. We've been taught to believe everything that those in power or control say. Yesterday at the board meeting it was in full on display. The first item on the agenda was the indoor dog arena. The members were there in force and following comments from there spokesperson, there was high energy and expectations for something good to happen.

    And, it did...kind of. A motion was made to put the indoor climate controlled dog arena on the PIF budget. It was endorsed emphatically by the 8 board members to direct the general manager to find a place on budget. It wasn't date specific, there's needs to be a second reading. Hopefully by then they will give the gm a timeline to get it done. Which in fact should generate the next question; when?

    Here's where it gets sticky. The PIF budget is already fully locked and loaded with items stretching out well into the 2030's. As the gm noted, fitting it in will be the biggest challenge. Then there's the real bugger of it all, we have no space. This arena complete with holding areas and parking and storage isn't going to magically appear. In fact, if one is to be honest, there's nowhere to put it.

    The reality of what happened yesterday made members feel good. That is the sum total of yesterday's action. It's what we have been reduced to. Those from the club left feeling like the arena is just around the corner. It's not, and it won't be happening anytime in the near future, unless someone becomes creative and committed to making it happen. The PIF budget is where the RCSC appeases members wanting something.

    They've come to understand attention spans and member angst is short-lived. Curious, yesterday after the meetings one of the potential candidates said to me, what if the RCSC took a lease on a vacant building and made it fit the needs of the members clamoring for space? What if rather than letting members think they were doing something, they actually worked towards a solution.

    I simply smiled. While serving on the board, we toured buildings. That's all we did, because there was never a real sense of commitment to real change. There's was seldom energy to be creative or resourceful. The end was always just more of the same. Good to see little has changed...not.
     
  4. BPearson

    BPearson Well-Known Member

    I once questioned a board member regarding being honest with the membership while he was seated on the stage. He didn't like it and it became quite heated. It's one of the reason's why when i write something and find out it isn't correct, i quickly try and fix my mistakes. Unlike some, i've never claimed infallibility. Yesterday in my "discussion" with the gm i made two errors. I should have been better prepared but i wasn't planning on speaking yesterday, which is why i didn't sign up to speak.

    Which is the perfect segue into the another one of the motions on the agenda yesterday. I could have lodged my support for the removal of golf cars from full play passes. I already knew with the board president out, it would be a 4/4 tie vote, so what was to be gained? As it turned out, a letter was read into the meeting and it is worth watching to hear it. The writer said it better than i could have. As a golfer, she questioned why non-members would get a better deal than members? As a member, she questioned why she should have to book tee times on a private country club when playing with guests, while non-resident members were taking those prime time tee times?

    They were great questions that went for naught. The majority of the board has decided its better left to the management team to decide whether it's right or wrong to give away our amenity's. And let me be very clear; that is exactly what this argument is all about. It isn't about subsidizing golf, it is about the most basic concept in Sun City's creation and now evolution. This board has told us bluntly, the amenities belong to management, not the membership. Think about that and how absurd that is.

    As i wrote late last night, when Bill Cook and i had the exchange, i said two things in error. By nights end i responded to him with the corrections and posted them on the site. The first thing was regarding outside play in Sun City West. I said half of the play was from the outside, which was wrong. I watched the video back and the general manager there reported at their annual membership meeting in June, outside play generated 2.49 million dollars (approximately 30%). He also said that they accomplished that with members having first option on tee times and that non-members never paid less than the membership. Their business model for golf is far better than ours which has always been my point. The second mistake was regarding the 990's and the extension which is 6 months, i thought it was 5.

    It's easy to admit when you are wrong, the problem is for people in positions of power, more often than not, they won't do it. They think it makes them look weak, when in reality it makes them look human. The vote yesterday on the golf cars has been all built around a single premise. Months back, the general manager made the point and the director of golf reinforced the point, "golf is profitable in 2022."

    If that is the case, there is no reason to be giving non-members cheap rates (half price, better than that, but why argue?). There isn't enough money in full play non-resident passes to make much of a difference. So we are clear, it will come in at around 300k this year, but that would assume members wouldn't fill any of those 12,000 plus tee times which is a nonsensical claim. We simply don't know how many of those tee times might be filled by members paying $35 a round or non-members paying $46 a round. We know in Sun City West, they sell a boatload of them.

    Where i get incensed is when i hear the argument i/we want all outside golf to end. No one has ever said that, at least no one in their right mind. What we have said is outsiders shouldn't get treated better than members. There currently are and 4 of the board members just told us that is perfectly fine with them that.

     
    Last edited: Sep 30, 2022
  5. FYI

    FYI Well-Known Member

    How about dumping the proposed gymnasium in the Mountain View project and give that space to the dog club?
     
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  6. eyesopen

    eyesopen Well-Known Member

    Yes! Benefit to owners and their dogs, the community will have more well trained owners and dog neighbors AND Sun City will have a shiny new unique “summer safe” tool in our MARKETING TOOLBOX!
     
  7. BPearson

    BPearson Well-Known Member

    I gave that some thought as well Tom. The challenge is no matter what one does, barking dogs in the arena they want will come with distracting noise for both pool users and theater goers. I suspect if data really matters, they could show far more dog people than either basketball or volleyball players.
     
  8. eyesopen

    eyesopen Well-Known Member

    Bill,
    The dogs are trained or in training. Minimal barking.
     
  9. BPearson

    BPearson Well-Known Member

    I'm a dog lover, but i currently don't belong to either of the two dog clubs. I have no skin in the game so to speak. When i was on the board i voted for Duffeeland, but once the RCSC owned it, i never went back with my dogs. I'm certainly not opposed to the RCSC owning this indoor arena but i have zero expectations it would be used solely for agility training for dogs. Back when we first moved here i did take the girls to obedience training at Fairway. They were there for a reason, they were by no means obedient. They were noisy and it was distracting.

    I try and listen closely and what i distinctly heard repeated several times was they wanted a place for socialization of their dogs. That's way more than a handful of well trained dogs performing agility training routes. As we have learned along the way, details matter.
     
  10. IndependentCynic

    IndependentCynic Well-Known Member

    You are probably correct Bill -- a small number of people are thinking "Agility Training", and a large number of people are thinking "indoor dog park".

    I don't know how many dogs reside in SC but I bet there're more members taking their dog for a walk every day than members playing a round of golf. One of these activities is all but ignored by the RCSC while the other is overly catered to -- yet both are active retirement activities -- both smack dead center in sweet spot of the RCSC mission --- provide recreation in the best interests of the members. Does anyone really think spending almost nothing to supplement Duffeeland and/or provide the hoped for Agility Training facility is really for the best interests of a whole lot of members? Does anyone think spending a couple million or more to convert golf courses to desert style will be in the best interest of a whole lot of members? Think about it. The BIASES in the culture of the RCSC (eg, everything golf, anti dog) is simply beyond disgusting. And their continuing mantra: "there's no room for another DP and Golf courses have deed restrictions" simply indicates they seemingly don't want to solve the problem. (AKA, You can't remove a deed restriction if you never try.)

    Dog facilities are as much for the enjoyment, health and well being of members as they are for their dogs. How is that any different than the enjoyment, health and well being that golfing members gain on SC golf courses? We don't have the new Vintage Car Club facility at Grand for the benefit of the cars, nor the Model Railroad Club room at Fairway to benefit the trains. Whether members are playing with a 32'duce, a new Santa Fe 2-10-2 engine model, a new Titleist Pro V1 golf ball, or their trusty rescue dog, its for their, the member's, enjoyment. Isn't that the only real reason the RCSC exists! Yet actions by the RCSC remain grossly inequitable for many members.
     
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  11. FYI

    FYI Well-Known Member

    I know that, you know that, and the Articles of Incorporation clearly state that!

    It's the board and management where it all falls apart. They prevent the Members from voting at their own Annual Membership Meeting claiming "Affairs of the Corporation" but when it's time to actually address those "affairs" they fail!

    That's why it's so important to vote for the right people for the board!
     
    Last edited: Oct 3, 2022
  12. BPearson

    BPearson Well-Known Member

    So exactly on point Tom. This election will determine our future; more of the same or, focusing on what the membership wants. What the membership wants used to matter, not so much anymore.

    In my discussion with the general manager the other day, we found another topic we see 100% differently. I mentioned the carry forward and the cash reserves and how it should be being spent on the membership. He was adamant that the reserves weren't large enough. I was stunned. His argument was what if something catastrophic happened? I mentioned it did back in 2006 when the Sun Dial roof collapsed. We didn't have the money to fix it until the insurance came through. It was an ugly time.

    From that came the the creation of the 5 million dollar reserve fund. It now sits at 5.6 million dollars. There's also a 2.5 million cash reserve and i asked how these two funds would not be enough. He said, you now how insurance companies are? I asked if our insurance policies were that bad, and he replied, no we have replacement cost insurance. Okay, that being the case, why are we stock piling cash rather than spending it on clubs/members?

    Now i hear he has said if we don't continue to build reserves and start spending it, he doesn't want to stay. I haven't heard it personally, but if that comment was made, oh well. That decision is not his to make, it is the board's. The previous gm was of the same mind, her argument was a lot of money in the bank helped her sleep good at night. There was one of my top priority's as a board member; not!

    As Emily mentioned, the general manager inherited a lot of problems; money was absolutely not one of them. In fact, most of the problems he has to deal with is because someone was more focused in saving money than investing in the communities needs.

    Who you elect matters. Pay attention, your vote can be the difference in fixing problems or magnifying them.
     
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  13. Linda McIntyre

    Linda McIntyre Well-Known Member

    We have replacement coverage insurance and that's his attitude? I say we have our insurance company rep and our auditors make a presentation to the membership and talk about our risks and cash position. Then we talk again.
     
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  14. BPearson

    BPearson Well-Known Member

    The biggest issue with his comments isn't regarding insurance (that should be a given that we are adequately covered). The difficulty is in understanding the revenue stream we live under in Sun City and the fact it is both a constant and instantly adjustable with an increase. Arguing we have too little money is laughable when considering our history and exactly how much cash we have on hand.

    There's nothing wrong with money in the bank, unless the way it was acquired was by cutting corners and letting the community fall behind from maintaining the high standards and expectations we have all grown to love/enjoy. Too board members only appear to care about if there was an increase in lot assessments, but there is always the other side of the coin. Nothing elaborates that more than the RCSC's failure to keep our technology up to date. We had the money, we had neither the will nor the leadership.

    The money they have shoveled into both PIF and carry forward could have/should have been spent on items we are now considering. The worst part is everything we are looking at will be way more expensive and way more slow to be integrated into the community. As my old friend and fellow board member, Norm Dixon, used to counsel new board members; your job is to spend money wisely."

    Such a simple concept, and so far removed from reality for years now.
     
  15. Linda McIntyre

    Linda McIntyre Well-Known Member

    I totally agree, but he's just trying to give a simple minded rationale that defies all logic. He needs his feet held to the fire. The failure of the previous gm, the Board's that went along to get along, and this gm in failing to take care of critical infrastructure and meet our club's needs, so somebody can feel cozy and sleep at night is nothing short of epic!
     

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