What is the fairest way to charge the Annual Property Assessment fee?

TDBO

 

Interesting question! I guess that would mean the elimination of two Rec Cards per rooftop as well. One person, one Rec Card!

I don't really comprehend the logic behind this comment? Voting has always been, "One Man, One Vote" so I don't see any advantage to dual members of a single household! Each member has the ability to cast their vote in the manner they choose!

 

It's actually a great question tk26 and one most folks don't want asked. My answer is simple: The fairest way is per person. For those who don't know, in 1960 it was a per household rate, but back then, there was no facilities agreement. Those buying here who didn't want to pay the $40 per unit didn't pay it. In 1961 as Sun City growth exploded it went to a per person $12 fee and they started having buyers sign a facilities agreement where everyone paid, either a single fee or $24 for both of them. It stayed that way for a very long time.

In 1999 when we purchased our first house, it was a per person rate. In 2003, before Jan was hired, it went to a per household and those who bought back then were grandfathered. In 2009, Jan convinced the board to change the grandfathering so that if an owner moved they lost their grandfathered status. It was absolute bullshit and i have a letter from the RCSC to the realtors telling them anyone owning before 2004 would be grandfathered even if they sold.

None of this would be necessary if they had stayed with single person fees. The argument was exactly as tk26 stated, easier to budget. While there is truth in that statement, it was intellectually dishonest because ultimately we were asking the single home buyers after 2003 and those who lost a spouse and moved to subsidize couples. I know the argument; it's just like property taxes. But, is it? Why for all those years Sun City opened and was formulated did they agree to per person fees?

Now the only real question is, how long before the single folks out number the married couples and what will happen once they do?

 

Time for me to think outside the box. You missed a third option: How about both? Currently the one-fee structure involves two different things. A "property' tax part that raises everyone's home value - because we are part of a community that has beautiful rec centers and golf courses. The other part is a 'usage' cost - which pays for maintenance and construction of amenities. Would it be fairer to set up a cost structure to get to the same $13,640,00 by charging one fee for property and up-to-two votes, and an additional fee for per-person usage? X + (X+Y) + (X+2Y) = $13,640,00

 

Yeah, per person is the fairest way to go.

I think the obligations to pay a PIF fee can used some changes as well. I believe if a husband dies and the wife changes the deed she get's stuck paying a PIF fee again?

I may be wrong about that but I have heard Members raise that issue at board meetings in the past.

 

The distinction that’s being overlooked is not the required annual assessment, $525 per lot/rooftop. That’s is a fixed amount, not influenced by owners or residents of the property.
What is unfair is the optional benefit that is associated with the payment.
Currently, a single (one person) owner deeded property upon payment of the $525 assessment, has the choice of registering for one RCSC membership that allows full access to all centers and amenities.
On a dual (two owners) deeded property, upon payment of the same $525 assessment, the benefit allows registering for two full access RCSC Member cards at no additional cost. Think two for the price of one, or buy one get one free…

Sun City is the only 55+ community in the area giving a two for the price of one. All others charge per individual, one membership card/rec access with assessment paid, all others pay for theirs! Sun City unfairly charges single deeded owners.
Reference RCSC comparison with other 55+ assessments, note the data is based on TWO memberships, so RCSC looks very affordable, a bit devious. Look at SCW assessment, it’s $509 compared to our $525, but they don’t have any free rec memberships.
https://suncityaz.org/discover/fees/

RCSC properties are being used by approximately 30% of its members for free!
(About 60% dual residents paying one assessment, getting two memberships. The remaining 40% single owners’s $525 assessment gives them one membership and also subsidizes the free memberships!!)

“In the interest of the members,” every one who has a RCSC membership card should pay!

• The $525 annual assessment is nonnegotiable.
• Only one benefit of registering for an RCSC full access membership card should be offered per paid assessment.
• Any other residents of the household must pay for their RCSC memberships.

**No where in the escrow documents we all sign agreeing to pay the annual assessment does it reveal anything about dual deeded “bonus” benefits.

 

Lots of interesting discussion going on here and the simple reality is the flat roof rate for two cards is loved by couples and hated by singles. And let's be very clear, the rates if we went to a per person would not be doubled for couples. The determining factor obviously would be the number of singles and couples that it would take to generate the same revenue as they are getting now. The bigger problem would be the changes that occur every year with homes selling and losing ones spouse. You do get a fluctuating revenue stream, all be it manageable.

Don't get me started on Pay to Play. That was essentially what it was in 1960 when roughly 40% of the buyers refused to pay the $40. It created a nightmare. I know the proposal was different with a flat rate fee and then you paid a usage fee for anything you did. That idea was floated both in the 80's and 90's and was never well received. Finally on Tom's question; if a spouse dies, the remaining spouse doesn't pay the PIF if she was on the deed. There need be a greater than 50% change on the title.

Virtually any proposed changes to the current structure will cause the proverbial shit storm. In all likelihood it would be with the same lame effort to grandfather existing residents under the lot assessment and the new owners under a per person. Obviously they would have to figure a fair rate for current single owners which would result in a dramatic drop in revenue for the RCSC. On top of that you would need to see what the current facilities agreement says to see how it would be handled.

My suspicion is there is no one with the will to float this kind of a proposal. I think a more realistic idea would be to lock single home owners into whatever the current rate is and start raising the couples rates to create a more equitable arrangement. Even that will cause angst from the couples who like the singles subsidizing them.

 

The annual assessment is not at issue.
The benefit offered is.
There must be geniuses at all the other 55+ communities that only offer one recreation facilities membership per assessment. Somehow they manage their finances;.
Sun City can’t, or just won’t. SMH

 

I think that is an important aspect because votes create the Board and the Board creates the rules.

That seems about right. Except as Bill noted, with additional revenue garnered from "2nd resident", the mandatory $525 could actually go down a little. And maybe dual households wouldn't actually need to pay double??

 

Therein is one of the challenges jeb, we have no idea how many singles there are compared to couples. Funny thing was, 4 years back, i went on the Sun City West website and found that information readily available. Just over 40% by the way. We know couples love the current arrangement and the fight to change it would be nasty and long. As my old friend Ben Roloff said to me over coffee years back, "how fair is it?" The answer was easy, it's not.

I'm not going to dig it out from the archived pages of TOSC but i wrote a treatise to the board when the GM was advocating the minimization of the role of committees (yes, that was the plan). I simply said if in fact it was time to kill committees, then before we ever go there, we need find the new best way to converse/solicit the input from the membership. Talk about a fart in church. Yikes, even the GM shuddered to think about bi-annual town hall meetings where we openly engaged topics like "what's more fair? Lot assessment or per person rec fees? She contended only the angry members would show up. Really?

I learned an important lesson in leaderships over the years, and i took as many courses as humanly possible regarding it. No one person has all the answers. In fact, the smartest leaders were the ones who were willing to listen to what their constituents were saying. Unfortunately that's a rare trait these days and most likely why we have ventured so far astray.

 

Make it fair and simple:

• One optional full benefit membership and voting right per property upon annual assessment payment.
• Secondary person on deed eligible to register and pays for full member access to RCSC facilities, amenities and voting rights. SCW calls theirs Associate Member. No discounts. Every Member pays equally.
• No one should pay more or less than any other member to accept full participation in Sun City’s active 55+ community for just $10 a month ($525). What a great value!!

RCSC annual assessments won’t need to be raised for years when every one pays their fair share.

 

Welcome to TOSC! Turnkey26, please consider sharing your opinion about this or any other RCSC related concern or issue at the monthly Exchange meetings. There’s one this coming Monday:
The monthly Exchange Monday, February 13, 2023 @ 9am Sundial Auditorium
Where Members freely comment, suggest, question and discuss anything related to our RCSC. Board and staff will be present to respond.

The Exchange is only one of two opportunities where members are allowed to speak. The other is at board meetings where members are permitted to signup in advance to speak only to motions on the printed agenda.

Email any time:
BoardofDirectors@suncityaz.org
Bill Cook, GM bcook@suncityaz.org

I encourage you to voice your thoughts, please consider participating!

Unable to attend? Watch taped video on RCSC YouTube channel. https://m.youtube.com/@suncityaz7348

Exchange Discussion Tracking

• Printable PDF of Open Discussion Items + Items Closed since last Member/Board Exchange https://suncityaz.org/wp-content/uploads/2023/02/2-13-23-Member-Board-Exchange-Meeting-Document-Final-for-Posting.pdf
• List of ALL Discussion Items https://suncityaz.org/wp-content/up...ed-for-posting-to-website-all-information.pdf

 

It seems to me that --- there are owners who use multiple amenities almost every day and owners who use few to none in a year, there are properties with any number of names on the deed, including individuals, trusts, LLCs, etc., there are properties with one, two, three or more people residing there, there are single and multiple property owners, some own a property for 20-years or more, others that own for only a year or two. There are those that pay multiple PIFs because they change the names on their deed as they marry/divorce or enter/leave a trust, transition through an estate settlement, or simply move to a different house within SC. Equality is hard to see in all this. Hence, I suspect there is not an RCSC funding solution that everyone would think is "equitable".

The RCSC incurs non-discretionary costs to own/maintain a mix of assets (buildings, land, taxes, legal, some staff, security, and various infrastructure, etc) even if no one ever uses any RCSC amenity, plus discretionary costs related to member usage (some staff, part of the electricity, water, maintenance costs, etc). Some amenities are uber expensive to operate, some less so, and others that cost the RCSC very little. Thus the cost incurred by the RCSC to provide any given member's choice(s) can vary quite widely -- eg, it costs more to provide golf than billiards and billiards cost more to provide than the Readers Club.

IMHO, fairest way would be for each property to be assessed to cover it's share of the RCSC's non-discretionary costs (ie, ndcost/households) with memberships (limited perhaps to 2 + the number of extra bedrooms?) purchasable by the household for a price based on the discretionary costs Let the primary owner work out any cost disparity within the household. This would mean owners who never use the RCSC would pay the lowest cost (and have no privileges) and each member would pay exactly the same in incremental cost and have full privileges. I see pros/cons to allowing owners to buy memberships for their renters, so that requires more thought.

 

The only problem with this comment is the fact that according to your purchase agreement your assessment has nothing to do with your use of the facilities!

 

Exactly, FYI!
An owner must pay the mandatory annual assessment.
An owner is not required to register for RCSC membership unless they choose to have full access to the recreation centers, amenities, attend the annual membership meeting and have RCSC voting privileges.

 

Well I guess the nerves regarding charging non-user, widows, and couples the same/different assessments are still exposed. "Fairness" has never had a particularly loud voice in the RCSC, at least not to my ears, but residents certainly claim their assessment is not "fair" a lot. Thinking outside the box for a more equitable way of funding the RCSC across the community should always be on the table. The assessment pie doesn't change -- it's just how you cut it up. What I proposed was part "mandatory" assessment, per the facilities agreement, and part pay to play fee charged to each member for their rec card. This certainly seems more fair to me -- everyone pays a share, a card holder pays more than a non-card holder, a multiple card household pays more than a single card household. I don't think this violates any documents (but the devil is always in one's interpretation of the wording, so if I'm incorrect I apologize for wasting time/space on the forum).

 

RECREATION CENTERS OF SUN CITY, INC.
FACILITIES AGREEMENT
(Relevant Excerpt)
AGREED FACTS
Pursuant to RCSC’s Restated Articles of Incorporation, Corporate Bylaws, and Board Policies, each and every Owner is obligated to pay assessments and fees imposed when due, whether or not Owners occupy the Property or use RCSC facilities.
RCSC AGREES
To impose an annual property assessment upon said Property and its Owner(s) as established in the RCSC Restated Articles of Incorporation, Corporate Bylaws, and Board Policies to cover the costs of maintaining, operating and developing the common community recreational facilities in Sun City, Arizona.
OWNER(S) AGREE(S):
A. To pay in advance and when due to RCSC: (a) The annual property assessment for said Property regardless of the use or non-use of any recreational facilities, and regardless of whether such Owner or any occupants are qualified under the RCSC Restated Articles of Incorporation, Corporate Bylaws, or Board Policies to use any such facilities;

https://suncityaz.org/wp-content/uploads/2016/12/Facilities-Agreement.pdf

 

Maybe I am missing something here ( which is not unusual) but I don't recall seeing that word "fair" in any documents or paperwork when I was purchasing and closing on my home acquisition. My decision to purchase was NOT made on what was "fair". I made a decision and I continue to stick with it. I believe that some of us are trying to give "fair" a new meaning and are trying to weasel out of the commitment previously made. I am still trying to figure out what got us on this topic to begin with. Doesn't RCSC and the BOD have enough problems to solve without adding a new one.

 

We got here Gary because a poster asked a question which is always of interest to me. I've always understood the way Sun City does it is different than most other communities and is not even close to being fair. It's simply about collecting as much revenue as possible. I love our history because all of this has been battled over before. Those early years saw a mix of failed efforts to be fair; so much so the first year you didn't have to pay anything if you didn't want to use the amenities. That was an abysmal failure, hence the birth of the facilities agreement where everywhere paid when they bought here.

As i have written too many times and too many are clueless to understand; "our history is our path forward." Virtually everything and anything that we are wrestling over has been tried and failed or something very much akin to it. For years RCSC members paid their fees on a per person basis. Now it is a lot assessment and until the day comes when there are more singles than couples no one will want to wrestle with that problem, then they will be faced with the uprising from the singles.

As far as IC comments and those not using anything being charged the least with users/couples being charged the most, it's most likely the "fairest" way to assess, but what would the impact be when users dwindle in number to the non-users? Again, the reference point is 1960/1961 and we saw how trying to be fair worked out. The first rec center, Community Center, was almost sold off because there wasn't enough revenue for the community to maintain it. DEVCO heavily subsidized it to keep it open.

We know the per person works because that is what other senior communities do. We know couples in Sun City love when singles subsidize our yearly assessments and as witnessed from Gary's remarks he doesn't want to see that change. I get it, it doesn't mean i think it is fair or right. I know why they did it; a more consistent revenue stream, but realistically the changes due to death divorce and new homes sales is fairly a constant. The changes that do happen simply means you have to be more precise in your budgeting and accounting practices.

To Gary's point, the board has an enormous amount of issues on their plate. My hopes are they identify 2 or 3 of the priority items and then set goals and path forward to accomplish them this year. Changing how the lot assessment/rec fees are paid isn't one of them. Someday perhaps, just not this year.

 

Sorry tk26 but i cannot think of a more divisive item to put on the boards agenda. It would pit the minority single owners against the married couple owners and become a blood bath. It's simply what we would call a wedge issue in politics; totally polarizing at the exact moment they are trying to get everyone on the same page. You can't build a sense of community by tearing it in two.

Do i think a day may/will come when there is an effort to resolve it? Maybe and why i have always argued we should know the percentage of singles compared to couples. Information has always been power and one of the things we know is how little they have been willing to share with us. If you think i am wrong, watch the Exchange meeting today and see the absence of answers regarding golf and outside play. And to be very clear, i don't for one minute believe they don't know. I know if i were in their shoes and taking the heat for lack of tee times i would drill down and know exactly who was scoring the best tee times.

You can ask anything at the exchanges just don't look for an outpouring of support from couples looking to pay higher fees.