Budget $ finance meeting on 8/16/23

Anything exciting occur at the budget $ finance meeting yesterday? I was unable to attend, so am just curious. Thanks much for any info!

 

Another interesting meeting, nothing decided other than they are weighing every option available and then opening the process to the membership for their thoughts. It's all a process.

 

What's making this process so fascinating is literally everything is on the table. We know for the past 17 years, the budget process has been a one person show with virtual wave-by approvals and almost no follow-up or follow-through. What was presented was unlike any budgeting i have ever been involved with or witnessed. Everyone went along with it because the end result was few increases in rates and way too many years where there were no increases whatsoever.

In retrospect, we all should have been asking this one simply question: "How can that possibly be?" I suspect we all were afraid of that answer and even if we had asked, would we have heard what we are hearing now? At the end of the meeting the other day i said this: "The comments made by director Fast and interim general manager Kevin McCurdy were the most straight-forward and transparent statements i had heard in 20 years coming from those in the positions they were in."

How refreshing is that?

 

I recall one board member being disgusted with an "unnecessary" assessment increase yet encouraged people to donate to SCHOA. Will be interesting to see if that stance changes. The rate should have been raised to no less than 536 in January. The rec centers got the short end of the inflation stick.

 

Looking forward to watching the SAC meeting on tape next week. Should be very interesting and informative—- I hope!

 

What will be interesting will be when the SAC finds out what the available dollars will be to rebuild MV!

I'm hoping that someone from the F&B committee, and knowing the proposed upcoming budget, will be on hand along with the architect because at some point these two galaxies will need too collide!

 

Lost my mind mind here. Forgot there is no SAC meeting this week. “Sorry about that”, as agent 86 on Get Smart would say.

 

When we first moved here in 2003, we often referred to those kinds of miscues as being "Sun City ready." Thereby reinforcing the reason we had in fact moved here at the tender age of 55. Want the bad news Tom? It gets worse.

 

Thanks Bill—I think. Though I sometimes enjoy the “chaos” and challenges. That is why I am looking forward to more news from the SAC and B $ F committee(?). The good news is you are alive to experience all life has to offer.

 

Yup.

 

Back on track here, the exciting news about the budget and finance committee is everything is on the table. That's unusual in Sun City because more often than not, we tend to think and act more linear. What i mean by that is, what is, is what will be. I think, based on the two meetings i have attended, that will not be the case. That's a good thing, especially given the challenges we will be facing.

It was fascinating for me to hear a bit of history i didn't know. Director Fast had a list of all the PIF expenditures (it would be great if they would publish/post online), and in the beginning, early 2000's, the first bills they paid from it did not have the current criteria. I forget which center but they paid for a pool patio cover. Under the current criteria, to be covered it need have a 15 year lifespan and at least $300,000. I was surprised to hear that, as were many in the room.

This board clearly gets it. The more people know, the better prepared they are to get involved and take ownership. We've been living and working under the guise that everything is peachy and there was absolutely no reason for members to get involved or even care what was going on. Like i have said, it wasn't something done intentionally or with some sort of malice. We all got on the slow boat to apathy and the further we moved in that direction, the worse it got and the less they told us.

Knowledge truly is power and this board and interim GM aren't hoarding it.

 

The one statement Director Fast made at the last meeting that kinda confused me was when he stated that if the RCSC buys a property they can't resell it?

Now, I suppose that he's referring to the Article of Incorporation that states: "The Corporation shall not convey any substantial part of its assets, or any real property of assessed value for tax purposes exceeding $50,000, without affirmative vote of a majority of its membership entitled to vote thereon."

I know it's tough to get a majority of the Membership to do anything and that's why, in my opinion, when they purchased the restaurant at Grand for $700,000 and were shortly thereafter offered over a million dollars for it, they didn't even try to ask the membership! (It would have been nice if they had asked us our opinion on the purchase in the first place, but that's another issue for another day.)

Anyway, my point being, not that I'm indorsing the purchase of anymore property, but if the need or opportunity should present itself, why can't it be purchased thru the Sun City Property Holdings Corp. who's "Initial Business" is "The Corporation initially intends to engage in the business of real estate."?

Perhaps the big question is, where does the Sun City Property Holdings Corp. get its financing/funding from? I would suppose they have some sort of account from when they sell the homes that were left to the RCSC or acquired thru leans? Must be a stash of dollars somewhere?

 

Perhaps the big question is, where does the Sun City Property Holdings Corp. get its financing/funding from? I would suppose they have some sort of account from when they sell the homes that were left to the RCSC or acquired thru leans? Must be a stash of dollars somewhere?[/QUOTE]

FYI - you raise a good point. I had forgotten about the Holding Company. I did a quick search and found a link regarding the motion for Board approval. It amazes me that a lien is filed after a 60 day delinquency foe failure to pay an assessment. Further, the comment supporting the need for the corporation: how many times foreclosure was necessary. RCSC had a duty to protect its financial interest.

I get that - protecting financial interest. But a holding company seems extreme to me. A lien filing after just 60 days days also seems extreme to me. Payment plans don't work? I thought RCSC used a 3rd party collection service. RCSC would foreclose for a few hundred dollars if the situation presented itself? How is that possible?

Can someone shed light on this topic. Bill Pearson?

 

I think it’s important to recall the real estate market of 2016 when the RCSC formed the Holdings Inc. in June.
Sun City Property Holdings Company – Rationale for Formation
(Excerpt)
The RCSC Board of Directors is not interested in being in the real estate business or acquiring any Sun City AZ property. They are simply interested in upholding their fiduciary duty through due process of collecting all fees due the RCSC whenever possible. Therefore SCPH will simply place a bid to cover all RCSC fees and associated legal costs on a property being foreclosed on by the RCSC. If another bidder bids higher, which is what is expected, then all RCSC fees and associated legal costs will be paid for by the highest bidder and there will be no further action taken by SCPH. If in the unlikely event that no one out bids the SCPH, then SCPH would become the owner of the property. SCPH would then seek to sell the property to cover its costs, to include RCSC fees and associated legal costs.

The cost to the RCSC is about $2,000 for establishing and filing the legal documents to form the corporation and $1,000 to open a checking account, plus about $200 a year for operating costs. This is a very inexpensive insurance policy for the RCSC, as it protects RCSC from any liability associated with such real estate.

View HERE

 

No explanation as too what happens when somebody leaves their home to the RCSC when they pass away!

I would assume that if there was a lien for delinquent assessments then those dollars would go to the RCSC but where do the remaining dollars from the sale of the house go?

 

• A possible conflict with the RCSC’s purpose?
• Who manages Sun City Property Holdings, Inc.?

Wondering if there are no financial reports on the RCSC website for Sun City Property Holdings, Inc., Domestic For-Profit because it is entirely separate from the Not For-Profit RCSC?

• Arizona Corporation Commission lists Sun City Property Holdings, Inc.as Domestic For-Profit, Entity ID 21075799
Search ACC

• Other sources:
SUN CITY PROPERTY HOLDINGS, INC. is an Arizona Domestic For-Profit (Business) Corporation filed on July 14, 2016. The company's filing status is listed as Active and its File Number is 21075799.

The Registered Agent on file for this company is James R Hienton and is located at 5045 N 12th St Ste 110, Phoenix, AZ 85014. The company's mailing address is 10626 W Thunderbird Blvd, Sun City, AZ 85351.

The company has 5 contacts on record. The contacts are Bill Cook from Sun City AZ, Dale Lehrer from Sun City AZ, Dan Schroeder from Sun City AZ, Darla Akins from Sun City AZ, and Sue Wilson from Sun City AZ

 

Typically, if someone has a Will, the estate would first pay the debts of the estate, including all outstanding debts and liens, and the home would be transferred to the Foundation.

If there was no Will, and the gift was done by a simple "transfer on death" on the deed (assuming that's legal in AZ), clear title would still have to be given (all liens paid) and the proceeds would go to the Foundation. It was the original intent that the Foundation would accept gifts to support the facilities, services and educational programs of RCSC - I'm paraphrasing. Somewhere along the line the mission has been narrowed.

In my experience that's how it has worked.

 

I see our old friend Dave has weighed in on the Sun City Advocate's blog regarding the Sun City Property Holding company. The comments section is now 190 plus long and i tire of scrolling to the bottom to respond. For some reason Dave can't register here (as many other can't). I only know that because people invariably contact me for help but i am not the owner of the site, nor do i know who is.

For anyone who has recently logged on, please help those who cannot get connected, please explain to them what you did. If you can explain in layperson's terms what you did, that would be helpful. Thank you.

Now back to Dave (yes he reads this site) and more importantly, the SCPH company. I was kicking about when they formed the for-profit company and to this day, i never understood the reasoning. I suspect there is something there, and if memory serves me, it was along the lines if the RCSC was to lien a house and ultimately end up owning it, the RCSC could not sell it without a vote of the membership as required in our documents.

Typically they wouldn't become the owners. In most cases the lien would need to be satisfied, by the estate (as Linda stated above). Whatever outstanding liens were on the property would have to paid. There's a pecking order in lien placement and when the property is way upside down (typically held by the bank or to the state for back taxes), those coming in after the fact will get whatever is left, or nothing at all.

All of that aside, i think the for-profit arrangement was a pre-emptive effort, rather than a practicable one. I have no idea if they have ever exercised their rights or whether they even file liens. I know SCHOA does and has and sas collected on some of them. To my knowledge neither SCHOA or the RCSC has ever evicted anyone from their home. SCHOA may have taken an action when the home has been long abandoned. One of the things the RCSC argued was they didn't want the organization to be seen as the "bad guys" by evicting members in arrears, but needed to do whatever it took to get the money they were owed when the owners sold or died.

I was stunned to read Dave claim the SCPH company was listed under the Sun City Foundation for accounting purposes. That makes zero sense to me as one is clearly a non-profit organization and the other is a for profit company. I have a better understanding than most of the Sun City Foundation as i spent three years there as president. Admittedly that was before the SCPH company was started so, he may be right. Perhaps the goal was direct whatever revenue collected to them, but that strikes me as illogical because the RCSC has a fiduciary obligation to collect delinquent payments back to themselves, otherwise that missed revenue would be passed on to members making their lot assessment payments.

I stayed away from commenting on this topic, i simply am not well versed enough on what they have or have not done since they were formed. Dave however suggested it was clear that neither Tom, Linda or myself were as well versed on this and he was. Perhaps he is right...perhaps not.

 

Of course!

But it's also surprising how Dave has such little to offer at the F&B committee meetings?

 

Tom and Bill, I'm equally confused about the logic, or even the legality, of the Holding Company "on the books" of RCSC. The holding company is a separate entity. The Foundation finances are also a footnote.
I have my own opinions on this and believe it should be changed.

I agree about RCSC not wanting to being perceived as "the bad guy" but they fail that test in my opinion by filing a property lien after a mere 60 day delinquency. There are other ways to collect assessments without such a drastic move. The Board comments in the link that "eyes open" posted seemed pretty cold and it's just business. There needs to be a review of delinquency, rate of collection, costs of collection and what has happened with the holding company (or its current status). I know - so much to do. Yes, there's a lot to unwind, but this one just seems strange. And, I know Dave can explain!