Arizona House Bill 2374 Sponsored by Your House Representative Kevin Payne is DEAD

H.B. 2374 stalled in the Arizona Senate Government Committee and died without a senate vote thanks to those presented the opposition to 2374.

My opinion :

Sun City General Manager, the Board of Directors, and House Representative Kevin Payne did their best to mislead and bypass residents. Recreation Management went extremely low to alarm unknowing residents that the measure was protecting the +55 age charter of Sun City, and residents would suffer a fate similar to that Youngtown if 2374 was not passed. This is disingenuous and sickening.

Did Sun City Management employ a Lobbyist to expedite 2374 through the legislature? If so, there is little doubt they paid 10's of thousands of dollars for services that would deny you the transparency required under the Arizona Planned Communities Act. Ironically, a request for information to Sun City has been initiated but no response has been received.

If you wish an alternate view of the history back over ten years, Google the Anne Report Sun City, Az and then click on the "What's Happening". The information goes back over ten years. Take a look with an open mind and decide for yourself.

 

Hey Don, welcome to the site. Full disclosure, Don and i have talked in the past couple of weeks, as have ARS and I. For anyone who has followed this site, you know how i feel about Title 33, had we embraced it years ago, the lawsuit would have been dead in the water (IMHO). Had we followed it back when i was on the board, the community would be in a wholly different position than it is today. There would not have been the opportunity to shovel so much money into golf without doing it in a much more open setting. We would have legitimate discourse by the community to have purchased the Lakes Club.

That said, i part company with ARS because she has constantly railed against the PIF. She wants Sun City to have "unsurpassed amenities," but doesn't see the PIF as "fair." She's wrong. It is the fairest way to get the job done and is identical to how DEVCO built the amenities and then gave them back to us. Every house had a dollar figure built into the cost to pay for the rec centers, buyers just never saw it. The golf courses, with the premium added for golf course lots, was used to pay for them. It was genius; they simply gave us back what we paid for at the point of purchase.

The idea that residents would pass yearly assessments on top of rec fees for improvements is nonsense. I've had this argument several times in the last couple of weeks as those in favor of T33 asked me to testify. Sorry but i never saw this legislation going anywhere and i still find the lawsuit offensive to those of us living here. Not because i am opposed to T33, but any effort to undo the PIF is absolute foolishness. We live and die with it. The more effective we are in injecting the community into the decision making process, the better off we will be.

 

Not to start an argument, but it's pretty darn hard to argue the PIF is fair and equable. EG, I have an elderly friend who bought before there was a PIF; I bought when the PIF was in the thousands. Thus, I'm paying for things my friend isn't.

That said, of the alternatives I know being used in other communities -- special assessments, uplift on rent/assessment (held in reserve), etc., none are truly fair/equable. EG, if I own here for 10-years, whether I pay $3500 up front as a PIF, pay an additional $350 annually, or in several assessments, the cost is equal to me. But if I have to sell in two years they aren't fair or equable to me.

So, life isn't fair -- hardly much of a surprise.

 

Nothing wrong with a healthy argument IC. Fair is always in the eyes of the beholder.

The problem inevitably comes back to how you fund any improvements that need be done. The simple reality was the amenities by the end of the century were getting old and tired. Passing assessments would have been difficult at best and impossible at worst. The 16.2 million dollars for Fairway with 27,000 rooftops would have been $600 per household. That's just one project, though it was spread over several years. The question is, would people have voted to pay it?

The argument about fairness always boils down to what is the best way to raise the kind of money we need to keep Sun City relevant. You know we have a fair number of seniors living in Sun City who live on the edge of just getting by. Any assessments would push them over the brink. That would be tragic. On the other hand, the PIF was created so people would know up front they were going to pay it if they decided to buy here. A few years ago there was a poster looking in Sun City and elected to buy in Festival because there was no PIF. He chronicled his search over nearly two years and factored in the PIF to his decision.

The reality is those newer, nicer communities come with higher home prices and yearly rec fees three and four times higher than ours. Couple that with property taxes two and three times higher than ours and the PIF costs are quickly recovered. And, as the community rebuilds with PIF dollars, our property values are enhanced by the improvements. I will use our situation as a good example. we paid a $750 PIF in 1999 right after it passed. In 2016 we bought a second house with plans to move into it in the coming years. We paid the $3000 PIF, lost our grandfathered status and didn't get a refund because we didn't sell within a year of buying the second property. We knew the rules going in and accepted them for what they were.

Every new buyer should know about the PIF before as the look at the community. They can elect not to buy and move on or recognize they are investing in their future. It would have been way better had the RCSC started the PIF the day DEVCO left in 1978, but no one had that kind of foresight. Too bad, it would have made it more fair and our assets would have been improved beginning in the early 80's. In the end, the board made a tough decision that paved the way for us to improve the community without putting those who had outlived their resources in harms way.

The bigger issue for me is how the community has been shoved aside as the management and the board made those decisions on what to spend the 70 million plus dollars on from the PIF through 2020.

 

What I remember (and admittedly my memory isn't what it used to be) is that there was a fair number of vocal members back when the PIF was being decided upon as the methodology to fund major repair/replace of RCSC facilities. As you said, the PIF was the least objectionable (for the reasons you've presented) to the members who were dead set against paying increased annual assessments or a special assessment -- mostly because someone else was paying (ie, new residents). Somehow they didn't see that the seller would often have to discount their sell price to cover the buyers PIF. After enacted, PIF support soured for many as the GM tried to charge PIFs to members moving within SC, or converting to a trust, or adding a family member to the deed.

Many of our residents weren't born with a golden spoon, nor did they retire with one -- their PIF contribution is part of their mortgage and it's costing them money every month. My "eye of the beholder" belief is the PIF is a mess that will hunt us forever. My senses have always believed the proper way to fund would have been by adding a small increase in the annual assessment on day one of the RCSC's existence. This would have created the reserves needed, over the lifetime of a facility, to pay for its eventual repair/replace. Had that been done when DW deeded the facilities to the RCSC we wouldn't be having these discussions. Too bad DW didn't push that to the early BODs. It would be nearly impossible to transition to that now, but IMO it's the only equitable mechanism since owners would contribute based on their duration of ownership (hence their usage of the facilities) rather than some arbitrary up front charge which penalizes short term owners over long term ones, neglects effects of inflation, whims of Boards, etc. It has the added benefit of increasing member activism since, historically, any increase in the member assessment has triggered a chicken little landslide of criticism. We don't need the chicken little stuff, but we do need member involvement to moderate the whims of a management who seemingly think they can just raise the PIF to fund anything they want. My recollection, for example, doesn't remember that the PIF, as originally enacted, could be used for anything related to the purchase and initial renovation of the GRAND AVE site.

 

Hey IC, fair points. And, it’s exactly why i beg people to try and get their heads around Sun City’s history. We were the first of its kind and there were dozens of mistakes made. There was no primer on Age Restricted Communities For Dummies back in those days. It was all trial and error.

Woulda/shoulda/coulda will always be argued. Realistically when the PIF was passed, it was the only viable alternative that would have generated enough money to get the job done. As we’ve talked before, when the management moved away from community involvement, they changed the dynamic from how we were built.

As a community, we need always maintain our roots. The tenets we were built under made us what we are today and leaving them behind makes us leesor for that.