It's A Great Life If You Don't Weaken...

Discussion in 'Sun City General Discussions' started by BPearson, Nov 29, 2022.

  1. BPearson

    BPearson Well-Known Member

    Let's be honest, life in Sun City is pretty darned good. Of course we get the usual ills all of us suffer as we age, but for the most part, we are far removed from the craziness of life outside the walls. Forever and a day, since our founding, the anxieties of our daily existence is often captured in the little things.

    Before we moved here, my folks would mail us the Daily News Sun Newspaper a couple times a week. The best laughs came from the Letters to the Editor as they complained mightily about garage sale signs taped to the whatever pole was in front of their home. Then of course there was the laments of barking dogs or the neighbor who didn't pull their weeds fast enough.

    It was and still is the Sun City way of life. Minutia matters, always has, apparently always will. I'd like to think we've gotten more sophisticated, but have we? The past year, some of us have been focused on what the RCSC board has been doing (or not doing).

    The good news, in part was, they established the Member/Board Exchange meeting in April. The cost to get it was high as the president threatened the board to stop all comments at the board meetings other than on motions. Board members agreed so as to maintain the members having at least one monthly opportunity to speak freely about problems.

    The bad news is, we have been treated to some of the most curious of resolutions to issues raised by the membership. The other day we received notice of the December 5 member exchange. Included in the notice was this lengthy list of problems raised, resolved and closed; at least in their (the boards) minds.

    It's good to be queen for a day (or in this case a year) and just issue proclamations. I could tick off a bunch of items to refute, but why argue "success?" After all, far easier to stamp it solved than actually do something about the topics members presented.

    There was one item in the email that caused several of us to raise an eyebrow. The topic in question was: RCSC annual budget, the issue was: More disclosure, and the suggestion was: Audit should be reported publicly and Members should have input on the budget process 6 months prior. Wow, pretty thorough recommendations. Apparently with good cause as the budget has failed to pass now, twice (or was it only once?). It all runs together after a while.

    Anyway, the really great news was this stamp of approval on the recommendation: 11/16, Completed. Amazingly speedy solution with the motion being made on 11/7 and less than 10 days later it was solved. Here's the rub, because the solution was posted as such: "GM contacted other GMs in the area who do not post audited financials but allow for individual review by request. Also confirmed that the budgetary process at RCSC is in line with other organizations in that the budgets are developed by Management and reviewed by Finance and Budget Committees."

    Here's the problem; several of us follow Sun City West. After all, they are the closest (in structure) age restricted community of our kind, so we like to see how they handle their business. It's abundantly clear our GM didn't bother to talk to them because their budgeting process exactly follows the recommendations made at the November 7 member/board exchange.

    All for now, but when we come back, let's compare apples to elephants and see how they stack up.
     
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  2. Linda McIntyre

    Linda McIntyre Well-Known Member

    Thanks for your eloquent commentary. I especially love the "apples to elephants" comparison. I can't wait!
     
    Last edited: Nov 29, 2022
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  3. FYI

    FYI Well-Known Member

    That all sounds good but it's my understanding that many relevant documents (such as auditors notes) are withheld from the Budget and Finance committee!?!?

    If that's true, it's crazy! How can the B&F committee do its job without all the required information?

    And just because we're told that that's how other similar community's do it, I'm not so sure I can believe anymore what I'm being told! I was recently told that if the proposed budget wasn't approved we may have to close the doors!!!
     
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  4. Linda McIntyre

    Linda McIntyre Well-Known Member

    If the "rumor" about auditors notes withheld are a fact, the Treasuer is derelict in her duties. Audits fall under her responsibility. The audit is the main oversight document and the auditors letter bring to light deficiencies. There are way too many horror stories about audits not being provided to boards.

    And B&F can't properly be expected do their job the way RCSC is structured. Their limited meeting schedule barely qualifies for adequate oversight. If the GM is really talking to his peers he knows at least one of them meet regularly!
     
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  5. BPearson

    BPearson Well-Known Member

    Just a quickie update, when Barbara was fired in 2020, it came after she requested the audit while Jan was on vacation in July and Cook gave her the auditor's notes along with it. That's what triggered her angst and she reached out to other board members anticipating they too would be troubled. They were. so much so, they fired her within weeks.
     
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  6. FYI

    FYI Well-Known Member

    So then what you're saying kinda confirms the fact that the auditor's notes are typically not provided to the F&B committee for their review!
     
  7. Linda McIntyre

    Linda McIntyre Well-Known Member

    It was pretty obvious at the last Exchange that the Board had not even received the last audited financial statement, let alone the auditor's notes or report. They had never had an in-person report, which is standard, at least in an organization with income over $1 million (I think that's the threshold).
     
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  8. Skipper53

    Skipper53 New Member

    What do you know about 9411 Hidden Valley circle? The woman that lives there and there are 2 adult group homes in the 2 houses next to hers. It is very disconcerting. What is Sun City turning into? I have encouraged her to go to member exchange. Esther Albertus.
     
  9. BPearson

    BPearson Well-Known Member

    A little off topic, but i was told just the other day by a Realtor there is a Sun City resident buying properties and remodeling them into become group homes. No idea of the addresses or who the resident is.
     
  10. Linda McIntyre

    Linda McIntyre Well-Known Member

    Aren't there restrictions on operating businesses in residential areas? And they require a license to be legal - if that matters!
     
  11. FYI

    FYI Well-Known Member

    Perhaps Skipper 53 should attend the Member/Board Exchange on Monday and ask the Board about that? Of course they will simply pass that responsibility over to SCHOA!

    I don't understand why some sort of restriction can't be written into our CC&R's but I do agree with Linda that perhaps this does violate the operating of a business? But...does SCHOA even know about this or do they only find out after it's too late from a notice from the county?
     
  12. BPearson

    BPearson Well-Known Member

    The answer is yes, but there is always a but attached to it. Back while serving on the SCHOA board (2006-2008) the attorney they used (and still do), referred to the clause regarding businesses in home having to pass the sight and smell test. Another words, if the business resulted in no disruptions, it was as if it didn't exist. Think of an accountant who gets everything via computer and has no apparent impact on the neighbors. Then think of someone running a retail operation out of their garage with a stream of customers coming and going. Two different scenarios, two different outcomes.

    But wait, it gets worse; now we've got folks opening and running group homes and trying to claim protections under the ADA. Once again, a federal statute bumping up against another federal statute. Three years back, when we started trying to clean up the clarifications, we had a Realtor couple from Sun City West actually show up and argue for the need to allow group homes to be marketed in Sun City. I was stunned as i wondered how he would have liked these group homes next door to him in Sun City West?

    Finally, this is the classic argument for the breakdown in the importance of building a sense of community. There is no cohesive structure, as clubs, organizations and neighbors simply believe they have the right to do whatever. It's the by-product of not caring about community and thinking of everything as a business venture. We are where we are because of what we have done; it's that simple.
     
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  13. FYI

    FYI Well-Known Member

    Perhaps it's time for a new lawyer?
     
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  14. BPearson

    BPearson Well-Known Member

    She's actually quite good. I've always been impressed by her straight forward answers and not sounding like your typical attorney mumbo-jumbo. You know where they tell on on this hand and on that hand. She is really well versed in the law and court cases involving HOA's (it's all she does). Whether we like it or not, precedence is inevitably the determining factor. Sometimes there's a reason to plow forward in spite of precedence. This may be one of those times and is exactly why SCHOA needs to know and be involved with the group homes being opened.
     
  15. FYI

    FYI Well-Known Member

    Oh! My bad! You're saying that SCHOA has a different lawyer than the RCSC?
     
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  16. BPearson

    BPearson Well-Known Member

    And now, back to our regular programming: We started this thread regarding the budgeting process in Sun City. Some of us have related experience with non-profits and a handful of residents see themselves much better versed than others. However, for the vast majority living in Sun City, i would argue we (yes i am including myself) are literally part of the great unwashed. We know almost nothing. We can look at numbers, but realistically, how much do we really know?

    Of course the problem for many of us is, the raw numbers show the RCSC awash in cash. More money than anytime in our history (no one would argue that by the way). Perhaps that was why some of us asked the question: "If you have so much money, why do you need more?" It was a reasonable question and one that should have and could have been answered. However, when the GM was pressed on the matter, he told us point blank; "you can see the budget once it's passed."

    Obviously that didn't sit well. Even members of the budget and finance committee expected more. Even board members were disgruntled as they held off passing the budget without further explanations. Sadly, the situation got worse when a board member asked the GM what would happen on January 1 if he didn't have his budget passed and he told us: "he may have to close down." Huh?

    I won't beat a dead horse here, but let's try and approach this from a more proactive point of view: When i met with the GM for more than an hour he told me a couple of things that registered with me. First he said; we need more money in our reserve account." For those who aren't familiar, we have a reserve fund of 5.5 million dollars for emergencies. Clearly he thinks it should be higher as he proposed shuffling 4.5 million dollars to make it 10 million.

    The second thing he said was: "Sun City West has reserve funding of nearly 50 million dollars with a goal of 60% of their annual revenue." To be totally honest, i barely pay attention to our yearly financials, so following theirs (SCW), has never been on my radar screen. However, when he said that, i started looking. He was right, their reserve funding for capital expenditures is wholly different from ours.

    We've long argued, Sun City West does many things (not everything) better. We know around 2000 when the shit hit the fan and the members were clamoring for a more transparent style of governance, they quickly said, hell yes and embraced Title 33. Everything they do is in front of the membership, they have no closed-door meetings with the exception of executive sessions and only for the topics set by statute. Otherwise members know exactly what is going on and why.

    As i started digging, we found an amazing contrasting style of leadership. For starters, there is a reason their reserve funding is where it is at. They set a clearly articulated budgeting process in their policies, here's what it says: By Policy Fi-04, Section4.1.2.1, the Board established that an acceptable Reserve Fund balance is Between 40 and 100 percent of FFB. (The amount of our Reserve Fund divided by the Fully Funded Balance). I won't bore you with the details that are clearly articulated in the President's article in their monthly newspaper but it calls for excess revenue at the end of the year to be moved to the Reserve Fund.

    In fact, that article went in great length and depth to help readers, (their members), understand why and what was happening. This is the opening from his article and sets the tone of how they function: "October kicked off the important budgeting process, and we will see several iterations of it at meetings of committees, the Board and member forums before final approval by the Governing Board meeting in May 2023. From a Board perspective, we consider these factors when approving the budget presented by the General Manager."

    Damn, a lengthy process (6 months) with membership's involvement; what a novel freaking approach. I guess the good news is our GM was kind of right, their GM started the budget discussion with his preparation but clearly from there, everything shifted to the members and the boards being involved.

    A world of difference.
     
    Last edited: Nov 30, 2022
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  17. Linda McIntyre

    Linda McIntyre Well-Known Member

    Exactly. The only similarity between RCSC and SCW is the GM prepares the budget! SC had a about a month from presentation to B&F to the Board. No idea how much input was received from any standing committees. SCW B&F committee has a meeting scheduled monthly, with exception of summer I believe. What does SC have? Three? His check-off doesn't fly - at least by me.

    Follow-up on audits. A charity (501c3) that receives over 750k in donations and receives federal or state grants is required by the IRS to have an independent audit. Otherwise IRS does not require. States are all over the map about required audits; typically governed through by-laws, such as RCSC. Still begs the question. Where is it? We are entitled to receive it, but ALL board members should have it, as well as members of Finance - falls under responsibility of Treasurer to ensure it's done, so "assume" followup is also Treasurer responsibility?
     
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  18. FYI

    FYI Well-Known Member

    So are you saying that because we (RCSC) are not a charity we are not necessarily required to have an independent audit...unless of course our own Articles of Incorporation or Bylaws require it?


    ARTICLE VI – OFFICERS SECTION 6: TREASURER The Treasurer shall ensure that financial records and cash/investment handling procedures are audited after the close of each fiscal year by a Certified Public Accountant, as selected by the Board. The Treasurer shall make certain that annual income tax returns and other required filings have been filed as required. The Treasurer shall require safeguards to protect assets. Any indebtedness issued in the name of the Corporation shall be signed by the Treasurer or other Board Officer after such indebtedness is approved by a majority vote of the Board (5).
     
    Last edited: Nov 30, 2022
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  19. BPearson

    BPearson Well-Known Member

    Good question Tom and one i have no idea or answers for. It would be curious to know how much detail the budget and finance committee gets/sees regarding the annual audits. Do they see the auditors notes? Exactly how much is made available. If memory serves me. the thrust of Barbara's concerns were the auditor in their summary stated the audit was only an accurate accounting of the information they were provided (which is there more to protect them). I suspect there is nothing wrong with that, other than do we know how much of our financial information is actually supplied to them?

    Back to my remarks about the differences between Sun City and Sun City West. We know from the newspaper article from the SCW president they will be spending the next 6 months discussing their next budget. They aren't on a calendar year basis, for some reason their annual budget year starts in June. The best part of his article is he went into detail on the budget and how and why it works like it does. He cited any number of board policies that had been passed over the years providing direction for coming boards (as it should be done).

    Just out of curiosity, i looked at both the Nov and Dec issues of Sun Views to see if our board president had supplied us a basic working explanation regarding the RCSC's budget process? Damn, nary a peep. Look, i like feel good smarmy stuff as much as the next guy, but those two issues of the Sun Views were absolutely gushing with our accomplishments and why we should all be thankful. Kumbafreakinya.

    I need to take a minute or two to talk about some staggering differences in our two communities. We opened in 1960 and DEVCO left us in 1978, Sun City West started in 1979. We went better than 20 years before passing our PIF, meaning after DEVCO left us, we sat naked with no monies other than rec fees. In Sun City West, every building was newer and better built. DEVCO left there to build Sun City Grand around the turn of the century. Not sure when they started their APF (equivalent to our PIF), but they often followed our lead.

    The huge difference is their replacement costs are massively different. Most of our renovations are complete knockdowns and start over. They on the other had are simply retrofitting existing amenities. In fact, if you check on their website, you will see their capital investment plans out for years in advance. If you look closely, they are doing the upgrades often times from their capital reserves rather than using their APF. The reality is they didn't go 20 years with no revenue stream and buildings as old as ours.

    It's what happens when you have the luxury of repairing rather than replacing. I would just say this about our general manager's decision to add to the reserves; that should be a board action and done so properly, through motions and comments from the membership, not just because it's what he wants or thinks is important.
     
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