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

Discussion in 'Sun City General Discussions' started by turnkey26, Feb 9, 2023.

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

  1. Individual

    10 vote(s)
    71.4%
  2. Rooftop

    4 vote(s)
    28.6%
  1. turnkey26

    turnkey26 Member

    I am not certain where I should post this question so I started a new post. I realize there exists a post If you could ask the RCSC Board of Directors to focus on three things, what would they be? There is also a post The age overlay in layman's terms where the conversation of the Annual Property Assessment was injected. Those posts do not seem like the correct place to bring up this topic and question, so I will ask it here. But first some background.

    I moved here 7 years ago and I have asked and heard the question asked from single, widowed and divorced people. Why do I pay as much in the Annual Property Assessment fee as a married couple or two people on a deed? In other words, why is the Annual Assessment Fee charged per rooftop and not per person? This question has been asked at Board meetings and to Board members every year since I moved here 7 years ago. The answer that really stuck out to me was approximately 5 years ago. Three new residents went to the monthly Board meeting back then and asked the Board President that question. I remember the Board President looked at the person(s) asking the question, as they often do, with a deer in the headlights expression. As usual, when a tough question is asked at these meetings it gets passed on to the General Manager for an answer. It's almost like they are the ones running the show. Jan was the GM at the time and her answer was that it is easier for accounting and budgeting. 27,500 rooftops X $496 = $13,640,000. At the time, I thought, “what about fairness”? When someone is taking the easy way out, they are often taking the lazy way out. I have also come to believe the only way she had the answer that no one else had was because she probably suggested it years ago because it was easy for her and the Board went along with her ‘suggestion’. But what about fairness?

    Over the last 5 years I have asked a question of the deeded owners in Sun City. The question is simple. What is the fairest way to collect Annual Property Assessment fee? We should realize that questions on a survey can be asked in a way that leads to the conclusion it seeks. That was evident from the survey that many of you hopefully completed. If I asked a married couple what they wanted as far as the Annual Property Assessment fee they could have replied that they like it the way it is. They were getting a two for one and the single, divorced and widowed would answer it was not right. However, when fair minded people were asked what they think is fair I received a different answer. In the time that I have lived in Sun City I have met two couples who were married when they moved here and got divorced. Their opinion of the Annual Property Assessment fee changed because now they are the single person paying the same cost that they were as a married couple. I have also meet married couples whose spouse died and now the expense is all on the survivor. Death is inevitable and divorce is unpredictable and many of the fair-minded couples, when given the opportunity to think about what is fair, admitted to me the way the Annual Property Assessment fee is collected should be, everyone pays the same.

    There are some other considerations to think about when it comes to Annual Property Assessment fee. I will start off by stating the following is not equal across all rooftops. However, it stands to reason that two people in a home have two income streams and a single person has one income stream. Again, I realize this is a general statement and does not apply to every home. Also, two people on a deed have twice the access to the rec centers and the umbrella of clubs and activities than does a single person. Again, a general statement that does not apply across the board. However, the opportunity is there for two people to use twice as much of the rec centers activities as a single person although both homes are paying the same cost. I will concede that this does not apply to every situation and every deeded person in Sun City. However, if the cost of the Annual Property Assessment was charged per person it would be equal for everyone and that would be fair.

    So now I ask the survey question and please be respectful in your response.

    What is the fairest way to charge the Annual Property Assessment fee? By rooftop or by individual.
     
    Last edited: Feb 9, 2023
  2. FYI

    FYI Well-Known Member

    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!
     
  3. BPearson

    BPearson Well-Known Member

    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?
     
  4. turnkey26

    turnkey26 Member

    FYI. For $500 two deeded owners under one rooftop have two votes. One each. The single deeded owner for the same $500 has one vote. I realize that it is a one man or woman, one vote. I'm stating that for the same $500 assessment fee one rooftop is getting two votes and one is getting one vote. I believe that if every individual paid the same fee all would be equal. The biggest draw to being a member in good standing ( paying the assessment fee ) is the use of the rec centers, joining the clubs and use of the facilities. We can tell by our last election that the majority of people don't vote or come to the annual membership meeting. So feel free to remove that from the equation if that makes it more logical.
     
  5. turnkey26

    turnkey26 Member

    Bill Pearson. I see the Advocates are doing their own survey on different questions. Could this be a question asked there as well? If so, feel free to post the question there too. I am uncertain how to ask it on that site. Maybe it's the same audience.

    What is the FAIREST way to collect the Annual Property Assessment fee? It would be interesting to see the results. I really believe that if people think with a fairness attitude and not with their wallet it wouldn't require the single people to out number the married couples. Like I said before, what appears like a good situation now, can change with a death or divorce. If everyone paid equally now then the cost wouldn't change if those situations happened later in life.
     
  6. jeb

    jeb Active Member

    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
     
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  7. turnkey26

    turnkey26 Member

    Jeb. Very interesting. Although I did think of a third option I know that it has only been one of two ways since 1960. Individual and rooftop. Rooftop is really messed up in that all rooftops are not equal. A person can be a single deeded owner with a person who lives in the house full time. Granted the live in don't have to use the rec centers or clubs and therefore don't have to pay for the use. As I stated earlier, the rec centers, clubs and activities are the big draw so I would bet that most long term renters pay to use the centers. If that were the case then that household would pay $750, rounded of course. $500 for the deeded owner and $250 for the live in. I almost put in the third option that would consider pay for play. I just don't think that would even be considered by the Board so I left the poll with the two options that been around since 1960. However, if they were to consider such a proposal they wouldn't have it "easy" to figure a budget. In my little venture of asking my neighbors, friends and other members what is the fairest way to charge the assessment fee some have stated it is not fair for them because they choose not to use any of the facilities. Basically the Property Assessment fee is really a rec center fee. If you don't pay it you can't use it. The Covid shutdown taught me that many people believed it was a rec fee and wanted a partial refund while the centers were closed down. Sadly, many realtors are still calling it a yearly rec fee in their paperwork. No wonder it is associated as such.
    I regret putting the last part in about voting, the membership meeting and their association with the assessment fee because that truly wasn't the point of the question. I now want to remove it as I think it clouds the main point.
     
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  8. FYI

    FYI Well-Known Member

    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.
     
  9. eyesopen

    eyesopen Well-Known Member

    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.
     
    Last edited: Feb 9, 2023
  10. BPearson

    BPearson Well-Known Member

    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.
     
  11. eyesopen

    eyesopen Well-Known Member

    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
     
  12. jeb

    jeb Active Member

    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??
     
  13. BPearson

    BPearson Well-Known Member

    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.
     
  14. eyesopen

    eyesopen Well-Known Member

    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.
     
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  15. eyesopen

    eyesopen Well-Known Member

    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
     
    Last edited: Feb 10, 2023
  16. IndependentCynic

    IndependentCynic Active Member

    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.
     
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  17. FYI

    FYI Well-Known Member

    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!
     
  18. eyesopen

    eyesopen Well-Known Member

    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.
     
  19. IndependentCynic

    IndependentCynic Active Member

    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).
     
  20. eyesopen

    eyesopen Well-Known Member

    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
     
    Last edited: Feb 11, 2023
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