Most of you who read these pages know a lot more than many of those that don't. Sometimes it's a blessing, sometimes it may seem like a curse. The old saying "ignorance is bliss," has always been folly in my mind. Grasping exactly where we are and better yet why, is invaluable in making sound decisions. Thank goodness RCSC board members back in 1998/1999 were willing to understand the challenges facing them. We had an amazing amenity package handed to us by DEVCO, but across the board everything we owned was aging. Worse yet, there was virtually no money to do the things that would need to be done. The Articles of Incorporation stated clearly the RCSC could not incur "indebtedness" of more than $750K without a vote of the membership (they still do btw). Their options were limited and any idea they could pass a large one time assessment on any given improvement was assumed dead in the water. An interesting footnote to this discussion is captured in a letter to the editor i have in my files (from my friend Ben), where a Sun City resident in the summer of 1983 made a staggering proposal. His contention was based on the valuation of our amenities, every house sold in Sun City (going forward) should pay a $2500 buy-in fee. Readers thought he was nuts, in reality, he was just ahead of his time. Other communities around the country (especially fast growing municipalities), often passed what is called an "impact fee," Ben actually suggested it while serving on the long range planning committee in 1996 or 1997. Much like our writer in 1983, old-timers on the committee suggested he might have a screw loose. A couple of years later, as our amenities aged and grew worse, board members agreed, a bold step needed to be taken. The Idea of a Preservation and Improvement Fund/ Fee (PIF) was the only solution that made sense. It started low, at $750 and they began collecting it the summer of 1999. I know, we bought our first Sun City house a month after it started. As new buyers, and one that hopefully would spend the rest of our lives in Sun City once we moved here 4 years later (we bought when we were 51), it sounded like a smart idea. In fact, it turned out to be one of, if not the best decision an RCSC board has ever made. It secured our future and provided monies to improve every amenity we owned. Along with the $750 came a couple of requirements. First, the money could only be spent on improvements with a minimum 15 year life span. The second was the improvement had to have a cost of at least $300K. Both still exist today. For those who don't know, Sun City has averaged 2000 homes sales per year for several years now. With the current $4000 PIF payment, that typically would generate 8 million dollars a year. Unfortunately, sales this year are off a bit and this year will generate between 6 and 7 million dollars. Still a lot of money and sales will come back when interest rates drop. A second footnote is, Sun City West just raised their PIF (they have a different name for it) to $5000. With the cost of everything exploding, they are trying to stay ahead of the curve. They also are in a little different situation because most of their remodels aren't tear-downs and rebuilds from scratch. Because their buildings are considerably newer, they invest in expensive yearly capital improvements. They actually fund them with a percentage of their yearly revenue from rec fess (they don't call them lot assessments). It's a logical approach and one that was passed by their boards who didn't want to get to a point where remodels would break the bank. Even with that, they are looking to the future knowing their costs will be going up. Much like our 1999 board of directors, it was forward thinking. Their goal was never to keep their community the cheapest place to live in the country. For many reading this, i suspect you'll be scratching your head asking; "what is this all about?" Fair question and one i cannot answer objectively, at least not yet. I know history matters and i have been hearing rumblings about issues/problems facing us. What i don't know is how bad they are and how deep the challenges run. I do know this: Sun City's history has taught us no matter how difficult things were, the membership and the leadership worked together to solve every problem presented. We never shirked from it, we addressed them openly and worked to find ways to insure Sun City stayed the most unique age restricted community in the nation. Much like in 1999, the board is facing questions and the membership should welcome the opportunity to help find the answers. In that respect, it is both an opportunity and an obligation.
I'm looking forward to the Town Hall Meetings regarding Mountain View once the SAC completes their work and hear what the community thinks. But, not until we learn our financial situation and the anticipated costs of a rebuild will anybody be able to determine what can and can't be built at the Mountain View location. Perhaps we may find the best course of action is to actually wait until the Lakeview Center is remodeled to build a PAC? By that time we will have a better handle on our financial needs regarding the conversion of green space on our golf courses, any increases in minimum wage or additional staff requirements to address work orders, etc. I think we're approaching a critical phase pertaining to the use of our limited available dollars and may require a couple more years to flatten that curve and get back on track?
My understanding of financing is that the annual assessment now at about $525 is used to pay salaries. Also with continuing drought conditions, water for golf courses might be the least of our problems. How about having water for daily living? Closing a couple of golf courses might be a necessity!
The annual property assessment is used to cover the costs of operating and maintaining RCSC’s recreational facilities. Each year the Finance & Budget Committee is presented with an annual budget for the RCSC operations and a recommendation for the amount of the annual property assessment. The committee reviews the recommendation and either accepts it or makes an alternative recommendation to the Board of Directors. The Board, each year in December, approves the annual budget for the following year. They also vote at that time on any proposed increase to the annual property assessment. RCSC Source HERE
“My understanding of financing is that the annual assessment now at about $525 is used to pay salaries.” The annual assessment does not exclusively pay management/staff salaries. It does “cover the costs of operating and maintaining RCSC’s recreational facilities.”
Tom's questions are good as way too few Sun City residents simply don't know how Sun City works. The assumption almost always is, they don't care. In fact, in this weeks Independent, a letter writer to the Editor suggested the board was doing little or nothing because they understood how much apathy there is in the community. Yikes. Let me be abundantly clear; the apathy was manufactured over the past 15 plus years by pushing members away. It wasn't accidental and it wasn't caused by a shift in demographics. It was intentional so the GM and the majority members of the board could just do what they felt was right. Nope, not saying it was nasty or nefarious, it was just short-sighted and wrong headed. Oddly enough, the new board is taking the RCSC and the membership in a whole new direction. They are encouraging participation. They are expanding their communication. They want knowledgeable members. Without it, we are back to letting a handful of people decide what is right or best for the majority. When it comes to the finances and the budgeting process, it's been a black hole where one person controlled dollars in and dollars out. If you read President Fimmel's column in the Sun View or the Independent, you also read a truly brilliant commentary by the interim general manager explaining how the new process will work. Enlightening on so many levels. It will no longer be a one-person show and the RCSC will make every effort in helping members understand what is happening and why. Goodness gracious, you don't have any idea how refreshing that concept is to me.
