What’s the Long Range Planning Committee working on? A LOT! May 14, 2024 Meeting Summary Four Pages https://suncityaz.org/wp-content/up...ng-Range-Planning-Committee-Summary-final.pdf
Scary isn't it that our non-engaged community is expecting a professional Long Range Plan and this is the group tasked to provide it..... Granted it's been a number of years since I worked on these but back in the dark ages the simplistic foundation of the process was the amount of funds available in future years, then the reoccurring expenses, then possible negative issues requiring unexpected expenditures = ESTIMATED FUNDS AVAILABLE TO SPEND, then determine the goals of the corporation (community needs and wants in this case) and voilà, the start of the plan. This group doesn't know the future funds available, the reoccurring expenses and is already planning for another Recreation Center remodel with Mountain View still in limbo. I've said it before, we need to enlist professional help to steer our not so little community because the cliques and insiders on Boards and Commitees are first of all not qualified and second only working on their own wants and needs.
Reoccurring expenses are part of the budgeting process for day to day operations. PIF and CIF contributions are for Capital expenses (CIF) and PIF is for Capital projects. The reserve study and the subsequent 5 year plan for Capital expenses while a similar plan is being done for Capital projects. The revenue stream for PiF is based on home sales per year over the several years. The CIF revenue, while not having a similar track record for the future based on the PIF model. While these are not perfect, it does give us an idea of all future costs. A rhetorical question, why is it that every time some sort of problem pops up there is a call to bring in an expert or some other consultant. These people cost money and it comes out of operating funds (assessments) but everybody whines when the fees increase. You can’t have it both ways. BTW! My rudimentary math tells me it will cost about $1.8M per month just to “keep the lights on.” I could be wrong but this is just a semi educated guess.
By having a plan developed, members will hopefully better understand the need for fee increases. In my mind this all should have been done before the recent increases. More will hopefully be revealed. Sooner than later I hope! I do appreciate the simplistic process for budgeting you mentioned. An actuary would be able to provide a decent number for expected revenue and recurring expenses.
Would you be willing to share a guess as to expected monthly revenue which is used to pay to keep the lights on? I would love to hear that RCSC hired an actuary to study the budget situation and make some recommendations. Wonder what the actual cost of that would be?
This Responding to Tom T., “ In my mind this all should have been done before the recent increases.” Finance, Budget & Audit Committee did: 2024 Preliminary Budget Presentation – 10/17/2023 Regarding fee increase, see: Key Assumptions - Revenue (page 4) Annual Assessment 2023 (actual) $525 2024 (budget) $575 Change 9.5% https://suncityaz.org/wp-content/uploads/2023/10/RCSC-2024-Budget-Presentation-10.17.23-distr.pdf We’ll have information about 2025 coming this fall.
Although I graduated from university without taking statistics ( I would still be there trying to pass the class), I believe my career experience would be just as good as actuaries. I spent a career in a form of insurance and I know that they couldn’t predict the future any better than myself. Both take a large net over economic conditions. I would like to explain more in depth my guesstimate but I don’t want to take away from the formal presentation.
While I have seen and fiddled with a 5 year financial model prepared by RCSC personnel, it was under the old organization structure. The key variables are inflation and asset repair, maintenance and replacement (i.e., The Reserve study). My observation is everyone feels the need to express an opinion about some aspect of the model but they quickly lose sight of the big picture.
Thanks for info eo. I am more speaking to a long range (10-15 years at least) plan(revenues vrs. expenses). And a professional actuary would best be able to help us with the plan. More will be revealed— or so I keep hearing? But certainly a big thank you to all working on stuff!
“By having a plan developed, members will hopefully better understand the need for fee increases. In my mind this all should have been done before the recent increases. More will hopefully be revealed. Sooner than later I hope! I do appreciate the simplistic process for budgeting you mentioned. An actuary would be able to provide a decent number for expected revenue and recurring expenses.” Tom T I think the Budget and Finance Committee did an excellent job providing what you thought an actuary was needed for the 2024 Budget presentation. Just my opinion.
John, points well taken (we agree! I want this moment bronzed). What we have to do is forget the old way of thinking. We have a professional on staff whose sole job is the reserve study, tweaking and constantly updating. As for the 5 year plan, we did not want to release anything until the reserve study is completed, which I understand is almost done. Then comes the 5 year plan, then the budget and then to Tom’s concern, a ten and fifteen year plan. Also on the drawing board is a 20 and 30 year plan. Management, Budget & Finance and Long Range Planning are working together to make all this happen. It is a monumental task and patience from the members would really help.
I do agree with getting plan done before fee increases. Maybe next time. An actuary only suggested for 10 to 30 year planning. That is what they do.
Geoffry, Yes, we agree! For the first time in a long time the budget is actually being done analytically and not by the seat of the pants!!!! I am a huge proponent of this giant step forward and will contribute behind the scenes in any way I can. Kudos to Karen and the committee members for carrying on with this important work. I was worried it would drop by the wayside when I fled the scene... John Fast
