Living in Sun City, AZ is Complex and Unique

I am not talking about residents who own the second home in SC, I am speaking of non-residents who get a visitor punch card pass to use our Rec centers while they are out here vacationing. I just think we could charge more. I think the punch card is too cheap.

 

4,ooo? Where did that figure come from?

 

PIF projects being considered in Sun City
$103M could be spent over 15 years
Posted Wednesday, December 1, 2021 7:00 am
By Rusty Bradshaw Sun City Independent
Former SunCitiesEditor

If Recreation Centers of Sun City officials’ plans come together as envisioned, the corporation will spend more than $103 million on a number of projects through 2035.

RCSC General Manager Bill Cook outlined 13 projects and their estimated costs. The list includes $4 million for the Lakes East/West Golf Course, 10433 W. Talisman Road grounds and maintenance shop that has already begun construction.

Cook’s cost projections include a 2.5% to 3% increase due to inflation over the years. However, board member Rich Hoffer believes that is too low.

“I talk to a lot of financial people daily and nobody is thinking of a 2.5%-3% CPI,” he said. “The consensus is 10%, and that is expected to go up to 13% in 2023.”

Cook said his CPI estimates were made in an attempt to be objective.

The project list also includes $20.5 million for golf course water reduction measures, including irrigation replacement, turf reduction and fixing the leaks at Viewpoiunt Lake.

“ADWR is allowing water for only 90 acres per golf course,” Cook explained. “We have some courses that are over that now.”

The ADWR’s fifth management plan is scheduled to start in 2025, so it will be a tight schedule to complete the water reduction measures, Cook said.

“We proposed an extension, but have not yet heard an answer,” Cook added.

Resident Jean Totten asked if the PIF plan and cost estimates would be available to members.

“This presentation (Nov. 18) was hard to see from the audience,” she said. “We would like to be able to see it in a more readable format.”

She also asked if the Long Range Planning Committee had input on the PIF proposed projects. Cook said the LRP recommended he develop the plan. He also said the project list could be added to the RCSC website for members to access.

The board approved the project list on a first reading, which included an increase in the preservation and improvement fee to $4,000, a $500 jump.

The board was expected to address the motion for a second reading during it’s first December meeting, which was Dec. 6, a week earlier than usual because of the Christmas holidays later in the month. Results of that meeting were not available at press time.

If it passes a second reading, the board will consider it for a third reading in its second December meeting, 9 a.m. Thursday, Dec. 16, in the auditorium at Sundial Recreation Center, 14801 N. 103rd Ave.

In addition to the water reduction measures, the projected PIF projects include Mountain View Center replacement phase I, $24.5 million; Mountain View Center replacement phase II, $2.7 million; Mountain View Center replacement phase 3, $12.3 million; Mountain View pickleball, $9.4 million; Grand Center building 2 (additional club spaces within completed structure), $549,862; Softball clubhouse and lighting, $1 million; Riverview maintenance facility, $2.1 million; North maintenance facility, $2.3 million; Lakes patio and golf cart storage, $1.5 million; New administration building at Lakeview, $4.5 million; and Lakeview Center replacement, $21 million.

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2022 PIF BUDGET & PIF FEE INCREASE APPROVED:
RECREATION CENTERS OF SUN CITY, INC. BOARD MEETING MINUTES
December 16, 2021
(Relevant excerpt)
Unfinished Business Continued: The second item of unfinished business is the approval of the PIF Budget which was read by Secretary Lehrer.

Third Reading Motion #1 by Secretary Lehrer – I move to approve the Preservation and Improvement Fund (PIF) budget with the PIF Fee at $4,000.

Secretary Lehrer spoke on the motion then members who signed up commented on the motion and whether they were for or against the motion.

After all comments were made, roll call vote was taken by Secretary Lehrer and the motion passes 6 to 1 with Director Collins opposed and President Wilson not casting a vote.
https://suncityaz.org/wp-content/uploads/2022/01/2021_12_16-Board-Meeting-Minutes.pdf

 

Great info EO. Now as projects and costs were shown all that is needed would be projected revenue during same time period.
I have seen such a breakdown I believe in a LRP document.(minutes?) Have tried to find that document which showed revenue also, but have not had any luck.
I would like to see a similar updated revenue vrs cost document done and placed front and center on RCSC website. Seems simple to me.

 

Not the blended report you’re suggesting, but this is the PIF budget revenue piece for 2024. The Long Range Committee will likely provide five-year projections in their presentation.

Recreation Centers of Sun City, Inc
BUDGET WORKSHEET
FOR 2024 SUMMARY
PIF RESTRICTED INCOME
Preservation and Improvement Fee
PIF Investment Income
PIF Investment Fees
Capital Reserve Investment Income Capital Reserve Unrealized Gains/ Losses Capital Reserve Investment Fees
Total Restricted Income
VIEW the projections here, page 10 of 33:
https://suncityaz.org/wp-content/up...ivision-Detail-10.17.23-corrected-version.pdf

Treasurer Report January 2024
As of December 31, 2023, PIF had a balance of $33.1 million
At the end of the fourth quarter of 2023, $27,819,348 (cost basis) of the $33.1 million in the restricted Preservation and Improvement Fund has been invested in various FDIC insured treasury bills, mutual funds, and corporate bonds. Year-to-date these investments have produced interest income of $277,040 with management fees of $50,495 for a net income on restricted fund investments of $226,545.
Full Treasurer Reports
https://suncityaz.org/category/treasurer-reports/

Preservation and Improvement Fund (PIF) Budget Summary Spend by Project by Year
Presented November 18, 2021 RCSC Board Meeting
https://suncityaz.org/wp-content/uploads/2023/04/PIF-Budget-SUMMARY-P1-for-Board-Meeting-111821.pdf

 

Just curious Bill, the change went into effect in 2003. The actual Resolution #28 was not signed and entered into the By-Laws until 12/2012. Why the delay, and being that you were a board member in 2012 why are you unable to answer my original question of WHY it was changed? Inquiring minds.

 

Tom...I can tell you at this point that the management team has been spending extraordinary resources preparing all of the underlying documentation for a five year plan. Just one piece has been a complete inventory of every single piece of equipment, every square foot of flooring, rooftops, paving, pool decking, interior and exterior walls to paint, square footage of various outdoor amenities that require replacement or resurface - and the list goes on. That list is several thousand line items. Purchase date, replacement date, end of life date, projected cost, etc. This is but one small piece of the analysis. Add the financial needs determined by the reserve study, factoring in next building project(s), ensuring deferred maintenance is completely funded while current needs are met (requiring staff and money) are just a few parts of the plan (that includes operations, capital spending and PIF.) Taking in to consideration RCSC has no adopted long range plan, nor a real PIF plan (just place holders as I understand the list) and budgeting has been done year-to-year, this project is not something that can just be rolled out. In a perfect world if everything had been up to date, everyone had every piece of information, a small group could just sit in a room for a couple of weeks,⁹ hammer through everything and make decisions, this plan could probably have been weeks ago (although end of year is a hard time to take on large projects in any major corporate office).

With all that, the B&F committee did not work in a vacuum over the summer. Kevin McCurdy made numerous presentations based on the best information we had. Before a final plan can be presented to the Board (or members) for adoption, we all know it has to be supported with great detail. That's what is happening. It's what the residents expect and what they deserve.

The group is on a tight deadline and wants to get this right.

 

Why do I feel that Sun City has been managed by a group of amateurs up until now?

 

Please think of the average Sun City resident when presenting the results of all this work. The average citizen probably will not read pages and pages of budget data and reports. Even if read, they may not understand what they are reading.

Keep it simple, please. Revenue vrs. Costs for 5 years and 15 years should work just fine. And quite frankly, in my opinion, should have been completed before passing the new CIF fee and increase in annual assessment fee. And yes I know more shall be revealed. Hopefully sooner than later.

 

I want to clarify the inventory - they weren't starting from scratch, but making sure that everything is on the list. For insurance purposes a lot of information was already available, but this exercise required everything be reviewed and updated to its current state. And, processes put in place to ensure it stays current.

 

Definitely! And nobody disagrees about getting this done as soon as possible.

 

For those Members of the community who are aware of the recent disclosure of $20M in deferred maintenance; who are aware of the recent changes in the Annual Assessment increase; who are aware of the newly created CIF fee: please have patience. (And why is that amount of Members who are aware so low????)

It has taken many years for the RCSC to get into the shape it is in. It will take longer than a few months to correct previous mistakes. Our new GM has created a team of staff and VOLUNTEERS to work on the 5-year plan. It's a much needed start.

Again, patience, please.

Jean Totten
Chair, Outreach & Communication Committee
Taking One Day at a Time

 

My point was using MV as an example. Discuss it til you wear it out, add $10 or $15 million more to the cost, set a totally unrealistic timeline on completion and kick the can on down the road for the next board to sort out and unravel.

 

If I understand your point, this is why it's critical that a long range plan is adopted as well as a 5 year budget plan (that rolls forward each year). This helps ensure that the RCSC board and management team have an adopted working plan (road map) and we can avoid a lot of this stop, start, redirect. The LRP is always a living document that is under constant review as the community changes and economic factors come in to play, but it doesn't just get created and sit on a shelf to never be looked at again. It goes hand-in-hand with the budget and is used to also assist in forecasting the long term needs, i.e. PIF expenditures. It's hard to imagine why this methodology hasn't been implemented in an organization of this size.

 

Jean I do appreciate your call for patience. Why didn’t the BOD exhibit some patience when pushing through the CIF and the annual lot assessment fee?

 

Agreed. My point was that each new board seemed to try and reinvent the wheel while trying to figure out what to do and end up accomplishing nothing because as you stated, no course had ever been plotted. Any long range planning was conveniently ignored and it was a popularity contest or who screamed the loudest got their way.

 

Bill, I just read my Facilities Agreement and it speaks to property and owner(s) responsibility. But I don’t see where it offers a 2 for 1 deal. That deal is offered in the Bylaws not in the Facilities Agreement. The second paragraph for instance states:

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. If a property has two deeded owners are they not each an owner? Notice the wording says each and every which is a stronger statement than using each owner or every owner. It states each and every owner because we are in the process to purchase and have not become members at the time of signing the contract. If it was worded like the owner(s) were already members the Facilities Agreement would read: each and every member is obligated to pay assessments and fees imposed when due.

Under RCSC AGREES section B it states:
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.

Under Owner(s) Agree(s) section B it states:
The agreements set forth above shall be to the benefit of each and all Owners of said Property, whether they shall have become such before or after the date hereof, and their respective successors. The obligations, agreements, assessment and fees herein are subject to the provisions of the RCSC Articles of Incorporation, Corporate Bylaws, Board Policies and any and all other rules and regulations of the corporation, as amended from time to time. The annual property assessments, special assessments, preservation and improvement fees, capital improvement fees, transfer fees and any and all other assessments or fees charged by the RCSC may be amended by the Board of Directors of RCSC, at any time, pursuant to the Articles of Incorporation, Corporate Bylaws, and Board Policies of the RCSC and the laws of the State of Arizona.

It states that any of the charges can be amended at any time which means, to me, that the Facilities Agreement is saying, there are fees all owners must pay and they can be changed at any time. Granted, this is obviously talking about the rates but why can’t it also mean changing back to per member?

Where did they create the Bylaws that influenced the Facilities Agreement? They created it from the Articles of Incorporation. What does the Articles of Incorporation state?

ARTICLE 8 Section 5

The Bylaws of the Corporation shall prescribe the qualifications of Members and the terms of admission to membership, provided that the voting rights of all Members shall be equal and all Members shall have equal rights and privileges, and be subject to equal responsibilities. Such Bylaws shall also provide the method for determining assessments to be paid by the Members.

It makes sense that the responsibilities mentioned above are the assessment fee because we are subjected to those and the rest are voluntary in nature. Some of our rights include running for the board, attending the annual membership meeting and voting for board members. Our privilege is obviously the use of the recreation centers as the assessment is NOT a Rec Center fee. However, none of these rights and privileges are accessible to any member unless they are a member in good standing and to become a member in good standing they must pay the assessment fee or responsibility that is required by the Article of Incorporation. It must be equally applied to all members (not properties).

Equal is defined in the dictionary as follows:
1. Identical in mathematical value or denotation.
2. Treating each member of a group, class, or society the same.

The last sentence of Article 8 Section 5 states the following:
Bylaws shall also provide the method for determining assessments to be paid by members.

My argument is that the Bylaws of 2003 did not provide a method. They changed the formula. A method change would be, instead of charging once a year, give an opportunity to pay on a monthly basis. That would be a method change as long as it is equally available to all Members. I'm not suggesting the Board makes such a change. I am just giving an example of a method that can be done equally for all members. What happened in 2003 changed the formula, and even if someone argues that it's a method, it is still not equal to all members within in our group, class or society. It does not have equal mathematical value per member.

The Bylaws written in 2003 start out with the sentence:
Annual property assessments are assessed on two methods, as follows.

Knowing that there are two methods, and I would argue that it's truly a formula, when there are two methods or formulas, there is a good chance it's not going be equal for everyone. However, the Bylaws go on to explain how they are NOT going be equal for members. First, they grandfather in those living here before 2003. Grandfathering of people, by its very nature, gives preferential treatment to one group over another group. This alone is in contradiction to equality in the Articles of Incorporation stated above. However, they went a step further and created two more groups when they changed from per individual to per property assessment, because each property does not have an equal number of deeded owners.

Article 8 Section 3 states:
The Directors shall have the power to adopt Bylaws not in conflict with the Articles of Incorporation.

My argument is and always has been, the Bylaws created in 2003 are in total conflict with the Articles of Incorporation and they should have never been written. It's obvious from Article 8 Section 3 that you cannot write Bylaws that conflict with the Articles of Incorporation and this is exactly what happened in 2003.

I've heard many arguments over the years about this very issue. None of them have any standing. One argument is that bringing up this topic would bring division among the married and single members. Again that's not true. Bringing this topic up is not what causes division. The division started in 2003 when someone wrote bylaws and grandfathered people into a two tiered system.

Some have argued there are much more important things for the board to handle. Again, what can be more important than making every member of a community that is owned by its members, equal in the responsibilities they have to pay. Equality should be a number one priority for any board director or any member of a group, class or society.

Everything that's discussed at these meetings generally centers around five things, golf, pickleball, Mountain View, PAC, and softball. These things are value added, but only for a small fraction of the membership. The assessment fee affects 100% of all members of Sun City and I can't think of anything more important than making our members equal, especially when it's a self governed, member owned city. No matter how you slice it, when a single deeded owner subsidizes or otherwise pays twice as much as each member in a two deeded property, it is not equal.

The solution? I don’t have a good answer but a few suggestions.

1. If the facilities agreement allows the RCSC to amend the assessment fee, or any fee, from time to time and at any time and the agreement doesn’t have a 2 for 1 clause in it, they could change it without legal repercussion. (?)
2. If they are not certain how to charge per person they could ask SCW.
3. They could go back and take a 5 year average of how many deeded owners they have and divide what they need for the budget to get a per-person assessment fee. If for instance, there are 30,000 deeded owners over the 5 year average and they need $9,000,000, each deeded owner would pay $300.

To make one last point so that nobody thinks I am crying about the cost of the Assessment Fee. I am not. Quite the opposite. When I have guests and "show" them the amenities Sun City has to offer it becomes a bragging rite that "I have access to all of this for $525"! (now $575 soon to be $$$). Everyone is just blown away by the fitness centers, bowling, swimming pools, pickleball courts and on and on. They think I'm locked into one facility. When I brag that I have use of all of the facilities they have hard time believing. I am not arguing about the cost but about the equality in which the assessment fee is charged. In the past I argued it was not fair but I soon realized fairness has an opinion. Equality does not. A one dollar bill in one hand is equal in value to 4 quarters in the other hand.

However, I know the assessment fee is going to continue climbing with inflation and labor costs. It is upsetting to many members. Both the one deeded owner and the two deeded owner start the complaints when the rates go up but the one deeded owner has one extra thing to complain about. Paying more per member than the two deeded owner. It's time we fix this so that all members are treated equal in responsibility, rights and privileges.

 

THANK YOU turnkey26!!!!! Unfortunately, it will NEVER change back to what the beloved Founders of Sun City wanted! Mr. Pearson. writes novella after novella about returning to the roots of Sun City with one exception. Assessment fees! Of course! He is married, a two deeded owner!! Sun City is not at all what it was supposed to be. I reached out to the Foundation for the 4th time last week to get a question answered. Crickets. Yes Bill, I still feel they do not consider privacy a main priority. You were president once and you sure don't. I know, I know, no one gives a SHIT about me. I know someone who had her home on the market here in Sun City for over 700 days! A family member purchased a home here for a very stupid reason and now sorry about it. Two weeks ago my dogs went nuts at 4am. Someone was on my front porch pacing. The security light went on but did not record. I now have 3 new cameras out there. It is not a good time to move, but I am actively looking with a realtor. I tell folks who ask about moving here exactly how I feel about Sun City. The utterly absurd thing about all this is that people don't care the BOD screwed up over the past 10 to 15 years. Bill weren't you on the board somewhere around 2012? You know what bothers folks about Sun City?? Putting bagged dog crap in their trash cans! Right EO and FYI?