Very, Very Interesting!

Discussion in 'Sun City General Discussions' started by BPearson, Oct 4, 2021.

  1. BPearson

    BPearson Well-Known Member

    For anyone who watched the Sept 30 board meeting, my first trip to the mic was for one reason and one reason only. I asked the board if they understood whether they knew golf must be self-sustaining? They said yes. There wasn't any hesitation or hold back...nor should there be. It was one of two conditions the board took ownership of the golf courses in 1977.

    The first was they needed to stay golf courses, for at least 25 years, with renewal periods after that. The second was as i pointed out at the board meeting, the members living here needed to know they wouldn't become "money pits." They were not to be subsidized by membership dues. You may not like that answer if you are a golfer, but those were the terms they accepted the golf courses under.

    While serving on the board i asked the gm where those documents were and she told me spread around various places, stored in boxes and not quickly able to put their hands on them. I suggested we should get them centrally located and easily accessible. She said no; i asked why not. "Plausible deniability." I was stunned and never forgot that comment.

    Now i hear a rumor. I haven't seen it yet, but there are rumblings they may be taking a new tactic, claiming that isn't the case any more with golf. I will await to see if i can confirm that, but if that is the case, we have a very serious problem.

    Stay tuned.
     
  2. Poison_Ivy

    Poison_Ivy Member

    I do not understand the GM's power. If you as a board member asked for those documents to be centralized and she flat out said NO, well then right there she's not acting as a responsible employee of RCSC. She reports to the board, right? She should have been called on the carpet. There is still time, those documents need to be found now and open for all members to read.
     
    eyesopen and Cheri Marchio like this.
  3. SCR

    SCR Active Member

    I doubt seriously if those documents will ever be found.

    Question - how are important documents like those kept? In paper form, in electronic form, or both?
    All corporate documents are required to be saved in some form. 21st century procedures would be to make PDF’s of all documents in duplicate with each copy stored in a different place.
     
    BPearson likes this.
  4. SCR

    SCR Active Member

    There is of course the possibility that another copy of those documents exist.

    if there is another copy it would not be in The possession of the RCSC.

    Want to guess where that copy might be?
     
  5. Say What

    Say What Active Member

    There lies the problem. Why has every board member bowed down to the GM. BILL, you have a chance to fix what happened and that's by getting back on the board and make it right for decades to come!!!!!!!!!
     
  6. BPearson

    BPearson Well-Known Member

    I saw this coming a year ago when the question was asked of Chris H why golf was kept open and everything else was closed. He looked into the camera and unabashedly claimed if they closed golf courses the RCSC would had to pass on the lost revenue to the card holders and increase the annual assessment. I screamed at the screen in my office, “you can’t.”

    Stop and think about this: They fired Karen for a conflict of interest. It was bull. Now think about every golfer that served on the board and benefited because golf rates weren’t raised when they should have been. That is exactly the definition of conflict of interest. Of course, this is merely speculation based on my part and what i remember what was spent and what was documented. The only way to know would be a forensic audit but what we now know is the board and management are quite content to wrap themselves in a cloak of righteousness.

    I had high hopes for the new gm. Still waiting to see what i was hopeful about and for. We'll see.
     
  7. SCR

    SCR Active Member

    Forget your high hopes for the incoming GM. He was a student of the current GM and will most likely be guided by her.

    I'll say again - there is probably another copy of the documents you speak of. They are NOT in the RCSC's possession.

    Without those documents the ultimate disposition of the golf courses will be up to the MEMBERS of Sun City - not the BOD - Not the GM - Not the incoming GM.

    If golf courses become contested, I'd bet that the documents will somehow be found.
     
  8. FYI

    FYI Well-Known Member

    STATE STATUTE 42-13154. Covenant not to convert golf course to another use; violation; penalty

    A. As a condition for valuation under this article, the owner of a golf course shall record a deed restriction with the county recorder and file a copy of the restriction with the county assessor, restricting the property to use as a golf course for at least ten years. The deed restriction must be refiled as necessary to ensure that the deed restriction always applies for at least ten years.

    B. The valuation of a golf course under this section constitutes a covenant between the county assessor and the owner of the golf course that the use of the property will remain unchanged for the duration of the deed restriction.

    C. The assessor shall maintain a record of the value of the property determined under this article and the value of the property if it had not been determined under this article. The assessor shall maintain the record for at least ten years for use in computing the penalty under subsection D if the property is converted to a different use in violation of the covenant.

    D. If the property is converted to a different use in violation of the covenant, the assessor shall add to the tax levied against the property on the next tax roll a penalty equal to the difference between the total amount of property taxes that would have been levied on the property for the preceding ten years or the period of time the property was valued under this section, whichever period is shorter, if the property had not been valued under this section and the property taxes that were actually paid for the same period. The penalty due under this subsection shall be paid before completion of the next property tax roll and is enforceable and subject to the same penalties and interest as if the penalty were a tax levied against the property. END_STATUTE
     
  9. FYI

    FYI Well-Known Member

    Section 42-13152 - Computing valuation of golf courses
    A. In recognition of the importance of the open space and economic benefits of golf courses, county assessors shall value all golf courses uniformly based on guidelines prescribed by the department.
    B. Subject to section 42-13154, values shall be made on the assumption that no other property use is possible.
    C. Land shall be valued at five hundred dollars per acre.
    D. The improvement value of the golf course is established by the department's 1988 per hole cost, as prescribed in subsection E of this section for the grade of the golf course as described in the department's assessment practices manual for golf course assessment effective January 1, 1986. The per hole cost shall be multiplied by the number of holes included. The value shall be adjusted to reflect the application of economic obsolescence, which shall be uniformly determined as follows:
    1. Determine the number of actual rounds of golf played during the most recent twelve months ending on July 31.
    2. Multiply the rounds played during the peak month by twelve to determine the number of rounds of play the course would have had under optimum conditions.
    3. Divide the actual number of rounds played during the year by the optimum rounds played.
    4. The quotient is the relationship between the actual rounds played and projected play under optimum conditions or the per cent good after the economic obsolescence has been deducted.
    5. Apply the obsolescence by multiplying the total per hole cost by the per cent good.
    6. The obsolescence factors developed by applying the procedures prescribed by paragraphs 1 through 5 shall be applied to the data submitted to the county assessor annually by golf course owners or managers on a form prescribed by the department. The assessor shall mail the form to the last known mailing address of each golf course owner or manager on or before August 1 of each year. The form shall reflect the number of rounds played by month for the most recent twelve months ending on July 31. The form shall be returned to the county assessor not later than September 30 to receive the economic obsolescence adjustment.
    7. Add the replacement cost new less the depreciation for the structures and additional items to determine the full cash value of the facility improvements.
    8. To determine the full cash value of the golf course, add the per acre value as reflected in this section, the valuation of the golf course improvements, adjusted for obsolescence pursuant to paragraphs 1 through 6, and the valuation of the structures and additional items pursuant to paragraph 7.
    E. For tax year 1995, the 1988 per hole improvement cost described in subsection D of this section shall be used to value golf courses. In each subsequent tax year the per hole improvement costs shall be adjusted using the change in the GDP price deflator as defined in section 41-563. For purposes of this subsection, the per hole improvement cost values include landscaping, bridges, lakes, lake liners, practice ranges, irrigation systems, paths, golf greens and tees.

    A.R.S. § 42-13152
     
  10. BPearson

    BPearson Well-Known Member

    Dang guys, didn't i mention the Museum has copies of the deed restrictions for each of the courses in our files and also the Articles of Incorporation of Sun City Golf Courses, INC.

    As a subset to this, you can also find the recorded documents on the state's website. I would strongly encourage the RCSC to start digging those documents out of storage and share them with board members.
     
  11. FYI

    FYI Well-Known Member

    Do you have a direct link?

    I'm just curious whether or not the RCSC renews those covenants every 10 years as is required?
     
  12. BPearson

    BPearson Well-Known Member

    I don't, but i think you can search the states records and can get that answered. I believe the initial time frame was 25 years with a 10 year renewal after that.
     
  13. OneDayAtATime

    OneDayAtATime Active Member

    Does the Museum also have copies of the ORIGINAL Bylaws? Articles of Incorporation?
     
  14. BPearson

    BPearson Well-Known Member

    I haven't come across them yet, i will keep looking.
     
  15. CMartinez

    CMartinez Well-Known Member

    Not trying to bore anyone with additional tenets of law, but I found a copy of a lawsuit, filed by the RCSC, questioning their tax vaulation status. The origninal documents, which are apparently no longer available, were used to defend a tax case in Arizona. The section I find most interesting is this: "The deed restrictions limit the land to recreational use for the benefit of Sun City homeowners and in accordance with Rec Centers' original by-laws."
    I know the golf courses are now open to anyone who wants to play and pay. Nowhere do I find any kind of another legal ruling reflecting the availablity of the courses to be open to outside play.

    The next statement is more intriguing to me , as it states the RCSC may sell additional MEMBERSHIPS in order to meet a financial obligation. The RCSC never has offered to sell additional memberships nor has it ever defined that outside play is deemed as a membership simply be paying a daily fee. " If the sale of additional memberships to individuals outside of Sun City would enable Rec Centers to run more efficiently, arguably Rec Centers could open its membership to individuals outside of Sun City. Without the benefit of the original by-laws in this record, we have no way to determine if the right of use is indeed exclusive."

    So, the open play which is supposed to support the golf courses appears to have been ruled as "additional memberships". I have looked for a revised or updated argument to this case and don't find one.

    So was the GM correct in opening the golf courses for open play when others are not paying for an RCSC membership? The entire case can be found at "https://law.justia.com/cases/arizona/supreme-court/1989/cv-87-0087-pr-2.html". I don't know how to embed a link on TOSC, but here is the copy of the Arizona Supreme Court ruling on the taxation of the property, but the ruling specifically mentions the co
     
  16. CMartinez

    CMartinez Well-Known Member

    I also found an old copy of the cardholder guide, edited as of 07/2016. It specifically states "Renewal of annual golf permits/passes can be done prior to the expiration date, however, if the card is due to expire after such time that there is an increase in the fee for an annual golf permit/pass, the renewal will be done at the new increased rate or at an earlier date. If annual property assessments are not current, annual golf permits/passes will not be honored."

    I see now it is the practice to sell Yearly golf passes to non-residents. Does this indeed violate the original intent of the deed restriction originally in place?

    http://suncityariz.com/wp-content/uploads/2016/06/2016-07-CHG-Final.pdf
     
  17. BPearson

    BPearson Well-Known Member

    There is a volume of history regarding use of the amenities by outsiders. It runs the gamut and it started from the very beginning. The IRS watched closely and the intention was for the community to be the primary beneficiary of the services provided by DEVCO. At one point they got stung with a tax that was ludicrous and after a time some sort of agreement was reached. Over the years it has evolved to where it stands today.

    I'm no expert on this, never really cared about it, but i did follow the Sun City West saga this past year. Seems the new gm started looking at how things were being done and the attorneys they use told him they were exceeding the IRS limits for outside utilization. If memory serves me, no more than 15% of their revenue can come from outside the community, It's one of the reasons they closed the store selling products made by clubs and why they had to tighten down clubs that were allowing outsiders, some dance clubs and card clubs, that were getting revenue that exceeded the 15% limits.

    They've got it pretty well resolved but it came with some angst. Losing the tax status for either community would cripple us and so it is always a concern. Just as a footnote, Webb opened the golf courses to outside play to help sell homes which caused some anger with golfers living here. So to answer your question Carole, outside play is allowed but there are limits for IRS purposes.
     

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