Here is a wrap up of some of the issues the Recreation Centers of Sun City West Governing Board faced this past year, as well as other topics of interest.

Accounting change

Next year’s budget included a semantic accounting change to provide greater transparency of how the reserves are funded. The change is the wording at the bottom of the revenue column from “Excess Operating Cash Inflow/Outflow” to an expense line item “Reserve Fund Allocation.”

Why is this important? Our reserve needs are primarily dictated by our repair and replacement schedule. The reserve fund is the “savings account” we maintain to repair and replace the capital items that keep our facilities bright and shiny (reminder — capital items cost more than $5,000 and have a useful life of five or more years).

Historically, using “Excess Operating Cash Inflow/Outflow” was a reactive strategy to partially fund the reserve. It meant that any leftover operating revenue would “inflow” directly to the reserve fund; conversely, any operating reserve shortfall would “outflow” from the reserves.

Having a reactive strategy leaves too much uncertainty in funding the reserves. We have had years when houses sold well, or golf rounds exceeded expectations and the “inflow” into the reserves was large. As we are seeing this year as houses are moving slower, and as golf rounds are trending down, we need a more dependable revenue stream to keep the reserves where they should be.

Having a dedicated “Reserve Allocation” expense line item makes it easier for members to follow the money and see how their dues proactively provide funding for the reserves, separate from the collection of asset preservation fees. By making this differentiation, RCSCW will have the flexibility to handle years with less than average operating revenues and higher than normal capital needs.

Budget index

The board discussed the use of an index to predict operating capital needs for the upcoming year. This goes hand in hand with separating the operating revenue from the reserve revenue. Using an index, such as the consumer price index, to predict operational revenue needs could take some of the guess work out of the budget process.

An idea to be explored next year will be finding an appropriate index for operational revenue as we look at capital revenue separately. We do this to some extent now, but some members find the budgets to date have been a blur of operation and capital revenues and expenses.

GM OPS

This year the governing board re-instituted general manager operations meetings once per month. These meetings have provided a less formal, more open dialogue between the general manager and governing board directors conducted in a round table format. These meeting are open to members, with prior announced agendas and minutes that are published. These meetings are briefings on a list of topics and serve to set the agendas for workshops and regular meetings.

Water

Water was an important topic again this year, as the Arizona Department of Water Resources finalized its Fifth Management Plan. Effective in 2025, golf courses in the Phoenix Active Management Area will be restricted to 90 acres of irrigated turf. RCSCW has been anticipating these new restrictions and has held up the Grandview irrigation project until the full level of restrictions are realized.

Grandview is the first of our irrigation rebuilds, and roughly 40 acres of out-of-play turf has been removed. The new irrigation system will be an obvious enhancement over the 40-plus-year-old system. The new heads will be programmed much more efficiently to put just the right amount of water where it is needed.

Better irrigation isn’t the only alternative to saving water. New turf varieties are being explored that are more temperature resistant and use less water. But saving water takes money. RCSCW was fortunate enough to receive four grants from the Arizona Department of Tourism to help with turf reduction to the tune of more than $400,000.

As further water restrictions come down from the state and federal governments, our other large trurf sporting surfaces, such as lawn bowling and the softball outfield, may come under pressure to convert to synthetic sport surfaces. While there will be water savings, the conversion costs would be several hundred thousand dollars each. Maybe there will also be grants available for this down the line.

Fencing

Earlier in the year a member alerted RCSCW officials that Maricopa County Flood Control District workers were installing chain-link barriers and gates at the crossings of the flood control canals that run through the community.

The board conducted a meeting with the Maricopa County Ombudsman to discuss our dislike of chanin-link fencing in a community where residents have covenants, conditions and restrictions prohibiting the use of chain-link fencing on their properties. The ombudsman took our concerns back and Maricopa County officials reconsidered. As a result, the chain-link fencing was removed and corral-type fencing was installed and painted.

Next year

Topics to be carried into next fiscal year include expanded video surveillance, credit card fees and abuse of associate member cards.

This year has seen continued golf car thefts and thefts of catalytic converters outside of Membership at the R.H. Johnson Recreation Center campus, 19803 R.H. Johnson Blvd. Video camera surveillance has been installed overlooking the parking lot with signs that warn would-be thieves as to their use. Expansion of video surveillance in other locations will be discussed.

Credit card fees were a big topic discussed during this budget cycle. However, no consensus could be reached as to whether to continue to treat them as a cost of doing business or developing a policy to pass on the cost of using a credit card to the users. Over the years the fees have increased despite negotiations with credit card processors for better rates. As our revenues increase, the fees paid to processors will continue to increase.

The amount paid for credit card fees will become a large portion of our budget. Next year, the Budget and Finance Committee will be doing a deep dive into credit card fees, and avenues of potential mitigation.

The position of the governing board is that RCSCW facilities are paid for by RCSCW cardholders and for the exclusive use of RCSCW cardholders and their guests.

It is alarming that some owner-members are circumventing our procedures to enable non-residents to obtain associate member cards. Our CC&R Department is actively pursuing these cases.

Input

If you have other governing board topics that you would like me to address, please email me at tim.hurley@suncitywest.com.

We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.