The fact that Recreation Centers of Sun City West is operated in a less than efficient manner has been well documented by many.
Most concerns relate to poor use of the vast financial resources available to RCSCW, and management’s appetite for continuing increases in annual fees rather than looking for ways to minimize annual costs by increasing efficiency in operations. What can be done to correct these and other problems in RCSCW?
My solution to these problems is implementation of the time-tested principals of “lean management.”
Lean management benefits include development of processes and services that deliver value from the customer’s perspective, elimination of waste in procedures (things that don’t bring value to the end product or service) and continuous improvement (of processes and end results).
Several examples of processes that can be improved that come to mind include property transfers within Sun City West should not require repayment of annual memberships fees and asset preservation fees, only to be refunded later. This procedure is contrary to standard business practice of proration of such assessments in escrow. Adding insult to injury, when membership fees are refunded, a $27 fee is assessed by RCSCW to return the members own money!
Manual counts at clubs should be replaced with membership card sign in; and hourly manual counts should be stopped as they provide no added value to use information that can otherwise be determined by computer analysis of sign-ins. I understand that this is under review. However, there is no excuse for not implementing this cost saving technology immediately.
The foregoing are but a few examples of processes that add no value to the resident or to RCSCW and represent highly inefficient use of labor. These policies can and should be changed immediately, to reduce costs and pointless paperwork.
The reserve fund balance should be capped. The reserve fund balance is nearly $28.8 million, which is well over a year of all operational expenses for RCSCW, which are a bit more than $22 million. The preservation and capital reserve funds for Recreation Centers of Sun City are about the same for a much larger community with many more facilities than RCSCW. As of June 2021 the total Sun City Grand reserve account was a bit more than $21 million with an additional $4.7 million in reserve for their CARE program.
Sun City West is completely built out and has a very comprehensive asset maintenance and replacement program. I am pleased to see how well this is done — this is a good example of management of our community resources. These management practices assure that long lived assets, such as buildings, have an indefinite expected life span. Repair or replacements of building systems (HVAC, electrical, pool and hot tub, pavement, roofs, vehicles etc.) is monitored and planned in advance of failure, so surprise problems are rare. Further, RCSCW is insured against all hazards so out of pocket replacement for large assets will not occur.
I propose a reserve fund balance of no less than 12 and no more than 14 months of total cash expenses for RCSCW based on a 5-year moving average. This policy revision will assure a continuing robust reserve fund balance that only increases modestly as operational costs increase and will be more in line with the other Sun City communities reserve fund balances. The budget always plans for large excess in revenue over expenses, much of which is transferred to the overfunded reserve account. This is not in keeping with the intent of a nonprofit corporation and causes needless increases in membership fees.
There are many other policy items that need to be addressed that are too minor to discuss in this letter. When a bureaucracy creates hundreds and hundreds of pages of policy and procedures and never reviews them for applicability, procedures as I have pointed out occur.
Embracing lean management as guiding principles, the budgeting and spending will change the way RCSCW does business and ultimately change RCSCW to be a more “resident friendly” and cost efficient community. Sun City West is a great place to live and should be a leading example of conservative and prudent financial and business management.
There is a great deal of discontent in Sun City West about the issues outlined above and problems that have come to light in the recent past. As residents, we decide how and by whom the community is managed by being actively involved. The penalty for not being involved are the things I have pointed out. I have made it no secret that I will be a candidate for the governing board next term. Revisions to policies as I have indicated are but a few things on which I will work with the general manager and governing board, if elected.
