Two Steps Forward, Four Steps Back - Board Meeting Recap

RCSC Monday Morning Board Meeting

Once again, we saw an amazing turnout for the RCSC board meeting on February 14th, 2022. With well over 100 members in attendance, it is clear that those living here are again renewing their interest in the community we all love. In the not-so-distant past, you might have found 20 to 30 homeowners present at a meeting that lasted often an hour or less. These board meetings are clearly showing an uptick in interest on the part of the homeowner. We thank you!

The agenda contained a request from the Technology Committee, two second-readings on previous motions (Long Range Planning Committee-Analysis of Capacity, Capacity Utilization and Trend Analysis and Member Exchange/Change in structure of Board meetings), (1) third-reading on previous motion (Creation of an Ad Hoc Committee to Review & Revise the RCSC Bylaws), and a first read motion to reflect changes in the space allowance between shoreline and boats on Viewpoint Lake. It is interesting to note that in changing the Board/Board Member Exchanges, the motion contained verbiage that would curtail meetings over two hours. To the Board members’ credit, an amendment to the motion was made to STRIKE this sentence. This passed 7-1, and the motion itself went on to pass 6-2. Member comments along with common sense prevailed in the defeat of the motion regarding Viewpoint Lake and boat distances from shore and structures.

Funding Technology Upgrades

The request from the Technology Committee was introduced by Director Fimmel and followed on the heels of the presentation on January 27th by Randy Bird, head of the IT department at RCSC. That presentation painted a dismal picture regarding anything to do with technology at RCSC, several of us wondered why the Board didn’t make an emergency motion that very day to fund the requests. Also, interesting to note was the exchange between Director McAdam and General Manager Bill Cook regarding “Carry Forward” funds. She wanted to be assured that RCSC had adequate funds in the “Carry Forward” account after learning that last December a little over $1 Million dollars had been added to the budget from that account. GM Cook explained that “our Carry Forward is unbudgeted at this point, and that’s why we’re going through this process. Going forward, funding for IT would come directly from operations which is where the “Carry Forward” money is derived.” He went on to say that “the $500K represents less than 10% of the total. Multiple years of “Carry Forward” have been generated; this money is not otherwise designed for anything.”

A closer look at carry-forward funds

With that in mind, let me wander down the road of Sun City finances. I was an insider (as a board member) and have a pretty good working knowledge. That said, when general manager Bill Cook announced there was a substantial "Carry-Forward" amount of money to be used for the $500K Technology upgrades this year, and that it was less than 10% of the Carry-Forward, my mouth dropped. And I wasn’t the only one who was surprised as later on in the meeting (which I encourage you to watch), a member commented on that large amount of non-dedicated money. Mr. Cook's response was that it was because of how frugal they had been.

Here is where I put my historian hat on to help you understand what “Carry Forward” money is, where the idea came from, and where it ended up. Years ago, when the roof over the pools at the Sundial Recreation Center collapsed (June 2006), the RCSC had to fight with the insurance company to be reimbursed. This took two years with budgets slashed because RCSC didn’t have the reserves to fix it without insurance. Having learned their lesson, boards decided that they needed to set aside money for a "Capital Reserve Fund." They set a goal of $5 Million dollars and quickly reached it. This fund is set up in case we have an emergency and currently has a balance of $5.5 Million dollars in it. That's a good thing.

But the amount that was mentioned by GM Cook at the Board meeting sent me scurrying to look at the financials. I was clueless when he started talking about an $11-Million-dollar “Carry Forward” balance. I knew we typically carried about $1-1.5 Million over each year. But in reading those financials, the bigger issue is that in their "Balance Sheet" under assets labeled "cash and investments," not only did we put away 5 million dollars as a rainy-day fund, but we also went from having $7 million dollars on hand in 2010 to having $17 million dollars currently under that heading. In the past 12 years, they have accumulated more than $17 Million dollars. You read that right - $17 Million Dollars! Money that arguably was paid by members over the years to enhance the amenities in this community.

When saving too much becomes expensive

It's a good thing to have money in the bank. It's a bad thing to do it at the expense of the community. Why do I say “at the expense of the community?” Isn’t everything just great in Sun City? Well, the softball club has been asking for a new building for years and were told that if they got it other than through the PIF (Preservation and Improvement Fund - which has another $27 million in it), our yearly assessments would have to be raised $25 or $30 dollars per person. Our Life-Long Learning club is good, but other age-restricted communities have two and three times the sessions that we do. The theatre people have been clamoring for a performing arts theater for years. Had we taken some of that excess money years ago and built a stand-alone theater, we wouldn't be hearing that we need to spend $40 Million dollars to tear down and build back up what is needed at Mountainview. And finally, the biggest sin of all, is that we had the resources - and then some - to update and upgrade our Technology so it would be good or better than any other age-restricted community. Rather than do that, they just kept squirreling away money, turned a blind eye, and let it all turn to crap.

Let me be clear, that's not being judicious or frugal with our dollars; that's just being shamefully foolish. As a not-for-profit, we do NOT exist to make or save money.

Stay tuned, it gets worse.

If the meeting ended there, it would be bad enough. Alas, it gets even worse. I told you earlier, kudos to the board for throwing out the sentence regarding a two-hour maximum for board meetings that had been proposed in the second reading of Board/Member Exchanges changes to the bylaws. However, if you watch the video to the end, you will clearly hear the president state "this meeting has gone on for more than two hours and so we have to adjourn." Say what? An hour before that – by a 7-1 vote – they had struck that idea and now, president Lehrer was stopping the meeting because it was over the two-hour mark. The president arbitrarily decided she was done. There was at least one more member speaker from the floor to talk and the part of the agenda that includes Board member comments were shut down. She argued for the 2-hour time limit.

To sum the ending of this Board meeting up, I want to share the thoughts of a good friend after watching the meeting: " With five decades of continuously attending meetings, today's ending to the meeting was truly unique. It goes into a special category right next to Sue Wilson's board meeting on September 13th, 2021 where she opened and adjourned a meeting all in the same sentence."

Once you have watched the meeting, we would love to hear your thoughts.

Bill Pearson, member of the Advisory Panel