by Jan Ek
General Manager Report — October 2017
by Jan Ek
As directed by the RCSC Board of Directors, we did not budget income as conservatively as we have in the past. Two divisions, Bowling and Golf, did not meet their gross income budget as of September 30, 2017. Bowling missed their budgeted gross income by $18,132, which is due to leagues starting with less teams and the loss of one league completely. RCSC Cardholder daily green fees came in under budget by $77k ($43k less than last year), daily surcharge fees for annual golf passes are $12k under budget and guest daily green fees ended the third quarter at $24k under budget. Fortunately most of this negative budget variance in golf revenue was recaptured by public daily green fees, leaving the golf division under budgeted income by only $1,265 as of September 30, 2017. With an additional $9k in credit card fees, the golf division missed their budgeted gross income by only $6,986.
Although we ended the third quarter well within our budget for wages, taxes and benefits, I believe it is important to point out that this expense has increased by $871,620 over last year due to the passing of Proposition 206 by Arizona voters which increased minimum wage from $8.05 to $10 per hour in 2017 and provided sick pay for part-time personnel. This proposition will continue to affect us as it calls for increases in 2018 (to $10.50), 2019 (to $11) and 2020 (to $12). The Arizona minimum wage will continue to increase each year thereafter based upon the cost of living (starting on January 1, 2021).
As has become common practice to assure that there are sufficient funds for operations, many projects are held until the last quarter of the year. As of September 30, 2017, we have $954k in budgeted projects that are yet to be completed. Although this reflects as a positive variance from budget in our financial statements, these budgeted projects will be completed in the fourth quarter and/or carried forward into 2018 and these funds will be spent.
We have under budgeted utilities throughout the entire year and as of the end of the third quarter we have a $50k negative variance from budget, which is primarily in two expenses: water and sewer and pump and well electric. Both have considerable increases from last year’s expense, $20k and $28k respectively.
All divisions excluding Food Service met their budgeted general operating expenses. Unplanned equipment replacement at the leased café in Lakeview Lanes created a $4k negative variance.
The entire organization has completed the third quarter of 2017 within our operating and capital budget year to date and each division has ended September 30, 2017 within their overall budget year to date as well.
Preventive maintenance for pinsetters, lanes and lane conditioning machines has always been a high priority at both bowling centers. Although preventive maintenance is performed year-round, extensive maintenance is performed during the summer months to ensure a smooth operation during the fall season. All the bowling lanes were inspected during the summer by the United States Bowling Congress to ensure that the lanes comply with all specifications as mandated by the USBC.
Sign-ups for the annual New Year’s Eve Bowling Party at Lakeview Lanes will begin Wednesday November 1, 2017 at 9am. The party starts December 31, 2017 at 8pm with a potluck, bowling and prize drawings. The night will end with a champagne toast to the new year. Everyone is welcome even if you are not a bowler. Stop by Lakeview or Bell Lanes to reserve your spot as availability is limited.
Payments on past due assessments in September were at a decreased rate of 11.8% of past due balances. While down from the prior month, this is the highest payment level for the month of September. Overall past due assessments decreased by 1.5% in September and have decreased by 2.5% since the beginning of the year. Total accounts receivable decreased by 2.1% in September and is up 1.7% from the beginning of the year. Over 90 day and Over 30 day receivables both offset the prior month decreases with increases in September. August assessments went 30 days past due at an increased rate of 6.4%, which is at historical levels for this month, and July assessments went 60 days past due at an historically low 2.7% rate.
Payments from our third-party collections firm totaled $12,016 in September with a year to date total of $123,611. Payments in 2017 are approximately 74% of the 2016 year to date total. Payments made by Cardholders through the online RCSC Web Portal were flat in September and totaled $86,253 from 209 property owners. Year to date web portal payments total $911,816 from 2,134 property owners.
In September, property transfer balances decreased by just under 3% and lender related balances remained relatively flat. Outstanding balances related to property transfers represent approximately 56% of all receivables and past due balances. At the end of September trustee sale notices on Sun City AZ properties ended at 49 and properties owned by lending institutions at 16.
Three CPR, AED and First Aid training classes for employees were held in October. Thirteen employees completed the training. Additional classes are scheduled for November to complete the fall training schedule.
Recruiting and hiring continues and in October to date eighteen individuals have been hired. Some are due to turnover and others have filled seasonal positions.
Since we are in the last quarter of the year, we are preparing for employee benefits renewal and open enrollment. Typically insurance companies do not provide renewal rates until approximately 60 days prior to the end of the benefit year. Our management is proactive in hurrying that process along so we get the information with as much lead time as possible to complete our budgeting process. We have scheduled open enrollment meetings for Thursday and Friday, December 7 and 8, and are preparing materials for the meetings. Biometric screenings and health assessments will take place in early January.
On October 19, 2017, the IRS issued Notice 2017-58 detailing the cost-of-living adjustments affecting dollar limitations for Section 125 Flexible Spending Plans. The maximum amount that an individual can contribute to a Healthcare Flexible Spending Account has increased from $2,600 to $2,650 for all plan years starting on or after January 1, 2018. These contributions are taken pretax from participants paychecks.
On Sunday, September 24, The 8-Tracks took the stage at Sun Bowl amphitheater and kicked off our fall concert series. J. L. Pike wowed us with his non-stop energy and numerous appearances in the crowd. The following Sunday, October 1, That Kool Band made the night another dancing success. On October 8 we welcomed The Three Kings, a combination of Ricki Nelson, Buddy Holly and Elvis Presley. The voice of each artist was spot on. You could just close your eyes, go back in time and remember the first time you heard those songs. What can we say about the performance the following Sunday with The Garth Guy!? Dean Simmons filled the air with the undeniable sounds of Garth himself and what a show it was!
On Saturday, October 21 we were at Sundial for the Country Carnival. We had rides, games, prizes, food, ice cream and more. We also hosted a dance in the auditorium with the band Heartbeat.
The following day Sunday, October 22, we were back at the Sun Bowl for more dancing and entertainment from Graffiti Gold featuring Tommy Tayback and the Daddy O’s. Be sure to join us for our last show in October on Sunday the 29th as we swing to the music of Jump, Jive and Wail.
The fall Sun Bowl season wraps up with two shows in November: Sunday, November 5 with Sam Morrison and his Southern Rock Explosion and Sunday, November 12 with our annual tribute to our Veterans as Rollie Stevens, country artist and Phoenix Fire Fighter, performs. Both shows in November begin at 6pm.
Don’t forget on Saturday, November 11 from 4pm to 7:30pm in the Sundial auditorium is our infamous Casino Night! Free fun money for players as you rotate through the tables. This “just for fun” night will include poker, black jack, roulette, craps and more! We’ll have hot dogs and chips available for purchase and the proceeds will benefit the RCSC management team’s 2017 charity, the Del Webb Sun Cities Historical Museum. Remember, this is a free event for RCSC Cardholders and their escorted guests only! You will need to show your RCSC Member or Privilege card for entry; key fobs are not accepted!
Be sure to check the current SunViews for information regarding the 2018 Sundial winter/spring ticketed concert series. Season Tickets go on sale Wednesday, November 1, 2017 to RCSC Cardholders only throughout the month of November. The line-up can be found on our website www.suncityaz.org under the Recreation tab. Stay tuned for more information about these great shows coming to Sun City AZ!
For those who may not be aware, the monthly management reports are available on our website www.suncityaz.org under the RCSC tab. Also, if you have not done so already, please sign up on the RCSC email list where you can designate topics of interest and stay in the loop with RCSC News Alert Emails!