by Jan Ek
Financial Report:
We have completed year-end well within our operating and capital budget for 2015. We have six financial divisions within our operation: Building & Infrastructure, Member Services, Bowling, Golf, Food Service and General & Administrative. The Building & Infrastructure division includes all of RCSC’s buildings and infrastructure regardless of what they support; such as, repairs and maintenance of the recreation centers and facilities, grounds maintenance and repairs, golf pro shop & maintenance buildings, bowling center buildings, parking lots, and the dog park. The Member Services division includes the administration of the clubs, all of RCSC’s events and entertainment, communication including the newsletter and websites, the Sun City Visitor’s Center operation and marketing of Sun City AZ. The Bowling division includes the bowling operations at both Lakeview and Bell. The Golf division includes all the golf operations including golf course maintenance for RCSC’s eight golf courses. The Food Service division includes the snack shops at the regulation golf courses and the two leased restaurants at the bowling centers. The General & Administrative Division, commonly referred to as G&A, includes the corporate and board offices, cardholder services, accounting, human resources, purchasing & warehouse and information technology. Every one of these divisions operated better than budget and ended 2015 with an overall positive variance from budget of $1,304,971. So what happens to this positive variance from budget? Part of it is carried forward to complete the repairs and maintenance projects budgeted but not completed as of year end. Part of it, $748,098, has been used to balance the 2016 budget, therefore reducing the amount assessed to Sun City property owners. The amount remaining after that will be used to balance future year’s budgets or complete an unbudgeted project that needs immediate attention.
For the second year in a row, the golf division has operated with a net profit before depreciation. That means our golf division has operated in the black! Interestingly, both years we have had one of our regulation golf courses closed for renovation. As most of you know, the golf courses were deeded to the Recreation Centers of Sun City, Inc. with the restriction that they must remain golf courses.
Bowling:
The annual New Year’s Eve party was held at Lakeview Lanes and over 160 bowlers attended. Prizes, drawings and champagne were provided to all of the party goers to ring in the New Year. As always John Kaus and the Sun City Bowling Association did an outstanding job organizing and sponsoring the event.
The Bowling Department had an exceptional year in 2015, open play & tournament income was $21,000 better than the previous year and league play income was $26,000 better than the previous year.
The Metro Phoenix USBC Senior Tournament was held at Bell Lanes and Lakeview Lanes. Forty-seven teams participated (188 bowlers) in the tournament on the weekend of January 16, 2016. The tournament produced approximately $4,000 in unbudgeted income.
Cardholder Services:
Payments on past due assessments jumped in December to their highest level in 2015 and as a result overall past due assessments decreased in December by almost 5%. Over 90 Days past due balances changed the most and are at their lowest level in 2½ years. The Over 30 Day past due rate for November balances lessened to under the average for 2015 while the Over 60 Day rate was up showing a continuing from last month. Payments from our third party collections firm for 2015 totaled $93,528.
The chart following shows the total accounts receivable balance for end of the year for the past five years. The total is categorized by Assessments, Fees (Late/Interest/Lien) and PIF/Transfer with the relative percentage for each category at each year end.
In December property transfer related balances decreased by 3%, offsetting last month’s increase, and are just 1% below the 2014 end of year balances. Lender owned related balances decreased again by almost 5% and are 25% below the 2014 end of year balances
The balance flow for these two categories continues to be dynamic over time as does the number of properties. Outstanding balances related to property transfers continues to represent approximately 53% of all receivables due and past due balances.
Payments made by Cardholders through the online RCSC Web Portal in December totaled $53,907. Payments through the web portal in 2015 were $712,071 and continue to represent 3.6% of total accounts receivable payments.
Trustee sale notices on Sun City properties decreased to 43 properties at the end of December. The number of properties owned by lending institutions decreased slightly this month to 39 properties.
Preservation and Improvement Fees collected in December were $649,313, which is $373,013 over the amount budgeted. Year to date PIF fees are $6,817,766 which is $2,878,766, or 73%, over budget for the year. Again a reminder that we intentionally budget PIF income very conservatively to assure that we have the cash on hand for any planned project as we remain debt free.
Human Resources:
In December of last year, the Internal Revenue Service issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business purposes. The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The recent change is attributed to falling gasoline prices. Beginning on January 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is 54 cents per mile for business miles driven, down from 57.5 cents in 2015. Accordingly, RCSC has lowered its reimbursement rate to the IRS allowable 54 cents per mile.
Most RCSC’s employee benefit plans renew on a calendar year basis. Therefore, January is a month for closures, changes and renewals in the H.R. department. We have been processing enrollment changes, balancing employee benefit accounts, providing census reports for plan testing and providing other reports for the new plan year.
Member Services:
The opportunity to purchase assigned seats for both season tickets and individual shows has been a huge success. Assigned seating has been very well received and it has eliminated the long two hour or more wait lines for doors to open.
We kicked off the 2016 concert series with Sam Morrison and the Turn the Page band who gave an outstanding tribute to Bob Seger. The look and sound were so fabulous that it was hard to tell if you were seeing the real thing or a tribute artist. The show ended with two encores and a standing ovation.
The following Sunday, Joni Morris portrayed The Legendary Ladies of Country Music. Her band never missed a beat, and Joni swooned the audience with her powerful voice and four impressive costume changes. This show made us laugh and sometimes cry…a true performance indeed.
On January 27 we will welcome back to the stage re:Voiced. This a capella group consists of five talented and charismatic men. Audiences have been enthralled experiencing their band which embodies the full sound of a band using only their five voices. It’s definitely a show you won’t want to miss.
Coming up in February we will present the Motown Review; the magician/illusionist Eric Giliam; the Bob Hope, Bing Crosby, Red Skelton, Jack Benny & Jimmy Durante’ tribute show and the Carpenters tribute. There are still tickets available for these shows, but they are going fast. Check in with the Clubs Office at Lakeview Recreation Center and reserve your seats today.
We also will be hosting the 4th annual Dancing with the Sun City Stars on Friday, February 26 at Sundial Auditorium at 7pm. This is a free event, so remember to bring your photo RCSC membership card to gain access. Key fobs will not be accepted.
In January the Clubs Office held its first New Club Officer Training at Fairway. It was extremely well-attended and we appreciate the Club Officers participation!
On the third Wednesday in January we held morning and evening sessions of Discover Sun City AZ in the Sundial Auditorium. We believe there were record-breaking crowds for both sessions. It was eye-opening to see how many new residents we have welcomed to Sun City this year and we loved their enthusiasm and excitement to be part of this amazing active adult community!
Finally, be sure to mark your calendars for the RCSC Annual Membership Meeting on the third Saturday in February, the 20th at Sundial Auditorium. The event will be shorter than last year – just 9:00am to noon. This special affair brings together our community to review the annual budget and the highlights from the past year along with the goals and objectives planned for the future. There will be free coffee and donuts and lots of door prizes. We look forward to seeing you there.
General:
For those who may not be aware, the monthly management reports are available on our website www.sunaz.com under the Corporate 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!