by Jan Ek
Financial Report:
We have completed our third quarter of 2015 and are well within our operating and capital budget year-to-date. We are quite conservative in our budgeting process to assure that we can meet all the financial demands that come our way. For example, as of September 30, 2015 we had a positive variance from our budgeted income of $603,053, however our actual income through the third quarter was only $42,812 greater than last year despite the $6.00 per property annual assessment increase. You can see that if we budgeted income aggressively, we could quickly find ourselves struggling to make ends meet. We budget our expenses and operating capital requirements to be equal to or less than our income; we cannot have a deficit.
We budget our expenses expecting and knowing there will be increases. However, we seldom spend all that we have budgeted and during my tenure we have never had an overall negative variance from budget. There is one area of our financial statement that can be a bit confusing however, and that is the repairs and maintenance section. We budget millions of dollars of repairs and maintenance projects each year, but we seldom complete all of them in that same year. All repairs and maintenance projects, as well as operating capital projects, are carried forward and the money is retained for them until they are completed or cancelled. For example, as of September 30, 2015 we have $982,141 unfinished 2015 repairs and maintenance projects and $513,010 unfinished 2015 operating capital projects. We maintain the money in our bank accounts to complete these projects.
Do not confuse the Preservation & Improvement Fund (PIF) projects with repairs and maintenance and operating capital projects, they are entirely separate and you can see on the third quarter Balance Sheet that PIF is $7.7M less than last year at this time because of the PIF projects in process and completed. It is important to understand while our financial statement may reflect considerable cash and investments, these funds are already budgeted for expenditure at some time in the future.
The third quarter financial review is very important as it pretty much sets the stage for the 2015 year end and I am really happy to say that once again, we are in good financial condition. All divisions have operated better than budgeted, and therefore we feel very confident that we will be able to produce favorable year end results. I am also very excited to report that the golf division is in the black, despite its early struggles this year. After the last two years of operating in the black in the golf division with one regulation golf course closed for renovations, it may seem that possibly Sun City AZ could do with one less golf course, however, let me remind you that these golf courses were deeded to the Recreation Centers of Sun City, Inc. with restrictions that they remain golf courses and for many, that is good news.
Let me also remind you that we complete all these projects you hear Mr. Wellman talking about each month, millions of dollars of projects each year, and we still remain debt free!
Bowling:
November will be a busy month for the Bowling Department with the Arizona State Senior Women’s and Arizona State Senior Open Tournaments. These tournaments provide exposure to our community and will produce between $10k and $12k in unbudgeted income. The tournaments will use both centers so lane availability will be limited during squad times. All upcoming tournaments and events are listed on the RCSC website at www.sunaz.com by clicking on the bowling tab and selecting upcoming tournaments.
Signups for the annual New Year’s Eve Party at Lakeview Lanes will begin at 9:00am on November 2, 2015. Everyone is welcome to the event even if you are not a bowler. Stop by Lakeview Lanes or Bell Lanes to reserve your spot as availability is limited.
Almost all the fall bowling leagues are in full swing with the exception of a few spots waiting to be filled when the winter visitors return.
Cardholder Services:
Payments on past due assessments reduced again in September and were at the monthly average for the prior 12 months. Overall past due assessments increased in September by just under 1% with the Over 90 Days past due balances increasing the most. The 30 Day past due rate assessments increased in September and is at the same level for this month the last four years. Year to date payments from our third party collections firm are $76,028.
The charts below show the 30 Day Past Due Amounts and the Total Past Due Assessments for the past 4 years on a monthly basis for comparison.
The chart below shows the total accounts receivable balance for each month this year. The total is categorized by Assessments, Fees and PIF/Transfer with the relative percentage for each category each month.
In September property transfer related balances increased by 3% and lender owned related balances decreased by 15%. The balance flow for these two categories continues to be dynamic over time. Outstanding balances related to property transfers now represents 52% of all receivables due and is up to 52% of past due balances.
Payments made by Cardholders through the online RCSC Web Portal in August totaled $56,747. Year to date payments through the web portal are $540,335 and represent 3.6% of total accounts receivable payments.
Trustee sale notices on Sun City properties decreased to 40 properties at the end of September. The number of properties owned by lending institutions was unchanged again in September at 40 properties.
Preservation and Improvement Fees collected in August were $498,000, which is $273,000 over the amount budgeted. Year to date PIF fees are $5,134,520 which is $2,080,520, or 68%, 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.
An additional reminder that the Cardholder Services and Member Services offices have been relocated to Social Halls 2 and 3 on the second floor at Lakeview Center while the office space for these areas is being renovated. Work is progressing and we anticipate the changes being made will allow us to better serve our Cardholders.
Human Resources:
An independent audit of the RCSC’s Employees 401(k) Plan for calendar year 2014 was conducted this month by PKF Certified Public Accountants and we filed the IRS required Form 5500 on time. The value of employees’ 401(k) investments at year end 2013 was $997,591 and by year end 2014 increased to $1,118,162.
In 2005 RCSC exercised the right to participate in a settlement agreement established by a former brokerage firm that provided insurance services to us as a client of employee insurance benefits. Eligible clients such as RCSC were entitled to receive a portion of the Fund without having to prove fault, harm or wrongdoing. The firm had been charged with “bid rigging,” improperly steering insurance placements to insurers who paid them contingent commissions. In February 2013, RCSC received its first portion of the Insurance Brokerage Settlement in the amount of $44,681. In September 2015, a second portion was received in the amount of $812.95.
We are in the process of renewing employee benefits for calendar year 2016 and have scheduled open enrollment meetings on November 4 and 5 to be followed by Biometric Screenings in December.
Member Services:
We kicked off the fall Sun Bowl series on Sunday, September 27 with the original Tokens. It was 104 degrees at sunset and it was the night of the Blood Moon. Approximately 5,500 people enjoyed this magical night. The sounds of the past were extremely entertaining, and everyone sang along. There was dancing, laughing and a lot of ice cream eating taking place. We welcomed Comfort Craving as a new food truck vendor. I understand their grilled cheese sandwich is something everyone should try.
On Sunday, October 4 we had quite a change in temperature as The Hamptons performed non-stop. We avoided the sprinkles and the dance floor was full for the entire show.
On the second Sunday of October, Doug Brewin, a Las Vegas showman and the top-rated Alan Jackson impersonator, wowed us with his sound, his looks and the stage presence of the country superstar himself. An encore in front of approximately 6,800 people had the crowd dancing non-stop!
On Saturday, October 17 we had our first Fall Festival. This event was originally scheduled for the Sun Bowl, but due to the weather we moved to the Sundial mall and auditorium, llamas and all. We estimate about 800 residents fought the threat of rain to come and play games, win prizes, eat a lot of great food, dance and just enjoy the company of friends! The Sun City Fire
Department was on site with give-a-ways and trucks to climb on. We are proud to announce that you donated $1,308.57 to your Sun City Fire Department! We look forward to having this event again next year.
The following day, Sunday, October 18, we also moved the Let’s Dance Band to Sundial. Approximately 850 people enjoyed their Big Band sound, and the dance floor was full all evening.
Our last ticketed show of the year, The One Hit Wonderfuls, had everyone in attendance singing along to the hits that topped the charts and put many performers on the map. It was a walk down memory lane.
Our last concert in October was the Desert Dixie Country Band. The weather was perfect. Folks danced non-stop, while others sat back and just enjoyed the music in the air. Desert Dixie answered two encore calls!
You won’t want to miss our last two Sun Bowl shows of the fall series. On Sunday, November 1 we will welcome to the stage Randy Linder and the Creedence Clearwater Revival tribute. This show begins at 6pm. On the following Sunday, November 8 we will have our traditional Tribute to our Veterans. Rollie Stevens will perform a variety of patriotic classics and original tunes. Food trucks will be on site. Come out and honor our veterans with us!
Finally, remember that our 2016 reserved seating season tickets for Sundial shows will go on sale on November 2nd at 8:30am in the Clubs Office. Our main entrance, the gold entrance gate, will open at 5:15am. You will receive a number, and tickets will be sold in that number sequence. If you leave and come back later, and your number has already been called, you will have to start the process over again. During the month of November we will only sell season ticket packets to RCSC Cardholders only and are limited to one packet per cardholder. Beginning Tuesday, December 1, individual show tickets will go on sale.
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!