Capital Allocation Process(?)

One of the things I found fascinating as a Board member was the process or lack thereof for allocating capital dollars. (i.e., PIF, CIF and other capital spending.) I am just curious how others view this allocation process. Any thoughts?

 

Hello Mr. Fast,
Yes, I am concerned as well. I regularly listen from home all of the RCSC meetings and I have grown concerned about the demands of clubs vs. taking a vote and starting to fund new expensive project requests. Yes, I am thinking of that large request recently made on the indoor dog training stadium they want. How can a board just grant them a wish...when so many other items of importance need to get fufilled. I am thinking about the Mountain View project and many pending maintenance things.
I am worried about this. With your time on the board John, does the board ever use the word, No. I'm sorry but that is where I feel the allocation process is called into serious question. The process of so many demands...vs. impending needs in many other areas. Can you share some of your thoughts on the subject.
Also, Thank you for your service to our community, John!

 

I’m guessing you know my thinking on this John. Complete ASAP a 5 year plan and a lrp of at least 15 years to help with expenditures. Let the membership know all the plans and include them on the decisions. Yes accept the reality of future adaptation and change in the plans.

Personally, I do not believe the plan needs to be in such great detail as to create a lot of confusion. I have spoke to this at a couple board meetings and realize I do not know all the in and outs of RCSC budgeting. Thanks for your service!

 

Sadly, we got ass-backwards over the years. Back in 2010/2011, we had a perfectly functioning long range planning committee. Their task was to assess future needs and the committee would do the legwork to sort through the options and alternatives. One of their finals acts was the Marinette remodel and the addition of the pickleball pavilion. PB was exploding and the covered 8 courts was unique, there was nothing like it at that time. Hence there was nothing to copy or learn from.

When i was elected to the board in 2012, we they were in the midst of selecting the long range planning comittee's number 1 priority. They had been told the year before, that committee was only allowed 25% of the PIF budget. We had just completed (2010) the 5 year Fairway rebuild (16 million dollars) and there wasn't the kind of money kicking around like there is today. Home sales were solid coming out of the housing crash in 2009 and by then we were averaging 2000 homes sales per year (which we did until last year).

When i heard only 25% of the PIF budget was available to them, i asked why? I was told the other 75% was to be dedicated to golf. There were 6 board members who played a lot of golf, and the general manager had made golf course remodels her primary objective. It was hard to argue they didn't need work, i just saw the PIF allocations going forward to be an imbalance. The non-golfers on the board were simply out voted.

All that aside, the Marinette project was on the books, thanks to the Long Range Planning Committee. There was hope for an indoor pickleball/tennis venue but the lot would not accommodate their wishes. Originally the budget was for 4 million dollars and change but by completion the finally number was closer to 6 million dollars. That didn't sit well with the general manager.

Shortly after it was built, the board president came to one of our board work sessions and announced it was time to disband the long range planning committee. I choked down my coffee and asked, "why?' He proclaimed quite unabashed, "their work was completed." Huh? As usual, the motion passed, i think the vote to do away with them was 7 yes, 2 no. A couple of years later, i confronted him at board meeting and asked why we didn't have a long range planning committee? He stunned me even more than when they voted to get rid of it when he announced quite proudly; "they did have one, it's called the board."

Several years later an ad hoc committee for the Grand project was formed. I will spare you the details, but it was a step in the right direction. Once completed Director Hoffer led the charge to form a new long range planning committee. Again a step forward, but the gm did her best to keep it from having much influence. I went on it for about 6 months and realized i was wasting my time. I wasn't alone in quitting, we simply had no sway or impact.

The history only matters from the perspective of how we got to the point where the board just sticks stuff on the plan because a group of members show up and complain. We went for a good number of years where any small group (or large) could just lobby for what they wanted and the standard answer became, "we'll put it on the PIF budget." It truly was a ludicrous way to run an organization of this size.

Then it got worse in 2021/2022 when the majority status of the board members felt threatened by losing their majority in the coming elections. Several items were added with virtually no oversight or review. Big ticket items exploded into massive ticket items. They didn't come from the long range planning committee, the board was over-promising everything; costs be damned.

While John Fast and i argue from time to time, i would tell you no one was more instrumental in killing the taj mahal, 8 year, 40-50 million dollar fiasco than him. It would have crippled Sun City. Further, once he was on the board he helped shape the Strategic Alternatives Committee (SAC). It was the closet thing to an active, working committee Sun City had seen in nearly 20 years. Yes, there were some mistakes made, but it was an enormous undertaking with way too many stakeholders to ever be free of some of the bias that comes with a project this size and scope.

Which brings me full circle. I see SAC as the working model going forward. I don't care if we call it the long range planning committee or if it is a working combination with other committees (like budget and finance), but we are long past the board just adding items to take the heat off. Set up a procedure for anyone wanting improvements or enhancements and let them make application to this new committee. Have them bring their requests that fully layout their expectations and needs (and why?) to this committee who can do an evaluation along with working with experts in the costs coming with their requests. Ultimately they would make recommendations back to the board.

I know, long winded way of saying; let's fix how we've been doing business, but it is clearly time we fix how we do business.

 

One more time:

New policies and procedures for PIF - Long Range Planning work in progress.

Capital Projects. It's a new restricted Fund and projects must, and will be, clearly defined in each year's annual budget and funded. Finance continues to meet and the discussions are held in their meetings.

Plan due: Board directed draft plan from GM and his team to them by May 15.

Finance meets April 17th as announced on the list of upcoming meetings.

 

I've said it before as well, but think it's worth repeating.

I don't like the idea of the board allocating PIF dollars for some future project that may be years down the road. I'm not talking about the needed upgrading of the Rec Centers, but only new things on Members Wish Lists, like the recent indoor dog training facility!

When the board allocates $1.5 million dollars of PIF money to some other project, does that $1.5 million get subtracted off the current PIF account balance or do we just keep adding projects and allocating the same dollars to multiple projects?

If you want a so-called "Place Holder", then just establish an official Priority List and vote to have that project added to the list. No dollars, No timeline. It makes no sense to me to allocate some imaginary dollar amount to an imaginary project that nobody has any idea of the size or cost or timeframe when or if it ever happens!

That's my 2¢

 

I think the point is he wants it faster. Hopefully the 5 year reserve study will be released soon. Seems to me that's the first step in the process.

 

That's exactly why change is coming. To stop what just happened. There were currently known replacements and a long range future project, plus our big unknown is (water). That's why this whole exercise is so essential.

It can be debated but all the pieces need to be defined. Members will need to decide if this is the future. We've been just shooting darts. Helter shelter doesn't work. It's close. I know members don't trust anything right now, but it's members that are also working to change the status quo. We are listening.

 

The indoor dog arena is the classic example of how not to do anything and hopefully the board will learn from it (we'll see). It was a knee-jerk reaction when it was introduced and an even worse one when they proposed the 1.5 million dollar allocation. I know i was taken to task when i suggested this project would evolve into an indoor dog park during the summer heat, but the realities of asking for a 10,000 square foot building as a stand-alone training facility that size is laughable.

Then to compound the dog lovers lament, the cry "we've been waiting forever" was stunning. Guys, the performing arts theater has been on the books since DEVCO killed the massive PAC initially scheduled to be built on the corner of 99th and Bell Road in 1976. The Mountain View renovation has been kicked to the curb any number of times since 2010. Sorry, but the cry doesn't pass the smell test (pun intended).

I've listened closely to the dog club as they have lobbied (quite effectively) for the board to just build it. I get it, there's a boatload of dog owners in Sun City. We love our pets/family and we want the best for them. We've taken our dogs through the training classes (circa 2004) and the trainers were good. As an owner, i sucked, my wife was worse. She hated putting our dogs through the rigors of learning. Obviously others are far better with it than us.

The real question comes back to data? Simple questions should be asked (not at board or exchange meetings) but in front of a committee charged with helping the board make decisions regarding what we need as a community? How many training sessions will be scheduled per week? Per day? What kind of training? Agility? Obedience? Other? Will you continue to use the outdoor grounds when the weather is nice? How much use do other indoor arenas get and are there any in age restricted communities?

All of these questions lead to the obvious...if the number of hours per week (say 4 hours per day, 7 days a week) is so limited, what is the expectation for the space the other 8 hours per day? What i heard said repeatedly by the dog club was the word "socialization." I know what that means to me and i suspect where it would lead on days when it's over 100 degrees. I could be wrong, i have been before. Before we commit to anything we need to know the cost and what it will be used for.

Not to sound like we are a business, but every project should have an expected return on investment (ROI). Sadly when everything is pushed on the board and is stoked by emotion, our decision making process becomes somewhat tainted.

 

Whole heartedly agree process reform is needed.

The Best Friends Dog Club motion was not properly presented when passed. Not their fault.

Compare that to the
VINTAGE VEHICLES OF SUN CITY, with far fewer members, rushed Board decision to acquire property to create another rec center, Grand center, to accommodate.

Yes, long overdue to set best practices!

 

As I sit looking over the draft changes to Board Policy 16 to deal with the lack of a long-range planning process, I am struck by how difficult we have made this already difficult issue. When I was on the Board and made the motion for the GM to present a draft long range plan policy by March, I had hoped an open and collaborative process would follow. The GM and others(?) thought otherwise and formed a "group" of members of the Long-Range Planning Committee and the Budget and Finance Committee and named it after a skunk. Oh well you cannot make this stuff up. I believe Bill has some good ideas (he has probably gone into cardiac arrest hearing this.) but he needs to stand in line to have his ideas ignored. I'm first and I intend to use my full three minutes. This may sound like I am disenchanted but I am really not. I am simply pointing out what everyone already knows; the Board has an agenda and is fixated on controlling outcomes. Fixing processes is getting in the way.

 

Perhaps there needs to be some sort of a more definitive method to warrant actually building additional or a new space? A check-list of requirements to meet.

Clubs have rules. You need 25 Members to start a Club with all the additional requirements of establishing a Board and officers and maintaining and submitting attendance records. You need 50 Members to request dedicated space and that's assuming that any existing space is available and not building anything new?

New buildings or space should have more stringent requirements. I don't know exactly what they all should be but I have certain ideas, and as Bill says, need to be cost effective.

Personally, and I love dogs, but I don't see justification for a new building for the dogs. We don't really have the money when you consider we have 20 million dollars in deferred maintenance costs as well the unknown water situation. We know the Mountain View project went from a 20 million dollar pie-in-the-sky project down to somewhere between 10-13 million dollars because the money just ain't there.

I'm sure many dog owners are snowbirds so use would surely decline in the summer, and how many times are you going to put your dog thru discipline training?

Sorry...I just don't see it! Doggone it!

Call me a bad guy, but I'm still kinda pissed that we built Recreation Center Number 8! We don't need more amenities since we're a community with a fixed number of homes. We just need to manage what we have better and phase some things out while phasing new things in!

 

John. I'm not sure going back to fundamental best practices, from the ground up, is controlling outcomes. You helped get things rolling toward more open processes. You listened a long time ago about changes needed to the Finance Committee and helped make it happen. You were instrumental in stopping the MTNV mess. Give these revised procedures an opportunity to be presented and debated. You're selling the members short that are committed to making long overdue changes that are sorely needed, as well as the senior management leaders (not the GM) that's doing all the hard work to give us what we need. Management can't continue to operate in such a haphazard manner - look where we are. The Committees are not doormats in the process and those working with the detail right now are thoughtful and sensitive to all sides. This task has not been taken lightly nor does anyone involved have an agenda, other than do the best job we can to produce a plan that should have been part of the RCSC model years ago. We can't go back, but we can fix it. If not dysfunction remains.

 

I would love to hear you talk to the board on this topic for 3 minutes. And would even pass my 3 minutes to you.

 

Thus a need for a “projected revenue vrs necessary spending” plan for at least 15 years. The huge benefit of this is so MEMBERSHIP hopefully better understands how their money will be spent.

 

The LRP and the F & B committees are now working on revised procedures and processes. These items are not what I thought these committees were originally tasked with to accomplish. Let us see the lrp and budget first. Once again, I know, I know, they are being worked on.

And I do appreciate all the effort put forth by the committees.

 

Go to their meetings. We have tasks to do to get to the end product.

 

2000 miles away or I would. Considering the importance of these committees now, maybe videotaping them would help members understand the entire process, especially decision making.

 

Understood. It was a mistake to stop.