Do Numbers Matter?

Discussion in 'Sun City General Discussions' started by BPearson, Oct 5, 2021.

  1. BPearson

    BPearson Well-Known Member

    I know, dumb question...because most assuredly they should. After all, it was changing the numbers of the quorum from 100 to 1250 that got us to this point in time. I know, i know, it was to save us from ourselves and our "attorney recommended we do it," even though no one but the gm talked to him. And then there is that other pesky little detail she likes to shove aside...the documents stopped any floor motion dead in its tracks and referred it back to the board for study.

    That's all old ground. Let's plow some new, more fertile soil where there may be cause for the RCSC board of directors to literally crap in their pants. Too graphic? Maybe but for sure a reality. When they charged Karen with a "conflict of interest," they opened Pandora's box. I don't know how they close it. Lies don't seem to be working all that well.

    I need a little help here. I'm no numbers savant, but over the years i have done my fair share of budgets. I also served on enough boards to have to look at budgets on a regular basis. That said, i want to give the RCSC the benefit of the doubt here and ask a basic math question regarding said budgets.

    Aren't those little bracket thingies ( ) on budgets supposed to indicate deficits? You know, like when you are losing money in a given area?

    Thanks for any help you may give this poorly educated, naive old fart just trying to understand.

    PS. Just as a point of interest, the "prudent man theory" in relationship to ones fiduciary responsibilities lays the foundation that a board member arguing they didn't know, is not basis enough for a defense. A judge would look at it and ask, should they have known? Then throw in the caveat, they admitted at the Sept. 30th meeting they did know that golf is supposed to be self-sustaining and one has the making of the perfect storm. Yikes.
     
    carptrash likes this.
  2. Michael Wendel

    Michael Wendel Active Member

    Ignorance is not an excuse before the law.
     
  3. BPearson

    BPearson Well-Known Member

    Dang, sometimes i just don't make myself very clear. Showing you what i mean is way easier for you to understand what i am asking. So if you were a board member and looking at numbers like this: 2016 (141,367) 2017 (345,842) 2018 (394,647) 2019 (669,097 estimated). Wouldn't you be just a tad concerned about ignoring it due to a potential conflict of interest charge?

    To be even more clear, when we go to the " Capital Projects Expenditures" on a yearly basis over the past 15 years, the question simply becomes: Were these expenditures rolled into the cost for a round of golf or just left hanging out there as expenditures and not factored in? I know for a fact some of the years they were well in excess of a million dollars.

    Goodness, don't you just hate when people know crap like this? Way easier to do business when you keep the community dumb and in the dark eh?
     
    OneDayAtATime likes this.
  4. BPearson

    BPearson Well-Known Member

    I got an email from a friend questioning whether it was sound idea posting the numbers i posted above. Of course no one knows if they are real or imagined, so unless you are sitting there with those documents in your hand, who is to say? More importantly after 60 plus years, why are any numbers a secret? Why would we be scratching our head trying to figure out if golf is supposed to be self-sustaining? Why would anyone have to fill out multiple forms and then hope they bring documents to peak at? It's our freaking community, not there's alone. Sorry it's just not how we were built. It is however, the community the existing gm turned it into. That's tragic.

    By the way, i've never scratched my head even a little bit regarding whether golf had to cover their costs with a round of golf. I have watched as board members turned a blind eye and allowed it to go on. It needs to stop and it needs to stop now. The water crisis we are facing doesn't allow us the luxury of a wink and a nod by a handful of complicit board members trying to save a couple of dollars on a round of golf. And to be fair, every time they raise the cost of a round of golf, they lose more golfers. The gm quickly came to grips with that and why we are where we are today.
     
    Last edited: Oct 6, 2021
  5. BPearson

    BPearson Well-Known Member

    I freely admit, my mind works in fairly strange ways. After posting this thread, i thought there would be more comments than Mike's. Then i watched the number of readers grow, it struck me this thread was almost akin to peaking through the neighbor's bedroom window and seeing something you shouldn't be seeing. It's how we've been trained over the past 15 years. Data, statistics and information is just something we aren't supposed to be looking at; and when we do come across it, furtive glances are all we are allowed.

    Let me be blunt, that mind set was intentionally created. It wasn't how Sun City was built or why it worked. The founders didn't hide crap, they put it in front of people and asked them to decide. That's what owners do. Of course if you are just a "card holder," it's none of your freaking business. It is our business, it is our community and it directly impacts our future. Yet we know virtually nothing about it.

    Think not? If you attended or watched the Sept 30 board meeting, you saw the board agree they knew golf was supposed to be self-sustaining. There was never a hesitation, they freely admitted they knew. Now look back at the deficits i posted above, they were for golf, and they showed without question, golf was not self-sustaining, not even close. What's worse is if the "capital expenditures" they do yearly MAY not be included in those calculations (trying to be fair here).

    Either way, ask yourself this; which board member in the past years has said, hey guys golf isn't performing like it is supposed to, we better raise rates? Not one that i know of and certainly none of us knew (for certain) golf was under performing. We now know management knew, the board knew and not one of them did a damn thing! What was it we were asked: "why don't you all trust us?" How about this for starters; as a board member your fiduciary obligation obligates you to say something. Remember, the RCSC was created to serve the membership. Duh.

    It truly was through a freak of nature occurrence the information i have ended on my desk. It should never have happened other than i am if nothing else, inquisitive and relentless. The suggestion i got from a friend may be spot on. They might come after me, i don't know and at this point i don't care. The numbers tell a story and it is the siren call i have been making for too many years. Even while on the board, other board members didn't care.

    To all reading this, it is time to start caring. The water shortages are going to wreak havoc across the state and especially in Sun City, given the number of courses we have. To be clear, if they want to change the conditions that were made in 1977 when the RCSC accepted the golf courses, then let them come before the owners and vote it. Maybe it's time to do that, but i suspect the time was years back when they began fudging the numbers and ignored their obligations.
     
    carptrash and eyesopen like this.
  6. jeb

    jeb Active Member

    Bill, Are you getting those numbers from Annual Budget Summaries? I see on RCSC site 2020 (and downloaded a copy in case it disappears) - (671,877) deficit. I also noticed Monthly Statements show specific line items for golf income, but not golf expense.
     
    carptrash likes this.
  7. SCR

    SCR Active Member

    I'd still like to see the original documents from 1977 when the RCSC accepted the golf courses.

    If the documents cannot be located then the GM and staff members charged with securing those documents were derelict in their duties.

    However, I mentioned this before and never heard anyone respond - There is probably another copy of those documents that can be obtained. The RCSC is not the only organization that may have a copy.

    Without those documents, the golf courses and their existence are fair game for anyone who wants to challenge a non-existent document and make motions on how to proceed with golf course and golf in general in Sun City.

    I have long ago stated that golf fees should have been raised long long ago. If we are to use data collected on the courses on the number of golfers in Sun City using them it would probably be
    less than the number of golfers needed to support the courses without cooking the books and without the RCSC providing funds other than those collected from the golfers themselves.
     
  8. BPearson

    BPearson Well-Known Member

    Not off their website. but i have a copy in hand of the 2020 operating budget. Golf is carved out and you can see the yearly losses i posted above. The other rub is and it is most likely on their website under Capital Expenditures (just the current year) for golf was 1.2 million dollars. The burning question was; did they factor that into the golf losses? I've asked this before and have been told no, but i want reaffirmation again about that. If it hasn't, then those numbers become far more frightening.

    See my post SCR in another thread regarding said documents.
     
    CMartinez likes this.
  9. CMartinez

    CMartinez Well-Known Member

    Thank you for the info Bill, much appreciated.
     
  10. aggie

    aggie Well-Known Member

    I've tried to track the ownership of the Sun City golf courses operated by the RCSC but keep hitting a brick wall. The original deed from Del Webb to the RCSC is recorded on 6/1/1977. The curious thing is that the RCSC Quit Claim deeded all of the golf courses(except Quail Run) to Golf Courses of Sun City, Inc. on 8/22/1977 and there is nothing after that. Is title to all the golf courses held in a totally separate entity from the RCSC? Also, there are no recorded restrictions to these transfers. There is a perpetual claim to the name in the Arizona Corporation Commission records but there doesn't show any activity. Hmmmm....
     
  11. Michael Wendel

    Michael Wendel Active Member

    Creating "Golf Courses of Sun City, Inc." (GCSCI) could be a good move by the RCSC. RCSC gets some insullation from liability issues occurring on the Golf Courses. It may also make the insuring of the golf courses easier and possibly more efficient. This should also make it easier to keep the golf courses self sustaining. I haven't delved into RCSC finances, but I would expect to see members pay the RCSC. The RCSC uses our assessments to operate and fund the RCSC. Funds allocated to golf should go thru the GCSCI and be easy to track. How deep a member can look at the books would be key to seeing this info.
    Questions could be asked to management and the board as to how GCSCI works.

    This is a good find. All golf course expenses should come from GCSCI. Capital (PIF) expenses could be a different issue. PIF expenditures for Golf should also go through GCSCI as they are made (if GCSCI truly owns the courses).

    Something to have a deeper look. I always believe following the money will show you how things actually work (right or wrong). It will show competence and often uncover alternate agendas.
     
  12. eyesopen

    eyesopen Well-Known Member

    This is the deed for Quail Run.
    Especially Interesting content, Del Webb’s
    original intent when handing over
    the golf course(s.) See: Further Subject to the Following. ( other courses don’t contain this in Quit Claim docs of record)

    10/02/1979
    https://recorder.maricopa.gov/UnOfficialDocs/pdf/19790362978.pdf

    Regarding the other courses
    Sun City Golf Courses, Inc. Quit claim TO Recreation Centers of Sun City, Inc. September 26, 1978

    https://recorder.maricopa.gov/UnOfficialDocs/pdf/19780335241.pdf
     
    aggie likes this.
  13. aggie

    aggie Well-Known Member

    Thank you. For some reason it wouldn't come up on my searches. I would think any restrictions of use would have had to be recorded to make them enforceable.
     
  14. BPearson

    BPearson Well-Known Member

    You guys want a scary thought? You now know more than any board member regarding the golf courses and how the RCSC came to own them. To my knowledge, it was a topic the gm stayed away from...you know, "plausible deniability." I have in my hot little hand the Articles of Incorporation for Sun City City Golf Courses INC.; hell i'm not sure the gm has ever even seen them.

    Here is the opening lines from Article 3, Purpose: "The corporation is formed, organized and always to be operated as a "social club" within the meaning of Section 501 (c) (7) of the Internal Revenue Code of 1954 , as amended. The principal objective of the corporation shall be to construct, own, lease, hold, operate, conduct and carry on a golf club for the use and benefit of its members, including club houses and restaurants therein, locker rooms, golf equipment and supply shops."

    I found that part interesting given the president's explanation for why board members who voted on golf issues weren't liable for a "conflict of interest." She stated it wasn't a club. Of course if she never saw the document or knew the history, how or why would she know? At the time it was established, the board of directors for the RCSC became the directors for GCSCI.

    There's more, but lets not dwell on the language for now. The bigger question becomes when did this organization cease to exist? I find nothing anywhere to detail the merger, acquisition of the organization as an entity. Like all Articles of Incorporation there is dissolution language but it appears to me it would take a board action that was recorded with the State to do so.

    A couple of things to understand; the board of the RCSC was the same for this organization. Perhaps they found it inconvenient to get done with the RCSC meeting and reconvene and hold a second meeting. Just not sure; those of you who like record searches perhaps could find it in the state's records. It would have to be there if they actually did it. Second, there is some language regarding the assets/liabilities of the GCSCI and how they are to be handled, but the language regarding the golf courses and the obligations are actually in the deed restrictions themselves.

    Finally, all of the courses were transferred in 1977 except Quail Run which, as noted, was given about a year later. There are different stipulations that went with that course.
     
    Michael Wendel likes this.
  15. eyesopen

    eyesopen Well-Known Member

    Very little info…


    SUN CITY GOLF COURSES, INC.
    Company Number
    01098850
    Jurisdiction
    Arizona (US)
    Registry Page
    http://ecorp.azcc.gov/Details/Corp?co...
    https://ecorp.azcc.gov/EntitySearch/I..., 2 Jan 2017

    Company network

    Not yet available for this company. Click to find out more
    Latest Events
    Before 2017-01-02
    Incorporated
    See all events
    Corporate Grouping USER CONTRIBUTED
    None known. Add one now?
    See all corporate groupings
    https://opencorporates.com/companies/us_az/01098850

    SEARCH RESULTS
    Entity ID Entity Name Entity Type Entity County Agent Name Agent Type Entity Status
    01098850 SUN CITY GOLF COURSES, INC. Unidentified Inactive
    • Page 1 of 1, records 1 to 1 of 1
    https://ecorp.azcc.gov/EntitySearch/Index
     
    carptrash likes this.
  16. OneDayAtATime

    OneDayAtATime Active Member

    Mr. Sun City.....pray tell, what are we to do with all this information??
     
    SCR likes this.
  17. BPearson

    BPearson Well-Known Member

    We keep digging as we move forward. I've just started going through old files at the museum. Not sure how everything fits together. The reality is our organizational structure is set by documents and the organization has an obligation to uphold those documents. I just came across the Articles of Incorporation for the Sun City Community Association. They were formed in 1968 when they merged the Community Center (Oakmont), Town Hall (Fairway) and Town Hall South (Mountainview) was just opening. 4 years later, 1972, they did a name change and became the RCSC.

    I haven't read them yet, but will today. I want to see how far adrift we are from 1968. Articles of Incorporation can be changed but with some difficulties. The By-Laws are easy and where they usually add the bullshit to compound how things work. I've always believed the better versed you are, the stronger the cases we can make about what is going on.
     
  18. SCR

    SCR Active Member

    Bill, what are you digging for, and what is the end game if you find what you are looking for?

    Multiple posts of multiple bylaws, articles of incorporation, deed restrictions - what is the purpose of listing all this info if nothing is going to be done with it other than cite it?
     
    Michael Wendel likes this.
  19. BPearson

    BPearson Well-Known Member

    For as long as we have owned a house in Sun City (1999) the understanding has always been; the golf courses and the 10 pin bowling alleys were sold to the RCSC with an understanding they would be self-sufficient. They were bought under those conditions. During all of that time, i have never seen anywhere that was documented. When i was on the board i asked the gm for it, she never produced anything. The board didn't care.

    Now, as i read old newspaper stories from 1975 (the point when negotiations began with DEVCO for the courses) through the late 90's, there's always been a "mystery" over what the actual deal did or didn't say. There clearly was all through the initial agreement (18 months) to the point of ownership the courses would be taken purely on the basis of them being self-funded. The cost of a round of golf was supposed to be equal to the total cost of running them (including 50% of the maintenance Viewpoint Lake BTW) which fed the water to the courses.

    I found an article just now from the late 90's where the board tried to raise rates because they were losing money on golf. The golfers went crazy and the board president said he was trying to put his hands on the documents to show the golfers. Apparently the RCSC doesn't have them, or if they do, can't/won't produce them. In any event, the documents that were drafted and signed matter. Golfers may not like it, but the entire point when purchasing them was to hold harmless the other 85% of the population from having to feed the money pit. That is why it took so long for the courses to be turned over, residents understood the potential for them to become a very costly proposition...and now they are just that.

    I watched a year ago when Chris H stood up at a meeting and said; '"if we didn't keep the golf courses open during the pandemic, we would have to pass the revenue loss on to the members in higher lot assessments." Hell no. Now i am hearing the management is floating the same crap, even though the board president just admitted the courses need to be self-funded. It doesn't take a freaking rocket scientist to see what will happen in the next ten years. We are going to get financially crushed from losses in the golf division.

    Without proof of those existing documents, they (the RCSC) will just continue to subsidize golf. For years now i have been calling for a forensic audit covering the past 15 years. There's not a doubt in my mind the gm has been allowing golf to slide when it comes to being self-funded. The board is terrified of raising rates even though that is what the documents called for. Of course, if you don't ever produce the documents, why would they even try?

    So what's the point? Pretty simple. Golfers always claim a golf course has to stay a golf course because it's in the original purchase agreement. That said, if the deal was also in the original documents golf has to be self-sustaining, that too should be what we live by. The challenge in the next ten years will be all about golf. The game is declining in popularity, Gen X has little interest and as people moving here continue to work later in life, the game will stay on the decline. Either we get our head around it now, or just let the gm and the board keep the shell game going where we subsidize golf in even greater numbers than the past 15 years.

    I was never able to even get a sniff of the documents until i started digging at the museum. Every day i uncover more. If you think it's waste of my time, tell me and i can quit and we can let the charade continue.
     
    Cheri Marchio and carptrash like this.
  20. SCR

    SCR Active Member

    Not saying it’s a waste of time. What I’m asking is what are you going to do with any documents you find that say golf must be self sustaining.
     
    OneDayAtATime likes this.

Share This Page