Snowbirds - Can be or cannot be RCSC Directors that is the question

I had a free moment between chores and took a scan of the bylaw changes. As mentioned in my previous posts, I think Snowbirds should be eligible to serve on the RCSC board (all other similar 55+ communities allow "snowbirds" to be directors). For these purposes a snowbird is defined as a member who owns and occupies a home in Sun City (a second residence) but also has a home or primary residence outside Sun City.

My understanding of past practice was that only owner occupants who held an Arizona driver's license with a Sun City address on it were eligible to serve as RCSC directors. My understanding was this practice was based on the bylaw provisions defining director eligibility requirements. These provisions require that candidates reside in Sun City, be available for 10 months of the year and meet the requirements to hold an Arizona Liquor license. My understanding of the Arizona liquor license law is that only Arizona residents may hold an individual Liquor license.

The proposed changes to the bylaws provide that members have the right to be a candidate for an open board position. Members include snowbirds. If the change is intended to allow snowbirds to run for office (I am in favor of that) then I would suggest that the board eligibility requirements be changed to conform with this change.

I welcome any change that expands the board candidate pool and highly encourage anyone who is interested in running next year to talk to current and past board members about what is involved.

 

This is my understanding, and I did contact and research this with the Arizona Department of Licenses & Control; First of all, as far as the State is concerned, the Board of Directors are the Officers of the Corporation and it is the Corporation that holds the license. As far as the State is concerned, not all Officers are required to be named on the application/license, but 3 are still questionable to me.

CORPORATION

A Corporation must be qualified to Do Business in Arizona and be in Good Standing with the Arizona Corporation Commission. At least three Officers and all Stockholders owning 10% or more of the Corporation must be disclosed. Each person disclosed is required to submit a completed Questionnaire and Fingerprint Card.

But it also says this:

1. e) Corporation (not an individual): it must be qualified to do business in Arizona. The license must be held in the name of a designated agent who meets the requirements of an individual licensee. (Hmmm? a singular agent?)

I would suggest that you offer an amendment to the Bylaws at our Membership Meeting that would amend the current requirements to serve on the Board.

And for what it's worth, I believe that both a husband and wife should be eligible to run for the Board because it's not until they both actually get elected does a conflict occur! Let's face it, if both are running they most likely have very different opinions anyway. If both run and both get elected then the one with the higher number of votes gets the position. I get it, this would be a very rare occurrence but I believe it is a fair thing to do, because it could actually prevent a very good candidate from running if his/her spouse decides to also run for a spiteful reason?.

 

Fingerprint Card? I knew there was a reason I wasn't running.

 

If you're not a felon you have nothing to worry about. Felon's can't hold a license!

 

One of the anomalies from our history is the shrinking population of RCSC members. My friend Ben Roloff has newspapers where they reported nearly 40,000 members in the 80's and 90's. Today, we hover around 32,000. There's actually more houses, but less members.

Data matters. In this case, not so much to the RCSC, because they get their revenue from every home irrespective if a member lives there, or not. I suspect one of the answers why is the huge number of homes that are now rentals. With rentals, the RCSC can get privilege card purchasers, or not. Either way, they generate excess revenue, or they get revenue from members who aren't using the amenities.

Nope, not trying to hijack the thread, i want to amplify John's point. Our bylaws need to evolve to meet the ever changing dynamic within our society. While a small minority get squeamish when i mention our history, they shouldn't. We know that DEVCO was evolutionary and revolutionary. From the first days they opened they were constantly tweaking the system. Some far bigger than a tweak.

We have to do a better job on data collection. We know our antiquated technology was a bar to being able to do that. When i heard they were spending a lot of money on a new website, my first question was are we getting rid of that old golf program we bought to allow on-line booking for tee times that we retrofitted to use across other platforms within the RSCS.

The answer was yes: Hallelujah. It was crazy back when i was on the board, it's worse now. Good data collection should be at the core of future planning. Beyond that is our capacity to look beyond what is and begin to understand what could be. Good example is Tom mentioning we are land locked and there will not be more homes.

Obviously, that's not the case as we saw clearly what Royal Oaks did in their new development. High priced and built up, rather than out. Every shopping center suffering empty store fronts bring us closer. Three private owned golf courses are fertile ground for enormous development. The overly large number of churches with shrinking numbers of members is another opportunity in the making.

We need be positioned to grow, evolve and change. That only happens when those living here have a better grasp of what we (the RCSC) is doing and why.

We have a long way to go to get there.

 

I heard a past Board member state at the Candidate's Forum in 2023 that this is in the bylaws so they can find out if a candidate is a felon.

Aren't all RCSC Members Stockholders?

 

On the contrary! The RCSC offers no stock!

ARTICLE IV (Articles of Incorporation)

This Corporation shall have no power to issue capital stock, and no dividends or pecuniary profits shall be declared or inure to any Member, Director, Officer of the Corporation, or any private individual (except that reasonable compensation may be paid for services rendered to or for the Corporation affecting one or more of its purposes), and no Member, Director, Officer of the Corporation, or any private individual, shall be entitled to share in the distribution of any of the corporate assets on dissolution of the Corporation.

 

FYI, a designated agent is a legal term for a person or entity to accept legal service, that is lawsuits filed, motions in court, subpoenas, etc. During my career, our company was served all forms of legal process and I accepted the documents as I was in management. I would review same and call our outside counsel to alert them I was faxing them with the originals following via overnight mail.

The fingerprint cards are taken after the Board member is sworn in. Much to the disappoint of some people on this site, I was not found to be a felon. Sorry for my clean life.

 

Thanks, Tom, for clearing that up. So no one, including Directors, are stockholders?

 

Since I worked on the AFIS program I can say with certainty not all felons were part of the database. I hope this brings a laugh...

 

John, not an expert on non profits but I don’t believe we have any stock ( really not sure but believe no). On the other hand we cannot distribute profits to the stockholders as we would lose the non profit status.

Update! I just looked at the 2023 f/s and there is in stock, 10,000 authorized 15oo issued as of FYE no par value. I think this was Webb’s “seed money” in the beginning. Other than what I just typed there is no other mention of stock or value. The 9nly other portion of the equity section is undesignated assets and restricted designated assets Board directed, restricted funds. I will see if I can find anything in the notes but do not remember any note on this.

Maybe you can help on this, I admit it has been almost 2 decades since I worked professionally with f/s but this equity drives me crazy. Previously the equity regarding undesignated funds should cash, bank deposits etc., then we would have a breakdown on restricted funds and lastly buildings, land. This new fangled equity is crap in my mind as buildings and land value are hidden unless you go on a turd hunt (sorry) so you can find cash on hand and where.

So am I financial analysis fossil that should lay down and pass on next to a T-Rex?

 

GdV - In my career I have found that not even wall street analysts care to understand the accounting nuances of the F/S. Having participated in the preparation of many SEC reports I can confidently say some accounting rules are sometimes very puzzling, but they are what they are. I always think of "our" equity section as an accounting requirement that does not shed much light on the financial status of the corporation. I know this is probably not helpful, but it is what it is. My only equity in RCSC is tied up in the value of my home.

Best regards and God Bless,

John

 

Thanks John, nice for you to say that the experts don’t know things. Makes me feel better and I am going down the right road as a pain in the neck to the accountants.