Understanding golf rate increases better...

I know it's most likely a waste of time, because those golfers who want cheap golf won't listen and those that don't golf, most likely don't care or understand. Given a former board member has jumped on social media to get golfers to show up en masse on Thursday, i'm going to post this anyway.

Our closest competition for comparison purposes is Sun City West. They were built on almost the same platform as Sun City. The biggest difference is we have a free-standing home owners association (SCHOA), while the Rec Centers of Sun City West includes the obligation to address violations of their CC&R's. They used to farm out the initial complaint letters out to PORA but took it from them and now do it all in house. For those who don't know, that's the norm is senior housing communities.

Back to golf: All of their courses are newer and nicer, some a lot, some a shade better. We always hear they have less amenities than us (true regarding the numbers of rec centers) not true regarding golf courses. We have 8 courses, they have 7. We have 27,000 plus rooftops, they have 18,000 plus. On a per-capita basis, they have more. Which is why i often turn to their golf structure to see what they do, have done.

By the way, they changed the obligation for their courses to be revenue neutral. I don't know the full details at the point of purchase, but somewhere around 2000 they decided golf was never going to be self-sufficient and have been subsiding it ever since. We on the other just decided to ignore how our courses were purchased and buried the numbers so no one ever quite knew how good or bad we were doing.

That was then, this is now and where i want you to focus. The former board member was quite vehement this increase was attacking the the golf community in ways that were targeting the full play pass buyers and to some extent the surcharge buying golfers. I'm not even discussing the non-resident full play, they should just be gone.

I've written many times about who has been controlling the golf advisory committee and whose voice has been listened to. Oddly, i have ignored most of that and said point blank, the golf advisory committee should be involved in the discussions and have a voice. The problem is, their vision for the golfing community has been for the pricing to favor them (pass buyers) and make the daily walk-on players subsidize their cheap golf.

If you think i am wrong; here's the comparison between Sun City and Sun City West's rate structure:
Sun City full play pass: $1550.
Sun City West full pay pass: $3500. (it went up in July to $3600).

Sun City surcharge: $800. Sun City surcharge daily rate: $8.
Sun City West Kachina : $895. Sun City West Kachina daily rate: $23.
Summer rates are cheaper, this is only Nov through April.

Are you still with me because what we are seeing is every pass in Sun City West is about double. So, what would you expect to see regarding the daily walk-on rates? Double? Let's take a peak:
Sun City: $35. with a proposal to increase to $39.
Sun City West: Currently $44 (raised in July, 2023).

With the increase the difference is $5 a round. While many of you are unaware, the daily walk-on, guests and visitors makes up the largest share of the golf revenue. In Sun City West, they have clearly looked at golf differently and not just taking care of the pass buyers. It's all magnified as the former board member was calling for small incremental increases. Really? You mean like you did to the daily walk-on golfers by raising theirs a dollar every year and letting them subsidize many of you buying cheap golf passes?

It's all just numbers but it certainly tells a story.

 

Seems fee increases are needed and warranted. “Pay fairly to play”.

 

I have it on good authority from a "usually reliable source that there is a faction on the Board that wants to increase our annual assessments upwards of $200 a year (I've heard between $100 and $200), so that the money can be used for golf maintenance.
Now, as most of you know, I'm a golfer, always have been. But I have to tell you, yes, golf is going to be hit with some rather hefty fees coming up the road that were negotiated with the previous General Manager and the Arizona Department of Water Resources. Turf reduction is going to be a hefty price tag...it could reach $15 to $20 million!
However, this is NOT what a segment of the Board is looking at. They are looking at taking extra annual assessment money and moving it over golf. Somehow, I don't think this is fair to the majority of RCSC Members that don't play golf. By all of the accounts I've been able to see, there are roughly 4,400 golfers in a community that has a population of 39,900. That means that just over 11% of the population golfs.
As a golfer, even I am stymied by the rumored move. I know we have to do turf reduction, and that isn't going to leave much in the PIF for anything else, such as Mountain View, but to raise our assessments $100 to $200 PER YEAR is just insane.
It isn't on any agenda just yet. I just don't want anyone surprised when it shows up in a month or so. They're already increasing the price of golf by raising the large and small packages, and upping the surcharge being charged on the small package. It's done in an effort to stop all of the outside play packages that have been sold over the years. I'm all for that. But to ask for an additional amount that hits everybody is just bad business.
I wanted you to know what's being talked about so you're not surprised when it hits in a month or two!

 

Yikes! The only other item that would create as much turmoil, or more attendance at our up coming Annual Membership Meeting, would be if they said "Dogs No Longer Allowed in Sun City!"

I certainly hope this is, in fact, just a rumor but I do understand that this board is possibly just as divided as the one we just got rid of!
The rumor I'm hearing is that they are apparently in a quid-pro-quo situation where some Directors are threatening not to vote to pass certain items unless the other Directors agree to vote and pass theirs?

We are not in as good of place as they would like us to believe when it comes to the Board!

This message is brought to you by "Transparency"

 

If you get a chance Rich, watch the SAC meeting last Friday. It's a stunner as members of the ad hoc committee made some interesting comments. The rumors have been running about what board members want; rather than what SAC's mission is. Their problem is once the membership is involved, they either run over them or listen to them. My suspicion is no one but some staunch golf supporters will buy into the "let's spend a boatload of money on golf." We'll see.

While Jan Eck and i disagreed often, she always understood our golf courses would be average at best. No amount of money was going to make them top tier courses. I know from talking to golfers we need to do better than we have the past two years. 350,000 rounds of play beat the snot out of them. When you add in a 40% turnover in the golf maintenance dept and our equipment being badly outdated, they cannot keep up.

That's why McCurdy's comments have been so on point. There's always a reason for whatever is going on and his budgeting process has been enlightening and refreshing. Pretending something/anything was "no one's fault" (as Cook did regarding technology) was a crock. Rehashing who's to blame isn't the point though, getting it fixed and insuring it never happens again is.

 

Transparency? What transparency? (just kidding)

 

Tom, I have heard the same thing from two different sources. And from what I hear, the quid pro quo isn't going anywhere. Bill, thanks for the suggestion. I usually have an affinity for spending two or three hours watching people argue, but I certainly will take you up on that and watch it.

I think there has to be some give and take with the golf rates, as well as with the whole Mountain View situation. Unfortunately, what I see going on in Washington, DC is very similar to what I'm seeing from this Board. I have to say, I am a little surprised that some people that have the most experience seem to be causing most of the problems!

 

Time to spend down a few million of the unrestricted monies in the budget. I believe this is what the money is meant.

 

It's part of the plan.

 

Good to hear! Hope it is a big part of the plan.

 

Carol Arend
I am a year around resident and I play 3 days a week. I have been here for 25 years. Sun City is the cheapest place to play in the Valley. Even with the recommended increase of $1,875 that is still only $12 a round. With holidays, trips and other things that come up, I would probably be paying $15 to $20 a round. Still the cheapest in the valley. Our cardholder rate is $35 right now for 18 holes on a regulation course during the winter. I have not researched it, but I do not think there is a course in the valley that you could play for under $40 most are $60 and above in the winter months. I have heard from quite a few golfers who think the proposed rate increase for golf is insane. I would like to know where you can go to get cheaper rates???

 

Good question? There was a national survey/poll few months ago in which Sun City was rated top spot to golf in the USA. Why not market that rating?

 

So well said Carol and yet those who want cheap golf are screaming and will be half-crazed on Thursday. The charge is being led by those buying the full play pass. So we are really clear, there is less than 500 of them; a tiny minority. They are the same ones that helped influence the daily walk-on players rates to be increased $1 a year while they paid nothing more. It's quite simple, they wanted walk-on golfers to subsidize their cheap golf.

We know from Director Nowakoski's data, the average cost for a round of golf (to break even without capitalized expenses) was slightly over $22 in 2022. We also know those costs will be exploding next year, between wages and equipment purchases. We also know from his data, that those buying passes take far more of the tee times, and yet provide less revenue. To be clear, the full play pass buyers are the ones who benefit the most from the current structure.

Sun City, nor anywhere else in the country, can afford to survive on $5 -$10 rounds of golf. There's a reason why Sun City West and The Grand are more than twice as much for full play passes West ($3600), Grand ($4000); they don't want golfers buying them and playing 5 times a week. They both do passes that reduce the cost, but no one gives it away. No one.

Given what we are facing with all of the increases, golf will never be self-sustaining. I can live with that as it is an important amenity. That said, we need to know exactly how much we will be subsidizing and whether those playing are paying their fair share.

 

Dang been meaning to address this topic and am finally getting around to it. I condensed your comments down Rich to the real meat of the post. I mentioned along the way i have attended budget and finance committee meetings for the first time in 20 years this summer. I think i've been at the last 4 and can state i've never heard anyone mention the idea we needed a $200 increase next year. The number most often suggested has been a $50 increase, but even that i find high...unless or until they (the board) can rationally explain how the available cash on hand factors into the 5 year catch-up plan.

By the way, at the last B&F meeting, there was a discussion regarding PIF and apparently two board members were going to submit dueling motions this month. Turns out both were withdrawn. One would have rolled all of the PIF assets into the general ledger accounts (a horrible idea that most of the committee shot down) and the second one that has been touted a couple of times and is way more palatable. The suggestion was made to match the 5k that Sun City West went to and use the $1000 increase into a capital projects account (with some set criteria) and the other $4000 staying in the current PIF structure with the already established criteria.

I've always favored that idea. It creates a pool of money (5 years, 10 million dollars) to be directed towards much needed repairs. This is exactly why i think it is premature to start looking at how big next years increase is. Far more important to get a handle on how much money we can legitimately spend in each of the 5 year plan they are building and then decide where it comes from. Kevin McCurdy was asked how much money (once allocated) he could actually spend and he was blunt and to the point...6 to 7 million dollars would be the max. The RCSC simply doesn't have the man-power to do more than that.

It's why a cash-grab isn't where we are right now. We know they RCSC has roughly 20 million dollars in cash on hand (between carry-forward and emergency reserves). We know if they add the $1000 to PIF that will generate $2 million dollars next year and we know a $25 lot assessment increase adds another 800k. If they legitimately can only spend 7 million dollars on catch-up, where is this immediate need for more money than i have listed above?

I'm no numbers guy, but before anyone starts shouting the need more money, they best be able to show me/us why?

 

I'm no numbers guy, but before anyone starts shouting the need more money, they best be able to show me/us why?[/QUOTE]

Short answer Bill: we have to do multiple things simultaneously. Use the accumulated "carry forward" over the next 4 years to take care of the deferred maintenance issues, find a funding mechanism to pay for our annual maintenance and capital needs each year, and then be sure we can keep pace with general operating costs of wages, insurance, benefits, utilities, and items that fall under the capital threshold, etc.

It's unfortunate the members haven't had the presentation on the need for reserve funds. We don't need tens of millions, but we are under funded for big surprises. Items that used to costs a few hundred thousand have now reached a million plus or greater. Kevin provided numerous examples whereby we could wipe out our reserves very quickly - one was failure of one or more of our 10 wells, costing over a million each.

So using the current carry forward gets us caught up, increasing the PIF and using a portion for a new capital account would get us a new funding source to keep us on track, and modest assessment increases keeps general operations and items that don't fall under capital improvements funds up to date.

 

Short answer Bill: we have to do multiple things simultaneously. Use the accumulated "carry forward" over the next 4 years to take care of the deferred maintenance issues, find a funding mechanism to pay for our annual maintenance and capital needs each year, and then be sure we can keep pace with general operating costs of wages, insurance, benefits, utilities, and items that fall under the capital threshold, etc.

It's unfortunate the members haven't had the presentation on the need for reserve funds. We don't need tens of millions, but we are under funded for big surprises. Items that used to costs a few hundred thousand have now reached a million plus or greater. Kevin provided numerous examples whereby we could wipe out our reserves very quickly - one was failure of one or more of our 10 wells, costing over a million each.

So using the current carry forward gets us caught up, increasing the PIF and using a portion for a new capital account would get us a new funding source to keep us on track, and modest assessment increases keeps general operations and items that don't fall under capital improvements funds up to date.[/QUOTE]

Any increase seems a “money grab” to me. $525 per year for annual assessment amounts to about $15,000,000 a year. And more is needed? Hope need is clearly communicated.

 

Any increase seems a “money grab” to me. $525 per year for annual assessment amounts to about $15,000,000 a year. And more is needed? Hope need is clearly communicated.[/QUOTE]


Tom, the annual operating budget will be north of $27 million, possibly higher. The assessment is just a portion. Only other revenue is golf and bowling. All the numbers will be shown and explained.

 

I'm really curious Tom T, you seem intent on reducing costs and as i read many of your comments you don't seem very well versed on the RCSC's operations. I don't mean that from a angry or hostile perspective, but when you mention 15 million dollars sounds like more than enough, you simply have no clue. This is a massive operation with more than 400 employees and the suggestion to just shutter stuff to save money is odd.

I really hate arguing how cheap we are, in fact let's say we are more affordable than everyone else, but realistically our structure is well established and positioned well to move forward as the Gen Xer's start searching for their place in the sun. I doubt rolling up the sidewalks to save a couple of bucks makes much sense.

 

“I really hate arguing how cheap we are, in fact let's say we are more affordable than everyone else…” BPearson

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Thanks Bill! What about the “come to Jesus moment” we kept hearing about? That was a clue to me that money issues were imminent. If money is an issue I learned one option is to quit spending money. You have written before that the RCSC may be supporting to many amenities. “Bloated” I believe is the word you used.

The $15,000,000 is in addition to the other $20,000,000 of unrestricted monies in the budget. So I agree RCSC should be positioned well in moving forward.

So I have also stated a few times, let’s get everything on the table- revenue, expenses, and options before making decisions. Can hardly wait for this to happen.

Closing an amenity or two is just an option. If you disagree no problem. People say they want options and alternatives, but then shoot them down. Why ask if one doesn’t wants to hear different options? Makes little to no sense.

Hope this makes some sense! If there is only one option(raising fees), so be it.