Delayed Transition and Rising Assessments

Sun City Texas would have Transition to Homeowner Association control perhaps next year or most certainly the following year, if it were a more perfect world. The Sun City TX Transition Trigger is 95% of homes sold per Sun City TX Bylaws. Interestingly, some other Sun City’s have a much earlier transition from Developer to homeowner control.* The Transition trigger for Sun City Lincoln Hills is 75% of homes sold. This earlier Transition Trigger is the result of a California Legislative mandate designed to protect Homeowner interest.

*In the “Town Hall Feedback” communication an incorrect number for Sun City Lincoln was cited. Rob McDaniel provided the correct trigger number of 75%. Our thanks to Rob.

What does this mean?

The Developer’s decision to expand Sun City TX by an additional 2500 homes will now delay Homeowner Association control to around 2010-2011 or until 7125 homes have been sold. If the Sun City Lincoln Hills Transition trigger of 75% was utilized, Homeowner Association control would take place much sooner or after 5625 homes were sold. Of course, the Developer could declare that the Bylaws establish their legal right to delay Transition to Homeowner Association control into the next Decade. But, as one sage opined “The right to do something does not mean that doing it is right."~

Why should Residents care?

Most residents relocated to Sun City to pursue their hobbies, enjoy the sunsets and leave the financial matters to others! But, as DW5000 draws to a close and Transition is delayed, substantial losses are mounting in the two principal enterprises of the Homeowners Association—Restaurants and Golf. Both were expected to breakeven when DW5000 was completed.

Proposed answers to these financial problems, as outlined in budget documents, are increased assessments; higher fees and more price hikes. [See chart—Sun City HOA Fee Structure] Losses for Restaurants and Golf are currently estimated to be in excess of $645,000 and growing. These losses equal $168 per roof top. That is a very large portion of each resident's annual Assessment. [See charts – Golf and Restaurant Losses, 2003-2005]

Causes of poor financials in Sun City TX are frequently framed as; Resident’s unwillingness to patronize the Restaurants; Charter Clubs not paying their “fair” share; and Golfers not supporting higher green fees. The REAL issue is basically the inability to manage the Community Association Operations profitability or at breakeven basis. At this juncture, this is solely under the Developer’s control and responsibility but it has long-term consequences for residents. [Example: early last year Sun City Summerlin [Nevada] voted a $700 special assessment along with a 20% increase in annual homeowner dues.]

Of Course, Resident input is actively sought by the Developer; Committees are formed; Task forces are charged; Opinion Surveys are conducted but the final decision is that of the Developer. That is their prerogative per the Bylaws. [Written of course, by the Developer] The Developer has a primary business interest of building, marketing and selling homes. One only needs to review Pulte’s financial results to see that they are very good at that business. That said, homeowners should recognize and understand that Developer’s marketing and business interests are frequently not the same as Resident interests.

Therefore, in order to forestall further significant increases in annual assessments, advances in fees and the complete avoidance of special assessments, the following comprehensive actions are proposed: [Each of these proposals will require approval of the Developer controlled Board of Directors]

• Change the trigger point from 95% to 75% for resident control. This would give residents time to review the expense side of the budget and make necessary adjustments.

• Change the nominating/election process now in place to an open election for Board and Governance Committee member’s similar to other Home Owner Associations and Municipalities.

• Contract with a known and established Golf Management Firm to manage and operate our courses. Many of the well known municipal and country golf club courses in central Texas are already doing this and have been pleased with the results.

• Lease one or both Restaurants to an entrepreneur[s] that have successful track record in operating profitable, well run food and beverage establishments.

• Contract a Community Association management firm with experience and reputation to manage our day to day business.

Our goal is to foster transparent discussions and actions regarding the issues confronting our Community Association. We welcome an open dialogue with those that disagree with the actions proposed and/or why they are proposed. And, we would very much appreciate additional input from the many residents that have offered ideas, concepts and details about how to address issues confronting the CA. We welcome comment on the problems outlined as well as the solutions—both positive and negative [hopefully constructive].

Our mission is to make Sun City Texas a community with a solid financial base with an active adult environment. If you support our mission please forward this email to your neighbors and friends. If your neighbors or friends do not have access to the internet, make them a hard copy. Only with your support will we be successful with the proposed actions. If you wish to have your name added or deleted from the email data base, email jackstro@verizon.net

Future newsletters will focus on the financial aspects of Operations, future Plans and how different approaches may be utilized to address poor financial results.

Sun City Texas residents make Sun City Texas great