Maintained Home Confusion Runs Amok

The February5th SC information Newsletter focused on the chart contained in the January Sun Ray “How your $1,030 Dues will be spent”. The focus was specifically on the $10.62 from Residents Dues being spent on Maintained Homes. Why is the Community Association obligated to cover these expense overruns? The Newsletter also detailed the difficulty I was having obtaining information as to why the developer was not covering this cost if the expense is related to landscaping problems. A good question is why any residents are paying for this shortfall.

Although the initial inquiry was why dues of All Resident’s were being allocated to support landscaping and lawn maintenance of Maintained Homes, it has become quite apparent that there are other significant issues involving Maintained Homes. Many owners of Maintained Homes are apparently not getting the level of service they believed they purchased. And, of course, residents are upset about paying for the mowing of their neighbor’s yards; A quick review of the budget, suggest that the problem was evident in 2005, expected to grow in 2006 and continues into 2007. Landscape maintenance for Maintained Homes apparently has been less than satisfactory for some time and the budget document suggest that will continue. Where in the many venues of our Board meetings, governance committees and communications is this problem to be addressed and resolved? Apparently, owners of Maintained Homes have had about the same response in getting their issues addressed as there has been to getting the answer to why $10.62 is being allocated from All Resident dues to support this mess. The future contains many dead shrubs, sprinkler failures, sod and grass problems, and labor cost increases if not corrected. Unfortunately for all residents these added costs will continue after the Developer is gone and the subsidy disappears.

The Community Association apparently has assumed a Developer obligation with accompanying liability. Any contract between the Community Association and Developer must be at "arms-length" to prevent any potential interest conflict. Since this “arrangement” between the Community Association and Developer is imposing a burden upon All residents, it should be corrected immediately. It is not sufficient to merely claim that the Developer subsidy is covering the Total Community Association deficit.

The Developer has been seeking permission from the City to build a 1000 plus more of the Maintained Home type with landscaping included. [Zero Based Lot Lines and Garden]. Obviously, that kind of an expansion will only compound the current problems and add to CA losses. It is critically important to get both the service level and the financial considerations of this issue straightened out now because of present as well as future financial exposure to the CA and in turn, all homeowners. The responsibility should be placed with the Developer where it belongs.

Common Area maintenance may well have similar problems, as is being experienced with Maintained Homes, except that the problems are buried deeper in the expense budget. At $669K, the budgeted amount for landscape contracts is scheduled to rise 17% over last year and this does not include CA salaries allocated to the activity.

The CA should not be used as an extension of the Developer’s Product marketing program. The CA has a fiduciary duty to Residents. Maintenance “arrangements” should follow a practice similar to that of the home buyer—an inspection and acceptance before closing; then a warranty of a year or more where any problems are quickly corrected at the expense of the Developer.
We ask that the Board of Directors of the CA address these issues immediately.


Now who is really footing the Bill?
Money is fungible. Even so, the statement the developer is essentially subsidizing (paying for) the maintained home program is quite a stretch, to put it kindly. Resident’s assessments and various fees account for about 90% of CA operating revenue; Developer about 10%. Obviously, the Developer’s contribution (subsidy) could not cover all the losses for Restaurants, Golf and Maintained homes. Thus, Residents are stuck with a large portion of such losses.

CY06 Budget Information (page 6, February Sun Rays)
Food & Beverage $368,000 Loss
Golf $373,000 Loss
Maintained Homes $ 48,000 Loss
Total $789,000 Loss
$284,000 deficit funded by Developer according to Sun Rays amount*
$508,000 remaining losses funded by Residents based on Sun Rays.
*The 2006 Budget dated December 30, 2005 shows a different number: this would not change the analysis;
just the amounts.


Another way of saying the same thing:
If losses were eliminated for each of the above activities, there would be No need for a subsidy and no need for higher assessments.

Resident’s assessments could be rebated in the amount of $508,000 or $112.39 for the 4520 resident homes that apparently is being used as divisor. [$48,000/4520= $10.62].

So you determine whether you are paying to mow someone's grass; buying someone’s dinner at Accents or Legacy Grill, or paying for a green fee at White Wing or Legacy Hill. If the Developer was funding all the losses of Golf, Food & Beverage, and Maintained Homes, the subsidy payment would be $789,000 for 2006.
Resident Assessments would not be up 37% since the beginning of 2002.

Finance Committee Meeting
The Finance Committee meeting will be held Tuesday, February 28th at 1:00pm in the Activity Center Meeting Rooms 3&4 and the Maintained Homes Program is on the agenda. Suggest you attend and voice your opinion.

Developer Control
Life is not always fair in Sun City. Many of you may now know that the Chairman of the Neighborhood Rep’s has issued orders to the Rep’s that they cannot forward the Newsletter to their neighbors. The message this sends is clear; actually, the SC Information Newsletter was initiated because of the lack of Transparency in our Governance processes. There is more going on in Sun City than what is on the menu at Legacy or Accents although that information is of critical importance, at least at dinner time.
Such restrictions are all the more reason to continually add new residents to the email data base for SC Information Newsletter.
Email to jackstro@verizon.net to add new addresses. Or check Newsletter at http://scinform.blogspot.com/

Newsletter Objective
Our goal is to foster transparent discussions and actions regarding the issues confronting our Community Association. We welcome an open dialogue regarding the actions proposed and 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 Community Association. We welcome comment on the problems outlined as well as the solutions—both positive and negative [hopefully constructive].

Our Mission
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. For additional information and past [Archived] newsletters see:

http://scinform.blogspot.com/

Sun City Residents Make Sun City Great