It’s Your $$$$$$

Unofficial Newsletter “Fair and Balanced Opinions” From Sun City Residents

It is important that Residents attend the “Town Hall” meeting April 27th at 9:00am in the Activity Center Atrium on the Food & Beverage issue. Many of you have emailed the SC Information newsletter stating your concern regarding a subsidy that you may have to pay to the successful F&B bidder. Most residents thought the restaurants were being out-sourced in order to eliminate the substantial losses and to avoid subsidies. Some have stated “if the restaurants can’t operate at a profit, close them down and use the floor space for meeting rooms”. Only the Board can make that decision.

Unofficial facts:
Sun City Food & Beverage services had a deficit of $356 thousand in 2005, as noted in the December 30th CA Budget Report. Add Golf losses and the total for these two enterprises approached $600,000 for 2005. It was these very unsatisfactory financials that prompted the CA Board of Directors [at the urging by the SC Information Newsletter and residents] to begin the process of outsourcing the Restaurants and Golf. In a few months, SCTX will reach its planned maturity of 5000 homes. Had Pulte not announced the DW2500 expansion, residents would soon be solely responsible for the financial performance.
Some say why worry about a Restaurant Subsidy since the Developer will cover it anyway. Actually, this is not quite how it really works. First of all the Developer’s Subsidy for 2005 will likely cover less than half the losses of Restaurants and Golf for last year. Moreover, over the past few years the Developer’s subsidy has markedly dropped as it was offset by boosting resident assessments. So residents are really paying for all the amenities received. An additional reason for not obligating the CA to unacceptable costs or contractual terms is that they are difficult to extinguish if a new direction is desired. The Golf Task force has apparently confronted this issue with the Golf equipment component. Even though a Golf Management company may well be able to operate with much less equipment expense, the CA has elected to continue paying for all equipment currently owned and under lease.
Bottom line—ongoing efficient operations are important and contractual commitments binding the CA [residents] deserve serious scrutiny as well as full disclosure to the residents. Residents ultimately foot the bill.


Questions that need to be addressed

Residents desire to have a number of questions answered before a contact is signed largely because there has been so little meaningful information provided to date in the NRO newsletter. Fragmentary information has leaked out but the CA and the Board of Directors have maintained an unexplained degree of silence about this process. It been rumored that the request for bids were sent by the CA to only a few selected companies before the task force was formed; that only two bids were ultimately evaluated; and that the lack of bids was raised as a major issue. And there are wide ranging estimates reported about the amount of ongoing costs incurred by the CA as well as size of subsidies and management fees. Residents are eagerly awaiting clarification on all of these issues as well as what is going to happen in general.

Letter of Intent has apparently been signed on behalf of the board of Directors.

What are the financial penalties (how much) if the CA does not sign the contract?

Contract

What will be the total annual financial exposure [fees, ongoing costs, and subsidy] for the CA/Residents under the new vendor?

If the new vendor makes investment/modifications to the restaurants, will the CA be required to fund these changes?

Who will be responsible for all utilities, property taxes, equipment repair and replacement, the CA or the new vendor?

Who will continue to make payments to the equipment replacement reserve fund, the CA or new vendor?

Will the CA be obligated to pay management contract fees on an ongoing basis? If so, how much and how long?

Will the CA continue to receive the income from the rental of the Ball Room, Activity Center Atrium, and Pavilion? Please explain the financial arrangement for special events i.e. weddings, large meeting, etc.?

Will the CA receive the revenue for the vending machines? Please explain the arrangements.
What is the length of the contract?

Is there a termination clause that allows the CA Board to cancel the contract? Are there financial penalties?

General Questions
How many contracts where evaluated?

Is it true that only restaurant management firms were contacted?

Sun City Grand Board minutes indicate they leased at least one of their restaurants; what firms were invited and considered for this option?

Does the Board of Directors [especially Resident Board members] feel that the Restaurant Outsourcing Process resulted in getting the best financial terms obtainable in operating our F&B services?

Is the CA Board still considering a survey that would ask the residents if they would support a subsidy for restaurants? Is it fair to the new vendor if residents continue not to support the restaurants?

We will send the Board members a copy of this email; just like we have always done in the past. We ask them to respond to the above plus those additional questions from the floor. If you want, you can print this and submit it at the meeting.

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

Please forward this email to your email friends