Committee: Sun City West recall warranted by board actions
Posted
By Recall Committee of Sun City West
On Oct. 13, 2023, the Sun City West governing board conducted a workshop. During this meeting, two board members who are subject to a recall made self-serving statements. In addition, members in the community in attendance at the workshop made derogatory comments about the recall. There was no notice that such political statements were going to be made prior to the statements being made.
In his statement, board member Dick Rhoades stated that “investment criteria are quite prescriptive, and investments are reviewed by the Budget and Finance Committee to see that policies are complied with.” The association’s policy for investments appears as Fi12. The policy states that the foremost consideration for investments is the preservation of capital. Preservation of capital means exactly that. The failure to preserve capital in the investments made has resulted in the reserve fund being depleted by more than $4 million. The current policy was adopted to avoid risk, and the refusal to adopt this policy has resulted in the underwater position.
Board member Jack Leary said the recall members “do not understand the charter club system.” The recall effort has no quarrel with the charter club system, only with the manner in which Mr. Leary has endeavored to enact revisions to the rules, regulations, and procedures. The recall committee does not, and has never, advocated for permitting the public to use Sun City West facilities, other than golf and bowling. It is the committee’s understanding that there is currently discussions taking place in the Sun City West administration that may allow an outside group to use our facilities for a discounted guest fee.
The recall effort deplores Mr. Leary’s dictatorial style as evidenced by Mr. Leary’s statement that there is not a democracy in the administration of the charter clubs. Indeed, charter clubs have been closed under his watch.
At the Oct. 13 workshop, a resident stated General Manager Bill Schwind and governing board President Tim Hurley regularly play golf together. Playing golf together is not the issue, making decisions affecting the association where there is no oversight by the governing board is the issue.
There is not an arms-length relationship between the general manager and the board president who has not held the general manager accountable.
One of Mr. Schwind’s supporters claimed that Mr. Schwind has only raised dues an average of 3% a year for the past several years. Has this resident forgotten management’s proposed dues increase for the last fiscal year where management wanted to raise dues from $496 to $525? Because of pushback from the community, the proposed increase was reduced from $525 to $509. Once increased, dues never go down.
The general manager was praised for producing a net income during the last several years in the face of spiraling inflation. The spokesperson failed to recognize that the increased cash flow was possible because of increased revenue from golf and asset preservation fees, not from holding the line on expenses. The general manager has not revealed the salaries for himself or his staff. There has never been an analysis of staff compensation compared to the responsibilities of the staff members.
An individual defended the general manager for closing the golf courses for 19 days during the pandemic when nobody knew what was happening with COVID. During those 19 days, many of Sun City West’s golfers went to other golf courses, the vast majority of which, remained open. Other than realizing that 35% of the association’s revenue was lost during those 19 days, what new information was learned about the spread of COVID? Even the governor refused to close golf courses, calling them essential businesses. Closing our golf courses cost hundreds of thousands of dollars that can never be recouped.
A Schwind supported mentioned that the general manager closed our Village Store to help people from having tax issues. Mr. Schwind talked about needing office space, and he got it when he closed the store. The centerpiece of Sun City West’s village vanished.
Another individual at the workshop talked about the comparative cost analysis of Sun City to Sun City West on the recall effort’s website, and likened it to comparing a VW to a Rolls Royce. Sun City must not be too bad because Mr. Schwind lives there. The only comparison on the recall website was for costs that each community pays to operate and maintain a comparable number of facilities and golf courses. Sun City West’s paying an average of $5.7 million more per year than Sun City to operate facilities is not something to gloss over.
Yet another supporter stated just because our capital investment account is down $4 million, this is not justification to take adverse actions against the responsible individuals. This resident stated that although the investment is down, a loss has not yet been incurred. What this resident failed to report is the current value of the reserves is part of a calculation to determine the amount of reserves needed for expected capital improvements. A depleted balance in the reserve account may trigger a special assessment to meet the minimum required for reserves. Unlike individuals who may have also incurred investment losses during the same time period, the association had a policy where risk was to be avoided, and the policy was violated which created the current unrecognized loss of over $4 million.
Facts pointed out by the recall committee are not being used to further any agenda other than to preserve assets and require accountability. Mr. Schwind started as general manager in January of 2019, and since that time there has been an erosion in the association’s assets and morale. There has also been a steady increase in annual dues and asset preservation fees. Do not blame the recall committee for pointing out facts and voicing the community’s disapproval of the Governance of this association. The committee wants to restore it as one of the premier affordable senior living communities by introducing new leadership at the management and Board level. Visit ourscw.com.