Recreation Centers of Sun City, Inc.
General Manager Report
January 2010
by Jan M. Ek
Well 2010 has not started out with any lag in issues to be addressed. Every resident in Sun City should be aware of the proposal by Arizona American Water to bundle Sun City with other areas that are likely to require more treatment for their water than Sun City, which will require both RCSC and Sun City residents to help pay the costs of others' water treatment. Additionally, Arizona American Water is also asking the Arizona Corporation Commission for another water increase of 27.7% plus a 40.8% increase for wastewater. As you may recall, we last received a 20%-30% increase from Arizona American Water in June 2008. With the recent increase in electricity of more than 10% from APS, I am sure that Sun City residents, as RCSC, are finding these increases difficult to manage financially. We, along with the Sun City Taxpayers Association and Sun City Homeowners Association, will be providing information to the residents of Sun City about what they can do individually to let the ACC know they are not in favor of this bundling and increases.
Financial Report:
In 2009 we completed some additional capital projects because of managed savings in our operations and we were still able to end the year in a positive position from budget. Additionally, we took on the operation of the snack shops, which were not budgeted in 2009, and we ended the year with a net operating loss of only $17,358, compared to our history, this is a significant success. Our only operation that has and is causing some financial concern is our golf division, which is not news to anyone who has stayed informed. The golf division ended 2009 with a $373,501 net operating loss, a $295,000 negative variance from budget which was made up by other managed savings in our operations. Our process of offering outside golf memberships to anyone 55 years of age or older for $2,000 without a cart has not been successful to date. Management is concerned that even with some changes to the program, many will have already purchased their golf passes for this golfing season. Therefore, discussions and decisions will need to be forthcoming about what our process will be for the golf division and RCSC in 2010 to meet our budget.
Bowling Division:
For the year 2009, tournament lineage was up 14% and guest league lineage was up 18% when compared to 2008. Cardholder league lineage was down 10% for the same period. Installation of new bowling lanes at both RCSC bowling centers is expected to begin in mid-July and be completed prior to the start of the 2010-2011 season.
In the January 2010 SunViews, Director of Bowling Operations Randy Johnson submitted an article that explains how the bowling operation has been able to successfully keep their prices low with outside play. Bowling is a good example of how outside play can help support RCSC while cardholder participation has declined.
Food Service Division:
Again, I want to thank the residents of Sun City for patronizing our snack shops and restaurants. While our food service division ended 2010 slightly more than $60,000 worse than budget because of taking back the operation of the snack shops, we have done so with much success compared to years past. Please continue to support our snack shops and restaurants.
Cardholder Services:
The auditing of RCSC owner records by the Cardholder Services department continues. As of the end of the year we are about 50% completed with the mismatched owners between RCSC and Maricopa County records. Cardholder Services staff are now beginning to review ownership records for properties that have transferred into trusts.
As of the end of the year 81 Members referred to collections have made payments totaling $39,230, or 11% of the referred balances. Of these members 34% were due in 2009, 37% were due in 2008 and 29% were due in 2007 or prior. This distribution has changed slightly from last month reflecting payments being made on 2009 balances. Overall for the last six months of the year, our new in-house staff collector has directly processed payments for 587 Members totaling over $320,000. From July 1 through December 31, 2009, the total of all assessments older than 30 days grew by only $2,597. During this same time, $2,030,070 in new assessments that could be aged to 30 days at the end of the year were invoiced to members. This represents a growth in over 30 balances for the invoiced balances of only 0.13%. Also, the percentage of all assessment balances older than 30 days compared to all outstanding assessment balances dropped from 25% to 22% in the last six months of 2009.
Given the continuing economic conditions these are very encouraging statistics. All of the staff in the Cardholder Services department should be recognized for their contribution in auditing ownership records, collecting outstanding balances and servicing Members during this time. In addition, I want to commend Chris Herring, our Director of Support and Services, who has led this team in an effort that I am sure seemed unending and impossible at times, this new process and procedure is not only serving RCSC very well now, it will make a significant difference in the future as well.
Human Resources:
On December 19, 2009, President Obama signed the Department of Defense Appropriation Act which extended the COBRA premium reduction eligibility period for two months until February 28, 2010, and increased the maximum period for receiving the subsidy for an additional six months (from nine to 15 months) for employees who are involuntarily terminated. The Act, as amended, mandates that employers notify certain current and former participants and beneficiaries. RCSC has updated the required notices and complied with all requirements of the Act.
In 2009, RCSC filled 94 open positions compared to 118 in 2008 indicating an approximate 26% decrease in employee turnover. Positions filled include 63 new hires, 24 rehires and seven promotions.
Currently there are 355 employees on staff; 152 full time and 203 part time. Two hundred twenty two ,or 63%, of staff are Sun City residents.