General Manager Report – February 2014
By Jan Ek
So a new year has started and we have ended our first month of 2014 well within our operating and capital budget. Golf is certainly not having a repeat performance of 2013 as it ended January with a positive variance in gross revenues of $68,938. It is obvious that nice warm weather makes a difference! Matter of fact, golf’s positive variance in its net operating excess is impressive and if this trend continues, we may see one of the best years ever in the golf division! We had a few individual expenses that hit earlier than budgeted, but will not produce a negative variance from budget in the end. The Board and Management team are always looking for ways to do it better, different, more efficient and more economical. Sometimes we try things that work really well right out the gate and other times we have to continue to work on a better solution. The continuity in the management team has brought great long-term solutions that continue to produce positive effects for Sun City and its homeowners. It is not unusual for me to be contacted by other communities who ask how we are doing it. How are we continuing to improve our facilities and amenities and barely raise our annual property assessments and remain debt free? They say it makes no sense. It makes perfect sense to Sun City AZ: we pay cash for everything, we never stop looking for ways to do it better and more cost effective; we have the Preservation & Improvement Fund which provides us the capital needed to make major improvements; and we provide our staff with reasonable pay, good benefits and fair treatment, which provides Sun City with continuity and lack of turnover. A winning combination that other communities are wanting to copy!
Installation has been completed on the two tier racks for spare bowling balls at both bowling centers. The new racks will accommodate twelve spare bowling balls and the table tops will provide an area for bowlers to place towels, accessories etc.
The bowling department has begun to expand its “Learn to Bowl” lesson program. Previously classes were held twice each year. Recently, changes were made to the program where classes are offered to beginning bowlers and intermediate bowlers separately. Both classes will be held three times during the fall/winter bowling season. In addition to the classes, individual lessons are offered for only $10 per person for all RCSC cardholders (including lineage). All of the bowling lessons and classes are headed by the Bowling League Coordinator, Di Tormanen. Di has over twenty five years coaching experience and is a certified USBC Bronze Level coach.
The payments on past due assessments increased considerably in January; above the monthly averages for the past year by 21%. December billings went past due at an increased rate of 8.9% which is well above the average for the past 12 months. November balances returned to average 60 day past due rate after the seasonal increase in October for these balances. Total accounts receivables started the year off well by decreasing by 3.5%. This was the first decrease since September and the largest decrease in a year. Outstanding balances related to property transfers decreased by 2.6% in January and now represent 57% of all receivables due and 56% of past due balances.
Trustee sale notices on Sun City properties increased slightly to 48 for the end of January and the number of properties owned by lending institutions decreased by 10% to 61 this month.
Resale transactions were strong in January resulting in Preservation and Improvement Fees being collected in January totaling $565,100, which is $313,100 more than budget. Remember that we intentionally budget PIF fees conservatively to assure that sufficient cash is on hand when PIF projects are scheduled so we can pay as we go and remain debt free.
The IRS codes have allowed flexible benefit plans to be designed in a manner that saves the employee and the employer tax dollars. In order to comply with all the regulations set by the Internal Revenue Service, the plan must be tested to help eliminate any top heaviness similar to a Pension Plan. A final testing of RCSC’s Flexible Benefit Plan in February shows the plan has passed all 3 tests to conform to Sections 125 and 129 of the IRS code for the 2013 plan year. RCSC’s plan has consistently passed all tests.
Each year employers must report to the Centers for Medicare & Medicaid Services (CMS) the creditable coverage status for their group health plans’ prescription drug benefits. “Creditable” coverage means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. Reporting is accomplished through a web-based form and requires information about the entity providing the coverage and the options covered by the disclosure. RCSC is required to provide the report to CMS no later than March 1, 2014. The report was completed and submitted by HR on February 14 and we are happy to report that RCSC continues to provide creditable coverage.
In addition, employers are mandated to disclose by no later than October 1 of each year to all Medicare eligible individuals with prescription drug coverage under their plan whether coverage is creditable. This information is essential to an individual’s decision whether or not to enroll in a Medicare Part D prescription drug plan. HR provides this information to individuals as they enter the plan and is included in the 2014 Benefit Guide that is provided to all participants.
The Arizona Department of Administration requires employers to participate in an Occupational Employment Statistics Report in cooperation with the U.S. Bureau of Labor Statistics. This report is also required to be submitted electronically. Information is used for statistical purposes in communicating salary comparisons nationally, statewide and citywide. HR completed an online spreadsheet with job title and wage for each employee in February.
Since January 1, 2014, we have added 85 individuals to RCSC staff. The majority of those resulted from bringing Golf and Grounds Maintenance back in-house. The remainder filled open positions in various departments and a few new 2014 budgeted positions.
What outstanding performances we had in February! Revoiced, who performed on Super Bowl Sunday with a super show!
The following Sunday we were treated to a presentation of Riders on the Orphan Train. Musician Phil Lancaster teamed up with award-winning author Alison Moore to tell the story of the mass relocation by rail of several hundred thousand children from NYC, who were chosen by new families at train depots in every state between the 1850s and the 1920s. We were privileged to have members in the audience share with us their stories passed down from parents and grandparents of their experiences on the trains. We welcomed to the stage our own Sun City resident, 102 year old Victoria Moe. Vicki wowed the audience with her energy and shared with us some of her experiences while on the Orphan Train. We had over a thousand in attendance, the largest record attendance for this performance.
The next week the atmosphere changed to a 70’s vibe with the “Yesterday Once More” show, featuring the story and music of Richard and Karen Carpenter. Three standing ovations followed the show and over a hundred tickets were sold at the door.
The remainder of the spring shows look to be just as promising!
Don’t miss Del Webb Days, Saturday, March 1st, at Sundial beginning at 3pm with sports games, sports celebrities and great food. Then Guy Pennacchio will take the stage at 4:30pm with his tribute to Frank Sinatra and then we’ll dance the night away to the music of the Real Tones beginning at 7pm.
In February we sold out 13 day trips and 6 overnight trips. March is shaping up to be just as successful, with 9 day trips and 3 overnight trips.
For those who may not be aware, the monthly management reports are available on our website www.sunaz.com under the Corporate tab. Also, if you have not done so already, please sign up on the RCSC email list where you can designate topics of interest and stay in the loop with RCSC news alert emails! We have forms available at the table in the back so you can sign up before you leave today.