Sun City West2011 12 Fi i l Pl2011-12 Financial Plan

General Manager Mike Whiting

11111

HousekeepingHousekeeping

• Copies of budget detail availableCopies of budget detail available– Fee schedule, specific capital projects

• Entire presentation online• Entire presentation online– www.rcscw.com

Pl h ld ti til th d• Please hold questions until the end– Write down slide No. and we’ll refer back to it

222222

Did You Know?Did You Know?• The vitality of SCW is directly linked to the y y

financial well-being of our community• We have 28,000 residents and 17,122

individual rooftopsindividual rooftops• The Recreation Centers and Golf Courses

are valued at $150,000,000are valued at $150,000,000• Golf Courses alone are worth $70,000,000• Your homes are valued at around $3 billion• Is it any wonder we want to protect our

assets?

3

Did you know…Did you know…• We’re in great financial shapeg p

– No Debt• We maintain our amenities

Del Webb Standards– Del Webb Standards• We have over $8 million in reserves• We educate our residentsWe educate our residents

– Torch / Rec Center News• We proactively manage our money• We plan for the future

– 5 year Financial PlanLong Range Plan– Long Range Plan

444444

How do we go about developing the b d t?budget?

• Budget TimelineBudget Timeline • Governing Board Assumptions • Financial Model developed by the BudgetFinancial Model developed by the Budget

and Finance Committee • Budget submitted March 1, 2010g ,• Public Hearings / Board Meetings /

Committee Meetings• Formal Adoption – May 26th 9:00 am R.H.

Johnson Social Hall

5

Budget TimelineStrategic Priorities Annual Financial Plan and FiveStrategic Priorities, Annual Financial Plan and Five

Year Plan

6

Governing Board AssumptionsGoverning Board Assumptions

• Reserve: 5% Increase (3% recommended)Reserve: 5% Increase (3% recommended)• Expenses: 4% Increase

G lf R 1% I• Golf Revenue:1% Increase • Other Revenue: no increase• Capital: $3,000,000 • Membership: As necessary to meet overallMembership: As necessary to meet overall

resource requirements ($15 or 4% increase)

7

increase)

Financial Model Developed by the Budget and Finance Committee

8

How our revenue is generatedgenerated

99999

One CommunityOne Community• All divisions accounted for separatelyp y• All revenues support entire Association

Membership e be s pFees are the foundation of

the Associationthe Association

1010101010

10 year revenue10 year revenue$10,000,000

$12,000,000

$6,000,000

$8,000,000

$10,000,000

$2,000,000

$4,000,000

$6,000,000

$-

$2,000,000

11

Recreation Golf Bowling APF Other

FY 2011-12 Revenue SourcesFY 2011 12 Revenue Sources

1% Oth

3% Bowling

7% Asset Preservation

Fee1% Other Fee

53% Recreation

35% Golf

1212121212

Expense HistoryExpense HistoryExpense History

Operating & Capital Depreciation

$19.3 $19.9 $20.3 $20.8 $20

$25

Mill

ions

p g p p

$15

$10

$0

$5

FY 08 09 FY 09 10 FY 10 11 Proj FY 11 12 Req

13

FY 08-09 FY 09-10 FY 10-11 Proj. FY 11-12 Req.

How do we spend the money?$20.8 Million in FY 2011-12

2% COGS13% Capital

(D i ti )

5% Landscape

2% Taxes and Insurance

1% Employee Related

2% COGS (Depreciation)

1% Legal and

3% Supplies and Services

5% Landscape Maintenance

5% Repair and

1% Interest & Financial

1% Legal and Professional

51% Wages and Benefits

12% Utilities

Maintenance

1414141414

4% Operating Expenses

How are we controlling costs?How are we controlling costs?

• No increase in insuranceNo increase in insurance • No increase in Wages and Benefits• Only 2% increase in overall expensesOnly 2% increase in overall expenses

– Water, electricity, gas, telephone, trash removal– Goods and services– Repairs and maintenance

15

FTE’FTE’sDivision 2011-2012 2011-2012 Division Full Time Part-Time

Recreation 65 51Golf Operations 3 34

Golf Maintenance 94 0Golf Maintenance 94 0

Bowling 4 9

General Services 17 1

Total 183 9516

Total 183 95

FY 2011-12 Capital by DivisionsFY 2011 12 Capital by Divisions$3.0 Million Total

1% Admin

46% Recreation

50% Golf50% Golf

3% Bowling

17

2011-12 Capital Projects2011 12 Capital ProjectsGolf and Landscape Equipment $741,157

R. H. Johnson Fitness Center $589,890

Grandview Cart Barn & Related Projects $261,000Grandview Cart Barn & Related Projects $261,000

New Pump Station $215,000

Athletic Equipment $223 500Athletic Equipment $223,500

Others $969,110

Total $2,999,657

181818181818

Capital Project Process Allows Many Opportunities For Inputpp p

Community Committees & PlanningGoverning Committees &

Board Identifies

Needs

Planning Committee is

Formed

Board Authorized

& Funds Architect

1st Community1st Community Forum

Wishes, Hopes, Dreams

Ideas

2nd Community2nd Community Forum

Architect Presents

Concerns/OpinionsMinutes

Recorded

1919191919

Year Two / Construction

Plans Select General Facility ShutReview

MaricopaCounty

Contractor &

Sign Contract

ConstructionPermits

DownContractor

Stages

AcceptanceConstruction Phase ! Phase II

WalkThrough AcceptanceBegins Phase ! Phase II Punch

List

Grand Opening

2020202020

RecreationRecreation 1% Other

3% Bowling 7% Asset Preservation Fee1% Other

53% Recreation

35% Golf

21

$ 21.3 Million Total Revenue in FY 2011-2012

R tiRecreation2010-2011

Projected2011-2012Requested

Revenue $11,007,174 $11,341,223

Operating Expense

$10,219,736 $10,523,186Expense

Net Revenue $787,438 $818,037

22

Association Fees

23

Membership Dues Per FY (for year ending June 30)Membership Dues Per FY (for year ending June 30)

$600

$400

$500

$200

$300

5-Yr Projections

$100

$0

Dues Change from Prior Expon. (Dues)

24

Del Webb Member Dues Comparisonp$3,600

$3,500

$4,000 2011-12

$2,088

$2,884

$1 860

$2,676

$

$2,500

$3,000

$740

$1,555

$1,061

$1,500

$1,000 $1,188 $1,260

$1,860

$1,000

$1,500

$2,000

$432 $740

$0

$500

2525252525

Based on a two-person household basisBased on a two-person household

For Your $1.00 a Day, YouFor Your $1.00 a Day, You Have Access to:

• 4 Recreation Centers

• 7 Golf Courses

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• 1 Sports Pavilion 30 Bowling Lanes30 Bowling Lanes29 Billiards Tables5 Shuffleboard Courts

Lib•1 Library45,000 books, tapes, CDs etc.

•1 Village Storeg

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• 27 Tennis Courts• 15 Pickleball /Platform Tennis Courts• 15 Pickleball /Platform Tennis Courts• 6 Pools • 8 spas• Bocce, Racquetball & Table Tennis

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• 1 Softball Field• Lawn BowlingLawn Bowling• 2 Dog Parks• 2 Mini Golf Courses

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• 3 Walking Tracks• 4 Fitness Centers• Horseshoe Pits,

Arcade, Children’s PlaygroundPlayground

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• 10 Ramadas 1 Park & 1• 10 Ramadas, 1 Park & 1 Bandstand

• 1 Performance Theater• 2 Restaurants & 6 Snack

Shops• 1 Lecture Hall• 2 Ballrooms

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• 5 Card Rooms• 20 Arts & Crafts Club

R (i l diRooms (including Computer Room, Woodworking & Metal S )Shops)

• Men’s Club• And More!And More!

32

3333333333

GolfGolf 1% Other

3% Bowling7% Asset Preservation

Fee1% Other

53% Recreation35% Golf

34

$ 21.3 Million Total Revenue in FY 2011-2012

G lfGolf 2010 2011 2011 20122010-2011

Projected2011-2012Requested

Revenue $7,490,733 $7,544,566

Operating Expense

$8,331,385 $8,475,661

Net Revenue ‐$840,652 ‐$931,095

35

Golf Rounds Per FY (Ending J ne 30)(Ending June 30)

450,000500,000

f

300 000350,000 400,000 450,000 * Actual Rounds instead of “Equivalent Rounds”

150 000200,000 250,000 300,000

50,000 100,000 150,000

-

36

Rounds Per Year Trendline

Year To DateG lf R d Pl dGolf Rounds Played

300,000

250,000

150,000

200,000

100,000

0

50,000

37

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

09-10 Cum. 10-11 Budget - Cum. 10-11 Cum

Del Webb R id t D il F G lf R t C iResident Daily Fee Golf Rate Comparison

$65 70

FY 2011 12

$35

$41

$48 $51

$56 $59 $60

40

50

60 FY 2011-12

$26 $31

10

20

30

-

3838383838

Based on a two-person household basis

Golf Fees - No Change in FY 2011-12

The Growing Importance ofN R id t PlNon-Resident Play

100%

Percent of Golf Fee Income

8.5% 8.2% 9.3%14.8% 17.1% 18.1% 21.0% 20.5% 22.0%

70%

80%

90%

50%

60%

70%

20%

30%

40%

0%

10%

2002‐2003 2003‐2004 2004‐2005 2005‐2006 2006‐2007 2007‐2008 2008‐2009 2009‐2010 2010‐2011

40

Resident % Non‐Resident %

Generates $1.4 Million = $50/Member

Environmental Services Department

Golf Course MaintenanceFY 2011-2012 Budget

Operating BudgetsCost Control Measures Cost Control Measures

Reduced overseeding

Less preparation at overseeding

Reduced fertilizer applications

Use of plant growth regulators

Use of generic brand chemicals

Soil and water testing

Changed rough mowers from reel type to rotary units

Increased hand watering

Perform annual irrigation audit

Not filling non essential lakes

Cost ControlUsing a portion of In-House labor for capital projects

Cross training staff members Reduces overtime

Employee sharing

Adjust operating hours during aerification, overseeding and frost delays

Reduced overtime hours

Eliminated seasonal workers (5)

R fi i ti f t Refining operation for greater efficiency

Limiting capital expenditures

Developed a five-year plan for equipment replacement and capital projects

Staffing History (Full-Time)Staffing History (Full Time)

107120

110 10798 97 94 94 94 94

80

100 94 94

60

20

40

0

2002 2003 2004 2005 2006 2007 2008 2009 2010 20112002 2003 2004 2005 2006 2007 2008 2009 2010 2011

* eliminated 33 positions since 1992

Capital ProjectsSumm r 2011 Summer 2011

Cart Path RepairCart Path RepairStardust Trail RidgeDeer Valley D V y

Pump Station ReplacementGrandview

Bunker RenovationTrail RidgeDeer ValleyDesert Trails

Five-Year Plan Year 2011-12 2012-13 2013-14 2014-15 2015-16

Pebblebrook Cart Path Repair Cart Path RepairpLevel Range Tee

Stardust Cart Path Repair

Replace MainLine Valves Phase I

Replace Main Line Valves Phase II

Level Range Tee

Grandview Pump Station Replacement

Level Range Tee Replace Main Line Valves

Cart Path Repair

Replace Main Line Valves Lake Aeration

E h M Cart Path Repair Cart Path Replace PumpEcho Mesa Cart Path Repair Cart Path Repair Level Range Tee

Replace Pump Station

Trail Ridge Cart Path Repair S d T

Replace Pump Station

Cart Path Repair Level R TSand Trap

WorkRange Tee

Deer Valley Sand Trap Work Cart Path Repair

Granite For Desert Areas

Cart Path Repair Level Range Tee

Desert Trails Drainage Sand TrapWork

New Granite For Desert Areas Pump Filtration

Granite For Desert Areas

Summer Course Closures5 Y Pl 5 Year Plan

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

PebblebrookClosed June-October

Cl d Cl d Stardust

Closed June-October

Closed June-October

GrandviewClosed June-October

Echo MesaClosed June-October

Trail RidgeClosed June-October

Closed June-OctoberTrail Ridge June-October June-October

Deer ValleyClosed June-October

Closed Closed Desert Trails

June-October

June-October

Equipment Replacementq p p

Total of 23 units scheduled Total of 23 units scheduled for replacement

Average of 3 units per golf Average of 3 units per golf course

Average age of equipment Average age of equipment being replaced 11.91 years

A f l lif f Average useful life of equipment being replaced 6.2 years

4949494949

BowlingBowling 1% Other

3% Bowling 7% Asset Preservation Fee1% Other

53% Recreation

35% Golf

50

$ 21.3 Million Total Revenue in FY 2011-2012

BOWLINGBOWLING 2010-2011

Projected2011-2012Requested

Revenue $651,824 $703,911

Operating Expense $634,461 $690,129

Net Revenue $17,363 $13,782

51

Revenue

Bowling Fees - No change to our members

52

Facilities and Equipment ReserveFacilities and Equipment Reserve

• Forecast fund balance June 30, 2011…Forecast fund balance June 30, 2011… $8,700,000

• Net increase in fund balance for FY 2011-12… $300,000 (3.3%)

• Estimated total balance June 30, 2012…$9,000,000

5353

Reserve Fund Balance FY 2011 12FY 2011-12

6% Budget 14% Capital gStabilization,

$500,000

14% Capital Equipment, $1,250,000

54

81% Uninsurable Loss, $7,250,000 * Budgeted $25,000 in FY2011-12

for reserve study

Bottom Line for 2011-2012Budget will modestly increase over 2010-11 budget

FY FY FY FYAll Amounts in

$ Millions

FY 2008-2009

FY 2009-2010

FY 2010-11

Bud.

FY 2010-11

Proj.

FY 2011-12

Req.Revenue $19.6 $21.0 $20.9 $20.9 $21.3

$ $ $ $ $Operating Expenses $16.4 $16.9 $17.9 $17.7 $18.0

Depreciation Expense $2.9 $2.9 $2.8 $2.7 $2.8

T t l E $19 3 $19 9 $20 6 $20 3 $20 8Total Expenses $19.3 $19.9 $20.6 $20.3 $20.8

Net Income $0 2 $1 1 $0 3 $0 6 $0 5

55555555

Net Income $0.2 $1.1 $0.3 $0.6 $0.5

ConclusionsConclusionsRecommending:• No increase in insurance • No increase in Wages and Benefits• 2% increase in overall expense (including depreciation)• 4% increase in dues • No increase in golf fees• No increase in bowling feesg• 3% increase in reserves• $3 million in capital projects• Spending $25,000 in FY2011-12 for reserve studyp g $ , y

Projecting 1% increase in golf revenue

56

oject g % c ease go e e ue

Challenges for the futureChallenges for the future• Changing DemographicsChanging Demographics• Aging of our community• Legislative Mandates• Legislative Mandates• Surrounding growth

CC&R f t• CC&R enforcement• Volunteerism (cost impact)• Competition of newer communities• Wells / Water issues

57

QuestionsQuestions

58