Infrastructure’s role in long-range financial planning
By Jack Steiner
Public Relations Chair
In September 2011, our General Manager introduced the topic of “Infrastructure” to the then seated Governing Board at the Board’s annual orientation. His intent was to provide insight into understanding what is meant by infrastructure and to encourage its consideration in long-range financial planning for Recreation Centers of Sun City West owned properties.
I have been thinking more and more about this topic and I feel the need to open a discussion to explore what is meant by infrastructure and why this is important for all Owner Members to think about, not just the Governing Board.
The dictionary definition for infrastructure is: “An underlying base or foundation especially for an organization or system. The basic facilities, services, and installations needed for the functioning of a community or society …”
Applying this definition to Sun City West in terms of future planning for sustainability of what Del Webb envisioned and the preservation of certain essential “facilities and services” as defined, is important. Not only do we have to make the necessary repairs, but we have to plan ahead to set aside funds (sometimes by raising dues) so the money is ready when the repairs are needed. When the community was brand new, it was easy to keep dues low because the infrastructure was new so little had to be set aside for its long-term maintenance. Now, however, it’s time to start budgeting for that inevitability.
So, what might be some specific elements of infrastructure? Here are just a couple of examples: the R.H. Johnson Pool, irrigation systems, and parking lots.
In the case of the R.H. Johnson Pool, there is no Visqueen between the soil and the concrete, which has allowed chemicals to leach up from the soil and damage the concrete deck. Despite our efforts to repair the deck over the last couple of years, we will eventually need to replace the whole thing. This will not be cheap.
In the case of parking lots, the lifespan is about 20 years because of the nature of asphalt and the damage Arizona’s sun and heat inflict. The Rec Centers maintains more than 40 acres of parking lots adjacent to our owned properties. These must be maintained, and the maintenance is not cheap.
The water wells and irrigation systems are additional concerns. Many of these predate the community and are more than 50 years old. They include miles of underground piping capable of sending water to other golf courses in case a water well pump fails at one course. We have been and will continue to replace parts of the system as lines break or valves wear out.
The wells, however, will eventually get beyond the point where they can be repaired. We are projecting the replacement of two wells in the next 25 years. Again, these are not cheap – they cost about $1 million to $1.5 million apiece.
The cost of maintaining these elements as well as our other facilities is planned for in our public budgeting process. That’s where we count on you to share your thoughts, concerns and priorities with us. With some areas of Sun City West reaching the 30-35 year old category, there is expected to be more discussion about how to fund certain infrastructure items.
The Staff, Governing Board and Budget and Finance Committee have been wrestling with infrastructure failure risks and costs for some time. I thought you might want to join in the discussion.
Hi Mr. Walker. In this case, we had to wait for two permits during the construction process. One was the usual permit before construction could begin, and that took several weeks. Another was a permit to allow us to run a water line under Meeker for the fire sprinkler system. That required inspections by the water company, Maricopa County Department of Transportation, and Maricopa County prior to the permit being issued. Then we were able to being construction again. Now we face just regular inspections, as you point out. Every time the block wall goes up four feet we need another inspection (it used to be eight feet). It is a time consuming process, which is why we are doing it during the summer.
Dianna M. Náñez – Aug. 17, 2012 09:50 PM
The Republic | azcentral.com
Tempe is poised to spend about a half-million dollars to purchase a fleet of electric golf carts for use on its two municipal courses.
The City Council awarded a one-year contract, with four one-year renewal options, to Clayton Holdings LLC, Comerica Leasing Corporation and Banc of America Public Capital Corp.
Clayton Holdings was approved to handle the initial lease-purchase agreement for the 120-unit golf-cart fleet at an interest rate of 1.86 percent. But Thursday’s council approval also allows Clayton, Comerica and Banc of America to be on the city’s short list of approved firms eligible to participate in the financing of any future lease purchases, according to a city report.
The contract allows Tempe through a lease-purchase agreement to buy a fleet of 120 electric golf carts for Ken McDonald and Rolling Hills golf courses.
The total combined cost of the one-year contracts must not exceed $500,392, according to a city report. Of that amount, about $17,774 is related to the financing cost. The remaining amount will be the cost of the 120 golf carts, which was managed through a separate contract.
Tempe Public Works officials have said that the purchase will allow Tempe to make more money on golf-cart rentals. Under the city’s revamped golf-business model, Tempe retains the revenue stream from golf-cart rentals. Previously, that revenue stayed with the company Tempe contracted with to run the city’s golf courses.
Tempe will still pay operations and maintenance costs related to the golf carts, but by owning its own fleet, the city estimates it will earn about $667,000 annually in revenue on golf-cart rentals.
The lease-purchase agreement will cost Tempe about $125,098 annually and will be paid off in about four years.
Read more: http://www.azcentral.com/arizonarepublic/local/articles/2012/08/13/20120813tempe-approves-spending-500k-golf-carts.html#ixzz23uLGvFGJ
There are many people that think the pickle ball court project is not only unnecessary, but unfair. The tennis courts are not only used by the tennis club members, but by Casual play non tennis club members and guests. Noise is an issue for the surrounding residents and there is no proof that the acoustic fence will make the noise level acceptable. The home owners property values surrounding the pickle ball courts should be the number one priority, not appeasing the pickle ball club members. If you expand the acoustic fence in an attempt to protect the Deer Valley homes and those adjacent to the parking lot, you will probably exceed the budget and end up spending an unacceptable amount of money on the pickle ball club. Most of us do not need nor desire a pickle ball Tournament Center in the Palm Ridge area.
It is my understanding that the county issues one permit and at each stage of construction there is an inspection that may cause a delay if something non-compliant is found at the inspection. Are you saying that a permit is needed at each stage???
Hi Mr. Andress. The delays are due to the long wait required for county permits. Once we receive permits at the various points in construction, the actual construction moves very quickly.
Hi Greg….I agree with you .. the building of a cart barn ( especially at this time in our economy) was not the best thing to do!
Also the least expensive way to go is to lease electric golf carts.
Sun City Grand does this in a four year lease…they do not have to worry about the replacement of batteries and the maintenance is done monthly by the leasing co. They receive new carts at the end of four years. If you research the NEW Batteries….they will take a golf car 36 holes! One Golf Car Co. has an electric maintenance vehicle that will go 150 miles. It does have a generator on it. I had hoped the new cart barn would be outfitted also for electric
carts …looking to the future…less polution. My previous responses to you you have not been published because of negativity. I hope this one was not too negative.
Bill Noble
Good thinking Mr Steiner! Infrastructure and maintenance of existing facilities is becoming much more important as the community ages.
This places more importance in maintaining what we have, and in some cases must keep!
The cost of maintaining what we have must be given great weight when considering adding new projects and facilities which add to our costs of doing business!
The community needs to evolve as time goes on, but no one would want such change if existing facilites were allowed to fall into disrepair.
The membership cannot fund everything desired by small groups of members.
sure seems like it taking forever to build this cart barn. the golf carts will be destroyed by the sun by the time this thing is build. i was in the construction industry for a lota of years. this project looks like it a real slow project. what gives.
Hi Greg. The carts and cart barn were approved as part of our annual capital budget, which went before the Governing Board and the community in a Workshop, a Regular Governing Board meeting, and two public Budget presentations before the Governing Board voted on it.
I do not recall a line item in that questionaire as it related to new carts and a spiffy new cart barn for them. What I do remember was the good people of SCW asking/requesting/peacefully DEMANDING our fearless leaders pay a little more attention to our financial spending concerns. It looks to be “business as usual”, no matter the pressures of their constituents. So be it. You truly CAN’T “fight City hall” in this case.
You can’t even get umberellas for a little respite from the blazing hot, seering sun during the hottest month on record for the full time residents, for crying out loud. Come October when the Snowbirds begin returning, they’ll all be on full display! Count on it! That’s what get’s their votes!!!! Who are they listening to? No guesswork there. Remember when they wanted a “Gathering Place”? They got it… now what? Disaster. Strike Zone… another disaster. What’s next? A new parking lot? Infastructure. Right. Listening to us on spending issues. Right.
Hi Mr. Kosanda. The pickleball complex will be a nice addition to the amenities in Sun City West. There is actually a net gain of five regulation courts, and it has yet to be determined what will happen to the RHJ pickleball courts. The Palm Ridge Complex is for the residents, not tournaments. There are more than 600 members of the Pickleball Club and they are very active using that facility during the season. As with the wonderful tennis complex at RHJ, this gives the pickleball players their pickleball complex, something that will be used and enjoyed for many years to come.
Hi Mr. Richard Hert,
You have good comments!!! not Negative! I too feel that the Board & Management are trying to do what is best for SCW!
I would like to see some of the benefits for the residents brought
back….The nice snack bar we had at PebbleBrook & Grandview run by resident employees..We really can’t Provide food service in our snack bars until we have a food service employee that doesn’t have to do double duty as a starter!
I would like to see an unlimited Golf card at $1450 (even if it
was only 6 months..which includes most of our affluent residents)
Possibly 300 unlimited cards instead of 180! Thanks to Mr. Steiner…we can voice our opinion constructively!
Yours for better Golf and a Better SCW for Residents!
Thank you,
Bill Noble
I agree with Mr. Hert that we need to stop wasting our monmey on unecessary projects. The elimnation of the 3 tennis courts for more pckleball courts at Palm Ridge is just one of numerous projects that are wasting our monies.
Tearing down some of our infrastructure that was being used as tennis courts and replacing it with pickleball courts just so we can hve big tournaments for outsiders that pay no fees to Sun City West is a travesty. We will end up with a net gain of 3 pickleball courts for an estimated cost of $220,000 which is more than likely underestimated by our Board.
Palm Ridge will never be the same as the noise, congestion, and parking issues for this facility will have on impact on the residents who use Palm Ridge for other activities.
Hi Mr. Hert. Thank you for your comments. We hear you and understand there are concerns about the spending. We are working hard to balance what we’re hearing from the entire constituency. While some residents want no changes and no improvements, others want much more than we can afford. We have a very long budgeting process every year in which we hear from residents about what they want, what they don’t want, what’s important to them, etc. We look at projected income, and we look at data like our ASU Survey and other national studies that show us what new retirees are looking for in active adult communities. We also look at our current residents, with the understanding that some are on fixed incomes and others have no financial worries. We try to balance all of this – the need to stay relevant in an increasingly competitive market, the need to maintain current amenities, and the need to keep costs affordable. We encourage you to join us in the next budgeting process and tell us specifically what projects you like, which ones you don’t, and help us balance all the competing interests. We do not approve everything that everyone wants. Taking a look at just the items you mention – there were serious issues behind our need to take over the Strike Zone, and for legal reasons we will not discuss them here, but it wasn’t just because we felt like jumping into the restaurant business. With the pickleball courts, this sport is a growing trend nationally, and the Pickleball Club is funding $70,000 of the project, which is the kind of partnership we’ve been trying to encourage with our clubs. With the cart barn and carts, some of these are needed to accommodate outside play, which brings in more than $1.5 million a year. We can bring in even more from these outside revenues, as well as larger golf tournaments, only if we have the carts to accommodate them. In other words, it is an investment up front to bring in more money in the future. (Half of the new carts are just replacement carts for the aging fleet, which we do every year.) While you may still not agree with all the decisions we make, we hope you understand that we are trying to balance the many needs of this community while planning for the future so Sun City West stays attractive and vibrant – offering to future generations the kind of lifestyle that attracted you here.
I somewhat agree with your thoughts, But on the other hand you need to stop wasteing our money on your folly projects!i.e. strike zone eatery, pickleball courts, golf carts and golf cart barns, not needed expansions of rec centers and meeting rooms and concentrate on the necessary inprovements to the infastructure !!!!
Mr. Steiner,
What a great Topic!!! Infrastructure…..Mr. Whiting has been doing very well in the “Long Range Planning”…What I feel is the same as Infrastructure!!!
We have a great Place here “Sun City West” and the Board and Mr. Whiting have been working to keep a Great Place!!!
This is very necessary, however we also recently have had some 40 plus For-closures and Short sales in our City!
Many years ago I worked in Sun City and came to live in Sun City West 16 years ago….The Golf courses were full and everything was new! You are absolutley correct…We need to keep SCW in Pristine
condition! We also need to do something for our residents NOW!
A GOOD thing to give the residents a voice.
Thank you,
Bill Noble