Our Money – Our Future

It was recently announced that the Community Association had a $2.3 million net working capital deficit as of year-end 2006. This serious cash shortfall means that our Community Association cannot pay staff salaries during several months of 2007 without short-term temporary loans from Pulte. These advances by Pulte are then liquidated near year end by prepaid Golf Annual and Punch Card fees and Homeowner Association dues. While Pulte is still here at Sun City building homes, they have indicated cash shortages will be covered. So what is the problem? They will be gone in a few years and a larger problem will be exclusively ours!

There are many reasons for the shortage; however, the key reason relates to the method the Developer has used to calculate their annual operating payment to the Community Association. The CCRs (Covenants, Conditions, & Restrictions) provide the rules by which the annual payment is to be made and the CCRs define the various terms.

It seems clear from the CCRs that the Developer should pay the Community Association annual operating deficit for any year that one exists. However, as they say, the devil is in the details.
In 2005 the Community Association had an operating deficit of $756 thousand; but the Developer paid zero toward that normal operating deficit. The rationale from the Developer was in the details of how the various terms are defined. But, does the right to do it make it right?

This cash shortage is not just some accounting entry; it has a real impact on all residents. The Finance Committee calculated that the shortage equates to $466 per rooftop. This issue is so serious that, I believe, prospective home buyers, should be advised.
Evidently, the issue has been known for some time; however, very little information was disseminated about it until March 2007. Most residents did not know of the issue or the magnitude of the problem.

The resolution of this issue is clear – it rests either with the Developer or the Residents. Given the very serious nature of this issue, I recommend:

1. The CCRs be changed immediately so that this issue does not continue – and we do not go further in the hole in future years.

2.The Developer should compensate the Community Association for the $2.3 net working capital deficit

3. The entire issue should go to arbitration if there is not a quick resolution of the issue.

4. That the residents not be asked to pay huge special fees in order to solve this financial issue.

5. The amount of this shortage be reported every month in Sun Rays so that all residents can be regularly informed of the magnitude of the issue and the progress toward solving it.

This issue is important to the future of our community. We need leaders who represent the residents and will stand firm to help solve this issue quickly and correctly. Your choice is important in the upcoming Board member election. If elected as Resident Board Member, I pledge to represent the residents and help push this issue through.
Jack Stroobandt