At the Town Hall meeting this morning a resident found an error in my calculations for the Frontier plans. It turns out that if you want a TV plan from Frontier, the first TV with DVR includes the Set Top Box and I was calculating that you needed both a Set Top Box and a DVR for the first TV. This error showed an $11 per month error on all the Frontier plans. I was incorrect and Thank you to the resident for catching my error.
On the Frontier plans the first TV, if you want DVR, includes the Set Top Box which means there is not an additional charge of $11 per month on the Frontier plans that I displayed in the presentation at the meetings.
Please review these plans carefully now that the plan pricing for Frontier has been corrected. We have removed the Video from the website and will put up the Town Hall meeting from the Tuesday 2 pm meeting which will have the corrected information.
We have already replaced the PowerPoint presentation on the website with the corrected information. Here is a link to the updated PowerPoint with the corrected pricing for the different Frontier plans.
In this episode Bob talks with Patrick Farrell, College of the Desert Manager of Community Tours and Leadership Giving. Tune in to learn more about College of the Desert. Following the interview there is a video highlighting the last 60 years at COD.
This week Bob welcomes back Desiree Porras, our Fitness Director. Tune in to learn more about health and wellness at Sun City Shadow Hills and about some upcoming events from our Fitness Department.
Saturday, December 28, 2019
Photos by Jerry Solomon
Non-residents often ask "what's it like during the winter? These pics show the eclectic weather, seemingly incongruous to have a flourishing palm tree with snow-capped mountains in the background. Snow level today BELOW 3000 feet . . . brrr.
Wednesday, December 25, 2019
Photos by Jerry Solomon
Our Holiday trimmed clubhouse and our sky clouds this AM . . . enjoy . . . 2020 should be a visionary year, causing opthimologists to take a sabbatical.
After my message this morning, I received some questions which I thought would be best answered for everyone.
It is true Spectrum will not be offering the Door Fee of 1.035 million, just as Frontier will not be offering their Door Fee of 1.380 million. This came at the request of the Board to both companies for a couple of reasons.
Because we are well funded in our Reserves it was felt we did not need the money up front but would prefer a reduction of the monthly fees for the Cable services. This meant that Spectrum reduced their monthly fee by $5 per month rather than giving us the Door Fee. If Spectrum were to give us a Door Fee the monthly fee would be $53 instead of $48. In the case of Frontier, we got a reduction of $6 per month so the price dropped from $18 per month to $12 per month for not having a Door Fee.
If we did get a Door Fee it was estimated that we would have to pay taxes on the money. This would mean about $300,000 to pay out in taxes. By not having a Door Fee all the money could be used as a credit on our monthly fee thus giving 100% of the benefit back to each resident. This seemed a better way to go to benefit the residents directly.
Please understand that because there is no Door Fee, we all receive a lower monthly fee without paying taxes.
We found an error in the proposal that did not line up with the proposed new channel guide for Spectrum. NFL Red Zone is included in the proposal. Once we got the new channel lineup today from Spectrum, we saw the error. The new Channel list is now posted on the Website and can be obtained at www.scshca.com/bulkcable. HBO is not included, but NFL Red Zone and all the other channels on the posted channel list are included. HBO will cost $15 per month additional if you want that service.
I have been asked if the Dodgers are included and that answer is yes. They are listed as ‘SportsNet LA.’
Please let me know if you have further questions and I will get back to you as soon as possible.
Have a great Christmas and Happy New Year. I will look forward to seeing everyone at one of the Town Hall meetings.
The Board of Directors at their November 18, 2019 monthly meeting voted in Executive Session to discontinue the practice of having the SCSH Patrol Officers pursue and stop traffic violators. This change was the recommendation of the Security Contractor and the Safety Advisory Committee in order to eliminate any potential danger to the officers and reduce potential liability. However, the Patrol Officers will still video violations and if they witness a traffic violation, they will obtain the license plate number of the vehicle and the owner of the vehicle will receive a citation in the mail within ten (10) days of the violation. The violator will be able to view the video and/or photos of the violation. They will also be able to contest the violation citation to the Covenants Committee and appeal their findings to the Board of Directors. No change in the current policy, except the Patrol Officer will not pursue and stop the violators.
After the Board meeting on Monday 12/16/2019, Spectrum submitted a new proposal. The Board has been reviewing that proposal in detail. I have attached a new presentation to describe the current proposals from both Spectrum and Frontier which you can view at the following link:
Some basic points in the new proposal from Spectrum are:
Price will increase from $40 to $48 per month excluding all taxes, fees and any HOA fee
Spectrum will not pay a Door Fee to the HOA ($1.035 Million)
Reduction in content – No HBO or NFL Red Zone
Small dollar amount changes in equipment pricing
These changes will bring the estimated total monthly cost per residential lot to approximately $51 to $57 per month depending on taxes and fees for the Spectrum plan.
The Board immediately began working with our representatives and Spectrum to try and resolve legal issues with their contract. At this point the Board believes all issues with the legal terms in both contracts from Spectrum and Frontier can be resolved within a few weeks.
The Board has scheduled the Montecito Ballroom on 1/13/2020 and 1/14/2020 to hold Town Hall meetings to explain what we believe will be the final proposals from both companies. The times of the Town Hall meetings will be 9:30 am and 2 pm on both days. We will then release a new survey for residents to fill out. This survey will be released on 1/15/2020 through the E-blast system and will need to be done by 1/22/2020 at noon so results can be tabulated before the Board Meeting on 1/27/2020. It is the Board’s intention to vote on which proposal to put forth to residents for a ballot vote in April. We need to decide at the January meeting which company and proposal to submit for a formal ballot vote if we are going to have all the material printed and ready to release in time for such a ballot vote.
The survey will be going out through the E-blast system and will be available on our website in the Residents-Only section. Only one survey per home address, any duplicates will mean both surveys will be deleted, so be sure to only fill out one survey per household. Your name and address will be required on the survey to be valid and incorrect addresses will be voided, so please take your time when you fill out the survey. This last survey will reflect the latest and up-to-date information on how the residents feel about moving forward, information that will be valuable for the Board vote on 1/27/2020.
The members of FAC want to thank John Deshaw for his 2-1/4 years of service to the Community and to the Committee! Well done!
FAC now has three openings. We would love to hear from you if you have an interest in serving on the FAC.
Work Completed
During the months of November and December, the FAC continued its work with the Board as well as with DRM and Troon management on behalf of the Association including:
Review and recommend Board approval of the Associaton’s unaudited November 2019 financial statements including the:
financial statements prepared by DRM/Associa, Troon, and the Controller.
combining and combined financial statements included in the HOA Treasurer’s Report prepared by the Controller.
summary financial information on the HOA’s financial position and results of operations included in the Controller’s report to the Board.
condensed Association financial information to be published in The View.
Review of the variance analysis prepared by the Controller on the 2019 Operating Fund revenues and expenses to assess impact, if any, of the 2019 Forecast.
Review of variance analysis prepared by the Controller on the 2019 Replacement Fund expenses and inter-fund transfers to the Operating Fund.
Review of the 2019 Forecast (11+1) of the Operating Fund and Replacement Fund as compared to the 2019 Budget and the 2019 Forecast (10+2) prepared by the Controller.
Regular meeting of FAC held on December 13, 2019.
Preparation of the FAC monthly written report to the Board for its meeting on December 16, 2019.
Review of November 2019 bank statements, bank reconciliations, and Replacement Fund investment account statements.
The Board approved the revisions proposed by FAC on the Association’s Investment Policy for 2020.
The Board approved the revisions proposed by FAC on the Association’s Procurement Policy.
The Board approved the increase of $1 million to $16 million in the Fidelity Bond proposed by FAC as of January 1, 2020, to comply with California Civil Code Section 5806.
Work in Process
The FAC proposed revisions to the Charter and Mission for the FAC and the Charter and Mission for the FAC Subcommittee on the Replacement Fund and Reserve Study (Subcommittee). The proposed revisions were approved by the Board for posting to allow for comments.
The FAC and Subcommittee prepared written recommendations for the Board’s review in the preparation of Board Action Forms requesting expenditures from the Replacement Fund for replacement or major repairs of common area real and personal property components.
Further Information
Please review minutes of our monthly meetings and written reports to the Board included in Board meeting packages on the HOA website.
Additional FAC Members: Larry Anderson, Steve Proia, Carey Thompson, Bob Giovannettone, and Bill Ferstenfeld. FAC Subcommittee Members on the Replacement Fund and Reserve Study: Chris Stevens, Don Salvatore, Steve Proia, Carey Thompson, and Bill Wethe, Chair. Contact the author at finance@scshca.com.
Every year when our new assessment amount comes out, I get questions about why the assessment is going up. So, I hope to explain here some of the factors that determine our monthly assessments. Our assessments are set up to allow us to meet all our costs and maintain sufficient reserves for future replacement, improvements and major repairs.
I want to start by saying that I believe that as long as there is inflation, monthly assessments must always go up. If we are to maintain facilities and services at an equal level year over year, assessments will need to go up at least by the inflation rate in order to compensate. The only way we could keep assessments at the same level would be to have a reduction in services or maintenance, and I do not support such a philosophy. As a result, I have often stated that assessments must go up every year if we want to maintain the same level of services.
There are also many reasons to increase assessments by more than the national inflation rate such as cost increases imposed by the state government (for example our state-mandated minimum wage increases). It is also possible that residents might want to boost costs for additional services. For example, the Board increased our landscaping cost by $3.50 per month per home because many residents wanted more landscaping services so our community would have a better appearance.
Our 2019 balanced budget was based on $270 per month, not the $265 per month that we are all paying. We were able to reduce assessments to $265 because of a budget surplus in 2018 that allowed us to lower assessments by $5 per month. So, from a budget point of view, costs for 2019 were based on $270 per month. Inflation toward the end of 2019 was 1.75% and was estimated to reach 1.8% by December, but for this discussion I will use the rate of 1.75%. This means, to maintain facilities and services at their current level, that costs must go up by 1.75% or $4.73 per month. (1.75% of $270).
Next, we need to add in the costs of increased labor as a result of state-mandated increases in the minimum wage. The minimum wage will increase from $10.50 to $15 by the year 2022. We must pay this increase each year, and it will mean a labor cost growth of about 8% per year. Because a company like Troon employs more than half of its staff at minimum wage, you can see this increase can be considerable.
As a result, the Board implemented labor cost increases for 2020 at 1.5% for non-minimum-wage staff and then state-mandated increases of about 8% for minimum-wage staff. There were two buckets for calculating labor, one for non-minimum-wage staff and one for minimum-wage staff. With inflation at 1.75%, we did well to hold labor cost at 1.5% for those that were not minimum wage. Combined labor costs will then come in at about 4% - 5%.
We need to keep in mind that our HOA does not permit contracts longer than one year. This can work against us when trying to contain costs for a period of time longer than one year. Although we can bid each contract every year, all increases in costs will be passed on to us each year.
As a result of low unemployment and the increased minimum wage, contract costs have increased. For example, our security contract went up by $1.50 per unit per month. The landscape contract went up by $3.50 per unit per month. The latter is for two reasons: residents wanted increased service, which requires more labor, and the minimum wage requirement. These two contracts alone increased costs to the HOA by $5 per unit per month.
Now, let’s talk about Reserves, which we refer to as the Replacement Fund. We accumulate a portion of each month’s assessments for future replacement and major repairs of common area real property improvements as well as common area personal property and equipment. The Finance Advisory Committee (FAC) initially considered setting this portion of the assessment at $45 per unit per month starting in 2020. However, this would mean our 30 year cash flow forecast would include eight years in which our funding would be less than 70%, an amount considered to be the minimum financially responsible level for reducing the risk of special assessments.
As a result, FAC recommended we put an additional $2 per unit per month (for a total of $47 per unit per month) into the Replacement Fund in 2020. The increase in the funding rate starting in 2020 will mean that the 30‑year cash flow forecast to be below 70% in only two years. Over the long term, the Board agreed this is wise because it provides residents with added confidence that we should not need a special assessment, which is one factor in maintaining home values.
After accounting for all these different concerns, our increase in costs was projected at $15 per month per home for 2020. Because the balanced budget for 2019 was $270 per month, this meant we were trying to keep assessments for 2020 below $285 per month. Through the budget process of looking at expenses we might not need, or costs that could be reduced, the balanced budget came in at $281 per month per home. Because the HOA had a projected surplus for 2019 of $331,000, the Board decided to use this surplus to reduce the balanced budget assessment by $8 per month, making the net assessment $273 per month for 2020. This amounts to a net increase to residents of $8 per month beginning in January.
But keep in mind that our balanced budget in 2020 is $281 per month, and we will have two more years of minimum wage increases. So, we have two more years of increased costs that are beyond our control.
Once you calculate the past two years of budgets, you can then project that, for the next two years, assessments will increase at least 4% per year. Hopefully, if we can maintain some efficiency, we can keep from exceeding that 4% level. However, given state-mandated cost increases, holding assessments to inflation increases will not be possible, in my opinion. The only way to hold assessments to less than a 4% increase would require a reduction of maintenance and/or services, not my first choice.
Even after considering all these factors, I take a moment to stare at the sunset and recognize that we still live in a beautiful place that is worth every penny. Paradise is the perfect description; so, without a doubt, I will always contend, “It doesn’t get any better than this!”
This week Bob interviews Shadow Hills resident Patricia Williamson. Patricia is with the Palm Springs Kennel Club, the organization that puts on the dog show at the Polo Club grounds in January. Listen to learn about the breed shows, obedience and agility contests, and other happenings at this three-day event.
At our last Board meeting on Monday 12/16/2019, the Board made a presentation of current information regarding Bulk Cable Contract negotiations. You can view that presentation by going to the following link
The Board has been waiting on a response from Spectrum since our last meeting with them on 8/21/2019. Since then, Spectrum communicated in writing on multiple occasions they needed additional time to review their initial proposal and establish a new pricing model due to changes with many of their content providers. It is not the Board nor our attorneys who have been delaying negotiations.
On 12/6/2019 the Spectrum representative stated to us the following:
Spectrum has incurred significant increases in our programming costs across the board. This has required us to revisit our offer with our finance group to make sure we are in compliance with our new cost model.
After the Board meeting on Monday 12/16/2019, Spectrum submitted a new proposal. The Board is reviewing that proposal in detail now and we can hopefully have more complete information to you soon.
Some basic points in the new proposal include:
Price will increase from $40 to $48 per month excluding all taxes, fees and any HOA fee
Spectrum will not pay a Door Fee to the HOA ($1.035 Million)
Reduction in content – No HBO or NFL Red Zone
Small dollar amount changes in equipment pricing
These changes will bring the estimated total monthly cost per residential lot to approximately $51 to $57 per month depending on taxes and fees.
Unfortunately, this increased cost proposal by Spectrum does not address the contractual legal concerns which the Board communicated to Spectrum four months ago, so we again have asked Spectrum to respond to these concerns.
We have continued negotiations with Frontier and will hopefully resolve any legal issues with their agreement by next week. Currently, we have one insurance point to reach agreement on with respect to the significant terms of a proposed contract.
Hopefully this clarifies how we are proceeding. We are trying to work with both companies as quickly as possible to reach a positive conclusion. But we must wait for their responses and that is something we cannot control. Once we have all the information from both companies, we can decide how to proceed in the best interest of the HOA.
The Palm Springs Air Museum is the top-rated tourist destination in the Coachella Valley. They currently have 65 planes, almost all of which are still in flyable condition. They will be getting a retired stealth bomber in the spring. The museum also has a wonderful library containing every aviation war movie ever produced and every copy of Life magazine.
Patrick Shannon is a volunteer docent who is in charge of telling their story to the public. He has a wonderful PowerPoint presentation.
Fly the United States Flags at Half-Staff Saturday, December 7, 2019 in Honor of National Pearl Harbor Remembrance Day
Pearl Harbor Remembrance Day occurs on December 7 of each year, designated in memory of the lives lost in the 1941 attack and to remember that we enjoy freedom thanks to their sacrifice. The attack claimed the lives of 2,334 servicemen and servicewomen and wounded another 1,143.
On Pearl Harbor Day, the American flag should be flown at half-staff from sunrise until sunset to honor those who died as a result of the attack on U.S. military forces in Hawaii. . Some organizations may hold special events in memory of those killed or injured at Pearl Harbor.
After participating in our Tenth Annual Golf Cart Parade last week, the Rancho Mirage High School Band and Instrumental Music Department proudly invites our friends at Sun City Shadow Hills to attend our Winter Music Spectacular Concert December 17, 2019 at 7 pm at the Helene Galen Performing Arts Center, 31001 Rattler Rd, Rancho Mirage, CA 92270.
Featuring the String Orchestra, Brass Ensemble, Jazz Band, Marching Band, the Wind Symphony, and the SCSH Pom Squad.
Admission is FREE and donations are accepted.
We will also have a silent auction with wonderful baskets for the holidays.
We hope to see you there.
~ Dr. Brian McDaniel, Director of Bands and Instrumental Music
