Sun City West committee reviews FY 2025–26 financial plan; $5.9M in capital projects highlighted

Sun City West Budget and Finance Committee Treasurer Director Christine Novello convened the committee on April 15, 2025, to review the proposed fiscal year 2025–26 annual financial plan. Cliff (presenter) summarized the operating budget, capital improvement program and reserve projections, and said the annual plan “has 19 of the 40 or so items in terms of deliverables or objectives in our strategic plan.”

The discussion centered on three takeaways: (1) major capital spending this year funded largely by assessment processing fees (APFs), (2) how the association budgets for operating costs and staffing, and (3) multi‑year water‑conservation/irrigation projects for the association’s golf courses. Cliff described the capital plan as showing roughly $8.1 million in cash inflows for capital this year, with $5.9 million coming from APF fees, $1.2 million from member dues and $981,000 from the reserve fund. He said the association is budgeting approximately $5.9 million in capital improvements for the coming year and projects about $53 million in capital improvements over the next five years.

Why it matters: the committee and staff framed the plan as balancing routine operations, strategic deliverables and long‑lived infrastructure replacement. Cliff said the reserve fund modeling projects a beginning and an ending reserve balance of $28,000,000 over the planning window and a modeled fully funded balance (FFB) percentage in the low‑40s. The presentation and follow‑up questions aimed to show how the plan sustains current service levels, funds major asset replacements and protects reserves over time.

Capital funding and APFs: Committee members pressed on how much of near‑term capital relies on APFs versus dues. Cliff noted that APFs subsidize the reserve allocation and allow the association to take 7.5% of member dues into the reserve fund (he cited industry comparators of 15–40% as context). Cliff said, “we have the APF fees... so we're able to provide all of those services and only ask our members to contribute 7 and a half percent of their dues and fees to cover our reserve fund because we have our APF fees.”

Irrigation and golf course projects: Members asked for specifics on the irrigation/water conservation projects driving long‑term capital needs. Cliff and Todd (staff referenced by name) listed project cost estimates given to the committee: Echo — $5.5 million; Stardust — $5.5 million; Pebblebrook — $8.8 million; Trail Ridge — $4.4 million; Deer Valley — $5.9 million; Desert Trails — $5.1 million. Cliff said those projects are infrastructure replacements and that converting turf to desert landscaping will extend asset life from 35–40 years to roughly 70 years, producing long‑term operating and maintenance savings and potential future water‑rights revenues.

Operating budget items and staffing: Committee members asked about labor assumptions. Cliff said the budget includes a conservative cost‑of‑living/minimum‑wage assumption of $0.50 per hour and noted last year’s increase was $0.35. On staffing, Cliff said the budget is built on “full employment” assumptions (budgeted FTEs reflect the services and service levels the association provides) while acknowledging turnover and periodic vacant positions produce some payroll savings and operational strain. He explained that the association reviews positions annually and adjusts hires during the year when appropriate.

Events and divisional reporting: Committee members asked for clearer divisional profit‑and‑loss reporting for amenities such as special events and venues. Cliff explained special events are presented as gross revenue (revenue minus event costs, excluding payroll) and that some venues such as the Sports Pavilion show a net expense because no ticket revenue is collected there. He said the events program typically generates $200,000–$250,000 in incremental cash flow after accounting for costs (not counting labor allocated under general expenses) and offered to present a deeper breakdown to the committee at a future meeting.

Next steps and governing board review: Novello and staff said the governing board will consider the capital and operating recommendations at its upcoming workshop and then vote on the annual financial plan. The committee noted one capital line — a $300,000 website redesign — as an item the governing board workshop might pull out for further consideration. Staff will present the budget to the community at two upcoming budget forums (April 23 and April 24) and the governing board will vote in May, per staff comments.

What was not decided: The committee did not adopt the annual financial plan at this meeting; staff will present the final package to the governing board, and the governing board must still vote to adopt the capital items and the operating plan.

Ending: Staff committed to providing more granular P&L breakdowns for events and amenity lines and to publish the five‑year planning figures that underlie the short/medium/long‑term reserve buckets. The budget package and the reserve/investment proposals will return to the governing board for formal action in the weeks ahead.