Sun City West board reviews reserve fund investment strategy, working group favors modest equity increase

At a Feb. 14 Sun City West Governing Board workshop, the Budget & Finance working group presented an in-depth review of the association's reserve investment strategy and sought direction on proposed changes to investment policy.

The working group, led by Mickey Jacobs with members Rick Ruffai and Director Christine Novello (treasurer and BNF chair), displayed 20-year cash-flow models and CapTrust scenarios showing that raising the association's equity allocation above the current 10% could materially increase long-term reserve balances without a large rise in volatility. The association has about $30 million in its reserve fund and is in a capital-intensive 10-year period that covers most golf- and infrastructure-related projects.

Why it matters: the reserve fund finances repair, replacement and new capital projects across Sun City West's amenities. Small changes in long-term investment returns compound over decades and can affect whether future strategic projects require special assessments or outside funding.

The working group modeled the current 10% equity/90% fixed-income policy against alternate mixes (20%, 25% and 30% equity) using historical annual returns over the past 20 years. CapTrust's stress…