Sun City West reports audit clean bill, moves to shift reserve investments toward equities

Sun City West’s governing board reported a clean financial audit and projected year‑end gains to its reserve fund, and directors approved motions authorizing planned expenditures and procurement for the 2025–26 budget.

The association’s chief financial officer, Cliff Swan, told owner‑members the external audit produced “the highest level of assurance and a non‑modified opinion” and summarized projected year‑end positions for operating and reserve funds. Swan said investment returns and budget savings are expected to leave the reserve fund near $29.3 million after roughly $10.1 million in capital spending, and he added plainly: "It's all about the cash."

The budget and finance committee, chaired by Christine Novello, reported that staff and the committee completed a multi‑month review of the association’s investment policy (FI‑12). Novello said the governing board approved changes that formally split reserves into near, medium and long‑term buckets and raised the long‑term target allocation to equities from 10% to 25% so that funds not required for at least 10 years can seek higher returns.

The board also approved a procedural motion authorizing the general manager to execute contracts, purchase orders and checks for projects in the operational and capital budgets approved last month. Novello explained the motion was to allow procurement to proceed on items already approved in the budget.

During the meeting the board reviewed year‑to‑date and projected results: Swan said operations were roughly 1.8% below revenue budget largely because of lower golf rounds and event revenue, but expense savings and investment income created an operating surplus expected to add about $550,000 more than budget to reserves. He said investment income (interest, dividends and realized/unrealized gains net of fees) was expected to be about $1.6 million for the year.

Board actions taken at the meeting included unanimous votes to accept end‑of‑year committee reports, renew two special committees (Torch and Election) and to authorize the general manager to begin procurement under the new budgets.

The governing board and the budget committee emphasized that the change to FI‑12 was the result of seven months of analysis, multiple public presentations and a working group review. Novello said the committee deliberately kept short‑term reserves conservative while allowing longer‑term dollars more exposure to equities to improve returns over multi‑year horizons.

Looking ahead, officials said the association will continue quarterly oversight of reserve investments with its external manager and will publish the full audit and reserve study information online for members.

Members with detailed questions were encouraged to review the audit and the committee’s FI‑12 working‑group materials posted on the association’s YouTube channel and website.