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Will our dues go up up up up up....since other DVC things are happening??

Discussion in 'DVC-Mousecellaneous' started by edk35, Oct 19, 2009.

  1. edk35

    edk35 DIS Veteran

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    Is there a limit to how much dues can go up? A cap so to speak?? Will we all be SHOCKED :scared1: when we get our statements in Dec.??????
     
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  3. DVCGeek

    DVCGeek DIS Veteran

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    By law dues can't exceed costs & budgeted reserves.

    The POS states that the non-taxes portion can't go up by more than 15% IIRC, and historically it is generally 3-5% every year.

    So over 50ish years they will go up a lot because of compounding, but in any given year it probably won't be a huge increase. You may want to look at some historic trends to see what has happened before. It's not a guarantee for the future but is a starting point for estimates. Here's a link:

    http://dvcnews.com/index.php/dvc-program/owning-dvc/faqs?task=view&id=51
     
  4. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    Disney doesn't want the dues to go up, at least not until they sell all of the existing inventory. I feel that they deliberately keep the dues low to make it easier to sell new contracts.

    That's why there aren't more paid perks and why the rooms and resorts aren't maintained as well as they could be.

    :) Bill
     
  5. Deb & Bill

    Deb & Bill DVC-Trivia Contest, Apr-2006: Honorable Mention

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    And why it takes more points to stay in a BLT villa vs the others.
     
  6. DVCGeek

    DVCGeek DIS Veteran

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    Rethinking this a bit; when OP said "since other DVC things are happening" in the title, what were you referring to?

    Do you mean how are your dues impacted by new resorts (such as Hawaii and possibly the DC area) and what not? Short answer is there should be very little or no impact from them. Dues are for the upkeep of YOUR home resort(s) and their share of common DVC expenses (Member Services for instance).
     
  7. edk35

    edk35 DIS Veteran

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    Oh I guess I should have clarified better. I mean...it seems that with the "current economy" there have been little things here and there that have changed, for example the "valet perk" and more complaints to MS about this that and the other. I just wonderered..if our dues would be impacted by the economy changes/ cut backs at WDW and such.
     
  8. wdrl

    wdrl DIS Veteran

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    We can only speculate about how the weakened national economy could impact our MFs, but I don't think anyone can establish a casual relationship between the two with any certainty. For example, our MFs receive a positive impact from breakage income, which is income derived from DVC inventory rooms that are turned over to CRO for booking at the 60-day mark. Breakage income is about 8 cents to about 10 cents per point. If fewer people are traveling to WDW due to the economy, or if those that are traveling to WDW are opting for cheaper non-DVC rooms, then each DVC resort's breakage income might be less. Another possible adverse variable are the ad valorem taxes each resort is billed by the local taxing authorities. If the local authorities aren't getting the needed revenue from sales taxes, income taxes, etc, they might try to make up the shortfall by increasing the taxes on DVC resorts.
     
  9. drusba

    drusba <a href="http://www.wdwinfo.com/dis-sponsor/index.

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    Best guess is that dues might go up a little (2% to 3%). We should still max out on breakage income -- actual income from renting rooms at the breakage period is actually a lot more than the breakage income that goes to set off dues; that income goes first to offset dues but up to no more than 2.5 % of the annual operating budget, amounts after that 2.5 max go next to MS for operating expenses and then anything left over goes to Disney's bottom line. Thus, even a decline in total breakage income should still leave members getting the max offset of dues.

    I suspect employee costs (wages, benefits for Disney employees and outsourced such as housekeeping)have not gone up much this year because of the lack of any real wage increases and employee costs are probably at least 60% of everything in the budget; however insurance costs for those employees will likely increase. Property and liability insurance costs have likely risen but transportation costs might have even declined -- when budgeted last year for this year gasoline prices were significantly higher than they are now. Property taxes may have risen but I think the local government agencies made their main moves before last year's budget. In any event, I am guessing that the upcoming budgets should not have any big moves from last year.
     
  10. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    I assume that a lot of things go on behind the stage that we will never know about. When you talk about breakage income we assume that we get dollar for dollar.

    Buy the time Disney CRO takes their discount and the DVC subtracts their processing fees, I bet that it makes more money for Disney than the membership. If it didn't they would leave more rooms in reserve and available when rooms should be taken out of inventory for maintenance reasons.

    Same thing for declared inventory. How many rooms does Disney deliberately not declare so CRO can rent them out. What's the formula and is it adhered to?

    :) Bill
     
  11. DisneyWalker44

    DisneyWalker44 DIS Veteran

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    I think DVC has done a great job of keeping costs increases reasonable the past 16 years or so. But I'm worried about 2010 dues. Crashes in the Orlando housing market could lead to tax increases.
     
  12. PamOKW

    PamOKW <font color=green>The two most important items for

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    Another factor that may effect our dues is the return on the money has invested for capital expenses may (probably) will show a lower return. It could be reflected in an increase. That's one of the effects we felt post-9/11. I don't expect to see a "shocking" increase this year but I think the days of flat to even decreasing dues are behind us.
     
  13. wdrl

    wdrl DIS Veteran

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    In the recent cases of BLT, SSR, and AKV, I am amazed at how many units DVD declares for the DVC that are not actually needed based on the rate of sales. For example, on August 31, 2009 DVD declared 20 2-bedroom villas for AKV, which brought 325,800 points into the AKV. However, through October 15, 2009, DVD has only sold 3,040 points from this declaration. Equally noteworthy, DVD still has 121,988 points to be sold from the prior AKV declaration made on November 21, 2008. Based on the rate of AKV sales, there was no need for DVD to roll out 20 more 2-bedroom villas for the DVC in August 2009.

    DVD has "overdeclared" units for SSR as well. On January 22, 2009, DVD declared 30 Treehouse villas for the DVC. Yet, through 10/15/2009, it has only sold 126,162 of the 452,625 (27.9%) points from this declaration. At the rate of SSR sales, DVD could have easily declared only 10 THVs for the DVC and still have a large cushion of points. Thus, the DVC membership has had far more THVs available for bookings than justified by sales. Even in BLT's case, DVD has declared units at a faster rate than sales.

    Based on its current policy of Declarations, it appears that DVD is actually quite liberal in turning over more units to the DVC inventory than warranted by sales. I don't know what formula it uses, but, at least for the past year, it has been to the benefit of the DVC membership.
     
  14. disneynutz

    disneynutz DIS Veteran DIS Lifetime Sponsor

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    If they have declared more units than sales, that means that somewhere there will be a lot of vacant rooms. That tells me that Disney makes more money turning over vacant rooms to CRO verses not declaring them.

    :) Bill
     
  15. dwelty

    dwelty "God Bless 'em, let 'em pee"-Roy Disney

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    Maybe I'm missing something here, but I thought property taxes were a percent of the properties value. If this is the case I would think a weakened housing market would send property values down, resulting in lower property taxes overall. I know this is the case in my hometown, which is why cities are trying to make up the money elsewhere (code enforcement, more traffic tickets, etc.) Orange County cant just raise taxes because revenue is down, it has to be based on the propertie's value. I doubt the value of these properties has increased during this recession.
     
  16. DVCGeek

    DVCGeek DIS Veteran

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    While I hope you (and others) are correct that dues increases won't be too high for 2010 for the variety of reasons posted, wasn't there a broad reaching wage increase of 4 to 5% for thousands of employees in Sept. or early this month?

    Yes, that is generally the case, BUT the tax percentage (milage) could go up. Usually this would require a vote by the residents (I think). I assume that is how it works in FL (and CA & SC)...
     
  17. YourEveryDayAdam

    YourEveryDayAdam Mouseketeer

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    There are a couple of ways that I could see dues might be affected by the downturn in the economy. Both of them won't be a factor by any real measurable means.

    1) Property values fall, and since taxes are based on property values, governments will raise tax rates to compensate for the lost revenue. There are a few reasons why this won't be a problem:
    --- Disney, including DVC, is pretty much an entity unto itself. I would wager that Disney, and it's related entities (including DVC), pay the large majority of property taxes to the city and county. There aren't many houses and individually owned property in the area, and the ones that are there make up only a tiny fraction of the tax revenue. The majority of the money in tax revenue comes from Disney itself and the nearby hotels. The money here may slow down a little during the economy but it won't dry up. Taxes will continue to get paid as normal.
    --- Even IF the government somehow raises the tax rates, since the property values would have decreased, the percentage increase in rates would likely be revenue neutral and cause no direct impact on dues. Once the economy recovers, the government will have a surplus and the politicians will quick work to reduce taxes. Tax increases are unlikely also, since no one likes tax rates going up and politicians will be hard pressed to do this in the middle of a recession.

    2) Members not paying their own dues could cause a budget shortfall for members in good standing to make up for. There are a couple of reasons this won't be a measurable problem on dues, short of a complete meltdown of the global economy:
    --- Any member that doesn't pay their dues loses their ability to use their points. Banking, borrowing, and any existing reservations are cancelled. If they continue to not pay their dues at this point, their points will expire and the rooms their points represent will get sold off as breakage income and put in to the dues pot that way.
    --- If they continue to not pay their dues, eventually, Disney Vacation Club Management Corporation (DVC-MC) will foreclose on their points. These points will then be turned over to Disney Vacation Development Inc. (DVD Inc.) to be sold. Any proceeds from the sale would belong to DVC-MC, which is a company, operated by Disney, that is for the benefit of DVC members. These proceeds would then be put back in to the dues pot. Of course, DVD Inc. is going to take their share of the proceeds as well for selling the points, but it should still be a wash as far as annual dues are concerned. This also wouldn't be the case if the member in question had a loan on their points, as the security interest in the loan would have to be satisfied first. However, if the member isn't paying their dues, then they likely aren't paying their loan either, in which case DVD Inc is going to foreclose first and then they would become responsible for and pay for the dues shortfall on those points.

    Ultimately, the economy might have a small impact on dues, but it won't be any measurable increase. If anything, the economy (and the current lack of inflation that is caused by it) will help dues, since everything that is needed to run the resorts will not be going up in price as much (if at all) this year. Especially labor, probably the largest expense of DVC, is really cheap in Florida right now.

    It's really the times that the economy is booming and nobody is worried about spending money, because that's when prices go up.
     
  18. White_Sox_Fan

    White_Sox_Fan DIS Veteran

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    I don't know about Olando, but in our county the real estate assessment is based on a 3 year rolling average which means that despite the fact that property values were down over the last year our assessments still increased.
     
  19. wdrl

    wdrl DIS Veteran

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    I don't understand the point you are trying to make. First, you imply that Disney manipulates the declaration of units to the DVC, deliberately not declaring units so that CRO can rent them out. Then, you state that Disney overdeclares units so that it can turn the excess units over to CRO to be rented out. This sounds like another "Darned if they do and darned if they don't" situation.

    The data shows that Disney has declared far more units than warranted by sales. Does this necessarily mean that that "somewhere there will be a lot of vacate rooms?" Maybe so, and maybe not. Remember that DVD has sold over 1.55 million BLT points with a February Use Year. None of those points could be used anywhere in the DVC system before BLT opened on 8/4/2009. Thus, the February UY owners have only 6 months in which to use their 2009 points. Now, a lot of users will bank their 2009 points into the 2010 UY. But I suspect there will be a significant number of BLT owners trying to use their 2009 points in the 2009 UY. Since they have only 6 months to use their 2009 points, this will drive up demand for DVC rooms.

    In my opinion, DVC members benefit by Disney's current policy of overdeclaring units. Think of all the members who have happily gotten THV reservations because there are 30 THVs in our inventory, rather than the 10 or so that would probably be in the inventory if Disney held onto units until justified by actual SSR sales. If Disney also benefits somehow by overdeclaring, then its a win-win situation for everyone!
     
  20. manning

    manning <font color=blue>Just for that I have requested it

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    It can go up more than 15% IF owners vote to allow it. This is the only time you have a vote unless DVC allows otherwise.
     
  21. manning

    manning <font color=blue>Just for that I have requested it

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    This must be state wide in Illinois. I live in Du page county and it is a 3 year rolling average also.

    Wonder if this is uniform all over the country.
     

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