BCV Maintenance Fee Increase - 5.43%! (and a breakdown of the annual budget)

[Dean]

Sometimes the developer will start the dues off lower and then raise them over time, usually about the time most units are sold out. It never made sense to me that BCV and VWL were so much lower than BWV.

 

[StevieD]

Originally posted by vernon
Cruella, with the established resorts like OKW they have had a long time to build up a reserve, BCV hasn't had that opportunity so, for example, if they have had a maintanance bill come in that they weren't expecting it has to be paid for immediately ( and recovered immediately) as there is nothing in the bank to cover it. Again, BCV is brand new, but I would expect they also have to pay a share of joint facilities ( like SAB pool area) so while I think it's sensible to ask the questions, it is possible they have a genuine reason for the rise.

Your thinking is logical, however you will note that the capital reserve charge actually went down for 2003. So the increase is definitely not due to building up a reserve; the increases were for current allocated expenses

 

[StevieD]

Originally posted by wdeversole
Well, they are counting the two-bedroom lockoffs as one unit instead of two - is this consistant with the 2002 budget, or did they count them as two units last year??

It was accounted for in the same way for 2002 - so that doesn't explain the discrepancy.

 

[fkj2]

Firstly, rehabbing OKW and BWV might account for some of the increases there but primarily, I'll bet that there have been substantial increases in insurance premiums. Seems that those have increased substantially everywhere. Pretty soon, people won't be able to afford insurance or will be doing the "minimal coverage" thing.

 

[StevieD]

Originally posted by fkj2
Firstly, rehabbing OKW and BWV might account for some of the increases there but primarily, I'll bet that there have been substantial increases in insurance premiums. Seems that those have increased substantially everywhere. Pretty soon, people won't be able to afford insurance or will be doing the "minimal coverage" thing.

I know that people are focusing on insurance premiums based on the fact that insurance premiums have skyrocketed this year - but unfortunately, this does not really explain the increases in dues at BCV. Insurance premiums only account for a very small percentage of the overall operating budget for BCV - less than 5% of the operating budget, and only 3.4% of the overall budget (operating, capital reserves, ad valorem taxes). So even though insurance premiums increased by 39% at BCV, this increase only accounted for an overall increase in dues of 1.4% - the bulk of the increase of 5.4% was due to other factors.

 

[ralphd]

We have received the 2003 budgets for VWL and BCV. BCV does not list a Developer Subsidy. VWL lists a Developer Subsidy of .055 per point, thus the real point cost is $4.1092 rather than $4.0542.

ralphd

 

[StevieD]

Originally posted by ralphd
We have received the 2003 budgets for VWL and BCV. BCV does not list a Developer Subsidy. VWL lists a Developer Subsidy of .055 per point, thus the real point cost is $4.1092 rather than $4.0542.

ralphd

Take a closer look at your budget, ralphd. DVD is providing a subsidy. You'll note that the actual point cost for dues is $4.0847 per point, but DVD is only charging $3.9728 per point, a subsidy of $0.1119 per point. This is outlined in item 23 of the Description of Estimated Annual Operating Budget Components under "Developer Guarantee".

 

[drusba]

Do not own at BCV and thus have not seen budget. However, as to question about number of units-- while a resort is being sold, your dues are based on number of units dedicated to DVC and total budget is for that portion of resort with DVD absorbing rest. As you go from one year to next, the number of units included in the program will increase until the resort is sold out. Total dollars for the budget and for given parts is therefore likely to increase substantially each year as more units are included. To determine where there are real increases that affect you, you need to look solely at increase in any given item per point, not overall increase in total dollars for the budget. Also, your dues last year even per point were based on a partial year as the resort did not open until July and thus you should also expect some substantial increases in some areas per point.

 

[Nink]

I am new to the DVC. My new home is BCV. I am due to close tomorrow on our new venture.

Please tell me know how one finds out when the annual meetings are being held? Is it worth my time to go to the annual meeting at another location (such as WLV) and listen to what they say. I will be at WDW right after Thanksgiving this year and thought there might be a meeting I could attend.

 

[StevieD]

Originally posted by drusba
Do not own at BCV and thus have not seen budget. However, as to question about number of units-- while a resort is being sold, your dues are based on number of units dedicated to DVC and total budget is for that portion of resort with DVD absorbing rest. As you go from one year to next, the number of units included in the program will increase until the resort is sold out. Total dollars for the budget and for given parts is therefore likely to increase substantially each year as more units are included. To determine where there are real increases that affect you, you need to look solely at increase in any given item per point, not overall increase in total dollars for the budget. Also, your dues last year even per point were based on a partial year as the resort did not open until July and thus you should also expect some substantial increases in some areas per point.

Very reasonable thinking, drusba. However, note in my initial post that the # of units decreased substantially from 2002 to 2003, not increased. So apparently something else is going on that we are not yet aware of. In addition, your partial year supposition is also logical - but again, doesn't follow with the actual budgets we have been presented. The overall dollars actually went down, while the per point values increased. This is opposite what you would expect - but I think I know the reason. DVD provided an "estimated" budget for 2002 when they filed the prospectus, based on an entire years worth of operation. Then they charged everyone pro-rata based on 6 months of operation - so this makes sense. It still doesn't explain the # of units discrepancy.

 

[CarolMN]

Originally posted by Nink
I am new to the DVC. My new home is BCV. I am due to close tomorrow on our new venture.

Please tell me know how one finds out when the annual meetings are being held? Is it worth my time to go to the annual meeting at another location (such as WLV) and listen to what they say. I will be at WDW right after Thanksgiving this year and thought there might be a meeting I could attend.

The annual meeting times and dates are published in the Fall issue of the Vacation Magic (quarterly magazine/newsletter mailed to DVC Members and posted online on the Members' website). If you received the Fall issue, look on page 3. Here's what it said:

The 2002 Condominium Association Meetings will be held at the following dates and times:

Tuesday, December 3, 2002
10:00 am - The Villas at Disney's Wilderness Lodge
2:00 pm - Disney's Beach Club Villas

Thursday, December 5, 2002
10:00 am - Disney's Old Key West Resort
2:00 pm - Disney's Boardwalk Villas

Monday, December 9, 2002
9:00 am - Disney's Hilton Head Island Resort

Friday, December 13, 2002
2:00 pm - Disney's Vero Beach Resort

Please check with the Front Desk at each resort for the location of each meeting.

It's JMHO, but I think the annual meetings will be especially interesting this year.

 

[ralphd]

Originally posted by StevieD
Take a closer look at your budget, ralphd. DVD is providing a subsidy. You'll note that the actual point cost for dues is $4.0847 per point, but DVD is only charging $3.9728 per point, a subsidy of $0.1119 per point. This is outlined in item 23 of the Description of Estimated Annual Operating Budget Components under "Developer Guarantee".

You are correct Steve. The difference is the Developer Subsidy is a marketing expense, while the Developer Guarantee is a contractual cost to the developer. The Developer does not have to pay the $.055 per point under terms of the contract.

Your numbers are correct, however, as to the actual cost per point.

ralphd

 

[jag90]

I wanted to attend the Annual meeting for VWL unfortunately we will not arrive until Wednesday Dec 4th. Will there be any way for me to obtain the minutes from the meeting while I there?

 

[mb168]

The increase is probably due to those valid stickers they mailed out .

Did they possibly estimate the 200+ units for last year but now have actual numbers to go by??

 

[drusba]

StevieD, can see what they possibly did now. 208 is the total number of rooms in the resort (official number of rooms always counts any 2BR lockoffs as one room) and it looks like they based estimated budget for 2002 as if whole resort was dedicated. That likely has something to do with the fact that BCV was sold before it opened. For 2003, the 130 rooms represents units that have in fact been dedicated to DVC (which would jive with reports that BCV is a little more than half sold).

Also, another note for people trying to understand the subsidy/guarantee for level of dues. DVD retains a 4% interest in every unit sold. Under Florida law, a developer can subsize/guarantee level of dues and by doing so avoids having to contribute its share of dues for the portion of ownership it retains. It can, alternatively, not subsidize/guarantee and simply contribute its share of dues based on percentage of ownership retained.