If RCID is dissolved, what happens with DVC?

[Sandisw]

Last reminder. Please do not include opinions about how this started, whose fault this is or anything like that. Those lead us in the direction of politics, right and wrong, etc.

Discussing the process of how this impacts Disney and DVC are in bounds. The rest is not and to be fair to everyone comments about the reasons will be deleted and warnings issued or a closed thread.

 

[Ms Bibbidi]

...
I read an interesting article that said RCID was needed at the time because the local counties just didn't have the money to develop the infrastructure which Disney would require. That infrastructure is built now. the county would be inheriting something that already exists. If that's all true, then maybe the reason for RCID no longer exists anyway.

From what I have read, I believe you are correct as to why the RCID was formed.

People are worried this was too fast or done only for retaliation. I am not ready to accept those points as established or reliable facts.
I also read the RCID was never intended to be permanent. There were also recent discussions about dissolving it anyway. So, the preparation discussions may have been happening for quite some time now.
The opinion of a very very few state legislators about why it happened now is just political rhetoric. In California, the Legislative Counsel's written opinion accompanying the legislation or amendment is the only official statement allowed in evidence in court as a reason for the legislation. The opinion even of a drafter of legislation is not allowed in court as evidence of the reason for legislation. If 100 people voted on it, you could have 100 different reasons. So, the media can report any off the cuff statements of legislators, but it is not evidence of legislative intent or purpose. In Florida, that may be a written opinion from the General Counsel for the Office of Legislative Services, Florida Legislature. I assure you, it is not the opinion of Representative ___________, being interviewed by the press.

 

[Chuck96]

Sandisw, I believe you mean "please do NOT..."

Because I have opinions I want to share But know I shouldn't.

 

[Obi-J Kenobi]

I don't own DVC. There is a myriad of reasons why.

I know multiple posts have focused on property tax burden and potential increases or decreases.

But, it seems clear to me that currently DVC members benefit from tax-exempt debt benefits from RCID. In the future I would speculate the cost to complete those improvement projects would be more costlier without RCID's ability to conduct tax exempt bonding. I would further speculate that the increased costs for improving DVC properties would trickle down to the DVC members in higher annual maintenance and dues. I sincerely hope I'm wrong and I'm not trying to be a downer about elimination of RCID. This is a real tough situation.

 

[BeachClub2014]

But, it seems clear to me that currently DVC members benefit from tax-exempt debt benefits from RCID. In the future I would speculate the cost to complete those improvement projects would be more costlier without RCID's ability to conduct tax exempt bonding. I would further speculate that the increased costs for improving DVC properties would trickle down to the DVC members in higher annual maintenance and dues. I sincerely hope I'm wrong and I'm not trying to be a downer about elimination of RCID. This is a real tough situation.

Hence my concern.

 

[Duckbug.Ducktales]

People are worried this was too fast or done only for retaliation. I am not ready to accept those points as established or reliable facts.

I'm not sure how one looks at the timing of this and the statements made and comes away with the above conclusion. When discussion began in the legislature about repealing RCID, the reps pushing for this framed it as an unprecedented move. It was also not part of the legislative agenda this term and only pushed into the special session at the 11th hour.

In any case, it's all done and besides the point now. The question remains how it will affect Disney, DVC, central FL governments, etc. And in my mind in particular, how the way this played out will affect Disney's thoughts on future investments at WDW. It's not doom and gloom, at least not on my part; it's uncertainty and concern.

 

[redboat45]

He is up for re-election this year. What would happen if he got replaced? Would a different governor be able to just say they don't like this and throw it all out the window? Just seems weird that there will be a period of time after the election where everything is still able to be canceled.

This isn't an executive order. If he signs it, it will be law. So a new congress and governor would have to make a new law.

 

[Sandisw]

Sandisw, I believe you mean "please do NOT..."

Because I have opinions I want to share But know I shouldn't.

Thank you!!! That is exactly what I meant!!! Lol

 

[TiggerBouncy]

It's my understanding that Orange County FD already provides a fair amount of mutual aid assistance to Disney. EMS operations might improve in the long run.

Possibly. Again, I did not say whether insurance would go up or down. I just noted that Orange County taking over the EMS operations could certainly have an effect on the insurance rates which Disney pays.

After thinking about this yesterday I went a checked - taxes seem to be somewhere in the $1.30-$1.50 range per point. So all heck breaks loose and taxes double? Anyone who could afford to be DVC in the first place is going to be ok. It might be annoying, but not Earth shattering.

And this is where I am on it. Double is I think a very much extreme. More likely is say 10%. <Shrug>. A 10% additional cost on our taxes is something in the range of $0.13/point. For the average DVC owner - an outstanding $13-$26/year. This is hardly earth shattering, world ending numbers. If $26 is going to bankrupt you, you really need to look at that DVC investment.

But, it seems clear to me that currently DVC members benefit from tax-exempt debt benefits from RCID. In the future I would speculate the cost to complete those improvement projects would be more costlier without RCID's ability to conduct tax exempt bonding. I would further speculate that the increased costs for improving DVC properties would trickle down to the DVC members in higher annual maintenance and dues. I sincerely hope I'm wrong and I'm not trying to be a downer about elimination of RCID. This is a real tough situation.

I am not sure what you are talking about here. MANY of the improvements are also to the resorts in general - very few are DVC only except for soft-refurbishments, which we already pay for. Can you give me an example of a major improvement to a DVC property that was paid for by RCID?

 

[HopperFan]

Wait does Disney own the property or does it belong to the municipalities? If Disney owns the 27K acres or whatever encompasses WDW why would the municipality be responsible for its roads and signs beyond getting folks from the state routes onto the property? As far as infrastructure wouldn't the property owners be responsible for the costs associated with their project as would any other prospective business? This is convoluted because of the sheer size of the property but I don't believe a municipality would or should be on the hook for all the things mentioned above

For sure the county would have to pay for emergency services and it might go way up because there is a belief by the department they are under staffed. A county probably has more requirements than Disney had.

Likely Disney would still be responsible for most roads (like a gated community is) but some of the major roads are county roads and would now have to be maintained by counties, like Osceola Parkway which is a county road. There are also State Roads, some that enter into Disney property the State would now have to maintain.

The other things that might be up for discussion are water management, power generation, gas lines, water treatment, waste services, power lines.

From RCID website -

" ... landowners within the Reedy Creek Improvement District, primarily Walt Disney World, would be solely responsible for paying the cost of providing typical municipal services like power, water, roads, fire protection etc.

Local taxpayers, meaning residents of Orange and Osceola County, would not have to pay for building or maintaining those services."

 

[mistysue]

<snip>
And this is where I am on it. Double is I think a very much extreme. More likely is say 10%. <Shrug>. A 10% additional cost on our taxes is something in the range of $0.13/point. For the average DVC owner - an outstanding $13-$26/year. This is hardly earth shattering, world ending numbers. If $26 is going to bankrupt you, you really need to look at that DVC investment.

Exactly. I like to start from "outlandish worst case" in thinking exercises like this to rule out whether I should keep thinking it through. It really cuts down on my anxiety about how bad something would be. I'd still be fine with something that's totally not going to happen, so I'm fine with the lesser case.

 

[TiggerBouncy]

From what I have read, I believe you are correct as to why the RCID was formed.

People are worried this was too fast or done only for retaliation. I am not ready to accept those points as established or reliable facts.
I also read the RCID was never intended to be permanent. There were also recent discussions about dissolving it anyway. So, the preparation discussions may have been happening for quite some time now.

And the more I have thought about this, the more convinced I am that it's just not a big deal.

When Disney built WDW, it could not have happened without RCID. The local governments thought it was a loftly idea, but none of them had the influx of cash to be able to build the roads, electrical grid, water grid, fire and safety systems, and all the other things that go with a development as big as WDW was going to be. They would never have been able to afford it, and WDW would never have gotten off the ground. It was NEEDED if Disney was going to build this thing.

Today is a VERY different world. These things exist now. No one has to build them. Yes, new roads may need to be built; but there are ways for companies to do that (heck, the company I used to work for paid to have a traffic light installed - the first one in the city we moved into - it was a BIG DEAL). But the sheer size of the project is not that scope anymore, and even for a new gate, the counties are well rehearsed in how to handle it.

I am sure Disney benefits from RCID - otherwise, they would have moved to dismantle it years ago. But in general, Disney has always offset its buildings with undeveloped land. They have had to meet building codes anyway. They get some tax benefits, but I am not convinced it's even a MAJOR deal for them if RCID is dismantled. More like a minor annoyance and tick to their pocketbook; but nothing they can't afford easily.

 

[bobby5966]

I don't own DVC. There is a myriad of reasons why.

I know multiple posts have focused on property tax burden and potential increases or decreases.

But, it seems clear to me that currently DVC members benefit from tax-exempt debt benefits from RCID. In the future I would speculate the cost to complete those improvement projects would be more costlier without RCID's ability to conduct tax exempt bonding. I would further speculate that the increased costs for improving DVC properties would trickle down to the DVC members in higher annual maintenance and dues. I sincerely hope I'm wrong and I'm not trying to be a downer about elimination of RCID. This is a real tough situation.

Possibly, but I’d argue that other dues outside of DisneyWorld aren’t crazy - outside of hurricane related issues. In fact VGC are some of the better dues out there. Much of this is pure speculation, but again I personally don’t see that many changes coming. If it is a big deal I’m sure Disney will fight this tooth and nail. Otherwise it’s just something for the news cycle and political posturing.

 

[cheryl.UK]

The BBC is reporting that it's been signed.

 

[Duckbug.Ducktales]

And the more I have thought about this, the more convinced I am that it's just not a big deal.

When Disney built WDW, it could not have happened without RCID. The local governments thought it was a loftly idea, but none of them had the influx of cash to be able to build the roads, electrical grid, water grid, fire and safety systems, and all the other things that go with a development as big as WDW was going to be. They would never have been able to afford it, and WDW would never have gotten off the ground. It was NEEDED if Disney was going to build this thing.

Today is a VERY different world. These things exist now. No one has to build them. Yes, new roads may need to be built; but there are ways for companies to do that (heck, the company I used to work for paid to have a traffic light installed - the first one in the city we moved into - it was a BIG DEAL). But the sheer size of the project is not that scope anymore, and even for a new gate, the counties are well rehearsed in how to handle it.

I am sure Disney benefits from RCID - otherwise, they would have moved to dismantle it years ago. But in general, Disney has always offset its buildings with undeveloped land. They have had to meet building codes anyway. They get some tax benefits, but I am not convinced it's even a MAJOR deal for them if RCID is dismantled. More like a minor annoyance and tick to their pocketbook; but nothing they can't afford easily.

I hope you're right. We'll see.

If so, what may remain a big deal is the sour relationship between FL's largest employer and the state government. This was passed without allowing Disney any input or debate. It looks bad regardless of the financial repercussions. Maybe a new CEO can come in and clean up, or something of the sort. But for now, I worry that WDW may lean on nostalgia rather than innovation for revenue to a much greater extent than before.

 

[Obi-J Kenobi]

I am not sure what you are talking about here. MANY of the improvements are also to the resorts in general - very few are DVC only except for soft-refurbishments, which we already pay for. Can you give me an example of a major improvement to a DVC property that was paid for by RCID?

I cannot give you an example of a major improvement to a DVC that was paid for by RCID. My argument was more of a logical or natural consequence.

Here's what I'm thinking with a real life example. TWDC owns its own gas, electric and water utilities, but it leases them to Reedy Creek for millions of dollars every year. I'm guessing 10s of millions of dollars. Because RCID is a government, it can use tax-exempt bonds to improve these utilities, which would include materials, supplies and equipment that service DVC properties.

RCID charges Disney for the gas, electricity, water and sewer services the company uses. TWDC then deducts those costs from its income tax. At least, I have to believe there is a floor of accountants somewhere in Burbank demanding income tax deductions. This is America and TWDC is California company after all.

Without the tax-exempt bonds and this very special ability to borrow money, there is going to be millions (and I stress millions) more interest that TWDC has to pay for projects. In other words, I am not worried about TWDC ability to get a loan, but banks traditionally charge interest on loans. TWDC has to pay the cost for all the expansion and maintenance of services for DVC properties. If it costs TWDC more, I have to believe that the costs will trickle down to DVC. At least, I cannot fathom that TWDC is going to eat those additional interest costs.

That's how I could see a detrimental impact to DVC. I sincerely hope I am wrong for all the folks that own DVC's sake. I genuinely mean that and no snark was meant.

 

[Bjaiken77]

I hope we get some good articles on this and what it means at a high level. I don’t care about the blow by blow. I just want to know what it means for me as an owner and my time at WDW.

 

[bobby5966]

I cannot give you an example of a major improvement to a DVC that was paid for by RCID. My argument was more of a logical or natural consequence.

Here's what I'm thinking with a real life example. TWDC owns its own gas, electric and water utilities, but it leases them to Reedy Creek for millions of dollars every year. I'm guessing 10s of millions of dollars. Because RCID is a government, it can use tax-exempt bonds to improve these utilities, which would include materials, supplies and equipment that service DVC properties.

RCID charges Disney for the gas, electricity, water and sewer services the company uses. TWDC then deducts those costs from its income tax. At least, I have to believe there is a floor of accountants somewhere in Burbank demanding income tax deductions. This is America and TWDC is California company after all.

Without the tax-exempt bonds and this very special ability to borrow money, there is going to be millions (and I stress millions) more interest that TWDC has to pay for projects. In other words, I am not worried about TWDC ability to get a loan, but banks traditionally charge interest on loans. TWDC has to pay the cost for all the expansion and maintenance of services for DVC properties. If it costs TWDC more, I have to believe that the costs will trickle down to DVC. At least, I cannot fathom that TWDC is going to eat those additional interest costs.

That's how I could see a detrimental impact to DVC. I sincerely hope I am wrong for all the folks that own DVC's sake. I genuinely mean that and no snark was meant.

This question I don’t know, but would they be able to borrow for DVC resorts. Usually they have stipulations for those loans. I wouldn’t see this having any impact on the rates they get for DVC. I feel like that would be a misappropriation of funds, but I may be thinking of this incorrectly.

 

[Marionnette]

The BBC is reporting that it's been signed.

I don't think he has signed it yet. No other news sources are reporting that and I cannot find a BBC reference that says he has signed this particular bill.

 

[Duckbug.Ducktales]

I don't think he has signed it yet. No other news sources are reporting that and I cannot find a BBC reference that says he has signed this particular bill.

Same. Though I don't see why he wouldn't, he called for it. I hope that the June 2023 expiration date built in was a way of kicking the can down to reassess later once tempers subside.