OKW Budget breakdown

[RobDoc]

The 2003 budget for OKW is as follows:

............................................ 2003.......... change.......... 2002

Administrative ......................0.3376..........(-)...............0.3432
Annual Audit........................ 0.0013............................ 0.0013
DVC Reservations ................0.0053............................ 0.0053
Fees (Division)......................0.0071............................ 0.0071
Housekeeping......................0.6567..........(+).............. 0.6104
Income Taxes ......................0.0401......... (-)............... 0.0608
Insurance ............................0.1089......... (+).............. 0.0443
Legal ...................................0.0007............................. 0.0007
Maintenance ........................0.3486......... (+).............. 0.3023
Management ........................0.2528......... (+)............. 0.2258
Member Activities .................0.0835.......... (-)............. 0.0843
Security ................................0.0549......... (+)............. 0.0391
Transportation..................... 0.3584......... (+)............. 0.3484
Utilities ................................0.1730.......... (+)............. 0.1252

The Capital Reserve Budget is:
.............................................0.3973.......... (+)............. 0.3884

The estimated Ad Valorem Taxes (Property Taxes) is:

.............................................0.7764.......... (+)............. 0.7608



The total per point:

...................for 2003 will be $3.4944 ........vs. ............$3.2163

 

[Doctor P]

Doc and all,

I have the last two year's itemized budgets in front of me. Keep in mind that the 2003 operating budget adds to 2.4290 per point, but dues only has to cover 2.3207 (because of interest and breakage income). Last year, the expenses added to $2.1980 per point, but we paid dues of $2.0671 for operating expenses. Deviation #1, therefore, from last year's budget is that approximately 3.6 cents per point is lost in the offset income against expenses, almost all of which is attributable to reduced interest income. Operating expenses increased by approximately 23 cents per point over last year's budget. Of this 23 cents, housekeeping increase accounted for about 4.5 cents, income taxes DROPPED by about 2 cents, insurance increased by about 6.5 cents, maintenance increased by about 4.5 cents, security increased by about 1.5 cents, transportation by about 1 cents, and utilities by about 4.8 cents, and the management fee increased by about 3 cents. Deviations in Operating Expenses accounted for 23 cents of the increase with insurance accounting for 6.5 cents, utilities 4.8 cents, housekeeping and maintenance EACH accounting for about 4.5 cents, and the management fee 3 cents. Estimated taxes went up by about 1.6 cents. Thus, the 27.8 cent increase is mostly accounted for by a 23 cent increase in operating expenses, 3.6 cents reduction in offset income, and a 1.6 cent increase in the provision for taxes. Hope this helps.

 

[lehrsj]

Thanks for the information. The things I am wondering about are:

(1) Utilities went up by 38.2%. I can't think of a reason for this. Maybe it's higher cable fees for the Disney channel?

(2) Management Fee is up 12%. Is there more to manage?

(3) Maintenance is up 15.3%. Why is there so much more maintenance projected for 2003 than 2002?

Sherry

 

[Firefighter Mickey]

One of the things I wonder if we're missing from the picture is that we're only seeing estimated costs for 2003 - I've not seen any actual costs for 2002 yet. It seems quite possible that some of the increases for 2003 could very well be a result of overly optimistic estimates for 2002.

I can't say that I've a major problem with these increases; heck my other timeshare went up 4% and had a special assesment of 20% on top of that in order to replace TV's in the units.

 

[PamOKW]

I think much of this increase is attributable to the fallout from 9/11. Security costs are up 40% and the Insurance costs are up 146%. The other big winner is Utilities up 38%. I think Utilities costs have less to do with the rise in cable than with increased electrical costs.

I'm not happy with having such a big increase for the first time ever, but it looks like it's coming from areas that are pretty much out of DVC's control and it looks like they did try to contain costs that they could. The 34% decrease in Income Taxes is also kind of interesting.

 

[JudithM]

Pam, I agree with a lot of your observations regarding the increase in OKW fees. In addition to increases in gas & electric, let's not forget water, both from a drought situation & as a security issue (after 9/11).

Doc, thanks for posting all the numbers!

 

[walter]

Recently there was an article in the Orlando Sentinel which stated the substantial increase in insurance rates within the Central Florida area. The increase was approved by the State Legislature and allowed insurance companies to increase premiums as much as 45% in some instances. I spoke with my insurance man that has several clients who own or are in the process of purchasing property in the Central Florida area and he is having a difficult time finding a broker to write the same. It seems that major insurance companies are placing a cap on writing new policies in this area.

 

[Doctor P]

I would also suspect that there may have been some maintenance issues related to the drought and to the brushfires/wildfires as well as tropical storms in the recent past. The housekeeping issues may be as simple as the new contract for WDW employees that was in the news a while back. Just speculating, though.

 

[mb168]

Where is the tree hacking off the balcony budget ?

Does any of this include improvements such as have been going on? paint, appliances, etc

 

[Firefighter Mickey]

Tree hacking off of the balcony would likely come out of the general maintenance budget - any kind of grounds work would fall under that budget.

Exterior painting and interior refurb have their own accounts, but yes, the budget does include a yearly contribution to those reserve accounts as well. Reserve accounts carry a balance from year to year because they are usually big ticket items (and this is usually where the interest income comes from).