OKW Operating Expenses Question

[BobH]

Having been a member since only Nov 2000 I am now getting a look at an annual meeting announcement for the first time. Since DVC sems to cast all the votes are these prliminary figures pretty well cast in stone - or will we see changes after the meeeting?

Will we receive the final figures in a follwup announcement?

Is anyone aware of where historical figures on operating costs are located? For example I have read a lot of pros and cons on bus transportation on these boards. It would be interesting to know whether the amounts allocated to transportation have been declining over several years. Thanks for any input.

 

[PamOKW]

I don't ever recall the numbers changing after the meeting. The only "final notice" you will receive will be the bill. That usually comes out mid-to-late December....a Merry Christmas from DVC.

I'll try to take a look at some of the historical info on the budgets. A few years ago, someone raised this type of question and I've been trying to take a look at it year to year. One problem, of course, is that the resort has grown some over the last few years changing the costs due to size.

 

[PamOKW]

I can give you comparisons starting in 1999. In 1999, the budget was based on 529 homes. Since 2000, the basis has been 531 homes.

Looking at 1999 vs. 2002:
Interest Income +9%
Member Late Fees & Interest +8%
Breakage Income +4%
Housekeeping +3%
Transportation +7%
Admin & Front Desk +6%
Maintenance +4%
Utilities -23%
Management Fee +4%
Insurance -27%
Member Activities +3%
Security -1%
Income Taxes +1%
Fees to Division - + less than 1%
DVC Reservation Component +15%
Legal -58%
Annual Audit +77%

Looking at 2001 vs. 2002:
Interest Income +13%
Member Late Fees & Interest -1%
Breakage Income +2%
Housekeeping + less than 1%
Transportation -1%
Admin & Front Desk -4%
Maintenance +5%
Utilities +10%
Management Fee +2%
Insurance +6%
Member Activities -4%
Security -11%
Income Taxes down less than 1%
Fees to Division - No change
DVC Reservation Component +1%
Legal - No Change
Annual Audit -2%

The Operating portion of the dues in 1999 was $2.0578. For 2002 it's $2.0671. A neglible increase. In 1995, Operating was $1.7323 so that's a 20% increase over 7 years.

 

[BobH]

The OKW budget information you posted is very interesting. As you point out there has been a neglible overall increase in expenditures, but there is a wide swing in percentages spent in the categories:
Utilities could be expected to swing depending on fluctuating energy costs. I wonder about a (27%) decrease in insurance costs from 1999 to 2002 - has DVC cut back on their coverages? I doubt anyone has seen a decrease in their homeowners insurance to this degree. The cost of security has gone down significantly from 2001 to 2002 (11%). I wonder what the practical result of this is? I am sure the fluctuations are mostly the result of good management, but it would be nice to know what changes are experienced by the OKW DVC Owner as a result of the expenditure changes. Thanks for the data!

Bob

 

[DebbieB]

Here's a site I had bookmarked with notes from the 1998 OKW meeting. I gives some details on costs from that year, which would have been the 1999 budget:

http://people.delphi.com/skobel/okw1998.htm

Pam - great job breaking those figures out!

 

[PamOKW]

I just took a look at the actual numbers and the Insurance took a big drop in the 1999 to 2000 budget. It decreased from $464,287 to $343,799.

Security has gone up and down with the end result being the figure for 2002 is about the same as the budget for 1999.

 

[TrudyZ]

Couple of reasons why DVC insurance might have gone down.

1. If they were still under construction at OKW in 1999, they would have had to carry Builder's Risk insurance, which costs more to cover than a "highly protected risk" ( HPR); the catagory that Disney is in for Fire and Extended Coverage Insurance.

2. Disney is not the same as regular homeowner's--they buy "industrial" type insurance--carried thru carriers like FM Global, Alliance, Chubb, etc. The package (property and extended coverage, along with the other lines, such as workman's comp, liability, etc.) is usually put together by brokers such as Aon, Marsh, etc. The HPR market has been soft now for the last few years--and premiums have dropped.

The insurance market is very cycical--it will be back up again--just a matter of time.

Trudy