Subsidy of SS maintenance fees....

[ColoradoBelle1]

ANyone who owns at SS think that after completion the now subsidized maintenance fees will go up drastically?

Would I be right in thinking that when it reaches sell out that there will be enough owners to keep the maintenance fees more in line with OKW than some of the higher ones?

THanks,
Colorado Bele

 

[sjdisneywedding]

i dont know how they could justify a "drastic" increase.

 

[CarolMN]

i never thought of it as a "subsidy" per se - just the developer paying maintenance fees on the unsold inventory with some extra thrown in to cover the overhead until the resort is fully built out.

So it should end up to be a wash for current owners - the developer covers a proportionate share of operating costs until the resort is sold out and the owners are all paying annual dues.

Anyway, I don't think SSR will go up much more (if any) than at the other resorts.

Best wishes -

 

[tjkraz]

i dont know how they could justify a "drastic" increase.

It wouldn't be an increase...ColoradoBelle1's question refers to the removal of a subsidy that DVC is currently paying so that the small number of current members do not have to bear the total weight of common areas designed to accommodate many more guests. Once the resort is sold-out, the subsidy will disappear and members will fund the entire operating budget of the resort.

I would hope that DVC has set these values accordingly. The conspiracy theorist would say that DVC is picking up a larger portion of the tab now to keep the dues artificially low and continue to attract new customers.

I have no choice but to put my faith in DVC and assume there is some basis to the calculations. Dues only increased $.03 per point this year--less than 1% of the 2004 dues. DVC certainly could have passed along a larger increase (lower subsidy) without raising any eyebrows.

The announcement of Phase 3 only works in our favor. To my knowledge, there are no planned enhancements to registration, the main pool. recreation, etc. which would generate additional infrastructure costs. More members contributing to the costs of these common areas can only help the bottom line.

 

[sjdisneywedding]

It wouldn't be an increase...ColoradoBelle1's question refers to the removal of a subsidy that DVC is currently paying so that the small number of current members do not have to bear the total weight of common areas designed to accommodate many more guests. Once the resort is sold-out, the subsidy will disappear and members will fund the entire operating budget of the resort.

I would hope that DVC has set these values accordingly. The conspiracy theorist would say that DVC is picking up a larger portion of the tab now to keep the dues artificially low and continue to attract new customers.

I have no choice but to put my faith in DVC and assume there is some basis to the calculations. Dues only increased $.03 per point this year--less than 1% of the 2004 dues. DVC certainly could have passed along a larger increase (lower subsidy) without raising any eyebrows.

The announcement of Phase 3 only works in our favor. To my knowledge, there are no planned enhancements to registration, the main pool. recreation, etc. which would generate additional infrastructure costs. More members contributing to the costs of these common areas can only help the bottom line.

exactly what you said is what I meant: this is why I do not see how dvc could "drastically" raise fees. The subsidy is based on proportions of unsold portions, so how could they justify selling the units and raising the fees drastically? somewhat of an increase, yes but drastic, shouldnt happen.

as subsidy is eliminated, its replaced by fees paid by new members.

 

[Dean]

i never thought of it as a "subsidy" per se - just the developer paying maintenance fees on the unsold inventory with some extra thrown in to cover the overhead until the resort is fully built out.

So it should end up to be a wash for current owners - the developer covers a proportionate share of operating costs until the resort is sold out and the owners are all paying annual dues.

Anyway, I don't think SSR will go up much more (if any) than at the other resorts.

Best wishes -

DVC doesn't pay maint fees, not even on the sold out resorts when they own the points, it's in the POS. What they do is guarantee that they will cover any shortfalls for the year. This provision will likely save VB owners a Special Assessment. The dues will go up, the only question is how much.

 

[drusba]

There may be a misconception about the subsidy and guarantee that your dues will not be higher than the annual estimate given. What is really going on is this: legally DVD (the developer) has to contribute to dues after a resort is opened for any portion of the resort still held by the developer. That would mean DVD would have to actually put the money representing its share of dues into an account in which all the members' dues go. It can avoid that requirement to contribute to dues and pay that money up front by instead agreeing to subsidize any additional costs and guaranteeing that your dues will not be above the estimate given. In other words, DVD enters into that agreement so it can keep the use of all the money that it would otherwise pay in dues up front. You should note that the subsidy/guarantee actually continues to exist for resorts that are sold out because DVD always retains about 4% of each resort and wants to continue to avoid having to pay its share of dues up front.

It really will not have an impact on dues after the resort is sold out. Your dues are based on an estimate of the actual costs to run and repair the resort (and cover numerous charges like insurance, taxes, etc.). They cannot just make up figures but actually have to do a reasonable estimate of actual costs to determine dues. As more units are sold, more people will be paying dues and DVD's subsidized percentage will decrease. Your dues may later go up because actual costs increase (due to inflation, wage increases etc.) or even go down but the reason will not have anything to do with the subsidy/guarantee.

 

[crisi]

From what I have been able to tell however and IIRC, DVC does tend to underestimate due starting out. VWL and BCVs both saw bigger dues increases the first few years they were completely open. Not drastic, just put them more in line with BWV and less in line with OKW than the early owners might have guessed from the initial dues statement. With SSR, who knows however, VWL and BCVs share more in common with BWVs - it makes sense their dues are more in line. SSR is OKW like.....

 

[Dean]

There may be a misconception about the subsidy and guarantee that your dues will not be higher than the annual estimate given. What is really going on is this: legally DVD (the developer) has to contribute to dues after a resort is opened for any portion of the resort still held by the developer. That would mean DVD would have to actually put the money representing its share of dues into an account in which all the members' dues go. It can avoid that requirement to contribute to dues and pay that money up front by instead agreeing to subsidize any additional costs and guaranteeing that your dues will not be above the estimate given. In other words, DVD enters into that agreement so it can keep the use of all the money that it would otherwise pay in dues up front. You should note that the subsidy/guarantee actually continues to exist for resorts that are sold out because DVD always retains about 4% of each resort and wants to continue to avoid having to pay its share of dues up front.

It really will not have an impact on dues after the resort is sold out. Your dues are based on an estimate of the actual costs to run and repair the resort (and cover numerous charges like insurance, taxes, etc.). They cannot just make up figures but actually have to do a reasonable estimate of actual costs to determine dues. As more units are sold, more people will be paying dues and DVD's subsidized percentage will decrease. Your dues may later go up because actual costs increase (due to inflation, wage increases etc.) or even go down but the reason will not have anything to do with the subsidy/guarantee.

I think we're saying the same thing but the subsidy and guarantee are two different things. DVD never pays dues on what they own but in some cases they supplement the dues paid by other members, making up the difference. VB is the perfect example. They also guarantee that the collected dues will be it for any given year which is little risk to them except for something like VB. If I recall the FL statutes correctly, the have to do so for 10 years if they take this option. They can continue it year by year after that if they so chose. If they don't take the option or if the drop it, they have to pay the dues just like any other member.