-
Welcome to the WDWMAGIC.COM Forums!
Please take a look around, and feel free to sign up and join the community.
New Maintenance Fees for 2014
- Thread starter GoofGoof
- Start date
.[/quote]
starbird
New Member
Has anyone here lived in an HOA at the start of a new development? The reason I ask is this. Often, when buying a new home in an HOA that is just starting out, the costs are low, and they go over with you that "you can expect increases to be x% (some low number) but they COULD go up as much as X% (legal max)"
They almost always start low, because the developer is funding most of the costs up front and concerned with sales. Once sales are done, and the power/responsibility move to the homeowners, the next couple of years tend to be an adjustment period. Because even though they can raise by say 10 or 15%, they seldom max out (because part of the medicine for the pain/calls is that "while it did go up 9%, it could have been 15%").
Then, after you get to the point were the MFs actually cover the expenses (most HOAs are non-profit, so they can only have a limited amount of money in excess of costs to account for future improvements) - the increases level off.
I fully expected that with BLT. It is sold out now, has been open 3 1/2 years, and most costs should now be known. I anticipate this year was the adjustment year, maybe one more, but by 2016, I will assume we are on a more normal/average increase schedule.
They almost always start low, because the developer is funding most of the costs up front and concerned with sales. Once sales are done, and the power/responsibility move to the homeowners, the next couple of years tend to be an adjustment period. Because even though they can raise by say 10 or 15%, they seldom max out (because part of the medicine for the pain/calls is that "while it did go up 9%, it could have been 15%").
Then, after you get to the point were the MFs actually cover the expenses (most HOAs are non-profit, so they can only have a limited amount of money in excess of costs to account for future improvements) - the increases level off.
I fully expected that with BLT. It is sold out now, has been open 3 1/2 years, and most costs should now be known. I anticipate this year was the adjustment year, maybe one more, but by 2016, I will assume we are on a more normal/average increase schedule.
toolsnspools
Well-Known Member
Overall, BLT still has the lowest dues of any DVC resort. With the exception of SSR, we are significantly lower than all the others. I expect them to level off in the next 2-3 years.
I agree they should level off. There is a pretty good track record of DVC fees being somewhat predictable and that still holds true for most of the other resorts. Unless there are other unforeseen additions things most likely will level out here too.
So at the annual meeting they did say the fully staffed front desk was the biggest reason for the large increase at BLT. Makes me optimistic as an owner that next year will be just an average increase. Fees are still low compared to most, but catching up. No other major news out of the meeting from what I heard. No new news on perks or benefits.
I did hear about the lifeguard thing. I think the expanded lifeguard hours is impacting most DVC resorts. At least BLT already had a fence with a gate around the pool. All Disney resorts will be getting that fence so I'm guessing the other DVCs will be paying for their fences.
Funding of the fences has not been determined.
Disney has paid for DVC resort upgrades in the past, so really it could go either way.
asianway
Well-Known Member
All the audit does is review that the contracted rate (negotiated between DVC & the DVC controlled board of directors) is what was charged.
The audit does not make a judgment call as to what is a fair allocation. However, the thought that BLT owners should get free use of the monorail for 50 years is preposterous.
That's not a particularly fair representation.
DVCMC has a fiduciary responsibility to secure agreements which are reasonable to the members it represents. In other words, they cannot agree to pay 3x the going rate for housekeeping services just because such a deal would benefit another division of TWDC.
State oversight like the Division of Florida Condominiums, Timeshares, and Mobile Homes exists to monitor this activity. This is a potential area for abuse with any timeshare. There are many unscrupulous businesspeople who would make under-the-table deals to provide services at prices which are above market rate.
Disney executives do staff the DVC Board of Directors and members have essentially no decision making authority. However that does not give Disney carte blanche to charge whatever they wish for goods & services provided to the DVC resorts.
Beyond that, an essential part of any external audit is verification that established procedures are being followed. Disney accounting has its own documented rules for allocating transportation costs all across property, splitting costs between hotel and DVC at shared properties and all other aspects of financial management. When an auditor issues a favorable audit opinion, they are certifying that they have reviewed Disney's accounting standards and confirm that those standards comply with GAAP and are bring properly utilized.
asianway
Well-Known Member
I won't disagree with most of what you say but let's be clear the external auditor is not rendering an opinion on what is a fair and equitable allocation merely on whether those established procedures are being followed. Fairness is something in the eye of the beholder. The BOD unlike most timeshares only has the fiduciary responsibility which in most cases goes 100% at odds with the developers best interests as opposed to an owner controlled board-I'm sure you have experience with both. You have to trust they will be fair. Lewis, the Brain, Lawrence...obviously were incapable of doing that. Hopefully the new team can. One guy here thinks fair is free transportation which has no basis in reality.
A casual observation though. If front desk went up due to dedicated reps in BLT, shouldn't here have been a corresponding dip from the allocation of FTEs in the main building? Or was the allocation flawed from the outset? Or, is there a spreadsheet with a bad link in it that continues to double dip perhaps unintentionally?
ford91exploder
Resident Curmudgeon
A lawsuit on BLT dues is long overdue, The management fees and housekeeping are way out of line with similar properties.
The auditors are not rendering an opinion on whether the allocations are fair, but they will look at the methodology to ensure its reasonable. They are rendering an opinion that the financial statements are free from material misstatements. I worked in public accounting in the past and I work for a large corporation with multiple subsidiaries and I can tell you that our auditors take a hard look at any allocations we pass down to subsidiaries from corporate departments. They ask for the methodology and all of the data needed to run the calculation and they have challenged our inputs from time to time.
In an extreme example, let's say @ford91exploder goes through with his class action lawsuit and it is uncovered that TWDC was charging 75% of the housekeeping charges for the combined CR/BLT complex to BLT owners. Since that number would be grossly overstating the expense for BLT they may need to go back for several years and recalculate the correct rate. The financial statements would have a material misstatement and need to be restated. When this happens the audit firm will be under the gun and possibly liable if it's shown that the methodology used was not reasonable or accurate and they didn't do enough/any audit work around the allocation methodology. I have no first hand knowledge, but I would assume from personal experience the auditors are at least looking at the methodology and the data behind it and determining if it is reasonable or likely to result in a material misstatement.
I don't think there is a 1 for 1 dip in FTEs. Maybe close to that for the front line CMs, but then you get into management levels. There has to be an additional manager on duty at all times. When I passed by the desk there were always at least 3 people there. I doubt they cut CRs desk by 3 heads. The total number of combined FTEs has probably increased under the new model. I would assume adding that desk is a negative for CR profits.
I personally think it was a waste of money. You check in 1 time is it that hard to walk 5 minutes to the other building? I assume owners complained or asked for this but they never asked my opinion.
asianway
Well-Known Member
Your auditors audited both sides of the books I assume?
In most cases yes. There are some situations where we have an equity partnership where one side handles the operations of a project and the other side the bookkeeping. In that case certain allocated operations costs would be pushed down to the partnership which could have different auditors than the parent company.
asianway
Well-Known Member
Exactly. But that's not the case here
The DVC associations use a local Florida firm that has a specialty in timeshare associations to do their audits. I think TWDC uses PWC or one of the big 4. There are different auditors but the local firm would still want some support for an expense being allocated from the parent company.
asianway
Well-Known Member
"Some" support is what is provided
That would be a tough battle to win.
On a per-point basis, BLT housekeeping is middle of the road. BCV owners pay more per-point for housekeeping. BWV is higher. Aulani, HHI and Vero are higher. VWL is a fraction of a cent less.
Management fees are fixed at 12% of most operational costs. That's true of ALL resorts.
DVC can--and has--justified the abnormally high increases every year. Property taxes have risen constently. Those are assessed by the county and largely based upon sales prices so increases were unavoidable.
In 2013 BLT got a higher-than-usual bump when DVC recalculated the guest balance between hotel and DVC. For shared resort amenities DVC owners are charged based upon the percentage of villa guests to hotel guests. DVC occupancy proved to be higher than anticipated so owners were forced to pay a greater share of the operational costs for transportation, recreation, security, landscaping, etc.
Now for 2014 owners will finally begin paying the higher costs of the staffed front desk. Disney absorbed that from the time it was introduced in late 2012, all through 2013.
I'm sure many owners didn't anticipate those charges but that doesn't mean there's any basis for a suit.
I have no inside information. I have no idea what is actually provided. I just know if I was signing that letter as the partner I would want some pretty solid support for the charges.