tjkraz
11-19-2005, 10:27 PM
Here are some initial thoughts about the 2006 budget for SSR.
First, I'll break the costs into three general categories, listing '05 costs then '06 (rounded to the nearest penny):
Capital Reserves: $.47 / $.62
Property Taxes: .78 / .85
Operating Expenses: 2.58 / 2.51
Total Dues: 3.83 / 3.98
To this layman's eye, I think things bode very well for SSR owners. Of the $.15 per point increase, half was attributable to property taxes over which DVC has no control.
Then you've got a sizable increase in Capital Reserves budget, which was partially off-set by a reduction in the normal operating expenses.
The Capital Reserves budget shows over $3.5 million budgeted for "Interior Refurbishment" in 2006. While I'd be happy to see a commitment to maintaining the rooms, I'm forced to wonder if much of this has been allocated to the new construction slated for The Turf Club Bar & Gril.
The general Operating Expenses saw a net decrease, and some substantial adjustments from 2005 to 2006. It's difficult to highlight specific items on the budget. If we try to talk about items in terms of their per-point cost, we can't account for the developer subsidy. In discussing items in terms of absolute cost, one must bear in mind that more units are now open necessitating greater expenses for things like utilities and security.
That said, the most noteworthy changes from '05 to '06 are:
Administration and Front desk: Budget DOWN from $3.4 million to $2.5 million despite substantial new units and owners added.
Housekeeping: Budget raised moderately from $3.6 mil to $4.6 mil. On a per-point basis, this represented a substantial increase. However, a large percentage of DVC's subsidy in '05 may have been earmarked for Housekeeping.
Maintenance: Budget virtually unchanged from $2.3 mil to $2.7 mil.
Transportation: Budget UP substantially from $1.5 mil to $3.2 mil. Is this simply more busses for more guests? Impact of DME being passed on to members? Increase in boat service planned?
Overall, assuming that the budgetary re-allocations are the results of a normal learning curve involved with opening a new resort, I think SSR owners should be quite happy with their dues in coming years.
One other fact worth mentioning is the fact that DVC's operating subsidy was greatly reduced in 2006, yet costs remained in-check. Some had opined that DVC's subsidy was keeping dues artificially low, and that its eventual removal would cause a significant bump in member dues. This was not the case.
In 2005, DVC subsidized dues to the tune of nealy $.48 per point. The subsidy is now down to under $.08 per point in 2006.
The subsidy was designed to ensure that current DVC members were not forced to bear the cost of amenities and services designed to accommodate increased membership in the resort. It appears that the subsidy will be eliminated rather seemlessly as additional members are added and their dues pick-up these costs. In fact, dues may even see a reduction as the Phase 3 units are brought into the system, and those members use resort amenities originally designed and budgeted for only Phases 1 and 2.
First, I'll break the costs into three general categories, listing '05 costs then '06 (rounded to the nearest penny):
Capital Reserves: $.47 / $.62
Property Taxes: .78 / .85
Operating Expenses: 2.58 / 2.51
Total Dues: 3.83 / 3.98
To this layman's eye, I think things bode very well for SSR owners. Of the $.15 per point increase, half was attributable to property taxes over which DVC has no control.
Then you've got a sizable increase in Capital Reserves budget, which was partially off-set by a reduction in the normal operating expenses.
The Capital Reserves budget shows over $3.5 million budgeted for "Interior Refurbishment" in 2006. While I'd be happy to see a commitment to maintaining the rooms, I'm forced to wonder if much of this has been allocated to the new construction slated for The Turf Club Bar & Gril.
The general Operating Expenses saw a net decrease, and some substantial adjustments from 2005 to 2006. It's difficult to highlight specific items on the budget. If we try to talk about items in terms of their per-point cost, we can't account for the developer subsidy. In discussing items in terms of absolute cost, one must bear in mind that more units are now open necessitating greater expenses for things like utilities and security.
That said, the most noteworthy changes from '05 to '06 are:
Administration and Front desk: Budget DOWN from $3.4 million to $2.5 million despite substantial new units and owners added.
Housekeeping: Budget raised moderately from $3.6 mil to $4.6 mil. On a per-point basis, this represented a substantial increase. However, a large percentage of DVC's subsidy in '05 may have been earmarked for Housekeeping.
Maintenance: Budget virtually unchanged from $2.3 mil to $2.7 mil.
Transportation: Budget UP substantially from $1.5 mil to $3.2 mil. Is this simply more busses for more guests? Impact of DME being passed on to members? Increase in boat service planned?
Overall, assuming that the budgetary re-allocations are the results of a normal learning curve involved with opening a new resort, I think SSR owners should be quite happy with their dues in coming years.
One other fact worth mentioning is the fact that DVC's operating subsidy was greatly reduced in 2006, yet costs remained in-check. Some had opined that DVC's subsidy was keeping dues artificially low, and that its eventual removal would cause a significant bump in member dues. This was not the case.
In 2005, DVC subsidized dues to the tune of nealy $.48 per point. The subsidy is now down to under $.08 per point in 2006.
The subsidy was designed to ensure that current DVC members were not forced to bear the cost of amenities and services designed to accommodate increased membership in the resort. It appears that the subsidy will be eliminated rather seemlessly as additional members are added and their dues pick-up these costs. In fact, dues may even see a reduction as the Phase 3 units are brought into the system, and those members use resort amenities originally designed and budgeted for only Phases 1 and 2.