# Ocean Pointe’s proposed budget increase is 10-15%



## dougp26364 (Oct 29, 2019)

Yep, that’s right, and it’s NOT based on being fully funded. The budget increase if the reserves are fully funded would be around 45%.

What the heck are they doing down there? Whatever it is, they’re killing me. It won’t be long before owners begin defaulting and the problem escalates IMHO.


“The enclosed budget also represents proposed amounts for the Operating Expenses and the Property Tax Fee. If the issue of waiving fully funding the reserves passes, the Reserve Fee will be lower than shown. The Management Fee will then also be reduced from the Operating Fee shown on this budget, and therefore the net proposed increase for the 2020 Maintenance Fee would be in the range of 10% to 15% instead of the 44% to 48% increase shown.”


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## dioxide45 (Oct 29, 2019)

Didn't they have hurricane damage a few years ago? Perhaps big increases in insurance which would be under Operating Expense.


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## MOXJO7282 (Oct 29, 2019)

It's likely the insurance. I'm curious about what happens to the smaller non-Marriott HOAs. How do they deal with hurricane damage? I know with disdain how much the Marriotts go up but is the same thing happening at other resorts. if not then I'll be even more frustrated because as OP states at some point it becomes untenable and a mass exodus will occur.

As I think about it more I bet Marriott has that already figured as their endgame where weeks owner just get out and they take all the inventory and turn it into points and keep selling people the BS dream of how great points are bought from them until the whole system implodes because all costs keep going up. Then when the point system implodes in 20 years they're left with the valuable property to churn into something else.  Marriott didn't become king by being stupid and without a plan.


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## bogey21 (Oct 29, 2019)

MOXJO7282 said:


> As I think about it more I bet Marriott has that already figured as their endgame where weeks owner just get out and they take all the inventory and turn it into points and keep selling people the BS dream of how great points are bought from them until the whole system implodes because all costs keep going up. Then when the point system implodes in 20 years they're left with the valuable property to churn into something else.  Marriott didn't become king by being stupid and without a plan.



Sounds like a plan...

George


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## dougp26364 (Oct 29, 2019)

These are the largest in terms of percentages. 

Front desk 20.2%
Human Resources 59.7%
insurance 51.3%
management 46.1% * will be lower if fully funding reserves isn’t done 
Owner service 100%
pest control 57.4%


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## pedro47 (Oct 29, 2019)

How many staff members are in HR department can this small resort have and how many full time and part time employees are employed ?

Who Is employed in Owner service and how many full and part time staff members are employed?


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## TheTimeTraveler (Oct 29, 2019)

I wonder if the average Hotel Room is experiencing these same type of increases or is this isolated to just the Timeshare Industry?



.


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## dougp26364 (Oct 29, 2019)

2019 BUDGETED EXPENSES 17,562 UNIT WEEKS (PER UNIT WEEK)
2020 PROPOSED BUDGET 17,562
UNIT WEEKS (PER UNIT WEEK)
2019 BUDGET
VS
2020 BUDGET INCREASE/(DECREASE)
$%
2020 PROPOSED BUDGET TOTAL
$
2020 BUDGET BY VILLA TYPE
 2 BEDROOM 15,914 UNIT WEEKS (PER UNIT WEEK)
3 BEDROOM 1,648
UNIT WEEKS (PER UNIT WEEK)
Commercial Unit (1)
        Revenue
 Association Fees - Commercial Units
0.00
0.00
0.00
0.0%
3,515
0.00
0.00
3,515
GOLD (WEEKS 22 - 34)
1,650.50
2,420.27
769.77
46.6%
10,729,090
2,370.82
2,897.79
0
PLATINUM (WEEKS 1 - 17,51 - 52)
1,722.11
2,493.67
771.56
44.8%
16,156,538
2,443.46
2,978.53
0
SILVER (WEEKS 18 - 21,35 - 50)
1,632.09
2,401.40
769.31
47.1%
15,969,356
2,353.85
2,860.57
0
Bank/Investment Interest
5.24
10.02
4.78
91.2%
176,000
9.83
11.83
0
Late Fees
3.42
3.42
0.00
0.0%
60,000
3.35
4.03
0
Maintenance Fee Interest Income
5.69
5.69
0.00
0.0%
100,000
5.59
6.72
0
Miscellaneous Income
6.04
6.04
0.00
0.0%
106,000
5.92
7.13
0
Total Maintenance Fee Revenue
43,300,499
3,515
                     Expenses
 Accounting
19.28
19.55
0.27
1.4%
343,426
19.19
23.08
34
Activities3
39.64
45.02
5.38
13.6%
790,695
44.18
53.15
0
Administration
62.07
63.00
0.93
1.5%
1,106,439
61.82
74.37
111
Audit Fee
0.85
0.85
0.00
0.0%
14,860
0.83
1.00
1
Bad Debt Expense
7.60
7.60
0.00
0.0%
133,467
7.46
8.97
0
Billing and Collections
9.86
10.13
0.27
2.7%
177,981
9.94
11.96
18
Board of Directors
1.11
1.11
0.00
0.0%
19,500
1.09
1.31
2
Cable Television
6.15
6.24
0.09
1.5%
109,500
6.12
7.36
0
Common Assessment4
(3.59)
0.00
3.59
100.0%
0
0.00
0.00
0
Credit Card Fee
27.72
28.34
0.62
2.2%
497,760
27.81
33.46
0
Division of the Condominium, Timeshare, and Mobile Homes Fee (FL)
2.00
2.00
0.00
0.0%
35,124
1.96
2.36
0
Electricity
45.30
42.46
(2.84)
(6.3%)
745,691
41.66
50.12
75
Front Desk
91.21
109.59
18.38
20.2%
1,924,556
107.54
129.38
0
Gas
16.95
16.40
(0.55)
(3.2%)
287,969
16.09
19.36
29
High Speed Internet
2.93
2.93
0.00
0.0%
51,481
2.88
3.46
0
Housekeeping8
237.49
242.25
4.76
2.0%
4,254,888
237.72
286.01
425
Human Resources
16.72
26.70
9.98
59.7%
468,937
26.20
31.52
47
Income Tax
5.24
5.24
0.00
0.0%
92,076
5.14
6.19
0
Insurance
64.23
97.16
32.93
51.3%
1,706,566
95.35
114.71
171
Landscape / Grounds
40.24
40.72
0.48
1.2%
715,177
39.96
48.07
72
Legal
0.57
0.57
0.00
0.0%
10,000
0.56
0.67
1
Loss Prevention / Security
54.68
60.60
5.92
10.8%
1,064,448
59.47
71.55
106
Maintenance
127.16
138.50
11.34
8.9%
2,432,526
135.91
163.51
243
Management Fee
151.81
221.83
70.02
46.1%
3,896,227
217.68
261.90
390
Operating Capital
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Other Expenses
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Owner Services7
0.00
46.24
46.24
100.0%
812,009
45.37
54.59
0
Pest Control
2.23
3.51
1.28
57.4%
61,700
3.45
4.15
6
Pool Maintenance
22.06
20.94
(1.12)
(5.1%)
367,768
20.55
24.72
0
Postage and Printing
2.61
2.61
0.00
0.0%
45,899
2.56
3.09
0
Refuse Collection
2.99
3.06
0.07
2.3%
53,691
3.00
3.61
5
Rent for Recreation
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Taxes upon Association Property
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Taxes upon Leased Areas
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Telephone
4.35
4.48
0.13
3.0%
78,654
4.39
5.29
0
Water and Sewer
25.71
27.29
1.58
6.1%
479,392
26.78
32.22
48
Operating Fee
1,087.17
1,296.92
209.75
19.3%
22,778,407
1,272.66
1,531.14
1,784
                                                  Total Net Operating
Reserve Fee6
Operating And Reserve Fee
Club Dues1
International Owners Surcharge2 Owner Service Fee7
1,066.78
425.00
1,512.17
4.00 34.50 44.89
1,271.75
985.83
2,282.75
4.00 34.50 0.00
204.97
560.83
770.58
0.00
0.00 (44.89)
19.2%
132.0%
51.0%
0.0%
0.0% (100.0%)
22,336,407
17,314,903
40,093,310
------
------
------
1,247.97
967.39
2,240.05
4.00 34.50 0.00
1,501.43
1,163.88
2,695.02
4.00 34.50 0.00
1,784
1,731
3,515
       Estimated Property Tax5
 GOLD (WEEKS 22 - 34) 158.72 162.69 3.97 2.5% 721,193 155.46 232.48 0
 PLATINUM (WEEKS 1 - 17,51 - 52) 230.33 236.09 5.76 2.5% 1,529,613 228.10 313.22 0
 SILVER (WEEKS 18 - 21,35 - 50) 140.31 143.82 3.51 2.5% 956,383 138.49 195.26 0
 Total Maintenance Fee Plus Property Tax
 43,300,499
 3,515
    ------
------
------


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## hangloose (Oct 29, 2019)

10-15% seems very high.  Disappointing.

attached the file.


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## dansimms (Oct 30, 2019)

Perhaps it won’t be passed


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## Norcal5 (Oct 30, 2019)

dansimms said:


> Perhaps it won’t be passed


Does it really make sense for the management fee to go up if the reserves were increased?  Once Marriott owns over 50% as trust ownership increases the majority of votes will go for a reserve increase and management fees can go up 50% or more.  Maybe this can’t happen, I don’t know.


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## TheTimeTraveler (Oct 30, 2019)

"Most" of the time frame at Ocean Pointe are actual ownership weeks.  By the time Marriott converted to points in 2010 Marriott's Ocean Pointe had been sold out.  However, most weeks taken back by Marriott (thru ROFR or other means) are likely being put into the Trust. 

With that said, I don't believe it will be easy to reach that 50% Trust ownership threshold for many years.





.


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## SueDonJ (Oct 30, 2019)

Norcal5 said:


> Does it really make sense for the management fee to go up if the reserves were increased?  Once Marriott owns over 50% as trust ownership increases the majority of votes will go for a reserve increase and management fees can go up 50% or more.  Maybe this can’t happen, I don’t know.



Using SurfWatch as an example, whether or not it makes sense it's written into the governing docs that the Management Fee is, "... _equal to ten percent (10%) of the Estimated Operating Budget (exclusive of the Management Fee itself, but inclusive of Reserves and real property taxes ...)_" I'm certain that all of the US resorts use the same 10% but others, like Spain, are a bit higher.

I don't know if there are specific % limits in the docs for Reserves increases (didn't see any that jumped out of the SW docs but I didn't spend much time looking) but in my experience, at least, the resorts do a pretty good job of explaining how they use the Reserves and why any higher-than-expected increases are necessary. Remember that the Destination Club Trust is assessed the same MF's as every other like Weeks Owner for the Weeks which have been conveyed to it so if MVW were to gain the majority and go crazy with Reserves increases as you suggest, just to increase their Management Fee take, they'd also be on the hook for their craziness.


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## Norcal5 (Oct 30, 2019)

Thank you SueDonJ for providing that info.  It’s making me feel quite a bit better! (The end part)


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## Saintsfanfl (Oct 30, 2019)

TheTimeTraveler said:


> I wonder if the average Hotel Room is experiencing these same type of increases or is this isolated to just the Timeshare Industry?



Definitely not. A hotel operator has to answer to the owner, or in most cases the operator is the owner, whether directly or indirectly. They have a direct stake in the expenses and profitability of the hotel. A timeshare operator in this case doesn't really answer to the "owner". They not only do not have to suffer for increased cost, they get rewarded for it with a higher fee. There is simply zero motivation to save money (within reason) and there is no profitability except what they siphon off through the management fee as well as predatory sales tactics on those who stay in the units.

People delusion themselves into believing hotels suffer the same increases in order to make themselves feel better about paying the annual bills. Hotels do have similar issues to deal with but there is simply no motivation to handle it the same way a profit minded business would.


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## Norcal5 (Oct 30, 2019)

Please tell me how Human Resources line item could increase by 59%, or owner services 100%.  I doubt these employees received 59% and 100% raises, or that they now require 59% or 100% more staff than they did for 2019.

From previous quote: 
Front desk 20.2%
Human Resources 59.7%
insurance 51.3%
management 46.1% * will be lower if fully funding reserves isn’t done 
Owner service 100%
pest control 57.4%


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## Luvtoride (Oct 30, 2019)

Norcal5 said:


> Please tell me how Human Resources line item could increase by 59%, or owner services 100%.  I doubt these employees received 59% and 100% raises, or that they now require 59% or 100% more staff than they did for 2019.
> 
> From previous quote:
> Front desk 20.2%
> ...



I sent an email to the general manager and asked him all of these questions.  I will let you know when I get a response.  


Sent from my iPhone using Tapatalk


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## Superchief (Oct 30, 2019)

I think this is another example of the enrolled weeks owners bearing more than their fair share of the increase costs related to the points system. The DC points MF's increase % was much lower.


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## VacationForever (Oct 30, 2019)

Superchief said:


> I think this is another example of the enrolled weeks owners bearing more than their fair share of the increase costs related to the points system. The DC points MF's increase % was much lower.


DC MF is the weighted average of all resorts in the portfolio/trust.  It is not a matter of weeks owners bearing more than their fair share of increase costs.  You can own a week at a resort with flat or small increase or you can own a week with significant increase in MF.  It is like buying ETF of an industry vs. buying a company stock.


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## BocaBoy (Oct 31, 2019)

We have owned Marriott timeshares since 1987.  I have been saying for years that timeshare fees are out of control, and this actually started in earnest around the time of the Great Recession, when other costs were actually going down.  The most common response here on TUG has been to defend the increases and somehow claim that costs are going up at timeshares more than the same type of costs are going up elsewhere.  One of these years I expect that sentiment to change.  We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.


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## dougp26364 (Oct 31, 2019)

BocaBoy said:


> We have owned Marriott timeshares since 1987.  I have been saying for years that timeshare fees are out of control, and this actually started in earnest around the time of the Great Recession, when other costs were actually going down.  The most common response here on TUG has been to defend the increases and somehow claim that costs are going up at timeshares more than the same type of costs are going up elsewhere.  One of these years I expect that sentiment to change.  We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.



I’ve been shouted down when expressing concerns about the average 5% increases on an owners forum, by an owner/board member no less. It was a nasty enough attack when I questioned the increases and extra amenities added each year I left the group.

We’ve held on because we enjoy the system and resorts. But if we’re going to be talking 10-15% increases when all others are holding steady at 3-5%/year? We’ll be bailing out sooner rather than later.

Marriott and the board need to get a hold on these, IMHO, ridiculous fee increases. At least at this one resort. Grand Chateau held the line this year after several years of free increases out of line when compared to other higher end timeshares in Vegas. Ocean Pointe has ALWAYS been out of line compared to others IMHO. But our BOD keeps adding amenities, art work/sculptures or other not so necessary expenses and, Ocean Pointes year over year MF increases have been higher than what appears to be average, even for MVC.


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## cissy (Oct 31, 2019)

I'm so happy that I was able to sell my Ocean Pointe this year.  Increasing maintenance fees were the reason I had to do so.  I'll certainly miss it, but the expense was getting ridiculous.


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## bogey21 (Oct 31, 2019)

BocaBoy said:


> We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.



The truth is that voting with your feet is your only recourse.  Bitching, moaning and complaining get you nowhere...

George


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## Luvtoride (Oct 31, 2019)

Very true George and Boca Boy, but will anyone really "hear" anyway?  I wouldn't expect anyone to shed a tear for selling any of our weeks.


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## hogs14 (Nov 5, 2019)

can someone tell me what ocean point mf fees are for 2020 ? in another thread they are stating 10-15% increase from 2019 ?

_[Post moved from MF's sticky thread. OP owners, have your MF's been finalized yet? <-- SueDonJ]_


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## dougp26364 (Nov 5, 2019)

hogs14 said:


> can someone tell me what ocean point mf fees are for 2020 ? in another thread they are stating 10-15% increase from 2019 ?
> 
> _[Post moved from MF's sticky thread. OP owners, have your MF's been finalized yet? <-- SueDonJ]_



last year a 3 bedroom silver season was $2,000. So this year it would be between $2,200 and $2,300.


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## jimf41 (Nov 6, 2019)

This is a proposed budget. The board meets on November 13th to finalize the budget. There used to be a caveat on this thread that we don't post anything but final approved MFs. Is that no longer in effect?


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## Steve Fatula (Nov 6, 2019)

jimf41 said:


> This is a proposed budget. The board meets on November 13th to finalize the budget. There used to be a caveat on this thread that we don't post anything but final approved MFs. Is that no longer in effect?



I don't see anything posted in the 2020 MF sticky thread for Ocean Pointe? So, I don't see where it was violated?


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## dougp26364 (Nov 6, 2019)

jimf41 said:


> This is a proposed budget. The board meets on November 13th to finalize the budget. There used to be a caveat on this thread that we don't post anything but final approved MFs. Is that no longer in effect?



Even the title states this is a proposed budget and it’s a separate thread from the MF’s for 2020. I posted it because, IMHO, Ocean Pointes MF’s have been out of control for years as the board has added amenity after amenity, which all have to be maintained on top of being in a high risk hurricane zone. Ocean Pointe’s MF increases are ALWAYS among the highest in the MVC world.

Maybe in the end it won’t be 10-15%. Maybe it will be along the lines of their typical 5%, or maybe they’ll fail to waive the fully funded reserves and it will be 47%.


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## jimf41 (Nov 6, 2019)

Steve Fatula said:


> I don't see anything posted in the 2020 MF sticky thread for Ocean Pointe? So, I don't see where it was violated?



Sorry, got my threads mixed up. Still, I don't think it's necessary to get all fired up over a proposed budget.


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## SueDonJ (Nov 6, 2019)

jimf41 said:


> Sorry, got my threads mixed up. Still, I don't think it's necessary to get all fired up over a proposed budget.



You may have first seen hogs14's post asking about the proposed OP budget in the sticky thread, before I moved it from there to here because it wasn't the approved/billed MF's. 

Every year there are at least few TUGgers surprised by the proposed budgets, usually having to do with Florida or South Carolina resorts because of the fully-funded reserves issues but occasionally for other issues that don't seem to be in line with norms. Unfortunately it seems this year Ocean Pointe may be dealing with both types of increases?


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## dougp26364 (Nov 6, 2019)

jimf41 said:


> Sorry, got my threads mixed up. Still, I don't think it's necessary to get all fired up over a proposed budget.



If it was the usual 4-5%, I probably wouldn’t have batted an eye. But to say the “proposed” increase is 10-15%? WTH is management doing at this resort? Poor financial management by our former resort manager? Hidden building damage not revealed to the owners? Poorly funded cash reserves for future needs? Higher than anticipated payroll costs? More frequent replacement of furnishings due to higher than anticipated wear and tear? 

A proposed 5% increase at an MVC Resort doesn’t surprise me. If this is a one off adjustment, give the reason. If this becomes the new norm fees will double in 6 years, which is alarming to me. Whatever the reason a proposed increase of this magnitude NEEDS to be explained.


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## davidvel (Nov 6, 2019)

What do you expect the manager to do when the manager and its minions are in charge of the budget, and the manager makes 10% of the budget?  And the manager is a for-profit company?

The budget ain't going down.


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## rickandcindy23 (Nov 6, 2019)

Custom House Boston was increasing ridiculously every year.  We sold it, finally, after feeling robbed.  

I was able to get a trade with a Willow Ridge studio into Custom House for next year, but we decided on Europe, so I had to turn it down.  I was so disappointed to not be able to use a truly great exchange like that.  I am entering another one for the next year, a wide range of dates for mid-late spring.  We want to go to another baseball game for sure.


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## TheTimeTraveler (Nov 6, 2019)

dougp26364 said:


> If it was the usual 4-5%, I probably wouldn’t have batted an eye. But to say the “proposed” increase is 10-15%? WTH is management doing at this resort? Poor financial management by our former resort manager? Hidden building damage not revealed to the owners? Poorly funded cash reserves for future needs? Higher than anticipated payroll costs? More frequent replacement of furnishings due to higher than anticipated wear and tear?
> 
> A proposed 5% increase at an MVC Resort doesn’t surprise me. If this is a one off adjustment, give the reason. If this becomes the new norm fees will double in 6 years, which is alarming to me. Whatever the reason a proposed increase of this magnitude NEEDS to be explained.





I wonder what will happen when the economy has some inflation?





.


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## Steve Fatula (Nov 7, 2019)

davidvel said:


> What do you expect the manager to do when the manager and its minions are in charge of the budget, and the manager makes 10% of the budget?  And the manager is a for-profit company?
> 
> The budget ain't going down.



Isn't the "manager" the manager of all MVCI resorts, none of which have such an increase thus far other than this one resort (potential)? Shouldn't all the others rise as well by a massive amount using that reasoning? Not sure I follow the logic. Or maybe you are just saying up in general, not this specific resort?

It will be interesting to hear the whys of it.


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## dougp26364 (Nov 7, 2019)

Steve Fatula said:


> Isn't the "manager" the manager of all MVCI resorts, none of which have such an increase thus far other than this one resort (potential)? Shouldn't all the others rise as well by a massive amount using that reasoning? Not sure I follow the logic. Or maybe you are just saying up in general, not this specific resort?
> 
> It will be interesting to hear the whys of it.



Each resort has its own on site manager, who helps set the budget along with each individual resorts elected BOD.


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## SueDonJ (Nov 7, 2019)

dougp26364 said:


> Each resort has its own on site manager, who helps set the budget along with each individual resorts elected BOD.



Yes, as far as the actual operating costs of the resorts, but over and above those MVW corporate has extensive budget influence because for the most part they dictate the brand standard and maintenance/refurbishment schedules.

But in talking about the 10% Management Fee and the supposition that MF's are raised artificially in order to inflate it, I agree with Steve that it's a baseless accusation until/unless we see the same unexpectedly-high increases across the network of resorts. (That's not what's happening this year - OP's 10-15% is a true outlier.) Consider, the onsite General Manager is a hired position with a salary paid by MVW. The 10% Management Fee has nothing to do with the GM; it's collected by MVW (as stipulated in the Management Agreement governing doc) and is basically just a guaranteed profit margin. (Which at a 3-5% yearly increase in my annual MF's I don't begrudge the company, but it's certainly understandable that many do.)

My two resorts don't issue proposed budgets but included with the annual invoice is an explanation of any outlier increases/decreases and basic info about the state of the resorts. I take it that the resorts that do issue proposed MF's, don't explain outliers until after the approved budget is invoiced? This thread has me very curious to see the explanation for OP this year.


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## davidvel (Nov 7, 2019)

SueDonJ said:


> Yes, as far as the actual operating costs of the resorts, but over and above those MVW corporate has extensive budget influence because for the most part they dictate the brand standard and maintenance/refurbishment schedules.
> 
> But in talking about the 10% Management Fee and the supposition that MF's are raised artificially in order to inflate it, I agree with Steve that it's a baseless accusation until/unless we see the same unexpectedly-high increases across the network of resorts. (That's not what's happening this year - OP's 10-15% is a true outlier.) Consider, the onsite General Manager is a hired position with a salary paid by MVW. The 10% Management Fee has nothing to do with the GM; it's collected by MVW (as stipulated in the Management Agreement governing doc) and is basically just a guaranteed profit margin. (Which at a 3-5% yearly increase in my annual MF's I don't begrudge the company, but it's certainly understandable that many do.)
> 
> My two resorts don't issue proposed budgets but included with the annual invoice is an explanation of any outlier increases/decreases and basic info about the state of the resorts. I take it that the resorts that do issue proposed MF's, don't explain outliers until after the approved budget is invoiced? This thread has me very curious to see the explanation for OP this year.


My post was not really an accusation, more of conjecture.  I was pointing out that in this self-dealing structure, there a little to no incentives to "keep costs down."  And, I find it unconscionable that "management" gets 10% for monies that are collected to go into reserves. This is simply a transfer of money to a bank account, no coordination or other action needed.


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## SueDonJ (Nov 7, 2019)

davidvel said:


> My post was not really an accusation, more of conjecture.  I was pointing out that in this self-dealing structure, there a little to no incentives to "keep costs down."  And, I find it unconscionable that "management" gets 10% for monies that are collected to go into reserves. This is simply a transfer of money to a bank account, no coordination or other action needed.



I have seen instances where the resort boards have considered alternatives to the corporate input related to brand standards, sometimes with MVW agreeing to them and sometimes not. So in my experience, which admittedly is not the same as every other Marriott timeshare owner, efforts at the resort level to, "keep costs down" are at least attempted.

<shrug> I look at the stipulated 10% (and slightly higher for non-US resorts) Management Fee as the price of doing business with Marriott Vacations Worldwide. If I thought it, "unconscionable," I'd probably choose to not do business with them.


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## Steve Fatula (Nov 7, 2019)

SueDonJ said:


> I have seen instances where the resort boards have considered alternatives to the corporate input related to brand standards, sometimes with MVW agreeing to them and sometimes not. So in my experience, which admittedly is not the same as every other Marriott timeshare owner, efforts at the resort level to, "keep costs down" are at least attempted.
> 
> <shrug> I look at the stipulated 10% (and slightly higher for non-US resorts) Management Fee as the price of doing business with Marriott Vacations Worldwide. If I thought it, "unconscionable," I'd probably choose to not do business with them.



I agree with this. I find my resort does a pretty good job actually vis-a-vis MF. It's not 1%, but, they do make efforts to cut expenses where possible.


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## JIMinNC (Nov 7, 2019)

davidvel said:


> My post was not really an accusation, more of conjecture.  I was pointing out that in this self-dealing structure, there a little to no incentives to "keep costs down."  And, I find it unconscionable that "management" gets 10% for monies that are collected to go into reserves. This is simply a transfer of money to a bank account, no coordination or other action needed.



I understand your perspective on the 10% management fee being at somewhat cross purposes to keeping costs down. Having said that, compared to an alternative structure that we once had to live with in the Diamond Resorts organization, the 10% approach is preferable. With our old Diamond ownership, Diamond decided what their management fee was and since they controlled the board, they could vote themselves a big raise any time they wanted to. I recall a couple of years when the operating costs of the resort were flat or up only marginally, but the management and administrative fees paid to DRI went up double digits. If I recall correctly, I seem to recall one year that was close to +20% for the management fees. So, given that history, the 10% pro-rata limitation seems preferable. No, there is no real incentive to keep costs down, but they can't just arbitrarily vote themselves a raise.


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## bazzap (Nov 7, 2019)

SueDonJ said:


> I have seen instances where the resort boards have considered alternatives to the corporate input related to brand standards, sometimes with MVW agreeing to them and sometimes not. So in my experience, which admittedly is not the same as every other Marriott timeshare owner, efforts at the resort level to, "keep costs down" are at least attempted.
> 
> <shrug> I look at the stipulated 10% (and slightly higher for non-US resorts) Management Fee as the price of doing business with Marriott Vacations Worldwide. If I thought it, "unconscionable," I'd probably choose to not do business with them.


Yes, in at least some of the International resorts we pay 50% higher Management fee at 15%.
I wish we did only have to pay 10%.


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## Superchief (Nov 10, 2019)

dougp26364 said:


> I’ve been shouted down when expressing concerns about the average 5% increases on an owners forum, by an owner/board member no less. It was a nasty enough attack when I questioned the increases and extra amenities added each year I left the group.
> 
> We’ve held on because we enjoy the system and resorts. But if we’re going to be talking 10-15% increases when all others are holding steady at 3-5%/year? We’ll be bailing out sooner rather than later.
> 
> Marriott and the board need to get a hold on these, IMHO, ridiculous fee increases. At least at this one resort. Grand Chateau held the line this year after several years of free increases out of line when compared to other higher end timeshares in Vegas. Ocean Pointe has ALWAYS been out of line compared to others IMHO. But our BOD keeps adding amenities, art work/sculptures or other not so necessary expenses and, Ocean Pointes year over year MF increases have been higher than what appears to be average, even for MVC.


I had a similar bad experience with this same board member, and I voted against them on the current ballot. I couldn't find any helpful information on the owner's forum, so I still am not aware of any explanation for this exorbitant increase. There is a new GM, so hopefully this isn't a sign of things to come.


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## Superchief (Nov 10, 2019)

Luvtoride said:


> I sent an email to the general manager and asked him all of these questions.  I will let you know when I get a response.
> 
> 
> Sent from my iPhone using Tapatalk


Did you ever receive a response from the new GM? I had a question about the budget for Oceana Palms and received an email response from their GM within a couple of days. I am curious regarding where the new Ocean Point GM came from. The previous one was excellent.


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## Luvtoride (Nov 10, 2019)

Superchief said:


> Did you ever receive a response from the new GM? I had a question about the budget for Oceana Palms and received an email response from their GM within a couple of days. I am curious regarding where the new Ocean Point GM came from. The previous one was excellent.



Yes, I did hear from Dennis as we are trying to arrange a time for a phone call.  I posed many questions and offered to talk about them.   We didn’t hook up last week but we will try again to talk this week. 



Sent from my iPad using Tapatalk


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## dougp26364 (Nov 11, 2019)

Superchief said:


> I had a similar bad experience with this same board member, and I voted against them on the current ballot. I couldn't find any helpful information on the owner's forum, so I still am not aware of any explanation for this exorbitant increase. There is a new GM, so hopefully this isn't a sign of things to come.



That particular board member has virtually NO qualifications to be in the board if you read their bio. Hopefully they’re off the board after this year.


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## Luvtoride (Nov 12, 2019)

Luvtoride said:


> Yes, I did hear from Dennis as we are trying to arrange a time for a phone call.  I posed many questions and offered to talk about them.   We didn’t hook up last week but we will try again to talk this week.
> 
> 
> 
> Sent from my iPad using Tapatalk



I spoke with Ocean Pointe GM, Dennis Nau yesterday about the budget questions.  We discussed the following:
- Increase in some of the Personnel costs (activities, HR and front desk) is primarily due to the need to increase salaries to be more competitive with other businesses in the area.  OP has had an extremely high personnel turnover rate which makes running the resort effectively very challenging.  
-  Insurance- probably the biggest increase and one that the board is questioning as well.  They will have a board member familiar with insurance to answer questions and explain about the large increase in this expense.  I have submitted several specific questions to Dennis, to pose and discuss on the insurance expense increase.  
- Owner Services- the $812,000 charge are for services provide by MRHC (Marriott Resorts Hospitality Corp) separate from Marriott management fees.  These costs have always been in the budget but they were previously listed "below the line" of operating expenses and this was inconsistent with other Florida Club resorts.  By moving this charge to Operating expenses, MVC can assess their 10% management fee on these expenses, thus it is increasing Management fee by about $81,000. 
- Management fee- as previously discussed, this reflects fully funded reserves, which will be voted on at the board meeting on 11/13.  If it is voted NOT to fully fund reserves, this charge will decrease.  

This is Dennis' 1st budget cycle since his arrival at Ocean Pointe around Easter.  He is concerned about all of the feedback he's received from owners about this preliminary budget and understands our frustration.  He did say that MVC management is changing their compensation policies, in particular bonus awards to GM staff to better reflect control of costs with a target of a 3% or under cost increase. This will require GM's to be more proactive in pursuing expense control initiatives and finding new sources of revenue to help offset expense increases.

Dennis had previously been the GM at Marriott's Fairway Villas in NJ as well as having management roles at the Marriott Marquise and Marriott Eastside in NYC.  He has been with Marriott for 30 years and seems to bring a great deal of experience to his role here at OP.  

I'm sure we will get more information after the finance committee meeting today and the board meeting tomorrow.  I will try to follow up with him later this week.


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## Superchief (Nov 12, 2019)

Thanks for this helpful information. It appears that Dennis is in a very difficult situation and I hope some of these costs can be greatly reduced for the final MF's. 

I am concerned that many of the cost increases are driven by the implementation of the DC points program. Activities, front desk, HR, and 'Owner Services' have dramatically increased due to the shorter stays and increased spending on activities to generate higher customer ratings. I also thought that 'owners services' should be covered in the management fee Marriott already takes, since it is the primary service provided by the corporation. The 10% management fee shouldn't be pure profit margin for MVC. I'm not aware of any owner's services that are exclusive to individual resorts.   

I am happy to see the incentive to keep operating expense increases to 3% or less, but most of my MVC resorts have exceeded that target over the past few years. I would also like to know if the resort GM's and BOD's have any impact or awareness of the amount contributed by the DC trust to the individual resorts. Since most of these increases are driven by the point program, the trust should be absorbing more of these expenses.


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## jimf41 (Nov 12, 2019)

Thanks Brian & Chief for keeping us informed. I appreciate your work.


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## Luvtoride (Nov 12, 2019)

Superchief, I agree with your points and share your concerns.  The GM incentive for expense control was a new initiative to be implemented going forward (probably for next year), but your point about the DC trust points is well taken and needs to be better understood and explained as to the impact on all MVC resorts.  

As to the Owner Services charge, that is referred in a footnote (7) to the budget and one I still don't fully understand.  Apparently MRHC is a separate entity from MVC and provides other services (food and beverage services??).  I will try to get a better understanding of this next time I speak with him.  I see the area at the bottom of the budget that contained this charge in the past.  It was $44.89/ unit week last year there and is now $46.24/ unit week this year in operating expenses, an increase of 3.01% over prior year.


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## SueDonJ (Nov 12, 2019)

Luvtoride said:


> I spoke with Ocean Pointe GM, Dennis Nau yesterday about the budget questions.  We discussed the following:
> ...
> - Owner Services- the $812,000 charge are for services provide by MRHC (Marriott Resorts Hospitality Corp) separate from Marriott management fees.  These costs have always been in the budget but they were previously listed "below the line" of operating expenses and this was inconsistent with other Florida Club resorts.  By moving this charge to Operating expenses, MVC can assess their 10% management fee on these expenses, thus it is increasing Management fee by about $81,000. ...



I think it's great that you were able to get specific answers to your specific questions from the resort GM - that's what all of us should be able to expect as the norm. 

The GM's explanation for this one item confuses me, though. According to the SurfWatch docs that I referenced earlier in the thread, the 10% Management Fee that goes directly to MVW is assessed on every single item in the Operating Budget including Reserves and Property Taxes (with an explanation that it applies whether taxes are included as a line item component in the budget or assessed directly to the owners - which isn't the case for any resorts other than the CA resorts, making me think the language, or the intent of the language, is somewhat standard across every resort including OP.) It's a stipulation that's written in to all three sections of the Public Offering Statements for both my resorts: the Master Deed, the Timesharing Declaration and the Management Agreement, and there's nothing ambiguous about it.

I have the itemized Operating Budgets for both SurfWatch and Barony going back to when we purchased and I just looked over the last five years. "Owner Services" has been a line item during that time (and I'm assuming further back) with the following footnote: _"The Marriott Resorts Hospitality Corporation ("MRHC") has been delegated the authority to provide all services incidental to the management of the Condominium, including Owner Services and all property operations. In connection with the performance of those services, all operating expenses will be charged to and paid by the Association to MRHC, including some that may be incurred through affiliates of MRHC. Certain of the operating expenses charged to and paid by the Association to MRHC may reflect economies of scale associated with the number of projects managed by MRHC and the affiliated relationship between MRHC and the developer. The amounts charged for such operating expenses may reflect pricing that is lower than what equivalent services would cost if charged on an independent basis."
_
So I'm interested to know if the Operating Budget itemizations for OP (and any other resorts, Florida Club or not) during the years prior to 2020 didn't include an Owner Services fee and if they didn't, why not? Because, why at my resorts has the 10% MF been assessed on the Owner Services line item for all these years while at other resorts, maybe not? Also, what is specific to the Florida Club resorts that make them exempt, if they are, considering that it's always been explained (on TUG anyway, by owners) as the cost of administering what's essentially an internal exchange benefit among only the FC resorts?

Noting, if it's not clear, for my two resorts the (10%) Management Fee and the Owner Services fee are and always have been separate line items in the Operating Budgets. Also, the 2019 Owner Services line item total for SurfWatch was $450,785 and for Barony Beach was $583,794. You can bet I'll be looking specifically at this line when these two 2020 budgets are eventually invoiced. 

{ETA}
Something was rolling around in my brain and I finally found it - in this 2017 post from @dioxide45 about the Florida Club fee at Grande Vista:


> All owners at all properties pay an "Owner Services Fee". This fee in 2017 was $41.11. Owners in the Florida Club also pay a "Club Fee" of $4. These two fees are separate on the Operating Budget. However, when they send out the MF bills, they list the two fees combined as one total as "Florida Club Fee" in the amount of $45.11. Grande Vista Owners not in the Florida Club or those at resorts outside of the Club may not even see this fee listed separately on their bill, it is baked in to the "Operating Fee".



So now I'm a little more relieved about whether every owner pays an Owner Services fee, but as I now understand it the Florida Club fee is a line item in addition to the Owner Services line item in the relevant Operating Budgets, and that those two line items are combined as a separate component on the actual MF's invoices for Florida Club resorts.

But this still doesn't explain why the Ocean Pointe GM answered the question as if the 10% Management Fee hasn't until this year been assessed on either the Owner Services or the Florida Club fees. Do I understand correctly that's what he's saying? Because again, every single US resort is supposed to be assessed the 10%-of-all-line-items Management Fee.


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## Superchief (Nov 12, 2019)

This raises another question for me: 
What does MVC actually provide for the 10% management fee? I had always assumed this covered some of the 'overhead' of running the MVC program.


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## SueDonJ (Nov 12, 2019)

Superchief said:


> This raises another question for me:
> What does MVC actually provide for the 10% management fee? I had always assumed this covered some of the 'overhead' of running the MVC program.



It may be that Marriott has at times dipped into their profit and used those monies for various expenses that could have been assessed to owners but weren't - specifically I'm thinking about that brouhaha over Aruba Ocean Club's multi-year Special Assessment where Marriott partially covered the costs of substantial necessary repairs including roofs, windows, etc, but there may have been others.

Other than that it hasn't ever been my assumption that the Management Fee is anything other than a profit margin because the governing docs don't stipulate any requirements that it be used for resort costs. In the docs it simply states that the Management Fee is 10% of the Operating Expenses including Reserves and Property Taxes, and it goes to the entity which is contracted as the Management Company. The way I read it, if the Management Agreement between the resort and Marriott is dissolved and the owners hire another management company, that company would be entitled to the same unless they and the owners negotiate a different fee in their affiliation contract.


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## Steve Fatula (Nov 12, 2019)

SueDonJ said:


> So now I'm a little more relieved about whether every owner pays an Owner Services fee, but as I now understand it the Florida Club fee is a line item in addition to the Owner Services line item in the relevant Operating Budgets, and that those two line items are combined as a separate component on the actual MF's invoices for Florida Club resorts.
> 
> But this still doesn't explain why the Ocean Pointe GM answered the question as if the 10% Management Fee hasn't until this year been assessed on either the Owner Services or the Florida Club fees. Do I understand correctly that's what he's saying? Because again, every single US resort is supposed to be assessed the 10%-of-costs Management Fee with ONLY property taxes exempt from the assessment.



Looking at Playa Andaluza and DSV, Management fee is and has always been (as far back as my copies go) on the budget, and is 10% including owner services fee. I think the explanation seems wrong actually as far as the guy at Ocean Pointe. Only way to know is to look at the previous year budget details. Anyone have one?

I have no problem with the 10% management fee. I am sure they have expenses in the oversight, people for sure.


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## Superchief (Nov 12, 2019)

Steve Fatula said:


> Looking at Playa Andaluza and DSV, Management fee is and has always been (as far back as my copies go) on the budget, and is 10% including owner services fee. I think the explanation seems wrong actually as far as the guy at Ocean Pointe. Only way to know is to look at the previous year budget details. Anyone have one?
> 
> I have no problem with the 10% management fee. I am sure they have expenses in the oversight, people for sure.


I never had a problem with the 10% management fee because I had assumed it covered the corporate overhead expenses, including the website and vacation advisor staff, as well as corporate management. I'm sure there is also a 'goodwill' charge for the Marriott name that goes to Marriott (not MVC). I always thought that a majority of the MF's are related to resort specific expenses, including staff at the resort. I would have a real problem if the 10% is their profit margin requirement that we receive nothing in exchange for.


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## Fasttr (Nov 12, 2019)

Steve Fatula said:


> I think the explanation seems wrong actually as far as the guy at Ocean Pointe. Only way to know is to look at the previous year budget details. Anyone have one?


See attachment to post #9.  What the GM said appears to be correct when comparing 2019 vs 2020.


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## Luvtoride (Nov 12, 2019)

Fasttr, yes, that’s where I was quoting the per unit Owner’s Services charges from ‘19 vs. ‘20.  Apparently when it was “below the line” there and not included in operating expenses it wasn’t subject to the Management fee.  


Sent from my iPad using Tapatalk


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## Fasttr (Nov 12, 2019)

Luvtoride said:


> Fasttr, yes, that’s where I was quoting the per unit Owner’s Services charges from ‘19 vs. ‘20.  Apparently when it was “below the line” there and not included in operating expenses it wasn’t subject to the Management fee.
> 
> 
> Sent from my iPad using Tapatalk


That’s certainly how it looks from that attachment.


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## Steve Fatula (Nov 12, 2019)

Fasttr said:


> See attachment to post #9.  What the GM said appears to be correct when comparing 2019 vs 2020.



Ok, I have read post 9. Here's what I see...
$2,282.75
For DSV2, looking at the breakdown for this resort that I have in hand, which is 2018, the MF was $1212.27. Of that, the management fee was $110.21. So, I take the total MF (without property tax) - the management fee = $1,102.06, which would be the MF if there was no mgmt fee. So, 10% of that is precisely $110.21. Which is then added to the base MF. Works out exactly to 10%.

Now we move to post 9. For 2019, it shows a total MF (without taxes) of $1,512.17. Of that, the 10% was $151.81. Which is more than 10% if you use the same calculation, what am I missing?

For 2020, it shows MF without taxes of $2,282.75. The 10% mgmt fee is shown as $221.83, again, more than 10%. I am not understanding how Ocean Pointe is calculating the 10% fee differently as the first problem. Am I misreading it?


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## dioxide45 (Nov 12, 2019)

In past years, Marriott used to include the Florida Club Fee along with the Owner Services fee as a single combined item. For non Florida Club resorts, they included the Owner Services fee in the Operating Fee. I saw this with our Grande Vista budgets in the past. Seems Marriott was leaving some money on the table and fixed that up.


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## dioxide45 (Nov 12, 2019)

Steve Fatula said:


> Ok, I have read post 9. Here's what I see...
> $2,282.75
> For DSV2, looking at the breakdown for this resort that I have in hand, which is 2018, the MF was $1212.27. Of that, the management fee was $110.21. So, I take the total MF (without property tax) - the management fee = $1,102.06, which would be the MF if there was no mgmt fee. So, 10% of that is precisely $110.21. Which is then added to the base MF. Works out exactly to 10%.
> 
> ...


I have the same problem with Grande Vista
2020 Proposed Operating Fee $1,076.01
2020 Proposed Management fee $169.15

If you take the management fee out of the operating fee it is $906.86
The $169.15 is way more than 10%.

This is why I think (at least in Florida, Grande Vista) they calculate the management fee on all costs (including taxes and reserves).

If you add in the operating fee of $651.95 and a somewhat average of taxes (Gold-$139.65 and Platinum-$166.58) then take out the $169.15, you get $1711.95 for a total fee (Operating, Taxes, Reserve). That gets closer to the 10% being $169.15. I suspect they do a more detailed "average" of the taxes based on actual allocation of weeks. So it seems in Florida we may be paying the Management fee on Operating+Reserve+Taxes?


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## Steve Fatula (Nov 12, 2019)

dioxide45 said:


> I have the same problem with Grande Vista...
> 
> This is why I think (at least in Florida, Grande Vista) they calculate the management fee on all costs (including taxes and reserves)....
> 
> So it seems in Florida we may be paying the Management fee on Operating+Reserve+Taxes?



That would appear to be the case, it may be based on exact number of units of each type. Question I have is, is that correct based on the governing documents for Florida resorts? SueDonJ wrote in post 13 that at Surfwatch, it says "_equal to ten percent (10%) of the Estimated Operating Budget (exclusive of the Management Fee itself, but inclusive of Reserves and real property taxes". _

I'm just trying to figure out the numbers first. Does Surfwatch and Ocean Pointe pay property tax separately? We do at DSV, maybe that's why it isn't included in the management fee there?

It could be then that this is a perfect storm of sorts to cause such an increase. Adding in Owner Services, combined with insurance costs likely due to increased risk, fully funded reserves, and the 10% fee are the biggest items in the increase. All (but the 10% fee) increases the 10% fee too, which makes it a big line item.


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## BocaBoy (Nov 13, 2019)

dougp26364 said:


> A proposed 5% increase at an MVC Resort doesn’t surprise me. If this is a one off adjustment, give the reason. If this becomes the new norm fees will double in 6 years, which is alarming to me. Whatever the reason a proposed increase of this magnitude NEEDS to be explained.


In the current non-inflationary environment that has prevailed over the last decade or so, 5% year in and year out is exorbitant and cannot be justified. I don't see that type of increase in costs for property expenses anywhere else, with the occasional one-off special situation.


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## BocaBoy (Nov 13, 2019)

Luvtoride said:


> He did say that MVC management is changing their compensation policies, in particular bonus awards to GM staff to better reflect control of costs with a target of a 3% or under cost increase. This will require GM's to be more proactive in pursuing expense control initiatives and finding new sources of revenue to help offset expense increases.


It is mind-boggling to me that cost control has apparently NOT been one of the more important targets in determining bonuses for management.  No wonder maintenance fees are out of control.


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## bazzap (Nov 13, 2019)

A


BocaBoy said:


> It is mind-boggling to me that cost control has apparently NOT been one of the more important targets in determining bonuses for management.  No wonder maintenance fees are out of control.


At some of our “home” MVC resorts, the GM and team are very pro-active and effective in controlling costs, at others very much less so.
Greater consistency in this most critical and important area really should be a priority.


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## dioxide45 (Nov 14, 2019)

BocaBoy said:


> In the current non-inflationary environment that has prevailed over the last decade or so, 5% year in and year out is exorbitant and cannot be justified. I don't see that type of increase in costs for property expenses anywhere else, with the occasional one-off special situation.


Has there really been a non-inflationary environment over the last decade though? I know the costs of most things we buy have gone up a lot, in many cases much more than the reported inflation rate.


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## Steve Fatula (Nov 14, 2019)

dioxide45 said:


> Has there really been a non-inflationary environment over the last decade though? I know the costs of most things we buy have gone up a lot, in many cases much more than the reported inflation rate.



Eating out prices have more than doubled in our area in the past 5 years. For us, that's the highest "inflation" of anything that impacts us.


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## RLS50 (Nov 14, 2019)

dioxide45 said:


> Has there really been a non-inflationary environment over the last decade though? I know the costs of most things we buy have gone up a lot, in many cases much more than the reported inflation rate.


This is also my sentiments and experience.   There are a number of arguments / theories how and why real inflation is under reported, but that is another topic entirely.

However I do agree with the main points.

- Hotel Rack Rates have not increased as dramatically as the average increases in timeshare maintenance fees.    Timeshare maintenance fee increases of 4%-5% or more are probably not sustainable in the long run.

- I also agree that cost control should be a Captain Obvious focus for any GM and Board, and should have been from the beginning.   It is a core part of any management companies fiduciary responsibility to the HOA.

I think the major developers being publicly traded companies do us owners no favors.  In today's stock performance driven world, that puts additional pressure on timeshare companies to keep increasing profits each year in order to drive stock performance, keep major shareholders happy, and drive executive compensation.    Keeping maintenance fees as close to stagnant as possible does not help contribute to year over year profit growth, and certainly does not help contribute to the annual growth rate Wall St desires and expects.

I think in these almost competing agendas, self interest to boost the PPS will always trump desire to keep maintenance fees (and thus the corresponding management fee income) lower.   At the very least, knowing that your management fee profit increases with every dollar of overall maintenance fee increase, would seem to contribute to an almost ambivalent approach to serious cost controls.

I think when the timeshare divisions of the major Hotel chain companies were spun off from the main brand this profit pressure increased.   Because as a stand alone entity they no longer have the luxury of being buried in the overall quarterly results of the mother ship.

I think Diamond Resorts (pre-Apollo) might be a good example in this regard as a timeshare only company (even if a more extreme case).   The old CEO of Diamond Resorts (before Apollo bought it) even stressed to Wall St during at least one of the quarterly calls, that management fees were pure profit, and increased every single time any line item on the budget contributed to an increase in costs.    It almost sounded like the idea was being conveyed that maintenance fee inflation was always good for the bottom line of the management company and thus good for the stock price.   Based on their own comments to analysts, my interpretation was that increasing management fees appeared to be a key part of their core profit model.   I also suspect this is one of the factors that contributed to Diamond charging a 15% management fee, instead of the more customary 10%.

I think this is one of the real dilemmas...for us as owners...and for the (now) standalone timeshare companies...who have to answer to an increasingly active and impatient fund driven investor class.

But this is just one of the factors involved, I do not mean to suggest it is the only one.


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## SueDonJ (Nov 14, 2019)

dioxide45 said:


> In past years, Marriott used to include the Florida Club Fee along with the Owner Services fee as a single combined item. For non Florida Club resorts, they included the Owner Services fee in the Operating Fee. I saw this with our Grande Vista budgets in the past. Seems Marriott was leaving some money on the table and fixed that up.





dioxide45 said:


> ... So it seems in Florida we may be paying the Management fee on Operating+Reserve+Taxes?



I'm sorry for adding confusion to this thread; I've gone back and edited my last couple posts to clarify that in the governing docs it says that the (10%) Management Fee is assessed on all components including operating costs, reserves and property taxes (whether they're included in the Operating Budgets or billed directly to the owners.)

It still is confusing to me that Ocean Pointe owners, and possibly owners of other Florida Club-enrolled Weeks, have for all these years NOT been assessed the MgmtFee on the "Owner Services" line item. As an owner at resorts where it has been assessed as stipulated, I think it's fortunate for Ocean Pointe owners that Marriott didn't correct for the mistake this year by imposing a Special Assessment to at least partially recover what was, "left on the table" in years past.

As for the OP math, I'm leaving it to you human calculators to figure out how to get to a $38,962,270 total, resulting in the 10% Mgmt Fee being $3,896.227.


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## SueDonJ (Nov 14, 2019)

Steve Fatula said:


> ... I'm just trying to figure out the numbers first. Does Surfwatch and Ocean Pointe pay property tax separately? We do at DSV, maybe that's why it isn't included in the management fee there? ...



(Sorry! I've corrected my posts to reflect that the 10% MgmtFee *is* assessed on the property taxes.)

The CA resorts are the only US resorts where Property Taxes are billed directly to the owners by the counties; at all others they're included as a component of the Operating Budgets. Assuming (I know, I know!) that the language in the governing docs is similar across the entire network of resorts to the language in the SurfWatch and Barony Beach docs, the direct-billed CA property taxes should be included in the line items on which the MgmtFee for those resorts is assessed.


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## davidvel (Nov 14, 2019)

SueDonJ said:


> (Sorry! I've corrected my posts to reflect that the 10% MgmtFee *is* assessed on the property taxes.)
> 
> The CA resorts are the only US resorts where Property Taxes are billed directly to the owners by the counties; at all others they're included as a component of the Operating Budgets. Assuming (I know, I know!) that the language in the governing docs is similar across the entire network of resorts to the language in the SurfWatch and Barony Beach docs, the direct-billed CA property taxes should be included in the line items on which the MgmtFee for those resorts is assessed.


The Shadowridge (CA) TS Declaration expressly excludes "taxes ... separately levied by the County or other governmental agency against each Owner of the Timeshare Interest" from "Basic Expenses" upon which the management fee is calculated. 

Whether they follow this is an entirely different question.


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## dioxide45 (Nov 15, 2019)

SueDonJ said:


> I think it's fortunate for Ocean Pointe owners that Marriott didn't correct for the mistake this year by imposing a Special Assessment to at least partially recover what was, "left on the table" in years past.


I am not sure how they could do this. It would also be pretty low class. Really if you think about it, assessing the Management Fee on the Owner Services Fee and other back end accounting/HR fees is kind of a tax on a tax isn't it. Other resorts could have a case for a suit against Marriott. It was Marriott's mistake for the past 20+ years, not the owners. I am actually disappointed that the BOD buckled and allowed Marriott to move the line item up as a simple money grab. Why not move the Owner Services fee down for all the other resorts?


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## SueDonJ (Nov 15, 2019)

dioxide45 said:


> I am not sure how they could do this. It would also be pretty low class. Really if you think about it, assessing the Management Fee on the Owner Services Fee and other back end accounting/HR fees is kind of a tax on a tax isn't it. Other resorts could have a case for a suit against Marriott. It was Marriott's mistake for the past 20+ years, not the owners. I am actually disappointed that the BOD buckled and allowed Marriott to move the line item up as a simple money grab. Why not move the Owner Services fee down for all the other resorts?



Well of course, I'd prefer that, as one of the millions of owners who have always been assessed the 10% MgmtFee on top of the Owner Services fee!

My comment wasn't meant to say that Marriott *should have* assessed OP owners for prior years, but that I don't see anything that says they *couldn't have.* So in the Ocean Pointe owners' shoes, if I were facing this year a MF's increase explained as a correction for all the years they could have but didn't collect the same, I'd feel somewhat fortunate that I'd not been charged for years what I could have been charged, but also - of course - sorry to see that come to an end.

I wonder if this isn't going to call the attention of all the other resort boards to make sure the line items in their Operating Budgets are correctly aligned and that the MgmtFee is being assessed on every required item, and whether we'll see similar corrections in next years' MF's at any resort.

(Now taking the broader issue of the Management Fee to the thread where it's being specifically discussed relevant to all resorts:
2020 Maintenance Fee Discussion (inc. "Management Fee" line item)


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## dioxide45 (Nov 15, 2019)

SueDonJ said:


> Well of course, I'd prefer that, as one of the millions of owners who have always been assessed the 10% MgmtFee on top of the Owner Services fee!
> 
> My comment wasn't meant to say that Marriott *should have* assessed OP owners for prior years, but that I don't see anything that says they *couldn't have.* So in the Ocean Pointe owners' shoes, if I were facing this year a MF's increase explained as a correction for all the years they could have but didn't collect the same, I'd feel somewhat fortunate that I'd not been charged for years what I could have been charged, but also - of course - sorry to see that come to an end.
> 
> ...


Not sure I would say I feel fortunate. Over the 12 years we have owned, we have perhaps saved about $75 in additional management fees. So I am happy that I didn't have to pay that, but it really isn't that much all things considered. I really don't like percentage based management fees. For a property manager of rental properties, a percent works because they work for the homeowner/investor and have an incentive to make them the most money and thus get the highest commission. The problem is that with timeshares, the management fee is based on expenses. It doesn't really cost Marriott more to manage 1,000,000 in expenses than it does $750,000. All their other costs are covered by the owners in all the other line items. The problem with percentage based fees is that there is no real incentive to keep costs down. That 5% average probably works out to a couple percentage points in "growth" for the overall company. The bigger the management fee increase the bigger the growth. 5% average growth over the past decade is nothing to sneeze at.

With so many other vacation options out there I am seriously considering if I want to continue carrying nearly $3000 in MF for our two Marriott timeshare weeks. My wife and I could go on a pretty great cruise for the MF on one of those weeks and now that we live in Florida and can book last minute, we could perhaps do two week long cruises. It is getting harder and harder to justify the MF on these weeks for the value we get back.


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## jmhpsu93 (Nov 16, 2019)

Luvtoride said:


> I spoke with Ocean Pointe GM, Dennis Nau yesterday about the budget questions.  We discussed the following:
> - Increase in some of the Personnel costs (activities, HR and front desk) is primarily due to the need to increase salaries to be more competitive with other businesses in the area.  OP has had an extremely high personnel turnover rate which makes running the resort effectively very challenging.
> -  Insurance- probably the biggest increase and one that the board is questioning as well.  They will have a board member familiar with insurance to answer questions and explain about the large increase in this expense.  I have submitted several specific questions to Dennis, to pose and discuss on the insurance expense increase.
> - Owner Services- the $812,000 charge are for services provide by MRHC (Marriott Resorts Hospitality Corp) separate from Marriott management fees.  These costs have always been in the budget but they were previously listed "below the line" of operating expenses and this was inconsistent with other Florida Club resorts.  By moving this charge to Operating expenses, MVC can assess their 10% management fee on these expenses, thus it is increasing Management fee by about $81,000.
> ...



I met Dennis randomly as we were walking together through the resort when I stayed there in June.  He went out of the way to introduce himself to me and through our conversation outlined his desire to improve how OP is run and gave me a little bit of his experience (we were talking about cycling, of all things, which led to weather, which led to where he's been).  Seemed a very nice guy and I'll be interested to see what management improvements he brings there.  We're not direct owners there (Florida Club through GV) but anticipate staying there often in the future so I hope to meet more happy owners there that aren't getting crushed by the MFs.


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## hangloose (Dec 6, 2019)

Ocean Pointe maintenance is now posted.  Mine went up 7.5%.  Definitely high! . But not 10-15%.


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## Steve Fatula (Dec 6, 2019)

Definitely high. Too high.


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## Luvtoride (Dec 6, 2019)

hangloose said:


> Ocean Pointe maintenance is now posted.  Mine went up 7.5%.  Definitely high! . But not 10-15%.


Hangloose, mine isn't posted yet (I just logged onto the My Vacation Club site to pay maintenance fees).  I wonder why some are billed and others are not.  I have a 3 bedroom Silver season.  
I will keep checking over the weekend and post mine when it appears.


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## TheTimeTraveler (Dec 6, 2019)

Luvtoride said:


> Hangloose, mine isn't posted yet (I just logged onto the My Vacation Club site to pay maintenance fees).  I wonder why some are billed and others are not.  I have a 3 bedroom Silver season.
> I will keep checking over the weekend and post mine when it appears.






The Platinum and Gold weeks are paying for all the Silver weeks for 2020.   Just kidding. 




.


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## dougp26364 (Dec 6, 2019)

Luvtoride said:


> Hangloose, mine isn't posted yet (I just logged onto the My Vacation Club site to pay maintenance fees).  I wonder why some are billed and others are not.  I have a 3 bedroom Silver season.
> I will keep checking over the weekend and post mine when it appears.



we have a 3 bedroom silver season, 2,160 and change


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## Superchief (Dec 6, 2019)

Oceana Palms is also going up 7%. We really need to take a closer look at the budget components and be proactive regarding areas of control. There appear to be a lot of capital improvement projects, increase in activity expenses and related human resources. Those are definitely areas where spending can be better managed.


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## dougp26364 (Dec 7, 2019)

In the WTF column. They’ve put in a small herb garden by the grills at Pompano. Yes I know it’s probably not “to expensive” to maintain, but multiple “not to expensive” items are part of why Ocean Pointe’s fees go up disproportionately every single year.  

On the other end of the spectrum, they appear to have eliminated the paper or laminated menus and/or brochures in favor of QR code’s that have to be scanned to your device.


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## Quilter (Dec 7, 2019)

We were at Manor Club this past week.  I went to the owner’s forum.  We own at both OP and MC.  I mentioned the increase in OP’s m/f’s and asked the GM if she saw this as a possibility for resorts system wide.  She said she wasn’t sure but what she could say was that Manor Club will need to address the issue of salaries being low when compared to other jobs in the area since unemployment was only 2%.


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