>19% increase in MF’s at Ocean Pointe

[dougp26364]

[Post moved from MF's sticky thread.]

OUCH! Don't they have insurance?!

Ocean Pointe - 2BR Silver

2018 Florida Club Fee: $47.58 (5.5% increase)
2018 Property Tax Fee: $131.18 (0.0% how is that possible?)
2018 Replacement Reserve: $367.10 (6.3% increase)
2018 Operating Fee: $1,235.23 (27.24% increase)
Total $1,781.09

2017 Total: $1,492.39<<-- 19.34% increase

They do. It just has a huge deductible. I’m pretty certain when we get the full breakdown we’ll see that $200-$250 of this bill will be a one time charge to the operating budget. At least that’s what I keep telling myself.

 

[dougp26364]

Either there’s a one time charge for hurricane damage that has yet to be explained or we need to vote out some of the current board members.

[Comment moved from MF's sticky thread]
... 2017 fees were $1,814.32. So the fees are up $345.97 or a 19% increase. The web site does not list a portion of this as an SA for hurricane damage and the owner documents are not available online as of the time of this posting. I suspect (pray) most of this increase is a one time hit due to the hurricane.

 

[MOXJO7282]

I'm sure that's what it is. The same thing happened with the Monarch this year where the numbers came out before the explanation so it was a real shock.

 

[Luvtoride]

[Post moved from MF's sticky thread.]

Ocean Pointe 3 bedroom silver season

Florida Club $47.58
Property Tax $184.95
Reserve $441.66
Operatining fee $1,486.10
Total $2,160.29

This is not a proposal but what has been billed on the MVC web site wit( a due date of 1/19/2018.

2017 fees were $1,814.32. So the fees are up $345.97 or a 19% increase. The web site does not list a portion of this as an SA for hurricane damage and the owner documents are not available online as of the time of this posting. I suspect (pray) most of this increase is a one time hit due to the hurricane.

Doug, that's exactly my fees for the same unit, as I just reviewed in my "My Vacation Club" account. Yes, I suspect that a big part of this is a special assessment for Hurricane Irma damage sustained by the resort. I'm sure when the package comes out it will all be explained. It appears from another posting here for Oceana Palms (their increase was only 3.8%) that they did not sustain much damage, most likely because they are raised above ground level for most of the resort. To answer Saint's question, yes they and all MVC's have insurance, but it is subject to deductible amounts etc. that must be borne by the insured before insurance kicks in. I'm sure that the increase will be fully explained in the letter and owner documents over the next couple of weeks.

 

[SueDonJ]

Like all the other Florida (and South Carolina) resorts, Fully-Funded Reserves as mandated may be in play too if Owners did not vote to waive them.

If it's insurance related to hurricane damage, remember the catastrophic coverage and not the regular property insurance kicks in with a deductible that's percentage-based rather than a set dollar amount. Some prefer that MVW keep an amount in Reserves to cover the highest-assessable deductible for when/if it's needed. Others (like me) prefer that an SA be charged for the correct amount only when it's needed, in order to avoid a situation where MVW is sitting on Reserves that aren't designated for a specific time period and may never be necessary. If this is it and MVW follows form from last year's Hurricane Matthew-related deductibles, it'll be a "Disaster Recovery" line item in the Operating Fee expenses.

Whatever is in play, it should be fully explained when the package is posted to owners.marriottvacationclub.com.

 

[hangloose]

Ouch. Say it isn't so. I'm picking up a 3BR MPB OF unit now for 2018 use. First year MF will be next year :/.

 

[dioxide45]

The biggest increase is in the operating fee. Seems they are pilfering those funds in order to pay for the damage?

 

[dougp26364]

The biggest increase is in the operating fee. Seems they are pilfering those funds in order to pay for the damage?

That’s my hope. But until we see the breakdown we won’t know if this is a more permanent increase or a temporary bump in fees to cover unexpected operational expenses due to hurricane damage.

What I don’t understand is, hurricane damage is never a question of if but when and how often. They know the deductible which represents the risk. They can estimate the rate in which they’ll sustain that damage by historical numbers of when the area is hit by hurricanes. It seems easier to adjust the cash reserves to offset the eventual hurricane expense vs hitting owners with a one time fee to cover the same damages. Factor in interest on the reserves held to offset a deductible for hurricane damage and the funds collected would be less than the occasional intermittent special assessment. It would darn sure be easier than hitting owners up for an extra $200-$300 at Christmas time.

 

[merriot]

This maintenance fee has been going up consistently for years. We love getting away but the advantage is definitely Marriott's.

 

[SueDonJ]

That’s my hope. But until we see the breakdown we won’t know if this is a more permanent increase or a temporary bump in fees to cover unexpected operational expenses due to hurricane damage.

What I don’t understand is, hurricane damage is never a question of if but when and how often. They know the deductible which represents the risk. They can estimate the rate in which they’ll sustain that damage by historical numbers of when the area is hit by hurricanes. It seems easier to adjust the cash reserves to offset the eventual hurricane expense vs hitting owners with a one time fee to cover the same damages. Factor in interest on the reserves held to offset a deductible for hurricane damage and the funds collected would be less than the occasional intermittent special assessment. It would darn sure be easier than hitting owners up for an extra $200-$300 at Christmas time.

How can they know the catastrophic coverage deductible when they have no way of knowing how much damage will be caused? Say the deductible is 10% of the damage costs - should they collect and sit on the entire 10% of the total property replacement value? Half as much? One quarter? On the one hand I agree with you that the Florida resorts are likely to be affected fairly often by named storms that trigger this coverage so some provision could be helpful, but on the other I'm not a fan of MVW sitting on any Reserves that aren't specifically earmarked by both time frame and purpose. Although if I owned at a Florida resort you could probably persuade me to change my opinion on that.

 

[Saintsfanfl]

Reserving for a deductible is a tough one. It is safe to say that if nobody wants to fully fund reserves they will definitely not want to reserve for damage that may or may not ever happen. Some of the damage replaces things that are partially reserved for, but there is so much other work involved.

 

[Saintsfanfl]

It is pretty bad when Oceana Palms maintenance fees are $100 lower than Ocean Pointe. I guess with the second tower it lessened Oceana's increases but I was not expecting it.

 

[dougp26364]

How can they know the catastrophic coverage deductible when they have no way of knowing how much damage will be caused? Say the deductible is 10% of the damage costs - should they collect and sit on the entire 10% of the total property replacement value? Half as much? One quarter? On the one hand I agree with you that the Florida resorts are likely to be affected fairly often by named storms that trigger this coverage so some provision could be helpful, but on the other I'm not a fan of MVW sitting on any Reserves that aren't specifically earmarked by both time frame and purpose. Although if I owned at a Florida resort you could probably persuade me to change my opinion on that.

It’s not all that difficult to estimate the costs based on historical analysis and an estimate of inflationary expenses. It’s not precise to the penny but a good actuary can get pretty darn close.

 

[dougp26364]

Reserving for a deductible is a tough one. It is safe to say that if nobody wants to fully fund reserves they will definitely not want to reserve for damage that may or may not ever happen. Some of the damage replaces things that are partially reserved for, but there is so much other work involved.

I don’t look at it as funding reserves for a deductable so much as funding reserves for the hurricane damage you know will eventually happen. For a coastal Florida resort it’s not if, but when, will it happen. I’d rather pay an extra $20 or $25/ year and hope there’s enough time between storms to build the war chest. Every year without a hurricane would lessen the sting.

We’ve owned since 2001. That 16 years. There’s been two instances of catastrophic storms in the time resulting in assessment to owners in the $200-$250 range. I think Ocean Pointe opened its doors I 1999 or 18 years. That’s a catastrophic storm every 9 years. $25 more in the reserve fund would have pretty much covered both storms, and that’s assuming no interest was earned on that money.

Some will prefer to take their chances and pay the one time hit. I’d rather pay a little each year and, if the reserve is ever deemed “over funded” let the owners decide what to do with the surplus.

 

[Saintsfanfl]

If you fully fund reserves that problem completely goes away. Or as you put it, at least add a little bit more per year to the underfunded reserves.

Everybody seems to not want to pay extra into reserves but then they also do not want to go out of pocket to recoup the costs. We can't have it both ways.

 

[Saintsfanfl]

What exactly happened to Oceana Palms hurricane damage costs? They were closed for just as long at Ocean Pointe but they only had a 3.8% increase. Something isn't quite right here.

 

[TheTimeTraveler]

What exactly happened to Oceana Palms hurricane damage costs? They were closed for just as long at Ocean Pointe but they only had a 3.8% increase. Something isn't quite right here.

The Ocean Pointe footprint is about 27 acres, while Oceana Palms is just a fraction of that. Five buildings versus two, three pools versus one, lesser construction versus class one construction, and the list goes on and on....



.

 

[Saintsfanfl]

The Ocean Pointe footprint is about 27 acres, while Oceana Palms is just a fraction of that. Five buildings versus two, three pools versus one, lesser construction versus class one construction, and the list goes on and on.....

Point taken, although Oceana Palms has two pools while Ocean Pointe has four.

With the second tower Oceana Palms has about the same number of units as Ocean Pointe so they can definitely absorb things much easier than Ocean Pointe with less common areas. I guess there is a benefit to Oceana Palms not having nearly enough space at the pools to support the unit capacity.

 

[dougp26364]

If you fully fund reserves that problem completely goes away. Or as you put it, at least add a little bit more per year to the underfunded reserves.

Everybody seems to not want to pay extra into reserves but then they also do not want to go out of pocket to recoup the costs. We can't have it both ways.

Absolutely!
I fall into the category of adequate reserves and lower operational costs....... Also know as, I want it all.

 

[Superchief]

Does MVC get to collect their 10% management fee for special assessments? I don't think it is fair to owners for them to financially benefit from situations like this, but I expect them to do so.

 

[JIMinNC]

Does MVC get to collect their 10% management fee for special assessments? I don't think it is fair to owners for them to financially benefit from situations like this, but I expect them to do so.

For 2017, at Barony the $75 Hurricane Matthew disaster recovery fee was not included in the calculation of the management fee.

 

[SueDonJ]

For 2017, at Barony the $75 Hurricane Matthew disaster recovery fee was not included in the calculation of the management fee.

I think that's true for every resort where a "Disaster Recovery" fee was assessed, and it was clearly stated in the footnotes on the Budget reports.

 

[Superchief]

I just read on the OP owners site that MVC could have charged the 10% on this, perhaps due to the fact the hurricane damage was included in the operating fee. However, MVC indicated they will not charge their management fee on this (out of the goodness of their heart). Perhaps they are feeling guilty about their terrible customer service during the hurricane recovery period, and they probably made enough money on their Encore packages and rentals that were being honored over II exchanges when OP was at 40% capacity.

I still haven't seen the details regarding the maintenance fees at Ocean Pointe so I don't know what costs are driving the increase or how much will go toward hurricane recovery. I would like to know why the BOD decided to include the hurricane expenses in the Operating fees rather than have it as a special assessment similar to other MVC resorts. If I recall correctly, there was a special assessment at Ocean Pointe a few years ago to cover a similar situation, and it wasn't included in operating fees.

 

[pwrshift]

I hate the thought that Marriott may be using the hurricane damage across the board to really bump MF, which never go down. Surely they had insurance. Or maybe their master plan is to force week owners to get out of timesharing. Things also seem to have changed with their client relationships as evidenced with their terrible non-communication with owners who were concerned about their properties that were in the hurricane path.

 

[JIMinNC]

I hate the thought that Marriott may be using the hurricane damage across the board to really bump MF, which never go down. Surely they had insurance. Or maybe their master plan is to force week owners to get out of timesharing. Things also seem to have changed with their client relationships as evidenced with their terrible non-communication with owners who were concerned about their properties that were in the hurricane path.

They do have insurance, but the damage recovery fees are to cover the deductible. For a “named storm” deductibles are very high and are usually a % of the property value or a % of the loss/damage. As I recall last year with Hurricane Matthew at Barony Beach Club in Hilton Head, the management letter said the deductible was around $1 million.