HUGE 2017 MF's increases at SC Resorts / "Disaster Recovery" [Multi-threads merged.]

[dioxide45]

I am a points owner. My maintenance fees did increase of course. My question is will we also have a special assessment or some sort of fee?

Points owners won't have a special assessment. Consider though, DC piont MFs are billed before many of the resorts send out their bills. So your MF this year really isn't taking in to consideration the built in assessments that are being seen at the HHI properties. I think though that Marriott builds in enough of a buffer in the DC MF to that any increase will be inconsequential. Any impact might only move the MF only a few cents per BI.

 

[SueDonJ]

I am a points owner. My maintenance fees did increase of course. My question is will we also have a special assessment or some sort of fee?

I wonder the same thing, how these "Disaster Recovery" fees are being levied in the DC Trust Operating Budget because Weeks at all of the SC resorts have been conveyed to the Trust, and the Trust is responsible for the MF's on all those conveyed Weeks. If you get a line item budget for DC Points are you seeing a "Disaster Recovery" item in the Operating Fees?

 

[dioxide45]

I wonder the same thing, how these "Disaster Recovery" fees are being levied in the DC Trust Operating Budget because Weeks at all of the SC resorts have been conveyed to the Trust, and the Trust is responsible for the MF's on all those conveyed Weeks. If you get a line item budget for DC Points are you seeing a "Disaster Recovery" item in the Operating Fees?

I don't think that is the case. The DC maintenance fees were billed out long before these properties added the "Disaster Recovery" fees.

 

[SueDonJ]

I don't think that is the case. The DC maintenance fees were billed out long before these properties added the "Disaster Recovery" fees.

So these fees should show up in some form in the next budget report for the DC? I agree with you that because SC Weeks make up only a small percentage of the overall total number of Weeks in the Trust, the total "DR" amount charged to the Trust is practically inconsequential. But a portion of the total at each individual SC resort should be levied to the Trust in some form or another, shouldn't it?

 

[dioxide45]

So these fees should show up in some form in the next budget report for the DC? I agree with you that because SC Weeks make up only a small percentage of the overall total number of Weeks in the Trust, the total "DR" amount charged to the Trust is practically inconsequential. But a portion of the total at each individual SC resort should be levied to the Trust in some form or another, shouldn't it?

Yes. The trust will have to pay the same fees as an owner. So the trust will be paying these Disaster Recovery assessments. I would think that if there happens to be a shortfall from what the trust collected and what it has to pay out, MVW will cover it (perhaps with interest) and will ghet it back next year when the DC points MF is adjusted to cover the fee.

 

[JIMinNC]

So these fees should show up in some form in the next budget report for the DC? I agree with you that because SC Weeks make up only a small percentage of the overall total number of Weeks in the Trust, the total "DR" amount charged to the Trust is practically inconsequential. But a portion of the total at each individual SC resort should be levied to the Trust in some form or another, shouldn't it?

It has to be something like this, since the Trust approved their 2017 budget several weeks before most resorts had finalized their own. The Trust was one of the first to produce a 2017 budget and invoice for 2017 maintenance fees, so to do that, they had to make some assumptions about what their "Component Expenses" (their portion of resort maintenance fees) would be for 2017 before the resorts had even finalized their budgets. So they may do their budget based on what they EXPECT the 2017 fees to be from the intervals owned by the Trust. Then, if expenses are higher, they run a negative variance from budget to actual and that gets adjusted in the next calendar year.

 

[suzannesimon]

$242 (17.13%) increase. The highest 1 yr increase I've personally ever seen.
This is so disappointing. Not sure yet where the increase comes from but what could it possibly be to have an increase of that magnitude?

Again another situation where we get no fore warning and it just appears on the website.

$242 (17.13%) increase. The highest 1 yr increase I've personally ever seen.
This is so disappointing. Not sure yet where the increase comes from but what could it possibly be to have an increase of that magnitude?

Again another situation where we get no fore warning and it just appears on the website.

Insurance companies don't lose money for very long. Our condo association in Delaware told us last year that flood insurance would be increasing 18% per year for a lot of years so they could make up for Hurricane Sandy and other storms on the east coast. After paying increased fees down here on the Florida panhandle since 2005 for hurricane damage back then, they will finally be reducing premiums for the next year since there haven't been any recent hurricanes. It's the great unknown for condo associations and timeshares are no different.

 

[rsackett]

Just received an update from the Harbour Point Resort Manager. Here is the letter:

"HARBOUR POINT PRESIDENT’S LETTER HARBOUR POINT OWNERS’ ASSOCIATION, INC.

Dear Marriott’s Harbour Point Owner:

As you are all probably aware Hilton Head Island and Harbour Point and Sunset Pointe in particular were struck by a Category 2 Hurricane in early October. The Governor of South Carolina issued a mandatory evacuation order effective at 3:00 p.m. on October 5, 2016. Owners and guests were required to vacate the property by 12:00 noon so that the staff could have time to secure the property in order to insure that no one would be injured. The Board commends Rajka Osim, General Manager, and Alex Caballero, Director of Engineering, and their respective staff members for the great work that they have done. First to secure the property and secondly, for their work in coordinating the clean-up and restoration of the resort.

In addition to untold numbers of downed trees, the resort sustained major damage to a number of the structural components of the infrastructure. For example, the elevators were damaged, the roof was damaged, carpets needed to be replaced, the HVAC system needed to be cleaned and repaired, electrical systems were damaged, trees were uprooted and needed to be removed, water intrusion caused damage which required remediation and clean-up. There were other areas that were also damaged; have only mentioned the major systems that sustained damage.

As of this writing, the total damage amounts to Harbour Point amounts to approximately $800,000. The Management Team has estimated that this amount will rise to over $1,000,000. The resort is insured for $39,268,869.00 and there is a deductible which is 2% of the insured value, therefore the deductible is $785,377.00. This means that we will be responsible for the entire amount of the damage up to the amount of the deductible. $786,900.00 represents $183.00 per unit week. This will be a one-time additional cost due entirely to the damage that the property sustained from the hurricane.

You can be assured that the Management Team on Hilton Head Island is working diligently to restore the resort and bring it back to excellent condition. The Accounting Team is also working diligently to monitor the costs associated with the remediation.

Sincerely,

Joie Smith President Harbour Point Owners’ Association, Inc. Board of Directors"

Ray

 

[SueDonJ]

Just received an update from the Harbour Point Resort Manager. Here is the letter:

"HARBOUR POINT PRESIDENT’S LETTER HARBOUR POINT OWNERS’ ASSOCIATION, INC.

Dear Marriott’s Harbour Point Owner:

As you are all probably aware Hilton Head Island and Harbour Point and Sunset Pointe in particular were struck by a Category 2 Hurricane in early October. The Governor of South Carolina issued a mandatory evacuation order effective at 3:00 p.m. on October 5, 2016. Owners and guests were required to vacate the property by 12:00 noon so that the staff could have time to secure the property in order to insure that no one would be injured. The Board commends Rajka Osim, General Manager, and Alex Caballero, Director of Engineering, and their respective staff members for the great work that they have done. First to secure the property and secondly, for their work in coordinating the clean-up and restoration of the resort.

In addition to untold numbers of downed trees, the resort sustained major damage to a number of the structural components of the infrastructure. For example, the elevators were damaged, the roof was damaged, carpets needed to be replaced, the HVAC system needed to be cleaned and repaired, electrical systems were damaged, trees were uprooted and needed to be removed, water intrusion caused damage which required remediation and clean-up. There were other areas that were also damaged; have only mentioned the major systems that sustained damage.

As of this writing, the total damage amounts to Harbour Point amounts to approximately $800,000. The Management Team has estimated that this amount will rise to over $1,000,000. The resort is insured for $39,268,869.00 and there is a deductible which is 2% of the insured value, therefore the deductible is $785,377.00. This means that we will be responsible for the entire amount of the damage up to the amount of the deductible. $786,900.00 represents $183.00 per unit week. This will be a one-time additional cost due entirely to the damage that the property sustained from the hurricane.

You can be assured that the Management Team on Hilton Head Island is working diligently to restore the resort and bring it back to excellent condition. The Accounting Team is also working diligently to monitor the costs associated with the remediation.

Sincerely,

Joie Smith President Harbour Point Owners’ Association, Inc. Board of Directors"

Ray

First, Ray, I hope you don't mind that I edited the formatting in your post? I'll also be including a link to it in the Harbour Point post in the MF's thread.

Most of the SC resorts included a "Disaster Recovery" fee in the Operating Budgets for 2017. Of those reported to TUG only HP and Monarch* didn't, so it doesn't come as a surprise that you've gotten this letter. Can you share whether this is showing as a separate invoice in your account, and the payment due date? Thanks!

* As for Monarch, they're already a couple years into a non-hurricane-related 4-year Special Assessment so it will be interesting to see if/when they assess owners for these damages.

 

[rsackett]

First, Ray, I hope you don't mind that I edited the formatting in your post? I'll also be including a link to it in the Harbour Point post in the MF's thread.

Most of the SC resorts included a "Disaster Recovery" fee in the Operating Budgets for 2017. Of those reported to TUG only HP and Monarch* didn't, so it doesn't come as a surprise that you've gotten this letter. Can you share whether this is showing as a separate invoice in your account, and the payment due date? Thanks!

* As for Monarch, they're already a couple years into a non-hurricane-related 4-year Special Assessment so it will be interesting to see if/when they assess owners for these damages.

First - I do not mind a bit.

Second I have already paid my 2017 Maint Fees, and the charge mentioned in this letter is not showing up yet on My-VacationClub.

Ray

 

[mash84121]

For the $183.00 at HP, it was included in the MF. If you look at the line items on the MF, I believe it was listed as Disaster Recovery. So we won't see a separate charge for $183.00 on the website as it is already included. They do not show the 2017 insert on the website yet, but you should have received it in the mail a week or two ago that shows the line items for the MF.

 

[rsackett]

For the $183.00 at HP, it was included in the MF. If you look at the line items on the MF, I believe it was listed as Disaster Recovery. So we won't see a separate charge for $183.00 on the website as it is already included. They do not show the 2017 insert on the website yet, but you should have received it in the mail a week or two ago that shows the line items for the MF.

I paid $1,273.06 online and it does not show the $183.00 charge.

What did you pay?

Ray

 

[SueDonJ]

For the $183.00 at HP, it was included in the MF. If you look at the line items on the MF, I believe it was listed as Disaster Recovery. So we won't see a separate charge for $183.00 on the website as it is already included. They do not show the 2017 insert on the website yet, but you should have received it in the mail a week or two ago that shows the line items for the MF.

Ah! Thank you! The post in the 2017 MF's thread for HP didn't have a breakdown, showed only a 2.3% increase over 2016 so I assumed (I know, I know!) that the hurricane-related damages hadn't been included. Looking back to the 2016 thread I now see that the Operating Fee increase of $205.90, which includes the "Disaster Recovery" line item, was offset by a steep decrease of $177.44 in the Reserve Fee. I'll edit the MF post again so that it reads like the other SC resorts.

So, have any Monarch owners received the PDF and can share details re any hurricane-related line items that are included? Thanks!

Also, this might be a good place to drop a reminder that if there are multiple owners on an MVW account, each should register with their own log-in information on owners.marriottvacationclub.com, because MVW attaches the MF PDF's to only one. In the case of mine and Don's ownership I had always done everything through the one account registered in my name, but we've had to register with an online account for Don in order to see the posted MF packages. So I'm still doing all the work through a single account but now it's the one in his name, not mine. If you're not seeing posted MF PDF's you may want to consider if this is in play.

 

[mash84121]

I paid $1,273.06 online and it does not show the $183.00 charge.

What did you pay?

Ray

I paid $1273 as well. You only see the $183 on the itemized breakdown of your MF, where it breaks down all of the Operational Costs. They added a line item for Disaster Recovery for $183.

 

[AlmostRetired]

So, have any Monarch owners received the PDF and can share details re any hurricane-related line items that are included? Thanks!

]

I emailed the GM a couple of weeks because my wife and I are thinking about purchasing another week at the Monarch and I wanted to know this information in case we do. It appears the Monarch was lucky. The expenses related to Hurricane Mathew is estimated to be between $207K and $300K once all bills are reconciled This will be covered by the Monarch Operating fund which had a surplus. There is no assessment required. I am guessing nothing is going out since it had no impact to MF. I did ask the person in charge of the Monarch Owners website to update it with this information. The insurance deductible is 846K so with 6150 units, the max the assessment would have been is about $138.

 

[DennisN]

I was wondering if the disaster recovery charge could be used during income tax filing. Unfortunately, there is a $100 deductible for each incident. https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Deductions-and-Credits/About-Casualty-Deduction-for-Federal-Income-Tax/INF14772.html

I am thankful that this may be the only additional cost to staying at a beautiful property and look forward to our next visit in March 2017.

Moderator Note: Post moved from MF's sticky thread.

* This includes a one-time "Disaster Recovery" charge in the Operating Fee of $75.00 for damages/expenses caused by Hurricane Matthew. See the cover letter and footnotes that accompany the MF's package; note any overage above insurance recovery will be reimbursed, and, this amount is not included in the calculation of MVW's Management Fee.

 

[SueDonJ]

I emailed the GM a couple of weeks because my wife and I are thinking about purchasing another week at the Monarch and I wanted to know this information in case we do. It appears the Monarch was lucky. The expenses related to Hurricane Mathew is estimated to be between $207K and $300K once all bills are reconciled This will be covered by the Monarch Operating fund which had a surplus. There is no assessment required. I am guessing nothing is going out since it had no impact to MF. I did ask the person in charge of the Monarch Owners website to update it with this information. The insurance deductible is 846K so with 6150 units, the max the assessment would have been is about $138.

If you've received the 2017 Operating Budget or can access it on owners.marriottvacationclub.com, can you confirm that it does NOT include a "Disaster Recovery" line item? If not, it'll be the only (out of all those that have been posted in the MF's thread) SC resort that doesn't. For what it's worth, those resorts are also collecting only what's needed to cover the catastrophic insurance deductible.

Did the email from Monarch explain why/how there was that much of a surplus available? Maybe it's just me but I'd be concerned that they're not correctly estimating operating costs, especially as they're currently mid-way through a 4-year Special Assessment period. If they're sitting on a surplus wouldn't it basically consist of the SA they're in the middle of collecting, that they said they needed to cover necessary repairs/costs that weren't projected?

 

[MOXJO7282]

See below for excerpts from the Operating Budget. Quick summary it is included in the maintenance fees already disclosed by HP.


Operating Fee The 2017 Net Operating Fee is budgeted to increase by $23.50 (2.6%) per unit week. Our major challenge in this area continues to be recruiting associates to the island. This is due to the continued development, and related employment opportunities, off the island. Marriott Vacation Club has conducted a salary comparison study in the area for comparable jobs, and there is a need to increase hourly wages. It is a modest increase, but the amount multiplies when considering the number of associates in labor intensive roles such as Housekeeping, Engineering, and Loss Prevention.

Reserve Fee The 2017 Reserve Fee will not increase for 2017 and we hope not for next year as well. This Reserve Fee allows us to set aside funds for required maintenance items (the Feature Pool renovation project for example), yearly projects as well as major refurbishments (the Lobby refurbishment). Our goal is to manage your Reserve dollars through a comprehensive 20-year plan so that the resort will continue to be a great place to vacation both now and in the future. We are in a strong position for both current and future plans.

Disaster Recovery Fee For 2017, we will have a one-time Disaster Recovery Fee. As we write this letter we are still impacted by Hurricane Matthew. Initial clean-up and damage has been addressed and the resort is operational. However, we continue to find problems both from wind damage and salt water corrosion due to the storm that Harbour Point experienced. We carry insurance for catastrophic damage; however, the deductible is 2% of the value of the resort. Unfortunately, to cover this deductible, a one-time Disaster Recovery Fee of $183.00 per unit week will be required. We are confident that this will be the only financial impact to Owners to address the worst natural disaster to impact Hilton Head Island in over 100 years. We regret the need for the additional charge, but also feel quite lucky compared with many other resorts and homeowners on the southeast coast.

Summary The 2017 Operating Fund budget results in an increase of $23.50 while the 2017 Reserve Fund budget results in a decrease of $177.68. The one-time Disaster Recovery Fee of $183.00 will bring the total 2017 Maintenance Fee increase to $28.82. We thank you for your investment in Harbour Point! We are working hard to return the resort to 100% and it will be ready for your return. Thanks for your help in making Harbour Point special. We look forward to seeing you in 2017!

 

[dioxide45]

So without the DR fee, they would have had a decrease in the overall MF fee of over $150?

 

[MOXJO7282]

They've lowered the reserve fee for some reason and that counter balanced the DR increase.

 

[SueDonJ]

I'm getting more confused now between Monarch and Harbour Point both being discussed. But yes, at HP it appears that they've offset the DR fee with a decrease in the Reserve Fee. That's somewhat worrisome and bears watching next year because you don't want the normal Reserves to be underfunded.

Monarch is even more worrisome because it has suffered hurricane-related damage but it's the only one (of those reported) that is saying they have a surplus to cover the deductible. Either way, whether they have a surplus or they're off-setting it by a decrease in the Reserves, you have to take into consideration the ongoing 4-year Special Assessment that's already being levied. While a decrease in the MF's during an SA is questionable, covering the unforeseen catastrophic insurance deductible with a surplus during an SA doesn't make any sense.

At both resorts I'd like to confirm that the "Disaster Recovery" fees are shown as a line-item on the detailed Operating Budget and whether they're itemized as an "Operating Fee" or "Reserves", and, that the DR is not a factor in MVW's Management Fee. Owners?

 

[dioxide45]

Perhaps with Monarch already doing a complete renovation of the units, those renovations fix a lot of what hurricane damage there was? Don't need to fix something twice.

 

[dioxide45]

At both resorts I'd like to confirm that the "Disaster Recovery" fees are shown as a line-item on the detailed Operating Budget and whether they're itemized as an "Operating Fee" or "Reserves", and, that the DR is not a factor in MVW's Management Fee. Owners?

Even if it is a line item on the budget, it is possible that they still exclude it from the management fee. Grande Vista has a large village enhancement project a few years ago. Paying for that came out of the reserves but I think Marriott only got half the management fees on the funds targeted to that project. That is why whenever I calculated it, the management fee never seemed to calculate out to 10%.

 

[SueDonJ]

Even if it is a line item on the budget, it is possible that they still exclude it from the management fee. Grande Vista has a large village enhancement project a few years ago. Paying for that came out of the reserves but I think Marriott only got half the management fees on the funds targeted to that project. That is why whenever I calculated it, the management fee never seemed to calculate out to 10%.

Attached is a PDF file of Barony's 2017 MF's package. Page 2 shows that the DR is a line-item in the Operating Fees and there's a footnote about it not being included in the Management Fee calculations. It's been confirmed by owners at all reported SC resorts except Monarch that the same format was used; I'm now looking for something similar from Monarch owners.

 

[AlmostRetired]

Monarch - I looked at the breakdown of the MF and it does not contain any line items nor notes that suggest money is being used for Hurricane Matthew's. The reserve fee had no increase and the operating budget went up $34 oe 3.7 percent. As mentioned above, any damages are being handled by surplus dollars in the budget. Above Dioxide45 suggested it could be a displacement of money set aside for the renovation. I actually thought the same thing. I think the total surplus in the budget was 360K. From a previous update to owners about 25 units had damages but I do not know to what extent.

Until questioned above, I gave no thought to the reason for the surplus. It came up as an answer to a question and I do not believe email is conducive for explanations of unasked questions. Just as a side. I also do not think the HOA planned poorly and as such was the reason for the assessment. Other owners at the Monarch could feel differently. BTW, I am not friends with anyone on the board and in fact have no idea who is on the board. The liaison to the board has been responsive when I have reached out to her. The Monarch is a small property so I believe the GM handles all of Marriott's Sea Pine properties. She has been very responsive when I have reached out to her. When email is an ineffective way to communicate she has taken my call. I trust the GM and HOA ares doing the best they can and looking out for the owners.

This all being said I did call the GM and left a message. I had a couple of other things in the email that I need to discuss so i will ask about the surplus and if the cost of repairs is leaving a hole in the reserve fund.