daviator
TUG Member
- Joined
- May 8, 2011
- Messages
- 1,662
- Reaction score
- 1,543
- Location
- San Francisco, CA
- Resorts Owned
- WKORV, WKORVN, WDW, Westin FLEX, Marriott's MOC, Abound (Trust) Points
Just received my WKORV billing as well as the annual MF budgets and the summary financial statements. As usual, I do my best to read through and interpret them, which is difficult given the limited information provided. I'm wondering if anyone went to the annual meeting or has further insights about the financials, as I have some concerns.
1. I will accept all the budgeted items as "givens" even though they are very broad.
2. I have concerns about the reserve funds. First of all, the reserves summary for the AAO, which maintains the building exteriors, infrastructure and common areas, lists "Unit Interiors" with a useful life of 0, replacement cost of 0, and estimated remaining life as 0. Yet this fund has about $2.5 million in it. Weirder still, the 2025 contribution for this fund is listed as a *negative* $3.276 million. So a reserve fund that seemingly shouldn't exist (the AAO doesn't maintain interiors) has $2.5 million and they're going to somehow take away $3.276 million and the resulting seemingly-impossible surplus is dramatically reducing contributions to reserves. This doesn't make any sense to me.
3. For the VOA, which maintains unit interiors, the reserve summary shows the replacement cost for unit interiors as about $75 million, with a useful life of 18 years and an estimated remaining useful life of 3 years. Yet there is only $29 million in the pot for this fund as of 1/1/25, with a contribution for 2025 of about $6.7 million. If we really have a $75 million expense for major unit renovations coming up in three years, this fund is dramatically underfunded and will only have half what it needs to have in three years. I hope that the info provided is wrong or poorly summarized and that we do NOT have a $75 million expense looming in 2028, because if we do, we're looking at huge increases in 2026 and 2027 or a big assessment. (Perhaps the big 18-year remodels are already in progress and part of the $75 million has already been spent.)
4. On the financial statements, I note that all three associations (MA, AOA, VOA) show huge, multi-million-dollar investment losses for both 2022 and 2023. WTH is the association doing, gambling (and losing) with our money? Granted, 2022 was a lousy year for the stock market, but 2023 was a fantastic year (markets ended the year up about 25%), and yet they managed to lose about $7.4 million of our money in 2023. I get that a prudent investment plan requires you to average returns over good years and bad, but if they're losing $7.4 million in a good year, it seems cause for concern. What am I missing here? No wonder reserves aren't where they should be.
I assume there may be rational explanations for some of these issues and I'm hopeful that someone here might know what they are.
I scanned and will attach the documents I have.
1. I will accept all the budgeted items as "givens" even though they are very broad.
2. I have concerns about the reserve funds. First of all, the reserves summary for the AAO, which maintains the building exteriors, infrastructure and common areas, lists "Unit Interiors" with a useful life of 0, replacement cost of 0, and estimated remaining life as 0. Yet this fund has about $2.5 million in it. Weirder still, the 2025 contribution for this fund is listed as a *negative* $3.276 million. So a reserve fund that seemingly shouldn't exist (the AAO doesn't maintain interiors) has $2.5 million and they're going to somehow take away $3.276 million and the resulting seemingly-impossible surplus is dramatically reducing contributions to reserves. This doesn't make any sense to me.
3. For the VOA, which maintains unit interiors, the reserve summary shows the replacement cost for unit interiors as about $75 million, with a useful life of 18 years and an estimated remaining useful life of 3 years. Yet there is only $29 million in the pot for this fund as of 1/1/25, with a contribution for 2025 of about $6.7 million. If we really have a $75 million expense for major unit renovations coming up in three years, this fund is dramatically underfunded and will only have half what it needs to have in three years. I hope that the info provided is wrong or poorly summarized and that we do NOT have a $75 million expense looming in 2028, because if we do, we're looking at huge increases in 2026 and 2027 or a big assessment. (Perhaps the big 18-year remodels are already in progress and part of the $75 million has already been spent.)
4. On the financial statements, I note that all three associations (MA, AOA, VOA) show huge, multi-million-dollar investment losses for both 2022 and 2023. WTH is the association doing, gambling (and losing) with our money? Granted, 2022 was a lousy year for the stock market, but 2023 was a fantastic year (markets ended the year up about 25%), and yet they managed to lose about $7.4 million of our money in 2023. I get that a prudent investment plan requires you to average returns over good years and bad, but if they're losing $7.4 million in a good year, it seems cause for concern. What am I missing here? No wonder reserves aren't where they should be.
I assume there may be rational explanations for some of these issues and I'm hopeful that someone here might know what they are.
I scanned and will attach the documents I have.