Fees based on prims

[Arria Perreault]

As you know, the LL price policy has deep consequences about the expansion policy of CDS. As we have seen, the Monastery project is not anymore sustainable. In our GMP, we have also several voids. Until now, we have manage our expansion project by project. If we will grow more, we will have to manage it with a real strategy. As we are a community, we can compensate an expansive sim (a homestead sim) with a normal sim (model AM). We already do this, but in a sim. Every sim has public land: it is clear that this public is payed by all parcels owners of the sim. As CN resident, I pay for the theater or the praetorium. Let's imagine the same mecanism through all CDS. To do this, we need to have a good basis to fix fees. Until now, the prices were based on land. See for example the proposal for LA (http://forums.slcds.info/viewtopic.php? ... =15#p11397).
Now LL give three kinds of sim: normal, homestead (3750 prims, 125 US$ a month in July), opensim (750 prims, 75 US$, for landscape). It is clear that the surface is not anymore a good basis to fix the price. The prim become the best basis. In homestead sims, the price of a prim is higher (because we can have more room around). But if we try to sell parcels on homesteads, they are not really attractive (regarding parcels of a sim like AM). As we are a community with several sims, we can easely set an average price of prim. This will make the calculation of fees easy and transparent:

number of prims in my parcel x average prim price = monthly fee

I have calculated the today average prim price of the CDS:

Total of private owned prims for all CDS sims: 43688 (on 60000)
Maximum of fees paid by citizen (if all plots are sold): 1525.98 US$ (LL fee = 918 US$ -> 66%)
1525.98 / 43688 = 0.034 US$ for one prim

Example for calculation for existing parcels:

NFS: 118 prims -> 4.012 US$ (today: 3.96 US$)
CN: 118 prims -> 4.012 US$ (today: 4.66 US$)
AM: 234 prims -> 7.956 US$ (today: 8.6US$)
LA: 234 prims -> 7.956 US$ (today: 7.31 US$)

The current prices will change, but not dramatically.

When we add a void sim, we have to recalculate the prim price (I think that a normal sim with around of 70% of privately owned prims will not affect the price). Let's see the result:

By adding an homestead sim with 73% of privately owned prims (=CDS average), CDS will have 46426 privately owned prims and will get 189 US$ of fees for the new sim (66%). This will make the prim price to 0.037 US$

NFS: 118 prims -> 4.366 US$ (today: 3.96 US$)
CN: 118 prims -> 4.366 US$ (today: 4.66 US$)
AM: 234 prims -> 8.658 US$ (today: 8.6US$)
LA: 234 prims -> 8.658 US$ (today: 7.31 US$)

It is clear that each new normal sim will compensate this homestead. In the GMP, we have only three voids. With this model, they are easy to realize.

It is possible also to set two different prims prices: a low density prim price for sims like AM and a high density (or urban) prim price for sims like NFS. We could also imagine a prim price for commercial area or a prims price for NGO. With this model, we can also easely calculate the price of our public infrastructures: 554 US$ (16312 prims). These public infrastructures are the added value that CDS offers to its residents.

This model should also be translated in a law: the RA will have to decide for each new sim:

- % of privately owned prims for all CDS
- % added to the LL fees
- average prim price for CDS (or the different prim prices)

Such a model could give us some flexibility and dynamism in our strategy of expansion. It can also give more transparency. We could even calculate a projection for the whole GMP.
These numbers are only a basis for the discussion. I think that the Guild and the Treasurer must make all these calculations.

Sources for numbers:
http://spreadsheets.google.com/pub?key= ... NDOg&gid=0
http://masterplan.slcds.info/

[symokurka]

As far as I know (based on same source + budget thread) we actually have these figures (kLD, yearly estimation):

Revenues in tiers, paying privates = 4.226,4
Revenues in tiers, paying NGOs = 244,3
Total revenues from tiers = 4.470,7

Total costs (LL tiers)= 3.528,0
First margin = 942,7 (about 21% of total revenues)

Other costs (stipends, website, events)= 260,0 (about 6%)
Second margin (finacial fund reserve) = 682,7 (about 15% of total revenues)

So what i notice here is that if private citizens of four sims have to bear the full cost of a void (homestead) sim (without touching other budgeted costs and fund reserve), their cost in paying tiers would grow of + 11% of what they actually pay.
Therefore the typically political question becomes: raise taxes or not??

[symokurka]

And, alternative on rising "taxes" (=tiers) to citizens, IF we wish to hold the idea of void sims between full sims' clusters, have in mind that many of our citizens (including myself) might find fascinating (and economically convenient) the idea of selling their CDS land and buying a "NGO openspace void" sim. This of course should be regulated by a standard contract between private NGO and CDS...

Yes I know, I'm always provoking....

[Sudane Erato]

I appreciate Arria's basic point here. It's a bit complex, and with the aim of simplifying things, let me show only the basic cost to the community of full sims and void sims. Perhaps with that info, decisions regarding what our tax rate should be, and what percentage of prims we should hold for public usage, may be easier to arrive at.

I assume that shortly, all full sims will cost US$295 month. That's not true right now, NFS and CN cost us only $195/month (meaning that at this time our prims only cost us 1.63 cents / month), but I'm going to guess that that price will not outlast 2009.

One prim on a full sim cost us US$0.0200 / month = 2.0 cents
One prim on a homestead sim would cost us 3.3 cents / month
One prim on an openspace sim (the new useless ones) would cost us 10 cents / month

If we had four full sims for every one homestead sim, our prims would cost us only 2.05 cents / month
If we had one full sim for every one homestead sim, our prims would cost us 2.24 cents / month
If we had one full sim for every 4 homestead sims, our prims would cost us 2.65 cents / month

With these "prim cost" numbers it may be easier to formulate a community wide "tax based on prims" policy.

Sudane.......................

[Timo Gufler]

If we had one full sim for every one homestead sim, our prims would cost us 2.24 cents / month

Quite amazing figures, Sudane! In other words 1:1 ratio would mean only 13.7% increase (2.24/1.97) in unified prim costs compared to 0:1 ratio (full sims only) and 1:2 ratio 7.6% increase (2.12/1.97). Maybe Homesteads aren't so bad after all, as Desmond Shang noted in his post earlier...

Timo

[symokurka]

Yes, but figures (1,6 USD cent per prim) refer to what prims cost to CDS, and not what they cost to private CDS citizens.
The average CDS citizen pays already an average of 3,0 cents per prim (on residential and commercial plots) bearing the cost of "non paying" public prims.....

[Sudane Erato]

Yes, but figures (1,6 USD cent per prim) refer to what prims cost to CDS, and not what they cost to private CDS citizens.
The average CDS citizen pays already an average of 3,0 cents per prim (on residential and commercial plots) bearing the cost of "non paying" public prims.....

This is true, of course. My intent was to establish the cost basis, on which the political decision can be made regarding what citizens should pay to support the public prims, AND the rest of the community infrastructure, including stipends and event/promotion expenses, and exchange fees. In this case, the citizen pays 1.4 cents for those purposes (3.0 cents minus 1.6 cents).

Sudane..............................

[symokurka]

Yes, and to be clear if we assume that NFS and CN will have to pay a higher full sim tier in 2009 plus the pure cost of one homestead sim shared we will get to an average new price per prim that grows up from 3,0 us cents (actual average) to 4,0 cent per prim (+ 33%).
And we have to be clear with NFS and CN citizens, who would get the highest prim price increase.

[Timo Gufler]

plus the pure cost of one homestead sim shared

Stupid questions:

I don't know what is the general understanding of use of homesteads in the GMP but couldn't they also be used for residence, not only for decoration (if that is what Symo referred to with the word "pure")? By zoning them residential and mixing them using certain ratio with full sims (like 1:1, 2:3, 1:2 or 1:4) the price shouldn't be too high. If we want decoration region (like open sea or uninhabited mountain area) wouldn't the new cheaper openspace (with 750 prims) be more suitable for that use despite of its high prim cost?

[Rose Springvale]

As new sims have been added to CDS, they have always been priced to "pay" their own way. Parcels were divided and prims allocated, prices set based on the character of the specific property being sold. I've sat through two price setting processes and know that careful consideration was given to pricing in each circumstance.

We have never "gone back" and refigured prices when new land was added. I remember when NFS was a class 3 sim and there was discussion about upgrading and spreading the cost over the then two sims. The discussion went no where. Ultimately, NFS was upgraded without cost. Remember the performance issues? it was always said, but they pay less tier, why should they have the same performance?

While prims may be the true valuable asset in SL, it is not accurate to assume that all prims are equal, nor that the old land is always benefited by new land. I'll use my own office parcel as an example. When i bought it at the end of 2006, it was the corner lot in Colonia Nova, water on two sides and one of only a few in all of CDS with skybox privileges. As i wanted to hold confidential conferences,without always needing to use instant messages, it was important to me to have those two characteristics. When our office conference room was rezzed, it was one of only three skyboxes in cds, and the only one at the elevation (700m) we chose. it served its purpose very well.

Last week i took the skybox down. A trip to the sky of CDS will show you why... skyboxes are all over. there is land on two sides of my building. when i go to the lot next door,which i bought, i look up to see the tree roots of Alpine meadow. I think it is fair to say that my once premium parcel in CN is no longer premium at all, and probably below the average of value in the CDS as a whole. My tier has never been reduced though.

I also own one fachwerk in NFS. It sits way back in the corner next to the wall. To assume that the value of the prims in that house are the same as the prims elswhere in the sim is just simplistic.

One other thing that bothers me about a proposal to switch to a prim based tier system as opposed to a parcel based system is the suggestion that it apply to land already sold. If we want to adopt such a policy going forward, that's one thing. But to go back now and tell our citizens that their tier will now go up because we want to add green space gives me pretty much the same feeling that Linden Labs announcement that open spaces would get a 67% price increase and a less desirable product. There is no change in the benefits to the present owners. I don't even think a grandfathering system could make me want to support this treatment for sims already sold. It just feels like breaking the deal we made.

I know of no estate that increases the rates for the older sims to accomodate the new ones. I'm not opposed to adding homesteads, but think there must be ways for them to pay their own way, even if it requires subsidy from the treasury. I am opposed to open space sims as it makes no sense to restrict the use to such low limits for $50 usd per month.(125 usd homestead tier v 75 usd open space tier) Homesteads have FIVE times the prims. i think we can find ways to make them work where we want them, but open spaces are a luxury product that doesn't seem to fit the character of CDS.

[symokurka]

Timo,

pure cost

meant cost to CDS treasure (lindenlab cost of purchase) with no other charges for citizens.

[symokurka]

If we want decoration region (like open sea or uninhabited mountain area) wouldn't the new cheaper openspace (with 750 prims) be more suitable

Timo, What worries me about this proposal is that the "low impact" imposed by LL for opensapces, with 750 prims and, above all, limit of 10 avatars, sounds under reasonable standards. In "void sims" we should be able, in the future, to organize events. Already now we gather thanks to Pio's efforts far more than 10 Avies in our events, and we will hopefully gather more in the future. Atm the openspace sim seems to me hardly usable.

[Sudane Erato]

If we want decoration region (like open sea or uninhabited mountain area) wouldn't the new cheaper openspace (with 750 prims) be more suitable

Timo, What worries me about this proposal is that the "low impact" imposed by LL for opensapces, with 750 prims and, above all, limit of 10 avatars, sounds under reasonable standards. In "void sims" we should be able, in the future, to organize events. Already now we gather thanks to Pio's efforts far more than 10 Avies in our events, and we will hopefully gather more in the future. Atm the openspace sim seems to me hardly usable.

I totally agree! When LL starts offering the openspace sims for free, to assist communities to improve the quality of their environments, then we should consider them. Until then, 10 US cents/month/prim is absolute thievery. And, note. LL doesn't even plan to use the new openspace sims for the uses that THEY say they are intended for, light use and recreation. We are told, by the Lindens themselves(!), that after Jan 1, the open sea sailing sims which are part of the mainland will all be Homesteads!

Sudane........................

[Timo Gufler]

It seems my comments are not ignored since there were so many responses... I agree with Rose, Symo and Sudane that the limits make openspaces unusable for most events and residence. Arranging public meetings if number of attendants is limited to ten persons can be inconsistent. However, my opinion is that in some marginal cases there still may be use for cheaper openspaces (of 750 prims) when prim and avatar limits aren't important. But if it's consensus that in CDS there is no need for a cheap but limited region then let it be so.

It was quite surprising to read Sudane's information about LL sailing simulators. Even Linden Lab seem not to find any real use for their latest land product. I decided to interview some people in United Sailing Simulators area (non-LL-owned) about their openspace plans. One of the owners of New England estates said that they offer some alternatives for their region owners that very likely result reorganization of the area. She didn't consider 750 prim openspaces as a good alternative. A sailor in Hollywood area of the USS told that they are considering to convert their open waters to 750 prims sims. I wasn't able to find anyone from The Fishers' Islands to comment... Update: Fishers' Islands will convert most of their regions to homesteads and some to full sims.

I think Rose's points about covenants and price changes should be listened. People have bought their land and maybe allocated money in RL for the tier fees. Is it fair to increase the prices without asking them? Would there even be time for an in-world poll?

[Brian Livingston]

I pretty much agree with everything Rose said, so I am not going to bother typing out the same sentiments.

It is important to note that as each region has been added to our community, the financial plan for the new region was developed after careful consideration of the various factors influencing the value of each plot. This is not to say that we shouldn't revisit past decisions, but that the pricing decisions weren't made up on a whim.

Throughout the CDS, we have a number of different types of terrain, themes, and covenants that all affect the value of a given plot. For sure, a prim is a prim, regardless of its location. However, to price our plots simply based off the number of prims, without regard to the unique characteristics of each plot, is frankly an unwise proposal. By standardizing the tier fees based on prims, we will be forcing those who are in less-expensive ares of our community to subsidize the "premium" plots.

My suggestion is that any void sims that we do finance should be done out of our existing reserves or homesteads should be used and planned so that they help to cover the tier of the region. It would be one thing if our tier fees were raised by LL and we had to pass on the incremental cost to residents. However, we shouldn't increase tier fees on existing residents to subsidize the purchase of additional regions, especially at a time where the SL land market is overly saturated.

--Brian