[Lauren Ritchie]

Hi again,

I don't want to bore you folks -- just thought I'd try to clarify a couple things. First, I don't see Villages residents as feeble minded or stupid. Most of the folks I've met up there are retired professionals with excellent minds. I particularly enjoy the League of Women Voters ladies who have asked me to speak several times. They're sharp.

That said, if I were looking for a retirement home, I'm not sure I'd do a ton of behind-the-scenes investigation to figure out some murky financing structure that doesn't on the surface seem to affect me. Unfortunately, it actually does in this case.

Several of your posters got it right -- there are two types of community development districts in The Villages, and they issue two types of bonds. The bond that is "attached" to your house, the one that you're told about and appears on your tax bill, is issued by what are usually referred to as the "numbered districts." Those bonds buy concrete properties, such as sewer plants, and only the residents of those districts are obligated to repay those bonds.

The Village Center Community Development District is a different critter, and I've never heard anyone say that this was explained at the time of purchase. But perhaps it is. I'd love to hear if someone was told about it.

The Village Center CDD has the authority and power to issue bonds and to levy property taxes, though it has never done the latter yet to date. It also has the power to make everyone in the Villages repay the bonds, not just property owners inside the district, which, as I'm sure most of you know, are all commercial. The board is controlled by the developer, who acknowledges this openly in all the bond documents and in replies to the IRS, which are public record. The district is set up so that Morse always will control it until he choses to relinquish that control.

The Village Center CDD has the power to issue a different type of bond -- a recreational revenue bond -- which buys not only concrete things like swimming pools and golf cart paths, but also, "blue sky" items, such as the right to collect amenity fees.

One of the posters mentioned that people pay for these items, regardless of where they live, and I should get my act together before coming down on this method of payment.

To a degree, that is correct. Of course, any developer must charge for recreational things like pools and clubhouses and golf courses. I believe, however, that Villagers are paying twice and perhaps three times for the same items.

Think about it: When a developer builds a subdivision with clubhouses and pools and so forth, he typically includes those items in the cost of the house.

In this case, the developer has sold those goodie-type items to you through a purchase by the Village Center district, so those things ought to be deducted from the price of the house, right? In addition, he's sold you the infrastructure, such as sewer and water plants, through the numbered districts. Those items, too, ought to be deducted from the purchase price of the house, then.

Were they? Did you get a really sweet deal on your house? Did you pay far less for your house than people in other retirement communities pay? I think not. Ask yourself...when I bought a house, what did I buy? Theoretically, you bought only the actual lot and structure -- you're paying for everything elese separately, right?

If that's the case, you should have gotten a pretty cheap house. I don't think you did. The truth is that the cost of the amenties and the infrastructure was included in your house price. So, you're paying for them twice. Then, you're paying for them a third time because of the interest being paid on what are unnecessary bonds.

If that's OK with you, then God bless. Have fun. Ignore these columns. I disagree with your poster who doesn't think that Villages residents will be dragged into this IRS investigation. YOU are the district. YOU are its only source of income. It's not some disembodied entity. It's a taxing authority that issued bonds on YOUR behalf.

The fellow whose opinion is that nothng is going to happen may wish to do additional research. He will find that in other situations around the country where tax free bonds have been deemed taxable, the IRS typically requires that all or part of the bonds be redeemed or 'called'. To do that, the district would have to pay off the loan. And where would this money come from? It could come only from you, the property owner. I flatly asked the Village Center district manager if the district it had the financial capability to call the bonds (without bankrupty) and district officials did not answer. (tomorrow's column)

If the IRS can make stick its contention that the district and the developer are essentially one entity, then I think that opens the door to collect from the developer, too.

The notion that columnists who write for the Sentinel or any other newspaper do it to sell papers is a tired old claim without credibility that has long since lost any basis in reality. That's a diversion from the real issue, and if that were true, nothing in any paper would be believable. I don't mind when people disagree with my column -- and there's plenty of room to do so in this situation in particular -- but let's do it from a position of knowledge and respect.

I have done considerable research to try to present reasonable scenarios of how this might play out. There are more possible ways than I can detail, and I do not claim to be a bond expert. I don't think anyone can say what will happen yet. It's too early. But I think that there's at least a box to be drawn within which folks can see the possibilities, and that's what I've attempted to do with Wednesday's column.

Thank you for allowing me space to respond and to provide more information. I appreciate everyone reading the columns, too. And I look forward to hearing more from all of you.

Lauren