[TVMayor]

From August 6, 2014

VCCDD, AAC hoping to refinance bonds to lock in lower interest rates
August 6, 2014 By Marv Balousek
The Village Center Community Development District is moving swiftly to refinance millions of dollars in utility and amenity bonds before interest rates rise.
The district board voted Wednesday to proceed with bond refinancing as early as Sept. 8. The board also approved several resolutions to speed the process by retaining its current financial advisers, who are familiar with The Villages financial structure.
Earlier in the day, the Amenity Authority Committee also agreed to begin looking into refinancing bonds in hopes of locking in a lower interest rate.
“We have an aggressive timetable we have put together,” said District Manager Janet Tutt.
Besides saving money on interest rates, the move also could help with the district’s long-running dispute with the Internal Revenue Service by converting older tax-exempt bonds to taxable bonds.
“The reason for this quite simply is we have incredibly low interest rates,” said Supervisor Gary Moyer, who made the motion to begin the refinancing process.
The bonds were issued to pay for utilities such as sewer and water lines as well as amenities that include pools and recreation centers. Refinancing the bonds would mean that holders of the current bonds would be paid off and new bonds would be sold.
Elaine Dreidame, president of the Property Owners Association, said refinancing now is a good move.
“This would be a step ahead of the game,” she said. “I think it’s definitely the right thing to do.”
Moving tax-exempt bonds to taxable bonds would strike at the heart of the district’s dispute with the IRS.
The agency has challenged about $426 million in tax-exempt bonds issued by the district between November 1993 and June 2004. Those proceeds were used for commercial development in the Spanish Springs area.
The IRS has said those bonds could not be tax-exempt because the district’s board is chosen by landowners and not by voters. The district’s attorney has accused the agency of changing the rules after the bonds were issued.
The IRS is expected to make a final ruling in the case soon and, if the agency rules against the district, the fight could move to the courts.
A settlement proposed in 2009 would have required the district to recall the remaining tax-exempt 30-year bonds and issue them again as taxable bonds. The cost of reissuing them would have been paid by amenity fees from homeowners living north of County Road 466 unless Bond Counsel or another party were found culpable.
That settlement was rejected, but the district effectively would be doing the same thing now by refinancing the tax-exempt bonds as taxable ones without the cost of a recall.
“I can’t frankly see this coming to a conclusion in the near future,” Moyer said of the IRS dispute.
But he said it’s important to move quickly on refinancing the bonds so the district can capture the current favorable interest rates.
“We have to recognize there is a lot of work that has to be done in a very short period of time,” he said.