Amenity Fees and the "cap"
 

I recently received the below email concerning the Amenity Fee and provided the following responses.

“Good morning, Don
May I trouble with a couple of questions ?
1. Are there any actual HOA’s in The Villages that actually pay HOA dues instead of the usual amenity fees through their CDDs ?
2. Is there a site whereby you can type in an address and it tells you what village the home is in ?
Thanks for your reply and for your videos”

The genesis of the first question is clearly and effort to understand and avoid the rising Amenity fee, to which I provided the below response:

There are a few HOAs within The Villages community, their fees however are in addition to the Amenity Fee that EVERY homeowner agrees to pay upon purchase. What you will ultimately find is that these HOA fees will increase more than the Amenity Fee will. The Amenity Fee is tied to the Consumer Price Index (CPI) and can go up no greater than the CPI. The HOA fees are not constrained by the CPI but instead will adjust based on the actual cost changes for the services to be provided by the HOA. The CPI has traditionally fallen short of actual cost increases, so it is a constant losing battle to keep costs down each year to ensure that Repair and Replacement Fund (R&R) money (saving account) is not used to cover the annual operating costs.

There has been a lot of talk about a "cap" on the Amenity Fee. There was never a "cap", there was what was known as a "Deferral Rate" on the Amenity Fee that was for 1 year and was subsequently renewed annually for 8 years. The purpose of the Deferral Rate was to allow an equalization of the Amenity Fee that varied widely over the community.

Just to be clear – the “cap” exists in no one’s purchase agreement and no one has a written agreement that the amenity fee would never go above a certain amount. They may have been informed of the Deferral Rate’s existence by their sales representative, but it was never guaranteed. I’ve looked through hundreds of documents and even offered a $10,000 reward for some to produce such a document. No such documents exist.
At the time of the discontinuation of the Deferral Rate, over 85% of the homes in The Villages were at or within 95% of the Deferral Rate. The budget projections at that time, based on the current trends at the time, showed a revenue shortfall within 2 years that increased more each year after. This shortfall would have necessitated expenditure of the R&R funds just to maintain the current level of services. The only way to maintain the status quo under the Deferral Rate would have been to either a) decrease the service offered by the Amenity Divisions, b) defer facility maintenance and replacements, and/or c) close facilities. None of these were deemed an acceptable alternative.

There have been many comments made to the effect of “I don’t play golf (pick an activity), I shouldn’t have to pay for it”, “I’m over 80 (pick an age) and don’t use the amenities as much anymore, I shouldn’t have to pay as much”, “the rising cost of the Amenity Fee is going to price me out of my home and I’ll have to move”, and “this is just the developer getting rich at our expense”. To these short sighted and uninformed comments, I offer the following:

I don’t play pickleball, tennis, or use the pools, and the list goes on and on. The amenities are a package deal, no one likely uses ALL the amenities, what you don’t use someone else does and vice versa. Pricing the amenities piecemeal would be both administratively burdensome and cost prohibitive due the tremendous amount of additional overhead costs and would eliminate a large number of activities available to all the residents, a large number of these activities appeal to the less active or physically able residents. Executive golf only represents about 7% of the total amenity budgets (championship golf is not an amenity, it is a privately owned business and is not funded by the amenities budgets).

On age, how much did you use the amenities when you first moved here? If you are like most, a lot more than we did as we continue to age. It’s give-and-take for each person and activity. IF the Amenity Fee was age biased, what is the magic age? It’s different for each person. How would you enforce it? You’re 75 now, you can’t play pickleball anymore or you’re now 80 you can’t use the executive golf courses because they aren’t covered by your Amenity Fee. None of this is feasible. The activities that the older segment of the population engage in may be some of those eliminated as I discussed in the pervious paragraph, those more expensive on a “per person” basis – they would be the ones paying for the rec centers (the biggest cost in the budgets) and not the golfers.

IF the Amenity Fee CPI adjustments are going to price someone out of their home, I would have to ask about the other cost increases – food, energy, medical expenses, etc. – that have increased at a far greater rate. Everyone’s financial situation is different and unique, and we all have different needs and priorities, our financial plans for retirement must include considerations for these as well as continued cost increases must be a part of one’s financial plan for retirement. To blame the Amenity Fee CPI adjustments for losing one’s home or ability to live in a location or community is simply not taking the personally responsible for not planning for one’s future. I know, understand, and am sympathetic to the fact that one’s situation may have changed through the course of one’s retirement. Plans must then change to compensate, I/we should not be held financially responsible for someone else's unwillingness to change, which is what this comment asks for.

The Developer owns only a very small part of the amenities, and that amount is about to get even smaller with the sale of the amenities in CDD 12 & 13 to the Sumter Landing Amenities Division (SLAD). Of the amenities that they don’t own, only a very small number of services are provided by the developer for these, the largest of these is IT services that are competitively bid on every few years by the District government. IT services and Communication services represent a very small percentage of $200+ million amenities budgets. The annual adjustments they make to the Prevailing Rate (the rate paid by new homes and resales purchased during the year) are a necessity for them to balance their continuously rising cost of operations. They only receive the Amenity Fee on the homes purchased in the areas where they own the amenities – currently all areas below SR44. Amenity fees north of SR44 go to the SLAD and RAD – both government bodies. The developer has the advantage of using a balance sheet to determent what the new Prevailing Rate will be and doesn’t have to live under the constraints of the CPI for new houses they sell. Yes they want to make a profit on these funds, but it is a marginal process as their costs increase each time a new amenity is open, this happens long before the revenues from new home sales cover these costs. Unlike the SLAD/RAD owned facilities, the developer has the additional expense of having to pay taxes on these properties as long as they own them. The developer isn’t getting rich on the Amenity Fee, in fact looking at the current 2025 Prevailing Rate of $199/month and the past inflation rates it would not be a stretch to say they didn’t raise it any higher to prevent breaking that glass ceiling of $200/month.

A majority of the people who have purchased in The Villages did so because of the wide variety of Amenities that are available to everyone. These amenities come at a cost that we all agreed to pay when we purchased our homes. You purchased a home in a community with an overhead expense that you agreed to pay for, you didn’t get a rich uncle to take care of your every need and want in that purchase.

For the second question, go to this page of the DistrictGov.org website:
Find My District - The Villages Community Development Districts

Many may not like what I have written here, reality sucks. I have to stay grounded in reality and not lose sight of the realities that many forget exists outside the bubble of The Villages. Many have said, accused, or inferred that I am somehow indebted or compensated by the developer, these are untrue statements and ignorant lip service, and I openly challenge anyone to provide any proof to the contrary. Bring it! I will openly discuss and disprove this in the town square without fear.

Do I love where I live? Absolutely! Is it a perfect utopia? Absolutely NOT, it has its many flaws and shortcomings that I am unafraid to openly discuss and have done so many times in the past. I did spend nearly 20 years in management within the construction industry and have seen the right and the wrong way to do construction and run a business, and The Villages is an exemplary case of the right way to do this business.

Ouch! Someone must have trodden on a thistle.

Thanks Don. We appreciate you always taking the time to explain in detail aspects The Villages financial structure that are very complex and difficult to grasp, even for those of us who have lived here for a long time.

On Tuesday, Feb. 18, at 9 AM at the Savannah Center, the AAC will hold a workshop of ways to deal with the cap. This is not the first time they have done this. At the last meeting it was discovered that there are clauses in both the AAC and PWAC originating documents to the effect that their actions cannot create a circumstance in which homeowners in one area are treated differently than homeowners in another area. This was taken to mean that both the AAC and PWAC would have to agree on a cap (or deferral, whatever you want to call it). The last time, PWAC wasn't interested, and given the impending sale of amenities to PWAC it is fair to say they will be less inclined to do so. (Incidentally, it is acknowledged that PWAC does have the authority to set a "maximum" amenity fee, should they choose to do so -- see the Responsibilities section of the Sumter Landing Amenity Division area of the PWAC page on the district web site: Project Wide Advisory - The Villages Community Development Districts)

#2 Getting Around - The Villages Community Development Districts there's a street listing that you can search for an address to find the village name, district and unit name.

Thank you for your quick and thorough response. As always , we all appreciate what you do !

Is there some sort of backstory here that we newcomers need to understand?

If the OP is just a regular resident and has no connection with the developer, why are people emailing him questions about the amenity fees?

And why the justification of the fees by the OP? I mean its fine, the TOTV can be a soapbox, and his logic is probably right, but he has nothing to do with them right?

Don is a former CDD 10 Supervisor and is currently a Sumter County Commissioner. He is a well-known producer of YouTube videos concerning all things The Villages.

If by OP you are referring to Goldwing Nut, people are emailing him because he has a wide, introspective, and qualified understanding of the goings-on that most do not. His YT videos have long been full of insight, research, and commentary fueled by his experience and knowledge in both construction management and as a County Commissioner. THAT is largely why people are emailing him questions about the amenity fees. When one wants answers, one goes to experts.

Thank you, and to poster #7. I have seen and enjoyed the videos. But did not know the bio.

My amenities bill for years 2018 2019 and 2020 was $155.00/month. Yes the .00 cents is correct (statistically almost impossible if there wasn't a top stop). I have the receipts. The CPI for 2017 - 2.1% 2018 - 2.4% 2019 - 1.8% 2020 - 1.2%. If there wasn't a cap how is this explained?

Excerpt from the POA Bulletin 2019:

Deferral Amenity Rate - Each District that
has been assigned Amenity Fees – the Village
Center Community District (VCCDD - north of
CR 466) and the Sumter Landing Community
Development District (SLCDD – south of CR
466, but north of CR 44), have been given the
discretion to defer CPI adjustments. Each has
established a Deferral Amenity Fee Rate – a
maximum rate that an increase by CPI will not
exceed – of $155 that is renewed annually by
resolution. Once a homeowner reaches this rate,
the CPI increase is “frozen.”

True this top stop is not in my deed. However for the education of newbies it was practiced.

You might've missed it here in his post:

It appears that those three years were the last of the 8 years that the same rate was renewed.

Thanks - you are bringing back memories. I do remember wondering if in real estate law there is a "right of persistence clause" would there not be something similar in this case. Also the the POA article revealed the AAC and the PWAC had the right to set the amount up to the CPI index separately. There was a lot of strong arming that went on to get the AAC to eliminate the deferral rate. It appears there may be some buyer's regret occurring.

Is there a legal requirement that the AAC has to act in concert to the PWAC?

In the words of the great Bob Sheppard, be Clear, concise, correct. You are the voice of sanity when so much posted is lacking those elements.

Thank You Don! Love it!