The names were used to illustrate a point that we should not relinquish objectivity and take everything for granted no matter where we live. If you feel comfortable with power and money being used carte blanche without any accountability from a voting populous then TV is your heaven. Many more of us would like to have the ability to question means and motives when necessary. This is one of those times! If you feel that by someone taking over running this place after being elected by residents instead of being hand-picked then many of us will be glad to help you pack.

The going forward implications of this is actually more interesting to me than the amount that the IRS claims that is owed to them from past interpretations of the law/tax code. Quite frankly the amount that is owed is unlikely to be enough on a per household basis (roughly $6,000) to make anyone really change their mind about living here. How, from whom or if that ever gets collected is an interesting discussion, but the forward-looking ramifications are more interesting to me.

First, I'm not sure I agree that the tax exempt versus taxable status of the bonds really has an impact on the selling price of the amenity. (Which is why I fail to see how the developer was the direct benefactor of the tax-free nature of the bonds.) If, for example, you want to buy a car, the seller of the car does not base his price on whether you have to pay 8% interest or 5%. Your negotiated price is based on the value of the car. However, if you are able to secure a 5% loan from a relative versus paying the going rate of 8%, it is you who will benefit - not the seller of the car.

Of course, our situation is a bit more complicated than this. In our case, the amenity fees were set based on the availability of low-rate tax-free bonds. If this changes in the future, it may be necessary to sell new houses with a higher amenity fee associated with them to pay the higher interest rate.

What happens to existing amenity fee contracts is a different issue. I haven't read the fine print of my agreement lately so I don't recall if there is a loophole which allows them to be raised higher than CPI (perhaps by a vote???) If not, I fear that the central CDDs will be forced to cut back on some of what they provide. Personally, I would rather pay an incremental increase in the amenity fee than to see services cut back.

I don't think we were "tricked" into the existing condition by the Federal Government. I think the Developer took advantage of the residents by stretching the limits of the laws, and left us holding the bag. As far as the federal government i.e. IRS going aftger conservative groups ( Morse ), the last time I looked the IRS investigation began under a conservative president. I believe the IRS had legitimate concerns, and frankly I agree with their conclusions. But realistically, we're past the blame stage. Our priorities now are to make sure we, the residents don't get stuck paying the bill, and to do what we can to make sure this doesn't happen again.

Using Madoff in the same sentence as Morse is beyond the pale. You should know better. Most of the folks here are satisfied with the way the Morses have run the Villages Amenity Program at a very affordable price with amenities available to all. We left another over 55 facility in another state built by Del Webb because residents were allowed to take over the facilities and let their various clubs run the operation and instead of fairness we had facilities which were monopolized by a vocal few who worked their way into the structure. Tennis and Pickle Ball teams took over the tennis and pickleball courts. Swimming clubs and lane swimmers block off half the pools, ETC ETC. If you were a snowbird you were out of luck using the amenities since you were not a member of the clubs and could not join because you were not present to participate all year long. This does not happen here because of the control the Morses have. It is the primary reason we, as snowbirds, bought here and it is in my estimation one of the key reasons why the Villages with a large snowbird population is so successful. Snowbirds did not have to sell their primary home to purchase here. I still own that home in another state and the value is about $100,000 less than it was in 2007. In contrast the value of my home here is about 10% higher, than it was when I bought it in 2007. Residents running the place is not a panacea for anything. In fact, it could make it a lot worse as a few power hungry (sound familiar?) folks get control.

In what way did we get taken advantage of? If the bonds were sold as taxable bonds, the interest rates would have been higher and the amenity fee to pay back those bonds would have had to have been higher. So, who was the benificiary of the deal? I would say that we the residents were by nature of lower amenity fees.

I have been saying since this situation was discussed in 2009 that that the Professional Liability insurance carriers for both the Developer and the district needed to be notified.

Too many posters are beating that same dead horse, defending the Developer, etc. But the bottom line is what are we as residents going to do to protect our interests? IMHO that's all that matters now

Just a thought one of the issues the IRS raised in their initial filing had to do with the manner in which the flow amenity income was calculated which was also their question cocnerning the physical assets.

As to the amenitity fees posters keep reaching for agreements. However, depending on the outcome I personally feel that the status of that agreement is going to depend on the size of any IRS penalty, if they prevail, and to whom it will be attached.

Because the district is defending this with our amenities fees, which brings into play another question it seems likely at this point a likely target. I believe it was in the POA or perhaps the Village voice ahs to some $250,000 expended in defending this action and that was about a year ago.

non-binding descision
 

If this is in fact a non-binding descision, then why is everyone so upset? Did they not read the entire article or is there something about a non-binding descision that IS binding?

As far as I can tell this is mearly only a step in the direction to what everyone is so upset about in the many (not all) posts in this thread.

Am I missing something? :shrug:

Whew! Gotta take a break, I am exhausted:D

------------

based on personal experience, i share many of the same feelings re homeowner associations as villagerjack. if anyone does not now have a poor opinion of cliques, just wait until your neighbors replace the developer reps and start running the place. if that were ever to happen, i think i would have to start a movement on the historic side for secession!

btw - the 6/12 amenity auth comm agenda has been posted and irs updates is an item untder the reports and input section; audience comments is another item listed there!
http://www.districtgov.org/PDFView/P...20130612aa0201
wed 6/12 1:30pm Savannah Center - Ashley Wilkes Room

All of this debate will not change anything. I betcha that after it is all said and done, the fines will be reduced and the CDD will remain without the inmates running the asylum.

Gracie - one can only hope!

I hope you are correct Gracie. The Dell Webb facility I referred to previously started in 1995 with a buildout of 8200 homes. They still have 1000 to sell. Last year tbey sold kess than 100 new homes. Some homes are selling at just above prices paid in 1995. Average selling price is $112 s/f. Amenity fees $500/3 months. Taxes are lower than here. After 18 years they still have amenities to build because their formula is based upon number of rooftops as compared to TV Morse who gives us a lot of these facility/amenities up front. They attract very few snowbirds so their golf courses, tennis, pickleball are used heavily at all times of the year. Lack of sales is also attributed (by me) to inability to attract snowbird buyers who do not have to sell their homes. We were there 10 years. Teams monopolize Tennis, Pickle Ball, Croquet, pools etc. When we came for the winter of 1997 we were told that there were 800 members on the pickle ball club and we would have to wait a year to play. That was after owning there 8 years. Niw they have a modified Chelsea. So for all you folks who think that it is wrong for Morse to have control, I caution you to be careful. You may get your wish. I will put my future in the hands of the Morses anyday rather than some of the folks on this board who are dying to get control, even if it means denegrating Mr. Morse by comparing him to Madoff. Disgraceful, really.

Nothing is being hidden at all. Anyone that desires can read all the IRS Updates that have been posted on the districtgov website since this began. You can read all the letters that went back and forth over the years.

Village Community Development Districts

If you want to read it all. Just click on this and start at the very beginning. Has all the info you need about the IRS issue.

Village Community Development Districts

[quote=villagerjack;689098]I believe the numbers you are looking for are on page 4 of this link.
http://www.districtgov.org/images/IR...M%206.5.13.pdf

Astonishing
 

It is absolutely astonishing that anyone would wish for and want to be governed by a "non elected" person over representation by persons elected by the people. It is impossible to discuss this since it is so foreign to what we all stood for and fought for. It is totally possible that we as resident will be assessed in the thousands of dollars because of a failure to apply the proper accounting system taxable controls. Enough said..:shrug:

Here's a link to the decision.

http://www.districtgov.org/images/IR...M%206.5.13.pdf

We all moved here knowing just how this place worked. We "voted" with our wallets. No one forced us to come here, it was our own free choice and we can leave in exactly the same way. I do not see a CDD as anything but a very well designed deed restricted community and I liked it when I saw it.

The "non-elected" person has done a fine job preserving the rights if ALL residents to utilize the amenities on an equal and unfettered basis. Once in the hands of 'elected" people, power groups tend to form which can violate the unfettered right to access facilities, particularly for snowbirds who spend only limited time in The Villages. I have experienced this first hand. Please read my prior post in answer to Gracie.

The Morses could come in and steal the silverware and some of you would be defending them. If the residents have to pay for his dancing around the laws, or our amenities are reduced, you can bet that any defenders of the Morses will be in the minority in our community. I'm looking forward to the article in the Orlando Sentinel Wednesday which will cover possible consequences of the IRS ruling. Of course some people won't believe a word the paper has to say because the paper "picks on" the Morses so much. Sigh.

Perhaps you are astonished because you have not lived in a neighborhood where the board was elected by the residents and the elected board did not have the qualifications or foresight to govern anything. It can become a big mess with pet projects and no foresight for the future. Then the good ole boy system really kicks in and things can go to pot quickly. I speak from previous experience. As another poster has said, "be careful what you wish for.

If anyone is interested in viewing some previous post about the IRS situation - just look back and see how many (most) to the then members crucified Lauren Ritchie...after she wrote an article about the IRS situation and how we could possible lose!!!!! She hates TV - she is not a reporter - she is a liar -etc
She who laughs last laughs best --- she was right --- will wait for here next article and see what she says --- I guess the championship courses will now never improve. Those Georgia mountains starting to look better and better. Should i sell now and avoid the rush - if i can sell now !!!!! We will see at least I only own one home --- no rentals

[QUOTE=mickey100 I'm looking forward to the article in the Orlando Sentinel Wednesday which will cover possible consequences of the IRS ruling.

Of course, you are Mickey, I would be surprised if you weren't. (Bigger sigh here.)


djl8412, "If you feel that by someone taking over running this place after being elected by residents instead of being hand-picked then many of us will be glad to help you pack."


djl8412, wear comfortable shoes to help people pack because there will be a bigger exodus than you think if The Villages is run by "elected residents". Talk to people and see what they think of your idea of elected residents to change what we now have in The Villages.

PennBF:

It is absolutely astonishing that anyone would wish for and want to be governed by a "non elected" person over representation by persons elected by the people. It is impossible to discuss this since it is so foreign to what we all stood for and fought for. It is totally possible that we as resident will be assessed in the thousands of dollars because of a failure to apply the proper accounting system taxable controls. Enough said.


PennBF, this is exactly what people have stood and fought for... the RIGHT to live in a community of this caliber with this type of representation that we desire. I understand that some people would not want this type of representation and there are so many communities from which they may choose, they would not be happy living here. Good luck to them.

Nitehawk, IMHO, Lauren Ritchie doesn't strike me as the kind of person who would laugh.

Next step: (copied from the link in the OP)

Sources said the CDD has several options going forward including, settling with the IRS to preserve the tax-exempt status of the bonds, appealing to the agency’s Office of Appeals, allowing the IRS to go after the bondholders who could in turn challenge the ruling in court, or seeking a legislative fix. The issuer does not have the ability to fight the IRS in a court, only taxpayers can do that, they added.

I for one am not defending Morse. It just seems to me that we the residents were the ones benefitting from what you call "dancing around the law". Afterall, the result of this "dance" was lower amenity fees for us. If he had not structured the deal as tax-free bonds, we would have to pay higher amenity fees to cover the extra bond interest payment. If you see it another way, please explain.

I suggest you do an analysis of the market values of homes in similar over 55 communities and see how the values have held up over the years. My home in another Over 55 Community run by an elected board has dropped by $100,000 since 1997 while my home in the Villages has increased by $30,000. I wonder why Ritchie has not " investigated" these facts. My Villages home will sell for $200 s/f while my Del Webb is $120 s/f. There is a reason. It has to do with the Morse's running things in a proper way instead if elected unqualified self serving power hungry residents.

Thank you.

TOTAL $336,696.22 IRS Legal Expenses
http://i264.photobucket.com/albums/i...ps8f332262.jpg

The way I read

http://www.districtgov.org/images/IR...M%206.5.13.pdf

The CDD can continue on managing things as they have been doing with one exception they will not sell tax free bonds ever again.

The constituents of these cities having "representation by persons elected by the people" could only wish their cities and economies were run as orderly, beautified, and as solvently as TV is. They can only wish their home market values were as healthy as they are in TV. People here from the Stockton, CA area can tell you how great a job their "elected by the people" politicians have been doing.

9 American Cities and Counties Going Broke

"....Other municipalities have excessive liabilities that they are unable to meet. Central Falls, RI, declared bankruptcy in August due largely to its bloated pension plan.

Strafford County, NH, spends two-fifths of its budget on a single nursing home. It funds residents' Medicaid, but is not receiving full reimbursement from the state, causing multi-million dollar deficits.

Other cities have simply made bad investments. Harrison, NJ, built a $200 million sports arena that has not brought in the amount of money the city was expecting.

Similarly, Salem, NJ, built a large office building downtown with the intention of leasing office space. But construction delays caused lease payment delays and money has been taken from the debt fund numerous times.

24/7 Wall St. has looked at the nine municipal bodies with the worst credit ratings assigned by Moody's, not including school systems, rated Ba2 and lower. To get a sense of how these areas are doing, we also included most recent median household income figures from the Census Bureau. This level of credit rating implies a substantial risk of default for investors who bought these bonds with the expectation of being repaid.

This is 24/7 Wall St.'s list of Nine American Cities and Counties Going Broke......"

9 American Cities and Counties Going Broke - Yahoo! Finance

I was angry and what I said was over the top but helping me pack is not nice either. I am happy with how things are run here and I have heard horror stories of places where people who lived in nice communities pushed their own agendas and ruined those nice communities by spending on unnecessary and frivolous things. I personally lived in a community outside Cincinnati where the residents bought the golf course to keep it from becoming a public course and some the "girls" wanted to spend the money on fixing up the club house bathroom and hiring a masseuse and some of the "guys" wanted to completely replace all of the greens and get new golf carts. We didn't have the money for either of these projects but some thought we could easily borrow some.

We all come here with our own experiences. I think that this place is as close to perfect as it can be. I think that some of the reasonable posters on this forum would continue to keep it nicely, but even saying that, you never know. I am a red blooded patriot who believes in the American way but in this case I like the way the wizard of oz has done things. In a couple of years or so down the way we all can see how the folks who don't know exactly as well how to run things will do it. That will come very soon. I shudder to think about it.

The Morses could be absolutely perfect and yet because of their politics and the fact that they are rich some would continue to find fault with them. There is no reason to say things like they are "dancing around the laws", that is simply not true and not even the IRS has come near saying anything like that. I don't know them, you don't know them, no one knows them. This place is superior to anyplace I have ever lived and the Morses dreamed it up and keep it nice. It sometimes feels like some people because of the above mentioned prejudices would be tickled pink with any wrongdoing proven on the part of the Morses.

I read all about THE lawsuit and I still can't figure out why they were sued. It sounds implausible that they were sued for not maintaining properties here and for improper use of amenity fees and the folks who brought suit tried to get that case heard in other venues until they ended up where they were. We know how it ended and who got what.

Then the case of the Morses and the charges levied at them for shooting wildlife on their ranch in the west somewhere and leaving it to rot on the ground. I never even knew there were laws like that. I guess that because of their great wealth they paid someone off and those charges were reduced or something?? I never could figure that out, I don't hunt and know nothing about hunting laws and when I heard they were charged with breaking of any law, even one I didn't know about or understand I was really upset. Laws are not to be broken. They either didn't do what they were alleged to do or had good lawyers I guess because they aren't in jail.

Then the Morses removed their previous invitation to the Relay for Life to continue to have it at the high school after they asked the American Cancer Society to "kick in" directly for the Moffitt center and they refused. Not popular at all. There were slings and arrows shot by both sides...I always wondered what was the real back story. Someday we will know when someone writes a tell all book about this place.

They may all be a bunch of greedy and corrupt people, but what if they are decent, hard working and nice people or does being rich and conservative disqualify them for that? The truth is that they are probably somewhere in between, just like the rest of us. Pre judging people on the basis of anything is ugly. I do it, everyone does it. But we shouldn't.

I am going to work on finding bad in them and worrying more.

Good question, but here's the way I see it. Had the bonds issued been taxable bonds, they would have cost the borrowers less than nontaxable bonds, assuming they both had the same coupon rate. We'd have to go back in time and see the bond prices at the time of bond issuance to see exactly the spread between taxable and non-taxable bond prices. Anyways, the developer would have had to sell more bonds to obtain the same amount of money, so he would have paid a similar amount of interest. Not to mention there may have been additional tax writeoffs, depreciation etc., to be considered. I am no bond expert, and neither I expect are you, but we both know bond issuance and underwriting, etc., is complicated.

My chief complaint has been that the developer was warned back in 2003 about the legalities of the bond issuance, and he continued to do so. Here's what W. Mark Scott, director of the IRS' tax-exempt bond division, wrote to the district on Jan. 29, 2003, when the bonds got a thumbs up after an earlier audit.

"Our closing of these cases, however, should not be construed as an approval of your method of operations. We have concerns regarding: the amount of control the developer has over the issuer; the questions of value of the assets sold by the developer to the issuer as these are not arm's length [transactions]; the treatment of income and expenses (whether income is properly reported and expenses deducted only once); compliance with state law."

Please note above , the IRS said directly that they had concerns with the developer's compliance with state law. I'm sorry you don't like my term "dancing around the law" but when they were warned and continued to push the limits of the law, so be it.

Now, many years later, if the bonds have to be re-issued and we the residents have to pay the IRS penalties, we are concerned about the financial consequences to The Villages and our amenities.

Could Not Say Better
 

I could not have said it better. Although the Mores'e may be wonderful people and have done a great job in constructing a community the question remains as to whether they became weathy based on sound accounting practices or they bent the rules to maximize profit to them and now the residents are being hung out to dry. Judging from the input from the IRS it would appear the "residents are being hung out to dry". I continue to be amazed at some favoring a dictorship rules rather than a demoncratic vote by the people for representation. I thought the men and women who fought and died to protect our form of government meant something. Because the Morses have done a great job of building a community does not mean I would give up my form of government. Remember: Absolute Power Corrupts. Through a unique series of laws there is a family who controls the purse strings for over 100K residents by contolling appointments, etc. That is not a democratic form of government that some have given their lives for and I for one continue to believe in our democratic form of government. :bowdown:

there is nothing in life more important that the men and women who fought and died to protect our form of government...and our opportunity to always have the freedom of choice...some of us just prefer to choose the current form of govt in the villages to one that is more akin to our right to vote for the individuals most likely to screw things up.

:bowdown:

Couple of things.

The developer most assuredly has a staff of legal and tax people at his disposal. I would expect their advice to him was that the bnd issue was legal and proper. The IRS expresses some concern but closes the case. Don't forget the IRS is a department that tells taxpayers to come to them for advice on their tax returns, but, if the advice they give is faulty, the taxpayer owes the tax plus interest and penalties. I don't have such confidence in the IRS that I would automatically assume everything they say is 100% accurate. I suspect Morse went back to his advisors and had them review the issue and was told it was proper. Regarding state law, I remember the IRS has in their recent (last few years) review made statements that indicated they did not understand the CDD form of governance as established in Florida.

I would not say I'm completely comfortable with the CDD situation either. It seems that efforts have been made to further dilute the ability of the residential CDDs to have any say in finances especially with regards to the Project Wide funding. However, might this also somewhat shield the residents in this IRS dispute? The dispute is nominally between the central districts and the IRS. The amenities fee is capped by CPI. So the risk to us is the central district having to deplete its funds to pay the government or the bondholders or ??? and the effect that may have on maintaining the amenities to the level we are accustomed. I don't see any way the residents are on the hook for the total that may be due.

The Morse family has created a wonderful community here through some risk and hard work. They do not appear to me to be the type that would sit back and let the community go down the drain by allowing the amenities to deteriorate. They still have significant investments in this community, and they live here as well. Yes, you can sell the commercial property, the real estate office, and the championship golf courses. But the negative publicity of the residents being cheated out of the lifestyle they bought into while the family bolts for greener pastures would assuredly cut into the selling price. Truth is, they can likely make much more money by keeping this place up to the usual standard.

But I agree we need to be alert and aware.

"Good question, but here's the way I see it. Had the bonds issued been taxable bonds, they would have cost the borrowers less than nontaxable bonds, assuming they both had the same coupon rate."

WHERE DID YOU GET THAT FROM? TAX FREE BONDS ALWAYS HAVE LOWER COUPON RATES OF INTEREST FOR SIMILAR RISKS.

"We'd have to go back in time and see the bond prices at the time of bond issuance to see exactly the spread between taxable and non-taxable bond prices. Anyways, the developer would have had to sell more bonds to obtain the same amount of money, so he would have paid a similar amount of interest."

NOT SURE HOW YOU ARRIVED AT THAT CONCLUSION. THE SAME DOLLAR AMOUNT OF BONDS WOULD HAVE BEEN SOLD WHETHER THEY WERE TAXABLE OR TAX FREE. IN ADDITION, THE DEVELOPER DID NOT ISSUE THE BONDS, HE RECEIVED THE PROCEEDS FROM THE BONDS.


"Not to mention there may have been additional tax writeoffs, depreciation etc., to be considered."

NOT SO FOR REASONS CITED ABOVE