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[quote=Peachie;690167][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.[/quote] WOW!!! So much to digest but all missing the most important point: Let the residents determine their fate instead of a hand-picked few behind closed doors. Yes, there would be outcomes that many would not like which we always endure through life. I don't recall EVER standing and fighting for the right to live in a community of this caliber but we did move here of our own free will and our own free will also includes the right to choose how we are governed instead of NO CHOICE. I have plenty of comfortable shoes and most important of all............I can choose which pair I wear. not someone else. |
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I should point out that wnen Del Webb was in control, this did not happen. When residents were elected, the special interest groups took over, effectively shutting out smowbirds. We then bought in TV. I still own that home. It would sell for about $120/s/f. My home here $200/s/f. After 18 years they still have not sold out and Amenities not completed. Morse builds them first. Effectively Locking out Snowbirds by hogging amenities was not a good move. For the last few years, they sold less than 10 homes a month. This was the result of "electing" people to the board. I did not fight in the military to have my rights usurped by elected officials but it happened.
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[quote=djl8412;690455]
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Some folks seem to forget that TheVillages hold better than 100,000 residents many of whom have very impressive credentials meaning that we will have an internal market to select from when the time comes due.
In my mind the first order of business is ultimately who will be found to have the legal/financial obligation should the IRS prevail with the sub-political status action. Secondly would be the financial amount of that financial obligation and penalities and fees and the question of who is ultimately holding the bag on the monies to defend this action. Next is the the manner of the payout. following this is the affect this case has on the continual buildout. By the way there apparently is an argument that the Developer at least held this project together given the previous concerns about places like Del Web. Again I am confident that this is all going to work out |
Protecting
One of the advantages of a democracy is that it protects the minority Some are professing that an appointed person(s) is better who may not care about the minority. That is the opposite of a democracy and a formula for a number of countries that few would want to live in. As I mentioned before: Power corrupts, absolute power corrupts absolutely. Although a few continue to be surprised that it is astonishing that some prefer a dictator form of government as opposed to a democracy I am sure that when they understand the scope of possible abuse they will come to their senses. How many today understand abuses that may be going on? Just as a simple test: Who is paying the most for the improvements to property that mainly provides advantages to the business's? What program was taken from the Amenity funding controls and was placed in a program with no ceiling to protect the residents? To get the answers it would take research !! :shrug:
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In the early 2000's, residents were asked to vote on becoming a city and they voted it down because of the expense involved. This was when the population was less than 30,000. Today that expense would be much higher.
Think of all the things that a city provides that would have to be put in place: policemen and firemen, garbage pick-up, water and sewer, a city hall, all the various inspection offices, all the elected officials, etc etc etc. The developer would probably be happy to sell the new "city" his facilities, but at what price? This is really off the subject of the IRS investigation. Majority rules works well in probably 99% of the country, but not on Indian reservations, military bases, college campus, prisons, or The Villages. It's never going to happen here. |
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the nicest folks in the world for $145 a month what is it you need to be protected from? |
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Upcoming POA meeting
To get back to the topic at hand:
The POA has a General Membership Meeting on Tuesday June 18th, 7:00 p.m. at the Laurel Manor Recreation Center. This will be a chance to get the POA's take on the latest IRS development. It should be interesting to compare that with what the Orlando Sentinel says in its next article on the subject, which I understand is slated to appear tomorrow. Hopefully, the latest setback in the IRS investigation is going to wake some people up as to the necessity of supporting the POA. If things end up badly for residents in the IRS investigation (and they may or may not), the POA will be the only organization that we have to protect our interests. Certainly, the VHA will do nothing to help. |
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[QUOTE TV is the most efficient "city" I have ever had the opportunity to live in. Things just happen on schedule and seem to work without a hitch. If private enterprise was involved in running more parts of a city I believe we would start to see things turn around. They have to make a profit - they can't just raise taxes.[/QUOTE]
"Profound" I think!:ho: |
Potential impact of IRS decision on The Villages' tax-exempt bonds causing worries - OrlandoSentinel.com
Here's the article from today's Orlando Sentinel. |
Questioning IRS Motivation
I haven't read all 22 pages in this thread so forgive me if this question is a repeat; In light of the recent IRS scandal, do you think that both the developer and the general population of The Villages leaning on the conservative side could have influenced the IRS's decision?
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Appears to be a fair representation of events presented without sensationalism and hysteria. It does make one wonder why Our Villages was singled out by the IRS. I know what they say but I firmly believe that the present structure of the Center Districts permits delivery of services on an equal and unfettered basis to all residents and is why Our Villages sells as many homes as they do and why market values of homes have not declined as much as other similar developments. The number of snowbirds, who did not have to sell their homes to buy in The Villages, is amazing and likely the primary reason for the smaller decline in home prices during the downturn, which now has returned to more normal levels. I believe the reason for the large number of snowbird sales is attributed to the fact that under this unelected structure Snowbirds could be 100% confident that when they came for the winter, they would have access to all facilities on the same basis as full time residents. This is nit the case in other venues. Attracting Snowbirds has an added benefit........wear and tear on the amenity structures helps keep expenses and Amenity Fees at reasonable (bargain, really) levels as Snowbirds are here for only one third of the year. This was a brilliant move by the Morse Family....a win win for all, except perhaps the IRS.
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If it is the IRS thesis for attemting to tax the bonds is that the Residents in The Villages did not benefit from a more stabilized structure of the CDD's, albeit controlled by Morse, I would suggest they compare similar venues where there is an elective board and see what has happrned over the last seven years in terms of cost and delivery of services ability to access amenities, ability to sell your home as well as market values of homes during this recent downturn and they will find that this structure has indeed benefited Village Residents.
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You posted the following: “If the bondholder chose to proceed anyway, it should be his loss and not anyone else’s provided all risks were adequately disclosed” I was simply pointing out that if you or any other member of TOTV had at any time over the past ten years invested in a tax free muni bond fund, that you could be one of those bondholders that invested in the VCCDD bonds being challenged by the IRS. In a bond fund, you don’t choose the bonds, the fund’s analysts do and the average fund investor never bothers to scrutinize those trades. |
This is out of the Sentinal's article.
"Israel said the district is weighing its options on how to proceed with the case, but it's "too soon" to tell. District officials said they have spent more than $700,000 defending their position. Israel said he hasn't calculated how much in back taxes is owed." ...and the clock is still running on the legal fees as well as perhaps any additional interest which it appears are being paid and/or are to be paid by the central district(s) out of what, the amenities fees paid by Villagers? |
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What gives you the idea that the bondholders have "assumed the risk"? Have you now read the official statements for the bonds that I previously referred you to? If not, you may wish to do so, before reasserting your assumption-of-risk or any other theory. By the way, I would be happy, as a Villager, if you are right and the District could find some way to avoid such liability. If, after you read the bond documents, you come up with a way (e.g., some actual basis for your assumption-of-risk theory), you might want to pass your idea on to the District. If you have such a way already, it is to bad you didn't tell the District a long time ago. You could have saved it hundreds of thousands of dollars in attorney fees. |
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Another part of the artle in the Sentinel:
"The district sold $426 million in tax-free bonds from November 1993 through June 2004, including $364 million worth of bonds that were under scrutiny in the five-year IRS probe. The district used the borrowed money to purchase boccie-ball courts, golf courses, swimming pools and other recreational facilities from Morse, whose fortune is estimated by Bloomberg News at $2.9 billion." So, if I understand this correctly, the central districts, controlled by Morse, paid Morse $364,000,000 for these facilities. Who determined the prices to be paid, a disinterested third party appraiser or one controlled by Morse? How were the prices determined? They most assuredly were not based solely on cost to build or current structural value. If an income appraisal approach was used the income would be from amenity fees paid by Villagers. So Villagers pay the amenity fees which are then used to vastly increase the "value" of physical structures based on their "income" from the assessed fees. Then, based upon the fees paid by Villagers the physical lands and structures thereon are sold at very high prices, possibly at multiples of actual cost to build, from Morse to the central districts controlled by Morse which contain no residents, only commercial properties owned by Morse. Wow! |
Stop the presses, the end game on this matter may be sooner than we thought.
In the past, I and other posters on this subject have speculated that the Developer/VCCDD might challenge this all the way through the Tax Court(s), or even higher. But it turns out that the Tax Court path is an option available only to a challenging tax payer. But in this case the VCCDD is not a taxpayer but a Tax-free Muni Bond issuer and it’s next and apparently last recourse at this point is an appeal to the IRS Office of Appeals with a final challenge to the ruling issued in the May 30 letter from the IRS. A settlement agreement between the VCCDD and the IRS could well be reached in a year or less. I’ll have more to say on that shortly but wanted to get this info posted. |
From Bloomburg June 10, 2013
From Bloomburg June 10, 2013
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There is a minority that attacks anyone or anything that verbalizes a problem with the Villages or with the developer. I suspect most people are grateful for the posts you've made and information you've provided. I know I am. |
If I am not mistaken the question about the value of the assests by the IRS has been resolved in favor of the developer - that he actually was paid less than they were worth at the time. I'm sure you'll correct me if I am wrong.
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The district grossly overpaid Morse by $53 million, according to the IRS. The tangible assets, such as pools, golf courses, mail facilities, golf-ball washers and guardhouses, were worth about $6.9 million. Appraisers the Village district chose weren't qualified under IRS rules, partly because they weren't independent, and they failed to calculate correctly the value of the items purchased, Servadio contended. The district acknowledged that one of the appraisers "acted as a consultant to both parties in the transaction," but Israel argued that a regulation requiring independent appraisers doesn't apply to a tax-free bond transaction. Even if it did, he wrote, the appraiser was acting as an independent contractor and was "not subject to the District's controls in the same fashion that an employee might be." "In other words, it's all good to hire your buddies help you spend $64 million in public funds. This is Florida, where the rules are different. Go back to your office in the beltway, Revenooer Man. Documents 'recreated' And then there's the allegation of overpayment. The district went on a $53 million shopping spree in The Villages for recreational goodies but apparently misplaced its sales slip. Neither of its supposedly very qualified appraisers could provide a schedule of what each of the tangible properties was worth as opposed to the value of the other portion of the purchase, buying the rights to collect amenity fees. So, the district stated in a footnote in teeny-tiny type that it asked the two appraisers to "recreate their calculations." How very entertaining! Where would Richard Nixon be if Rose Mary Woods had "recreated" the 18-minute gap in the tapes of the Watergate scandal? Of course, the resurrected calculations show that the district paid just the right amount and that it used all the proper methods of figuring it out the value of the amenity-fee rights. " Adding $53,000,000 onto $6,900,000 of property seems a vast increase to me, and probably to most folks. |
The amount that the developer was paid for the amenities he sold to the VCCDD is irrelevant at this point regarding this IRS matter. The Sentinel and other rags love to bring this up to stir the pot.
It was only used by the original IRS agent as one of many examples he used to show that the VCCDD did not qualify to be issuing tax-free Muni bonds. It will have no relevance on what the final assessment of what is owed the government for back taxes. |
Remember - this is Gary's structure. I assume when everything is done and if money is owed - he will pay. But, if not, everyone bury him in law suits. You can Litigate anyone for anything and win or lose the cost to Tv in reputation and the literal cost to handle each suit will be substantial. I assume he will figure all of this in and pay anything he owes. He's a smart gUy.
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