Talk of The Villages Florida - Rentals, Entertainment & More
Talk of The Villages Florida - Rentals, Entertainment & More
#61
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CDD Cannot Have Police Department
I was told by a member of The Villages Public Safety Department that The Villages cannot have a police department under the Florida statue that authorizes CDD's. I have not taken the time to read through the entire statue.
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Plymouth (MA) Lexington (MA) |
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#62
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#63
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If the bonds were found to be improperly issued, and were required to be redeemed and reissued as taxable bonds, it is more than likely that the new bonds would be priced at rates that may be equal to or lower than the original municipal rate. After all, rates are much lower now than they have been over the past 10 years, and the bonds would still be secured by the revenue stream of our amenity fees. The back taxes owed to the IRS from current bondholders who did not pay taxes on their interest earned would be relatively small and could be rolled into the new bond issue.
I just don't see much liability for village residents. |
#64
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From your lips to God's ears! |
#65
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#66
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Costs
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First, a clarification for some of our readers. Technically, there should never be any liability to the IRS on the part of the Villages residents, at least not direct liability. The risk to us is that the Center Districts incur such a large liability to the IRS and to the bondholders (who would sue the Center Districts if the tax-exempt bonds turn out to be taxable) that the Center Districts can no longer afford to run the amenities system. Remember that amenity-fee increases are capped by the CPI, and the Center Districts can only tax within their borders. You are correct that today's low interest rates would mitigate the "hit" that the Center Districts would take. However, given the scandal that would underlie any issue of the replacement taxable bonds, one would think that the taxable bonds might require a relatively high interest rate in order to find buyers. More importantly, the taxable bonds, are not being issued at today's interest rates. If they are ever issued, they will be issued at tomorrow's interest rates-- whenever "tomorrow" is. (Let's hope it never comes.) Those interest rates are probably going to lot higher than today's interest rates. In addition, your analysis (in addition to assuming no penalties are imposed) implies that the liability of the Center Districts is limited to paying the back taxes on the original bonds. Remember that the bond holders, who got a warranty from the Center Districts that the bonds were tax exempt will (if the IRS prevails) also lose future tax-exempt income and will, one would think, try to hold the Center Districts liable for that as well. Finally, as I recall, the interest on the existing bonds goes back as far as 8 years. It will be even longer if the controversy continues to drag on. If the average bondholder is in the 33% marginal tax bracket and the taxpayers have to pay interest to the IRS, as well as the taxes, I am not sure that we are talking about a "relatively small amount" that can be "easily rolled into the new bond issue". Have you run any numbers? (I have not tried, but intuitively, it would seem that we are talking about a lot of money.) Despite my concerns, I hope that you right, and more importantly, I hope that the IRS does not prevail, or that if it does prevail, that it prevails in a way that places the costs of its victory directly on the Developer. It is the Developer who should, after all, be liable for all the damages in the event that the IRS prevails in this matter. But as shown by the circumstances surrounding the class action lawsuit, collecting from the Developer may not be that easy. The fact that the VCCDD (out of our amenity fees), not the Developer, is paying the legal fees to defend the tax-exemption of the existing bonds does not bode well in this regard. |
#67
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Advagoda ur a thinker
Great post! I agree so much with you. With the possible outcome of all this. Now could be " the good 'ol days of the villages" hey pompeii fell and it all worked out.
At least ol' Troy will be out there killin' dem gators. Yayayayayaay |
#68
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Not Good!
You guys all just managed to put my house build on hold for another year if at all.
My sales rep has told me nothing about this matter. For some reason two days ago the wife and I canceled our December build date. We had absolutely no reason why we just felt something uneasy? Now after reading 7 pages of this issue I feel ill about the whole matter. Would be like me selling you all a brand new car saying the warranty will take care of it, knowing full well the vehicle was designed as a flaw and will never be right. Oh wait that would be GM they did that! Maybe 200 inches of snow isn't that bad after all. At least no one is here going to take my home fine me or tax me on someone elses greed. Well I have a year to see where this is playing out before we let the lot go. I appreciate all the good articles to date. I might be in a panic or you guys might have saved us from a future retirement financial nightmare. |
#69
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I agree - its difficult to see where this is all going, and just because a bunch of residents say "nothing is going to happen" or " it won't amount to much money" doesn't guarantee anything. The sales reps are purposely not telling potential buyers of this situation, which I feel is dishonest. When you're thinking of potentially plunking down a quarter of a million dollars on a home, or more, it seems like you shouldn't have things making you uneasy.
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#70
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An excellent question. Should the sales reps be telling prospective buyers about the IRS issue? If so, it would likely cause a downturn in sales. If, on the other hand, there is "really" nothing to it, then they shouldn't be sabotaging their own sales efforts.
Should all sales agents tell prospective buyers that there is an IRS investigation currently underway that might impact current and future residents? |
#71
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Should they - yes. Will they - no. It seems to me that they aren't under any legal obligation to bring it up since there is nothing resolved or pending in the matter. If a potential buyer asks about it they should be forthright about what's going on. That probably wouldn't happen in most cases though.
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#72
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There is one thing everyone is missing. The issuance of tax free bonds requires special lawyers, Bond Consul, Bond Consul writes the bonds and the bonds are approved by The IRS as non taxable bonds prior to being sold.
If a mistake is made by Bond Consul causing the IRS to claim the Bonds as taxable then Bond Consul and their insurance are as much on the line as the issuer of the bonds. There are many deep pockets in front of the residents. I think that whatever the final ruling is will have a much larger effect on new bond issues than it will on the current issue. For the IRS CDD's issuing bonds is new territory because CDD's are a new quasi form of government that have become popular in retirement communities so every ruling is precedent setting. I could see this going either way with no monetary penalties but changing precedent for future bond issues. |
#73
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This issue has been in place for many years now with the IRS. It was going on four years ago when we were thinking to buy our first home here in TV. We have sold that home and are now building our second home here. We are not capricious people, we spend our money carefully, and go to the big box stores for better prices. We have carefully thought out all nine homes we have bought and built. I cannot guarantee that the IRS will not rule against the Morse organization. I am absolutely in awe of the way this beautiful, affordable, clean, wonderfully run,completely satisfying small city presents us with opportunities to live, enjoy, and continue in life with interesting and successful people all around us. I see evidence everywhere that the Morse family are dependable. They are definitely Republican and huge contributors to the Republican party. (Just for your information. Sometimes the slant of the paper and the political speakers invited to the squares is a huge and unpleasant surprise to some people) I am a moderate fyi. It is up to you.
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It is better to laugh than to cry. |
#74
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Living
in fear is not the way to live your life. Imagine if our ancestors decided it was not worth the risk to cross the USA in covered wagons because they may, starve, get scalped by indians, catch a disease, wagon breakdown etc., etc.
We will be over 100,000 strong in a few short years. We will have the strength to fix whatever comes our way. I am surrounded by smart resourceful people. Listen to Gracie. Whatever comes our way, we will handle it!!! |
#75
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Closed Thread |
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