[JohnN]

I'm not the sharpest branch in the tree.

$18,000 / household times 50K households, $900,000,000 - near a billion?

[KCinBAMA]

Originally Posted by Lauren Ritchie

The Village Center CDD has the authority and power to issue bonds and to levy property taxes, though it has never done the latter yet to date. It also has the power to make everyone in the Villages repay the bonds, not just property owners inside the district, which, as I'm sure most of you know, are all commercial. The board is controlled by the developer, who acknowledges this openly in all the bond documents and in replies to the IRS, which are public record. The district is set up so that Morse always will control it until he choses to relinquish that control.

Originally Posted by SteveZ

And yes, there is an annual common-area fee similar to what a homeowner's association (Orlando is full of them!) levies on all within a development for maintenance and upkeep of the common areas.
The CDD concept is not all that bad, in that when it works, it works very well.

Originally Posted by Muncle

That might have been a good time to explain Florida Statute 190 and the CDD concept,...
CDDs are very big in Florida …

Apparently CDDs are big in Florida. Are they usually drawn without any residents in them? Or, is this something that is unique to The Villages?

[ohiogolf]

Lauren:

thanks for writing this follow-up article. I found it to be comprehensive and well written. Thanks.

What I find interesting is the apparent IRS contention that the CDD paid more for the properties for which the bonds were issued than the FMV. If that is upheld through the tax court process, then it seems to me that the CDD (representing the residents) may have a claim against the developer for the excessive price, since there is surely a duty to assure that tax free bonds are legally issued. If the the bonds were not legally issued (by being in excess of the FMV), I suspect the developer would have some liability. I'm sure this avenue will be explored before the residents get stuck with any additional liability, if the tax free status is revoked should the IRS prevail. I don't think the developer could illegally profit at the expense of the CDD (residents), if the developer cannot sustain the FMV of the properties for which the bonds were issued. Sounds like a lot of legal fees in someone's future.

[Yoda]

Is this "all moves to tv on hold time?

hmmmm

[djl8412]

Originally Posted by Muncle

When my copy of the Orlando Slantenal arrived early this AM, I hurried to read Ritchie's follow-up story on the dreaded bond issue. I had gotten the impression that Sunday's article had promised some detail, some actual facts. Ah well, I've been disappointed before.

Basically all today's screed seems to be is a rehash of Sunday's with a bit more infatuation with our hero, the evil fighting IRS agent, Dominick Servadio. The gist of the matter is that rugged, macho Dom does not like the CDD concept, nor does his boss in the the IRS bond division (that last part actually was new info). Dom evidently believes:

*The district doesn't qualify under IRS rules as a valid issuer of tax-free bonds.

*The transactions didn't benefit the general public -- a requirement of tax-free bonds -- but instead, only the developer.

*The Village Center Community Development District issued $53 million more than the properties it bought were worth and handed the cash to Morse, who declared it as a gain on the sale on the corporation's 2003 tax return. Issuing bonds for more than 5 percent more than what's needed throws the bonds into the taxable realm under IRS arbitrage rules, the agent contended.

*The appraisal firms that set the value of the properties were tools of the district who did what they were told. They were not independent appraisers, as the IRS requires.

Ritchie never seems to get around to explaining why Dom has these views. That might have been a good time to explain Florida Statute 190 and the CDD concept, but I guess Ritchie couldn't be bothered with the research. I think there's going to be a big argument over whether CDDs are government entities entitled to issue such bonds. Next, Dom & Ritchie state flatly that the transactions do not benefit the general public -- I guess that's us. Don't know about you, but I benefit greatly from the golf courses, rec centers, sewer plants, etc. The last two items also appear to be matters on semantics, something the lawyers will love.

Again, Ritchie throws around that $18,000 per household herring without really putting any meat into it. It is apparently one of the possible 3,472 outcomes of doom Ritchie sees for TV and the hated Morse family.

Ritchie dismisses with total disdain any response from TV and it's legal representatives. She makes a point of further glorifying Dom because he chose to ignore a letter requesting a meeting and ascribes panic to TV because they want to get the matter settled quickly because the open case would be detrimental. And of course gets another cheap shot at the Morse demon.

As I and others have said, expect this battle to continue for quite a while. CDDs are very big in Florida and other states and the outcome of this case may well affect many. Meanwhile, I look forward to the continuing saga of Ritchie and Dom. She seems to have no problem getting access to him and the correspondence he receives from the subjects of his investigation. In the interim, maybe she can investigate the dog park on 466A or the lack of indoor pools. And don't be surprised if she picks up a freelance gig, say something like a monthly column in the POA bulletin.




`

You are very angry, aren't you? So are many of Villages residents but for different reasons. Many of us find it difficult to understand all these layers of bonds and amentiy fees. If Mr. Servadio is citing IRS statutory criteria, how does that translate into your verdict that he and his IRS boss just don't like the CDD concept. Mr. Servadio may just be mopping up a mess that should have been peeled apart years ago. After all, that's his job which we are paying him to do as taxpayers. Perhaps Ms. Ritchie is "dismissing" responses from TV lawyers or Janet Tutt because all they have seemed to be saying is "all the IRS had to do is sit down with us and we could have explained it all." That type of response tells me that the explaining should have been done ages ago but wasn't and now the IRS has presented them with the dinner check.

I am not a Philadelphia lawyer and have not disected the Florida 190 statute. It may do us a lot of good if you could educate us on it in a manner we lay people can understand.

P.S. : I do like life in The Villages and don't arbitrarily hate Mr. Morse, but he is not exempt from his fair share of taxation and if he has been less than up front with the handling of these monies, he needs to pay. Unfortunately, we may also pay.

[shermark]

This could have huge consequences. My wife and I love TV and the whole lifestyle package,great friends and great fun. But since this bond issue has come to light, we have no choice but to wait and see whether we buy there or not. On top of the many fees that are paid for by the residents, I can't see ourselves being saddled with another fee to bail out Mr. Morse. Correct me if I am wrong but from what I have read, it's incredible that the Villagers are not allowed to have any representation on any governing board concerning the financial dealings in TV. The media is going to pick up on this and soon this bond problem will be well known among the retirees around the country. I can see a slowing down of new homes being built and more and more re-sales. I certainly hope none of this happens. You Villagers invested in a tremendous lifestyle that can't be found anywhere else and you have all held up your end of the bargain by paying the bills and fees on time and then enjoying life to the fullest with what your money bought. I hope this does not unravel. But what will be the next expense by Mr. Morse. Pay toilets in the shops and restaurants ?

[golfnut]

[Alex]

Thanks to Lauren for two well researched articles.

[Muncle]

Originally Posted by djl8412

You are very angry, aren't you? So are many of Villages residents but for different reasons. Many of us find it difficult to understand all these layers of bonds and amentiy fees. If Mr. Servadio is citing IRS statutory criteria, how does that translate into your verdict that he and his IRS boss just don't like the CDD concept. Mr. Servadio may just be mopping up a mess that should have been peeled apart years ago. After all, that's his job which we are paying him to do as taxpayers. Perhaps Ms. Ritchie is "dismissing" responses from TV lawyers or Janet Tutt because all they have seemed to be saying is "all the IRS had to do is sit down with us and we could have explained it all." That type of response tells me that the explaining should have been done ages ago but wasn't and now the IRS has presented them with the dinner check.

I am not a Philadelphia lawyer and have not disected the Florida 190 statute. It may do us a lot of good if you could educate us on it in a manner we lay people can understand.

P.S. : I do like life in The Villages and don't arbitrarily hate Mr. Morse, but he is not exempt from his fair share of taxation and if he has been less than up front with the handling of these monies, he needs to pay. Unfortunately, we may also pay.

Originally Posted by iaudit

Why don't you try reading the IRS reports:

http://www.orlandosentinel.com/media...3/45365631.pdf

You will find that Dominick didn't pick this info out of thin air, but has all the references related to his analysis and conclusions. It is over 100 pages long and Ritchie has done a good job of SUMMARIZING the key points. If you really want to understand it, read it and then respond.

First things first. Yeah, I'm angry. I get really upset at people who bemoan the fact that they do not understand the concepts of bonds and amenity fees, seemingly wallow in that ignorance rather than try to learn, and then scream bloody murder about half truths written by an admittedly biased opinion columnist. If indeed you want to learn about these things, I suggest you first attend a CDD orientation offered every Thursday. You'll likely come out with more questions than answers. Read up a bit on the many web sites and return to the Thursday sessions with more direct questions. The knowledge is refreshing and it's a lot more satisfying than living in ignorance.

Now, to the auditor or whatever --- The thread and my comments were more about Ritchie and her hatchet job of a column than the actual IRS report. In theory, Ritchie's column should have been a stand-alone with no need to reference the report, much less read it in detail. But instead, what we got was her Chris Matthews imitation with a tingle running down her leg as she read or referred to Dom's conclusions.

However, I did read the IRS report. I've seen scores of similar gov't reports and written quite a few. Dom did a great job of cutting and pasting, citing and incorporating an abundance of other cases, relevant or not. Hey, he did fill over 100 pages (with big font!),, so it must be good. I am not a lawyer or an accountant, nor do I even play one on television, but it seemed to me that Dom makes a lot of leaps in logic that don't necessarily follow. It appears that many of Dom's opinions are assumed as fact. That's why this is far from the done deal that Ritchie so snarkily implies. Once TV legal and financial people review the report and have a chance to rebut it, we'll see how many of Dom's "facts" stand.




`

[OutsiderWithInterest]

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[OutsiderWithInterest]

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[Bryan]

Since our court systems move at somewhere around the speed of smell, it will be many (many, many?) years before this is all settled.

If the "officials" of the various CDD's let themselves be taken to the cleaners so badly on the sale of these facilities and if the appraised value was "fixed" as alleged, doesn't that imply some malfeasance on their part and can't they be sued and held personally liable? I would hope one of our watchdog organizations such as the POA would be looking into that and getting positioned to launch suits and publicity galore.

[SteveZ]

Originally Posted by Bryan

Since our court systems move at somewhere around the speed of smell, it will be many (many, many?) years before this is all settled.

If the "officials" of the various CDD's let themselves be taken to the cleaners so badly on the sale of these facilities and if the appraised value was "fixed" as alleged, doesn't that imply some malfeasance on their part and can't they be sued and held personally liable? I would hope one of our watchdog organizations such as the POA would be looking into that and getting positioned to launch suits and publicity galore.

Key to the entire story are the appraisals of the properties, and the insinuation that they are way out of line.

If we are to look at properties in 2009 at 2009 values, the numbers obviously are going to be different than 2002-2003 time frames. In the 2002-2003 time, many properties doubled and tripled in value compared to their 1997 valuations. That happened to me with house(s) I had back then, and do I still remember the sticker-shock of that house in DC I bought in 2004 (compared to it's 1998-build price, according to the state assessors books). The previous owner made a killing on the DC house, and I just sold it at a significant loss - but, those things happen.

If there was anything crooked happening back then, it will come out, but that's a mighty big IF. Reputations are now tarnished based on the "my opinion" and negative slanting, and should everything prove to be up-and-up (which is what usually is the case), what do you think then odds are of Ms. Ritchie and The Sentinel publishing a three-day, same-size column retraction?

Sensationalism, snide insinuations, fear-mongering - all adds up to unbridled gossiping. Makes the supermarket tabloids look pretty good in comparison.

I agree with Bryan. The real issue to property owners should be the degree of collusion between the CDD directors and the developer in setting exorbitant values on the amenities.

My wife and I are coming to TV in May with the thought of purchasing. Even before this story broke, I was concerned about this arrangement with no homeowner representation on the CDD's. Now I am even more nervous.

Is there any homeowner association in TV that can speak with a united voice to the developer. It seems that this would be a great time to open a dialogue and push for homeowner representation on the CDD's.