I have a question Ms. Ritchie. What is the date of the most recent news story on the subject in the Sentinel?

I understand the job of a columnist and I hope people on this forum can grasp the difference in your opinion column and a hard news story. Not to say you are fabricating any of your points. But there is a valid difference.

Here's my take on the issue. The only question is whether the Villages Center Community Development District is treated as a political subdivision and has sovereign power for the purposes of section 103 of the Internal Revenue Code. Moreover, the question is do they have the legal right to exercise these powers in the future for certain undeveloped lands owned by the VCCDD.

This involves the VCCDD and $57,250,000 in Recreational Revenue Bonds, Series 2003A and $7,005,000 in Recreational Revenue Bonds, Series 2003B. There is certain criteria in Florida statutue that makes a political subdivision. The VCCDD lays out the determining factors such as taxing power, power to exercise eminent domain, police powers, upkeep and development of infrastructure et al.

The answer now rests with the IRS. If the answer goes against the VCCDD and they run out of appeals, they will pay the monies and penalties; and most likely will not be able to issue more bonds. End of story.

I think you mean tax free bonds?

They could still issue taxable bonds albeit at a higher base %?

And then there was light.:wave:

Well that clears up one thing, I guess now you all know I am not Lauren Ritchie.

Thank you Lauren for going above and beyond with your detailed post and for offering to respond to individual questions via email.

I think a detail has fallen through a crack; the one about the CDD has to have a police department to qualify to issue tax free bonds. When called on that TV said we have a fire department. Da

Thank you Laureen and The Shadow.

I think the only thing we (TV homeowners) want to know:

Bottom line - If all goes against us re IRS - what is the cost? I still content that even in a total loss by the TV lawyers the cost, when split among all of us, would be relatively minor.

Without getting into another 20 paragraph discussion - please just guesstimate the bottom line.

Thanks.

Sounds like amenity fees go up to cover increased bond cost and maybe IRS fines or maybe if fees can't be increased enough then less amenities.


.

Thank You Ms Ritchie
 

I have not purchased a home yet. I thought if a bought in Lake County I would avoid this "Bond" issue. I now know I was wrong. This affects anyone who pays the amenity fee. I read somewhere in TOTV that the cost per home could be $17k-20k. Not sure who came up with the figure. I wonder what this will do to home values if the IRS prevails. I still like the Villages and will take the possible added cost into account. "You can't take it with you and my heirs don't need it". I just need enough to get to the end!

Lauren, thank you for taking the time to post, and to welcome questions. Certainly above and beyond the call of duty. Many of us in The Villages have welcomed your column and the information you've brought to light.

I do think that in the event of IRS victory, if penalties and costs were passed on to the residents, there would be some sort of class action lawsuit. Of course, considering legal fees, it would be an expensive and messy drawn out process, but c'est la vie. It does sound to me like the Morse's interpretation of CDD's was not in keeping with the original intent of the CDD legislation which could bear on the IRS decision.

Math: 20K times 50K (# of homes) = 1 BILLION dollars.

Moral: Don't believe everything you read:)

Whoa. Wait a minute. The Morses interpretation of CDDs has given us this remarkable lifestyle.

Or maybe lined their pockets.

Illegal is illegal and they/us may have to pay for the infraction. Hope not us and that the IRS comes up with a reasonable deal that fines the offender if there is an offense.

The maximum per home if the worst case happens and home owners are liable I believe is under $400 per home. I have done the math many different ways, added interest expense and legal fees, used the IRS figure for a fine, and tried to determine the worst case. And although I also don't want to pay it, it is minor and works out to around $15 a month per home paid over two years.

The tax-free bonds are bought by investors, and are available through any stockbroker. They are NOT the same as the bonds on our homes. They are bought mostly by institutions. You can buy them yourself but the minimum increment is $10,000. My broker told me that the last issue (a few weeks ago) was snapped up within an hour, so apparently many qualified institutional investors still regard them as a desirable investment.

In my opinion the Morses will continue to fight the IRS but if they are ever required to settle, they will do so in a way that does not harm TV or its residents. That is what their past actions have shown (think of how they handled the tornado-damaged homes a few years ago.) They have a very long-term investment in TV's commercial properties and will maintain the quality of TV long after the last home is sold.

My ball park calculations are also in the $400 area. The fact that issues are still " being snapped up" would indicate little concern in the market. Villagers should be aware of the issues but need to keep them in perspective.

I do think that the contraversy will have some effect on home sales . A number of my neighbors here in Maryland have made derogatory statements about the Villages based on this issue. Many believe in the "house of cards theory" for TV.

The Morse's interpretation of CDD may have given us a nice lifestyle, but if it is an illegal interpretation, as determined by the courts, it doesn't do us much good. What good is a castle if it is built on quicksand?

It just appears to me that the Morse's tweaked the interpretation of the CDD definitions to benefit themselves financially. Not a problem - this is what business people do. But if it is deemed illegal at some point in the future, I just hope the residents aren't left holding the bag. Bike42 thinks the Morse's will settle up so the residents aren't harmed. I have a feeling that if it involves handing over millions of dollars, the Morse's won't pony up. It was to their advantage when the tornado went thru - they were in the business of selling homes and they wanted things to look good for prospective buyers. When its time to settle up with the IRS, the development will most likely be finished and I'm guessing the Morse's will have sold out and moved on to their next business venture. Call me jaded, but I think whenever large sums of money are involved, not so good things happen.

May I suggest Royal Harbor or Arlington Ridge, you could save $20k - $25k.

EdV