[spk7951]

Originally Posted by katezbox

Hi,

You have a lots of really good questions that I can't answer - but hopefully which we will get answers to as this develops. There are a lot of parts of this transaction that could impact the status of the bonds, how they affect the bondholders, the developer, the CDD and us as Villagers.

I don't know if the transactions were "arms length," if any original IRS
determinations will be overturned, how the value of income from all these properties should be valued (put 10 accountants in a room and get 10 answers), was it double counted, etc etc.

My remarks were just to clear up some comments that seemed to not understand what a bond represented and others that villified the developer for making a profit. Ms. Ritchie writes an article we should all read - but which we need to interpret along with all of our knowledge and not take as fact. We should not shoot the messenger, but we should question her motives and those of her IRS source. Like Chelsea, I believe "what we get" for what we pay in TV is worth it.

Right now I think we can all learn as much as we can or put our head in the sands or start playing the blame game. I think your questions and those of a few previous posters agree that #1 is our best choice.

Katez,
Maybe you can help me understand one thing. If the developer claimed a gain of $53M then I would assume, hate to use that word, he paid a tax on that gain. If so would not forcing the bonds to be taxable be a sort of double taxation?

[katezbox]

Originally Posted by spk7951

Katez,
Maybe you can help me understand one thing. If the developer claimed a gain of $53M then I would assume, hate to use that word, he paid a tax on that gain. If so would not forcing the bonds to be taxable be a sort of double taxation?

Welllllll,

Now you would be confusing our tax law with logic.

In this case though, it is hard to tell what the developer paid taxes on given the complexity of the code. If he paid tax on his gain and the bondholders pay tax on their income, I don't see it as doubly taxing necessarily because one tax is on an investment gain and the other is on income from a security. Just don't get me started on estate taxes and tax on dividends though... we'll leave that for the political forum.

k

[Muncle]

Originally Posted by spk7951

Katez,
Maybe you can help me understand one thing. If the developer claimed a gain of $53M then I would assume, hate to use that word, he paid a tax on that gain. If so would not forcing the bonds to be taxable be a sort of double taxation?

Either I'm getting it wrong or some folks have the situation a bit confused. The way I understand it, party A (developer) built/created at his expense and sold a series of items to party B (the Village Center Development District or the Sumter Landing Community Development District). In order to get funding for this purchase, party B now issues bonds on the bond market. Party A is now out of the deal entirely, whether he made a profit or not, whether he declared the sale and paid taxes or not.

A point that I think some people get confused on here is that these bonds issued by party B have nothing to do with the individual residents and have no connection to the bond associated with individual residences. i.e., the phantom $12, $15, $17, $20K that seems to be added to your purchase price.

The new bonds were issued for the sole purpose of funding the initial purchase party B made from party A. The point of contention now is whether party B has the authority to issue tax-free bonds and whether these bonds in particular qualify to be tax-free. From this point on, it is lawyerville.

Am I totally off base?







`

[spk7951]

Originally Posted by Muncle

Either I'm getting it wrong or some folks have the situation a bit confused. The way I understand it, party A (developer) built/created at his expense and sold a series of items to party B (the Village Center Development District or the Sumter Landing Community Development District). In order to get funding for this purchase, party B now issues bonds on the bond market. Party A is now out of the deal entirely, whether he made a profit or not, whether he declared the sale and paid taxes or not.

A point that I think some people get confused on here is that these bonds issued by party B have nothing to do with the individual residents and have no connection to the bond associated with individual residences. i.e., the phantom $12, $15, $17, $20K that seems to be added to your purchase price.

The new bonds were issued for the sole purpose of funding the initial purchase party B made from party A. The point of contention now is whether party B has the authority to issue tax-free bonds and whether these bonds in particular qualify to be tax-free. From this point on, it is lawyerville.

Am I totally off base?







`

I do not believe you are off base. The only point I would add is the party A created at his expense and then sold at a profit to party B.
My thoughts were that if party A paid taxes would that then help decide if the bonds would be tax free or not. But as was noted that would be logic and we are talking about the IRS.

[JimJoe]

Originally Posted by Muncle

A point that I think some people get confused on here is that these bonds issued by party B have nothing to do with the individual residents]and have no connection to the bond associated with individual residences. i.e., the phantom $12, $15, $17, $20K that seems to be added to your purchase price.
Am I totally off base?
`

I agree that these bonds are totally separate and in addition to the bond on the house ($12, $15, $17, $20K), but I believe the bonds issued by the association party B do have something to do with the residents. They are issued to pay for the amenity and the maintenance of it, the residents pay for the them, and all residents of the villages could have to pay if they are determined to be not tax free. The payment will be either in the form of higher amenity fees, or a tax on their property. The annual CDD assessment is also separate and for repairs of the infrastructure and is assessed by each district.
If I am wrong someone please correct me.

[Schoonie]

Bottom line,this is all about cost and life style. We just returned last night to our other house in Virginia. It is 44 degrees and heavy rain. I paid much more for a house here than in the Villages. The ongoing expense is also much more than the Villages. The lifestyle here is not bad it is just different.

My wife and I looked at communities all over the country before our purchase in the Villages. In our opinion nothing else compared to the quality, lifestyle, services, recreation etc. Even with the Bonds and fees we would purchase again without hesitation in the Villages.

[JimJoe]

Originally Posted by Schoonie

Even with the Bonds and fees we would purchase again without hesitation in the Villages.

This definitely seems to be the consensus. The Villages is a fantastic place to live. I do however think there needs to be oversight on this issue. Current residents and also prospective buyers have a right to know what the current costs are, what they are for, and a reasonable forecast for the future.

[Russ_Boston]

Originally Posted by JimJoe

I do however think there needs to be oversight on his issue. Current residents and also prospective buyers have a right to know what the current costs are, what they are for, and a reasonable forecast for the future.

If I'm not mistaken there are oversight committees comprised of residents who are on the board of the turned over VCDD's. Isn't that true?

http://www.districtgov.org/images/Wh...ionResults.pdf

[JimJoe]

Originally Posted by Russ_Boston

If I'm not mistaken there are oversight committees comprised of residents who are on the board of the turned over VCDD's. Isn't that true?

http://www.districtgov.org/images/Wh...ionResults.pdf

I'd sure like to hear from them on this issue. This would be a perfect place for them to give feedback to their constituents.

[iaudit]

Originally Posted by Russ_Boston

If I'm not mistaken there are oversight committees comprised of residents who are on the board of the turned over VCDD's. Isn't that true?

http://www.districtgov.org/images/Wh...ionResults.pdf

The numbered CDD's, over about a ten year period, transition from developer picked supervisors to homeowner picked supervisors. However, the central CDD's (the one's that issued the recreation bonds) are entirely pick by the developer and will not change as long as he owns the business areas that comprise these central CDD's.

[JimJoe]

Originally Posted by iaudit

The numbered CDD's, over about a ten year period, transition from developer picked supervisors to homeowner picked supervisors. However, the central CDD's (the one's that issued the recreation bonds) are entirely pick by the developer and will not change as long as he owns the business areas that comprise these central CDD's.

I read somewhere the central CDDs are picked by the owners but there are only 17 owners in that district AND they get to make the decisions about the recreation bonds (the ones the IRS preliminary ruling was about) (paid for by the amenity fees). Can anyone confirm that?

And I still think the members of the numbered CDDs probably know alot about this issue and could enlighten all of us.

[The Great Fumar]

Originally Posted by SteveZ

Whether a columnist from the Orange County fishwrap believes I have spent my money wisely or not is of no matter.
It's a beautiful day in The Villages......

I agree with Steve and the operative word here is COLUMNIST..She is not a REPORTER and can say pretty much what she pleases.....and is about one step above a supermarket tabloid.....

[collie1228]

The main reason why the founding fathers insisted on freedom of the press was to make sure the people had a watchdog over their government. Since "the government" in this case is the development district (although I doubt Madison or Jefferson ever conceived of such a strange contrivance), I think that Ms. Ritchie, as a member of the press, is doing us all a service by bringing this whole IRS situation into the light of day. I, for one, would probably never have known about the IRS allegations, if she hadn't written her column, so I am thankful to her for that. We can all dispute the facts of the case, which is what we should be doing. But I haven't seen any disputed facts here yet - only some pretty good questions and some mud slinging. "Sunlight is the best disinfectant,” a well-known quote from U.S. Supreme Court Justice Louis Brandeis, and is just as true today as when he said it. Shooting the messenger doesn't help anything.

[Muncle]

Originally Posted by JimJoe

I read somewhere the central CDDs are picked by the owners but there are only 17 owners in that district AND they get to make the decisions about the recreation bonds (the ones the IRS preliminary ruling was about) (paid for by the amenity fees). Can anyone confirm that?

And I still think the members of the numbered CDDs probably know alot about this issue and could enlighten all of us.

Then attend your CDD meetings. They are open to the public. There was a column in last Thursday Rec section almost begging residents to attend the various budget workshops and meetings.

http://www.thevillagesdailysun.com/c...ns/recnews.pdf

Click on the above and go to the second page.

I'm sorry if it appears that I'm dumping on you, JimJoe, because that's certainly not my intent. It's just that there are so many sources of good information in the community that people just ignore. There's the CDD website, the weekly column cited above (sometimes informative and useful, sometimes a complete waste of paper stock), the 751-6700 number for general questions, direct email access to all members of the district staff -- http://www.districtgov.org/slcdd/staff.asp --, and of course, the CDD orientation classes held every Thursday. And there's such things as the VHA Newcomers Orientation at which they attempt to introduce new folks to a variety of services and functions in TV.

Now for the flip side. The developer and the district could do a much better job of getting information out there and explaining the intricacies of our government, both structure and in practice. This is a tough one, but the developer should produce a document for all prospective buyers that explains CDDs, bonds, numbered districts vs. VCDD/SLCDD, and similar issues. I say it is tough because obviously this could well dampen the enthusiasm of a prospect. In order to be readable, such a paper must be pretty succinct and many of these are not issues that can be explained in a paragraph or two. An easy example is your residence bond. It would hinder sales if the prospect thought this was just a $20K add-on for which he was getting nothing. The document would have to explain A) how this is authorized under Chapter 190 of the Florida Statutes, B) in what manner they money was used, C) how the amount was apportioned so that his bond was $20K while the villa down the street was only $13K, D) how the bond can be paid, and of course, E) that all new home buyers pay this cost but that it's normally buried in the cost of the house. And this bond would likely be the simplest to explain.

The CDD Orientations. I wish they could make them mandatory, tied to closing maybe. But they really are woefully inadequate as is. Firstly, most attendees don't know enough to ask pertinent questions (and there's always that guy -- normally a male -- who is either fixated on a single issue, like cart paths up north, and keeps asking questions/making statements about it so the lecturer can't get on to other issues) and get lost if the discussion gets into any detail. I suggest that the district develop two separate classes. The first would remain an orientation aimed at new residents, that paints the CDD program with a very broad brush. No nitty gritty. Then the should offer periodic sessions aimed at folks who've lived here a while, folks who thought they understood but now have more questions than answers. These would not be at 10AM at the district office but would be at various times at the different rec centers. And they should tailor their presentation to fit the prospective audience. There would bee minimal interest and few questions about trains at an evening session at Canal Street, but when the session was held at the Chathum Rec Center, the presenter better know a lot about trains and be able to discuss the noise.

They say TV is a community of rumors. If you haven't heard a good one by 10:00 AM, you are obligated to start one. But there are rumors and then there are rumors. The story that there is going to be a massive mosque built in what's left of the buffalo land as LSL is absurd and no one takes it seriously. But the tax-free bonds issue is another matter entirely. Thanks to Ritchie's hatchet job, many, many of TV residents know there may be something, but no one really knows the facts. To my knowledge, no one in authority has commented. I can understand that in a way, because one does not want to give legitimacy to a XXXX such as Ritchie. Regardless, the rumors persist I know there are likely legal and tactical reasons why they cannot bare all, but the developer and he distract owe it to us (not legally or even morally but logically) to provide what comments they can.

And there's a lot of other little things they could do, but I'm tired of typing.





`

[JimJoe]

Originally Posted by Muncle

Then attend your CDD meetings. They are open to the public. There was a column in last Thursday Rec section almost begging residents to attend the various budget workshops and meetings.

http://www.thevillagesdailysun.com/c...ns/recnews.pdf

Click on the above and go to the second page.

I'm sorry if it appears that I'm dumping on you, JimJoe, because that's certainly not my intent. It's just that there are so many sources of good information in the community that people just ignore. There's the CDD website, the weekly column cited above (sometimes informative and useful, sometimes a complete waste of paper stock), the 751-6700 number for general questions, direct email access to all members of the district staff -- http://www.districtgov.org/slcdd/staff.asp --, and of course, the CDD orientation classes held every Thursday. And there's such things as the VHA Newcomers Orientation at which they attempt to introduce new folks to a variety of services and functions in TV.

Now for the flip side. The developer and the district could do a much better job of getting information out there and explaining the intricacies of our government, both structure and in practice. This is a tough one, but the developer should produce a document for all prospective buyers that explains CDDs, bonds, numbered districts vs. VCDD/SLCDD, and similar issues. I say it is tough because obviously this could well dampen the enthusiasm of a prospect. In order to be readable, such a paper must be pretty succinct and many of these are not issues that can be explained in a paragraph or two. An easy example is your residence bond. It would hinder sales if the prospect thought this was just a $20K add-on for which he was getting nothing. The document would have to explain A) how this is authorized under Chapter 190 of the Florida Statutes, B) in what manner they money was used, C) how the amount was apportioned so that his bond was $20K while the villa down the street was only $13K, D) how the bond can be paid, and of course, E) that all new home buyers pay this cost but that it's normally buried in the cost of the house. And this bond would likely be the simplest to explain.

The CDD Orientations. I wish they could make them mandatory, tied to closing maybe. But they really are woefully inadequate as is. Firstly, most attendees don't know enough to ask pertinent questions (and there's always that guy -- normally a male -- who is either fixated on a single issue, like cart paths up north, and keeps asking questions/making statements about it so the lecturer can't get on to other issues) and get lost if the discussion gets into any detail. I suggest that the district develop two separate classes. The first would remain an orientation aimed at new residents, that paints the CDD program with a very broad brush. No nitty gritty. Then the should offer periodic sessions aimed at folks who've lived here a while, folks who thought they understood but now have more questions than answers. These would not be at 10AM at the district office but would be at various times at the different rec centers. And they should tailor their presentation to fit the prospective audience. There would bee minimal interest and few questions about trains at an evening session at Canal Street, but when the session was held at the Chathum Rec Center, the presenter better know a lot about trains and be able to discuss the noise.

They say TV is a community of rumors. If you haven't heard a good one by 10:00 AM, you are obligated to start one. But there are rumors and then there are rumors. The story that there is going to be a massive mosque built in what's left of the buffalo land as LSL is absurd and no one takes it seriously. But the tax-free bonds issue is another matter entirely. Thanks to Ritchie's hatchet job, many, many of TV residents know there may be something, but no one really knows the facts. To my knowledge, no one in authority has commented. I can understand that in a way, because one does not want to give legitimacy to a hack such as Ritchie. Regardless, the rumors persist I know there are likely legal and tactical reasons why they cannot bare all, but the developer and he distract owe it to us (not legally or even morally but logically) to provide what comments they can.

And there's a lot of other little things they could do, but I'm tired of typing.

`

WOW.. Do you feel better now? I have tried very hard to obtain information on these subjects from more than just the sources you cite so please don't scold me for asking questions. The problem is no one apparently has been able to clearly explain all of this.. and I think it should be clear both to the current residents and potential buyers. Don't you agree all of this should be clear to all of us? If not, why not? The Villages is a FANTASTIC place to live!! Is there a problem in us knowing the financials involved in it?

Was your answer a yes or a no? Can you confirm that the central CDD is controlled by a few owners and it makes the decisions about the recreational bonds for everyone (amenity fees)? When I read that I didn't make much sense to me but this IRS issue makes me wonder. That was my question.

No one disputes the need for infrastructure that is paid for with "the bond" (20k or so on a new house). It is either inside the cost of a new house (like up north) or paid for separately in the Bond (as done here). Either way it should be and will be paid for by the homeowner. But for example what happens when a repair or replacement needs to be made on that infrastructure? Will that be paid for by special assessment against the property (some places up north), by property taxes (most places up north), or by the annual Development District Assessment?

Don't Forget, The Villages is Florida's friendliest hometown!!